Document:

Exhibit 10.37

 

ADVANCED CELL
TECHNOLOGY, INC. {PRIVATE}

 

STOCK OPTION
AGREEMENT

 

THIS AGREEMENT, made as of
this 13th day of December, 2004, by and between ADVANCED CELL TECHNOLOGY, INC.
(“Company”), a Delaware corporation, and                             
(“Optionee”).

 

W I T N E S S E T H:

 

WHEREAS, Company desires to
provide an incentive to Optionee, to encourage stock ownership by Optionee, to
encourage Optionee to remain in the employ of Company, and to increase such
Optionee’s proprietary interest in Company’s success;

 

NOW, THEREFORE, it is agreed between Company and
Optionee as follows.

 

1.                                       Stock Option—Number and Price.

 

Subject to the terms and conditions herein and to
the provisions of the Advanced Cell Technology, Inc. 2004 Stock Option
Plan II, as it may be amended from time to time (the “Plan”), the provisions of
which are incorporated herein by reference, Company hereby grants to Optionee
the right and option (the “Option”) to purchase from Company up to
                                
shares (the “Shares”) of the Company’s Common Stock (“Stock”), par value $0.001
per share, at a price of $0.25 per Share (the “Option Price”).

 

2.                                       Type of Option.

 

This Option is intended to be a non-qualified stock option as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

3.                                       Exercise—Timing and Method.

 

(a)                                  Subject to the restriction in Section 6
of this Agreement, the Option may be exercised at any time on or after the date
of this Agreement with respect to the Shares vested as of the date of exercise.
       shares of the Shares shall be deemed vested upon signature of this
Agreement.  Shares shall vest at a rate
of
                     
shares as of the last day of each month following signature of this Agreement
for so long as the Optionee remains in the employ of the Company, a member of
its Board of Directors, or an advisor to the Company.

 

(b)                                 Optionee, from time to time during the period
when the Option may be exercised hereunder, may so exercise the Option in whole
or in part by delivering to Company (attention: Stock Option Plan Committee):

 

(i)                                     A written notice signed by Optionee

 

 

(1)                                  stating the number of shares of Stock that
Optionee has elected to purchase at any time; and

 

(2)                                  (unless the Shares are covered by a then
current registration statement or a Notification under Regulation A under the Securities
Act of 1933 (the “Act”)) acknowledging in form and substance satisfactory to
the Company that

 

(a)                                  such Shares are being purchased for
investment and not for distribution or resale (other than a distribution or
resale which, in the opinion of counsel satisfactory to the Company, may be
made without violating the registration provisions of the Act);

 

(b)                                 the Optionee has been advised and understands
that (i) the Shares have not been registered under the Act and are “restricted
securities” within the meaning of Rule 144 under the Act and are subject
to restrictions on transfer and (ii) the Company is under no obligation to
register the Shares under the Act or to take any action which would make
available to the Optionee any exemption from such registration;

 

(c)                                  such Shares may not be transferred without
compliance with all applicable federal and state securities laws;

 

(d)                                 the Optionee agrees to be bound by the terms
of any shareholders agreement then in effect among all (or a substantial number)
of the Company’s shareholders; and

 

(e)                                  an appropriate legend referring to the
foregoing restrictions on transfer and any other restrictions imposed under the
Option Documents, as defined in the Plan, may be endorsed on the certificates;
and

 

(ii)                                  In an amount equal to the Option Price of the
Shares of Stock then to be purchased, Optionee’s cash, certified, bank or
cashier’s check payable in clearing house funds to the order of the Company, or
such other mode of payment as the Committee may approve, including (1) payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board, or (2) payment in whole or in part in shares of the
Company’s Common Stock held by the Optionee or to be issued to the Optionee
under the Option, in which case Optionee shall deliver to the Company
certificates registered in the name of such Optionee representing the shares
owned by such Optionee, free of all liens, claims and encumbrances of every
kind and having an aggregate Fair Market Value on the date of delivery that is
at least as great as the Option Price of the Shares (or relevant portion
thereof) with respect to which such Option is to be

 

 

exercised by the payment in shares of Common Stock, endorsed in blank
or accompanied by stock powers duly endorsed in blank by the Optionee.

 

4.                                      Restriction on Transferability.

 

This Option is not transferable by Optionee otherwise than by will or
the laws of descent and distribution, and is exercisable, during the lifetime
of Optionee, only by Optionee.

 

5.                                      Adjustment in Number of Shares and Option
Prices; Reserved Option Shares.

 

In the event that there are any changes in the outstanding Stock of the
Company by reason of stock dividends, splits, combinations of shares,
recapitalizations, reorganizations, mergers, consolidations, combinations, or
exchanges of shares or the like, the number of shares subject to the Option and
the Option Price shall be appropriately adjusted by the Committee (as defined
in the Plan), if necessary, to reflect equitably such change or changes.  The determination of the Committee in this
regard shall be conclusive.

 

The Company shall at all times during the term of this Agreement reserve
and keep available such number of shares of Stock as will be sufficient to
satisfy the requirements of this Agreement.

 

6.                                      Termination of Option.

 

(a)                               This Option is not exercisable after (i) the tenth anniversary of
the date first above written.

 

(b)                                 Notwithstanding the termination date provided
in Section 6(a), no Option shall be exercisable after the date, if any,
set by the Board of Directors as an accelerated expiration date in the event of
the liquidation or dissolution of the Company.

 

(c)                                  Notwithstanding the limitations of Section 6(b),
the Committee may extend the period during which all or any portion of an
Option may be exercised to a date no later than the term specified in Section 6(a).

 

7.                                      Amendment.

 

The Committee shall have the right to amend this Agreement, subject to
the Optionee’s consent if such amendment is not favorable to the Optionee.  Optionee may not amend this Agreement other
than in a writing signed by the Company and the Optionee.

 

8.                                      Right of First Refusal.

 

(a)                                  Transfer Notice.  If at any time prior to an “Effective
Transaction” (as defined in the Company’s Certificate of Amendment of
Certificate of Incorporation), Optionee (or any transferee of Optionee subject
to or bound by this Agreement) proposes to transfer shares of Stock to one or
more third parties pursuant to an understanding with such third parties (a

 

 

“Transfer”),
then Optionee shall give the Company written notice of the Optionee’s intention
to make the Transfer (the “Transfer Notice”), which Transfer Notice shall
include (i) a description of the Stock to be transferred (“Offered Shares”),
(ii) the name and address of the prospective transferee(s) and (iii) the
consideration and the material terms and conditions upon which the proposed
Transfer is to be made.  The Transfer
Notice shall certify that the Optionee has received a firm offer from a
prospective transferee(s) and in good faith believes a binding agreement for
the Transfer is obtainable on the terms set forth in the Transfer Notice.  The Transfer Notice shall also include a copy
of any written proposal, term sheet or letter of intent or other agreement
relating to the proposed Transfer.

 

(b)                                 Company’s Option.  The Company shall have an option for a period
of fifteen (15) days from receipt of the Transfer Notice to elect to purchase
the Offered Shares at the same price and subject to the same material terms and
conditions as described in the Transfer Notice. 
The Company may exercise such purchase option and, thereby, purchase all
(but not less than all) of the Offered Shares by notifying the Optionee in
writing before such expiration of such fifteen (15) day period.  If the Company gives the Optionee notice that
it desires to purchase such shares, then payment for the Offered Shares shall
be by check or wire transfer, against delivery of the Offered Shares to be
purchased at a place agreed upon between the parties and at the time of the
scheduled closing therefor, which shall be no later than forty-five (45) days
after the Company’s receipt of the Transfer Notice, unless the Transfer Notice
contemplates a later closing with the prospective third party transferee(s). If
the Company fails to purchase all of the Offered Shares by exercising the
option granted in this Section 8(b) within the period provided, the
Optionee may effect the Transfer upon terms not more favorable to the
prospective third-party transferee than those described in the Transfer Notice.

 

(c)                                  No Offered Shares shall be transferred by
Optionee until and unless the proposed transferee enters into an agreement
satisfactory to the Company agreeing to be bound by the provisions of this Section 8.

 

9.                                      General.

 

Words used in this Agreement
shall have the same meaning as the same words used in the Plan.  In the event of any inconsistency between
this Agreement and the Plan, the terms of this Agreement shall govern.  This Agreement, together with the Plan,
constitutes the parties’ entire agreement with respect to the subject matter
hereof, and supersedes any and all prior and or written agreements or understandings
with respect thereto.

 

IN WITNESS WHEREOF, Company
and Optionee have executed this Agreement as of the date first above written.

 

	
   

  	
   

  	
  ADVANCED CELL
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  William M. Caldwell, IV

  	
   

  	
   

  	
  Michael D. West,
  PresidentExhibit 10.38

 

EMPLOYMENT
AGREEMENT

 

Advanced Cell Technology, Inc.
(“ACT”) desires to retain the services of William M. Caldwell IV (“CALDWELL”)
in the capacity of Chief Executive Officer, and CALDWELL desires to provide his
services to ACT in that capacity.  Accordingly,
for and in consideration of the commitments set forth herein, ACT and CALDWELL
agree as follow:

 

1.             Position and Duties

 

ACT agrees to employ CALDWELL in the position of Chief Executive
Officer (“CEO”), CALDWELL shall report to the Board of Directors of ACT, and
shall perform any and all duties now or hereafter assigned to CALDWELL by the
Board of Directors of ACT, as well as any other duties consistent with the
position of CEO.  CALDWELL shall be a member of the Board of Directors of the Company.  CALDWELL shall abide by ACT’s rules,
regulations, and practices as they may from time-to-time be adopted or modified.

 

2.             Compensation

 

A.            Annual Salary.  ACT
shall pay CALDWELL an annual salary of two hundred dollars ($200,000.00).  CALDWELL’s salary shall be paid in equal
bi-monthly Installments,
consistent with ACT’S regular pay practices. 
CALDWELL’s salary may be adjusted from time-to-time by ACT without
affecting this Agreement.  CALDWELL’s
annual salary will increase to two hundred fifty thousand dollars ($250,000.00)
if ACT closes an equity financing that provides at least ten million dollars
($10,000,000) of new money to the Company.

 

B.            Bonus: Beginning in 2005, in addition to his Annual Salary, CALDWELL shall be
entitled to receive an annual bonus of fifty thousand dollars ($50,000.00)
payable in the 4th Quarter, upon the successful completion of
his job responsibilities.  If CALDWELL’s
annual salary is increased to two hundred fifty thousand dollars ($250,000.00),
then he shall no longer be entitled to any specific annual bonus; however he
will eligible to receive an annual bonus that will be determined by the Board
of Directors in its sole and absolute discretion.

 

C.            Expenses: ACT shall reimburse CALDWELL for reasonable travel and other business
expenses incurred by CALDWELL in the performance of his duties hereunder.  The parties understand and agree that during
the period from inception of this Agreement through June 30, 2005.  CALDWELL will be commuting from Los Angeles
to the Bay Area.  The Company will
reimburse CALDWELL for reasonable commuting expenses incurred during that
period, and reasonable relocation expenses if he moves after June 2005.

 

 

3.             Benefits

 

CALDWELL shall be entitled to receive benefits under the following
benefit plans: group life insurance; medical insurance; disability insurance,
and 401K/retirement plan.  ACT may
modify, amend or terminate any or all such benefit plans at any time.  CALDWELL’s rights under any benefit plans now
in force or later adopted by ACT shall be governed safety by the terms of the
particular benefit plan.  In addition,
CALDWELL, shall be entitled to the following:

 

A.  Vacation:  Three (3) weeks
per year.

B.   Sick Days: Ten (10) days per year.

 

4.             Stock Options.  Subject to the approval of the ACT Board of Directors.  ACT will grant CALDWELL an option to purchase
the Company’s Common Stock (the “Option”) under
the Company’s employee Stock Option Plan (the “Plan”) in an amount equal to 5.0% of the
Company’s outstanding shares (inclusive of option reserve and warrants) upon completion
of the Series A financing.  The
Options will vest over thirty (30) months as follows: 25% of the shares will be vested as of the
Employment Date and thereafter 1/30th of the
remaining number of shares will vest at the end of each full month of
employment.  Vesting will depend on
CALDWELL’s continued employment with the Company and will be subject to the
team and conditions of the Plan and a Stock Option Agreement.  Except us specifically set forth in this Section 4,
CALDWELL’s rights under the Plan, or any other stock option plan later adopted
by ACT, shall be governed solely by the terms of the Plan, or the later adopted
stock option plan.

 

Notwithstanding the foregoing: (i) upon a Change in Control (as defined
in the Plan), the vesting of fifty percent (50%) of the then un-vested portion
of the Option and any other outstanding equity awards will be accelerated.

 

5.             Competitive
Activities

 

During the term of CALDWELL’s employment with ACT and for one (1) year
thereafter, you shall not, for himself or any third party, directly or
indirectly (a) divert or attempt to divert from ACT any business of any
kind, including, without limitation, the solicitation of or interference with
any of its members, sponsors, employees, volunteers, officers or directors, (b) employ,
solicit for employment or recommend for employment any person employed by ACT,
or (c) engage in the formation or promotion of, or be employed by, any
entity that is competitive with ACT. CALDWELL acknowledges that there is a
substantial likelihood that the activities described in this Section 5
would involve the unauthorized use or disclosure of the ACT’s Proprietary
Information and that use or disclosure would be extremely difficult to detect.  CALDWELL has accepted the limitations of this
Section 5 as a reasonably
practicable and unrestrictive means of preventing such use or disclosure.

 

6.             Inventions/Intellectual
Property Belong to ACT

 

Any and all inventions, discoveries, improvements or intellectual property
which CALDWELL has conceived or made or may conceive or make during the period
of employment relating to or

 

2

 

In any way pertaining to or connected with the systems, products,
apparatus, or methods employed, manufactured, constructed or researched by ACT
shall be the sole and exclusive property of ACT.

 

The obligations provided for by this Agreement, except for the
requirements as to disclosure in paragraph 7, do not apply to any rights
CALDWELL may have acquired in connection with an invention, discovery,
improvement or intellectual property for which no equipment, supplies,
facility, or trade secret information of the ACT was used and which was
developed entirely on the CALDWELL’s own time and (a) which does not
relate directly or indirectly to the business of ACT or to ACT’s actual or
demonstrable anticipated research or development, or (b) which does not
result from any work performed by CALDWELL for ACT. The parties understand and agree
that this limitation is intended to be consistent with California Labor Code, Section 2870.

 

7.             Disclosure of Inventions

 

CALDWELL agrees to disclose promptly TO ACT all such improvements,
discoveries, or inventions which CALDWELL has made or may make solely, jointly,
or commonly with others, and to assign as appropriate such improvements,
discoveries, inventions or intellectual property to ACT, where the rights are
the property of ACT, and agrees to execute and sign any and all applications,
assignments, or other instruments which ACT may deem necessary in order to
enable it, at its expense, to apply for, prosecute, and obtain Letters Patent
of the United States or foreign countries for said improvements, discoveries,
inventions or intellectual property, or in order to assign or convey to or vest
in ACT the sole and exclusive right, title, and interest in and to said
improvements, discoveries, inventions, or patents.

 

This paragraph is applicable whether or not the Invention, discovery,
improvement or intellectual property was made under the circumstances described
in paragraph 6.  CALDWELL agrees to make
such disclosures understanding that they will be received in confidence and
that, among other things, they are for the purpose of determining whether or
not rights to the related invention, discovery, improvement or intellectual
property is the property of ACT.

 

8.             Confidential and Proprietary Information

 

During his employment, CALDWELL may have access to confidential
information relating to such matters as ACT’s trade secrets, systems,
procedures, manuals, products, and clients. 
For purposes of this Agreement, “confidential information” means all information
and ideas, in any form, resulting in any manner to the business of ACT or its
clients, unless: (i) the information is or becomes publicly known through
lawful means: (ii) the information was rightfully in CALDWELL’s possession
prior to his employment with ACT; or (iii) the information is disclosed to
CALDWELL without a confidential restriction by a third party who rightfully
possesses the information and did not obtain it, either directly or indirectly,
from ACT.

 

3

 

CALDWELL understands and agrees that all confidential information will
be kept confidential by CALDWELL both during and after his employment under
this Agreement.  CALDWELL further agrees
that he will not, without the prior written approval by ACT, disclose such
confidential information, or use such confidential information in any way,
either during the term of this Agreement or at any time thereafter, except as
required in the course of his employment.

 

9.             Termination
of Employment

 

CALDWELL understands and agrees that his/her employment has no specific
term.  This Agreement, and the employment
relationship, may be terminated by either party with or without cause upon
thirty (30) days written notice to the other. 
Except as otherwise agreed in writing or as
otherwise provided in this Agreement, upon termination neither ACT nor CALDWELL
shall have any further obligation to each other by way of compensation or
otherwise.

 

10.          Separation Benefits.  Upon
termination of CALDWELL’s employment with the Company for any reason.  CALDWELL will receive payment for all unpaid
salary and vacation accrued as of the date of his termination of employment,
and his benefits will be continued under the ACT’s then existing benefit plans
and policies for so long as provided under the terms of such plans and policies
and as required by applicable law.  Under
certain circumstances, and conditioned in each case upon CALDWELL’s execution
of a release and waiver of claims against ACT, its officers and directors,
CALDWELL will also be entitled to receive severance benefits as set forth
below, but CALDWELL will not be entitled to any other compensation, award or
damages with respect to your employment or termination.

 

(a)           Definitions.  For
purposes of this Section 10, the following definitions shall apply: “Disability”
shall mean CALDWELL’s complete inability to perform his job
responsibilities for a period of one hundred eighty (180) consecutive days or
one hundred eighty (180) days in the aggregate in any twelve (12) month period.  “Cause”
means: (i) the failure to property perform CALDWELL’s job
responsibilities, as determined reasonably and in good faith by the Board; (ii) commission
of any act of fraud, gross misconduct or dishonesty with respect to the
Company; (iii) conviction of, or plea of guilty or “no contest” to, any
felony, or a crime involving moral turpitude; (iv) breach of any
proprietary information and inventions agreement with the Company; or (v) failure
to follow the lawful directions of the Board.

 

(b)           Termination for Cause, Death,
Disability, or Resignation.  In the event of CALDWELL’s termination for “Cause”,
termination for death or “Disability.” or his Resignation CALDWELL will not be
entitled to any cash severance benefits or additional vesting of any Company
equity awards, Including Company
stock options.

 

(c)           Termination Without Cause.  In the event of CALDWELL’s termination
without “Cause,” he will be entitled to (i) a lump sum payment in an
amount equal to six (6) months base salary, subject to such payroll
deductions and withholdings as are required by law; and (ii) accelerated
vesting of fifty percent (50%) of the then-unvested shares subject to the
Option.

 

4

 

(d)           Change of Control.  In
the event of CALDWELL’s termination without “Cause” within twelve (12) months
following a Change in Control, in lieu of the benefits set forth in subsection (c) above,
you will be entitled to (i) a lump sum payment in an amount equal to six (6) months base salary, subject
to such payroll deductions and withholdings as are required by law; and (ii) accelerated
vesting of one-hundred percent (100%) of the then-unvested shares subject to
the Option.

 

11.          Turnover
on Termination

 

CALDWELL agrees that on or before
termination of employment, he will return to ACT all originals and copies of
all or any part of:

 

a.             Lists and sources of clients;

 

b.             Proposals to clients or drafts of proposals;

 

c.             Reports, job notes, specifications, and
drawings pertaining to clients;

 

d.             Any and all other things, equipment, and written materials obtained by CALDWELL
during the course of employment from ACT or any client of ACT.

 

e.             Any and all inventions or intellectual
property developed by CALDWELL during the course of employment.

 

12.          Arbitration

 

Except for injunctive proceedings against unauthorized disclosure of
confidential information, any and all claims or controversies between ACT and
CALDWELL, including but not limited to (1) those involving the
construction or application of any of the terms, provisions, or conditions of
this Agreement; (2) all contract or tort claims of any kind; and (3) any
claim based on any federal, state or local law, statute, regulation or
ordinance, including claims for unlawful discrimination or harassment, shall be
settled by arbitration in accordance with the then current Employment Dispute
Resolution Rules of the American Arbitration Association. Judgment on the
award rendered by the arbitrator(s) may be entered by any court having
jurisdiction thereof.  The location of
the arbitration shall be San Francisco, California.  Unless the parties mutually agree otherwise,
the arbitrator shall be a retired
judge selected from a panel provided by the American Arbitration Association,
or the Judicial Arbitration and Mediation Service (JAMS).

 

ACT shall pay the arbitrators fees and costs.  Each party shall pay for its own costs and attorneys’ fees, if any.  However, if any party prevails on a statutory
claim which affords the prevailing party attorneys’ fees, the arbitrator may
award reasonable attorneys’ fees and costs to the prevailing party.

 

5

 

CALDWELL UNDERSTANDS AND
AGREES THAT THIS AGREEMENT TO ARBITRATE CONSTITUTES A WAIVER OF HIS/HER RIGHT
TO A TRIAL BY JURY OF ANY MATTERS COVERED BY THE ARBITRATION AGREEMENT.

 

13.          Severability

 

In the event that any of the
provisions of this Agreement shall be held to be invalid or unenforceable in
whole or in part, those provisions to the extent enforceable and all other
provisions shall nevertheless continue to be valid and enforceable as though
the invalid or unenforceable parts had not been included in this Agreement.  In the even that any provision relating to
the time period of restriction shall be declared
by a court of competent jurisdiction to exceed the maximum time period such
court deems reasonable and enforceable, then the time period of restriction
deemed reasonable and enforceable by the court shall become and shall
thereafter be the maximum time period.

 

14.          Agreement Read and Understood

 

CALDWELL acknowledges that
he has carefully read the terms of this Agreement, that he has had an
opportunity to consult with a representative of his own choosing regarding this
Agreement, that he understands the terms of this Agreement, and that he is
entering this agreement of his own free will.

 

15.         Complete Agreement Modification

 

This Agreement is the
complete agreement between the parties on the subjects contained herein and
supersedes all previous correspondence, promises, representations, and
agreements, if any, either written or oral. 
No provision of this Agreement may be modified except by a written document signed both by the ACT
and CALDWELL.  CALDWELL understands and
agrees that he will be required by the Company to execute a comprehensive Proprietary
Information Agreement.

 

6

 

16.          Governing Law

 

This Agreement shall be construed and enforced according to the laws of
the State of California.

 

 

	
  Dated: 

  	
  12/31/2004

  	
   

  	
  /s/ William M. Caldwell IV

  	
   

  
	
   

  	
  William M. Caldwell IV

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
  12-31-04

  	
   

  	
  /s/ Michael D. West

  	
   

  
	
   

  	
  Advanced Cell Technology, Inc.

  
	
   

  	
  By: Michael D. West

  
	
   

  	
  Title: Chief Executive Officer

  
							

 

7

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