EXHIBIT 10.7
[MICROISLET LETTERHEAD]
February 17, 2006
To: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Ph.D.
Dear ▇▇▇▇,
As you know, your employment with MicroIslet, Inc. (the "COMPANY") will be
terminated effective today, February 17, 2006 (the "SEPARATION DATE").
Pursuant to that certain letter agreement dated June 23, 2000 and amended
effective as of January 30, 2004 and May 1, 2005, upon execution of the attached
Waiver and Release, you will be entitled to the following:
1. Your base salary through the Separation Date, with final payment to be made
in accordance with the Company's standard payroll practices;
2. Your accrued and unused PTO through the Separation Date;
3. Reimbursable expenses you have incurred; and
4. Severance in an amount equal to six months of your current base salary, or
$125,000 (the "SEVERANCE PAYMENT").
In addition, you will have until December 31, 2006 to exercise your options to
the extent vested on the Separation Date. These are as follows:
Number of Remaining Number of Shares
Shares Vested Unvested at
Date of Grant at Separation Date Separation Date
------------- ------------------ ---------------
December 22, 2000 1,000,200 0
November 4, 2002 62,510 0
July 16, 2003 150,000 0
In the event that you elect continued health coverage under COBRA, the Company
will reimburse you for the same portion of your health insurance premium that it
paid during your employment up until the earlier of either (i) February 17, 2007
or (ii) the date on which you begin full-time employment with another company or
business entity. You understand and agree that you will be responsible for the
balance of the COBRA health insurance premium.
All payments described are subject to standard withholdings and deductions.
You are reminded that you signed a Trade Secret and Confidentiality Agreement
and Non-Solicitation Agreement at the commencement of your employment, and
should understand that these agreements are still, and shall remain, in effect
and you shall abide by the terms of such agreements.
You are also reminded that you will remain subject to the Company's ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Policy with respect to material, non-public information concerning the
Company which you possess as of the Separation Date. It is expected that all
material, non-public information that you presently possess will be publicly
disclosed in the Company's Form 10-K for the fiscal year ended December 31,
2005, to the extent it remains material at the time of filing. In accordance
with the Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Policy, you should be able to transact in
Company securities on the second business day after the Company files such Form
10-K.
Except as otherwise required by law, the payments and benefits described above
are contingent upon your execution and delivery to the Company of the attached
Separation and Release, and the expiration of the revocation period explained
therein. Please execute the acknowledgement at the end of this letter and the
Separation and Release and send the originally executed documents to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, MicroIslet, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇.
We appreciate your hard work and contributions to MicroIslet, Inc.
Best Regards,
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇, M.D., Ph.D.
Interim President and Chief Executive Officer
I hereby resign my position as Chief Operating Officer and as a director of
MicroIslet, Inc. effective February 17, 2006, and agree to and acknowledge the
statements set forth above.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Ph.D.
-2-
WAIVER AND RELEASE
Reference is made to that certain letter agreement dated June 23, 2000
and amended as of January 30, 2004 and May 1, 2005 (the "EMPLOYMENT AGREEMENT")
by and between MicroIslet, Inc. (the "COMPANY") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Ph.D.
("HARTOUNIAN").
Hartounian gave notice of his resignation as an employee and a director
of the Company on January 12, 2006, and the parties agreed that his last day of
employment and the last day he will serve on the Company's board of directors
will be February 17, 2006 (the "SEPARATION DATE"). In accordance with the terms
of the Employment Agreement, and in exchange for the consideration set forth in
the letter from the Company of even date herewith, and to which this Waiver and
Release is attached (the "EXIT LETTER"), Hartounian hereby delivers this Waiver
and Release to the Company.
Hartounian acknowledges that, with the exception of the payments
described in the Exit Letter, the Company has paid him all salary and bonus
payments to which he is entitled in connection with his service as an employee
and a director of the Company and that, except as provided in the Exit Letter,
Hartounian is not entitled to any additional compensation from the Company.
Hartounian hereby unconditionally and completely releases the Company
and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to the date of this Waiver and
Release. This general release includes, but is not limited to: (1) all claims
arising out of or in any way related to ▇▇▇▇▇▇▇▇▇▇'▇ employment with the
Company, the termination of that employment or the Employment Agreement; (2) all
claims related to ▇▇▇▇▇▇▇▇▇▇'▇ compensation or benefits from the Company as an
employee, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys' fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) ("ADEA"), and the California Fair Employment and Housing Act
(as amended) and other analogous state and local laws or regulations.
Notwithstanding the foregoing, the releases given herein in favor of
any officer, director or employee of the Company shall be null and void against
any officer, director or employee of the Company, and only that officer,
director or employee, who initiates a claim against Hartounian in his or her
individual capacity.
-3-
In giving this release, which includes claims which may be unknown to
Hartounian at present, Hartounian hereby acknowledges that he has read and
understands Section 1542 of the Civil Code of the State of California which
reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Hartounian hereby expressly waives and relinquishes all rights
and benefits under Section 1542 and any law or legal principle of similar effect
in any jurisdiction with respect to claims released hereby.
Hartounian acknowledges that he is knowingly and voluntarily
waiving and releasing any rights he may have under the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"). He also
acknowledges that the consideration given for this Waiver and Release is in
addition to anything of value to which he was already entitled. Hartounian has
been advised by this writing, as required by the ADEA that: (a) this Waiver and
Release does not apply to any claims that may arise after the signing of this
Waiver and Release; (b) Hartounian should consult with an attorney prior to
executing this release; (c) Hartounian has twenty-one (21) days within which to
consider this release (although he may choose to voluntarily execute this
release earlier); and (d) as set forth in the following paragraph, Hartounian
has seven (7) calendar days following the execution of this release to revoke
the Agreement.
Within three (3) calendar days of signing and dating this
Waiver and Release, Hartounian agrees to deliver the executed original of this
Agreement to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, MicroIslet, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇. However, Hartounian understands that he may revoke
this Agreement for up to seven (7) calendar days following his execution of this
Agreement (the "REVOCATION PERIOD") and it shall not become effective or
enforceable until such Revocation Period has expired. Hartounian and the Company
further acknowledge and agree that such revocation must be in writing addressed
to and received by ▇▇. ▇▇▇▇▇▇▇ not later than midnight on the 7th day following
execution of this Agreement by Hartounian. Should Hartounian revoke this
Agreement under this paragraph, this Agreement shall not be effective or
enforceable and Hartounian shall no longer have the right to receive the
benefits or payments described in the Exit Letter (other than those set forth in
numbered paragraphs 1, 2 and 3 therein).
This Waiver and Release, together with the Exit Letter,
constitutes the complete, final and exclusive embodiment of the entire agreement
between the Company and Hartounian with regard to the subject matter hereof.
Hartounian is not relying on any promise or representation by the Company that
is not expressly stated herein or therein.
[SIGNATURE PAGE FOLLOWS]
-4-
IN WITNESS WHEREOF, Hartounian has executed this Waiver and Release on the date
set forth below intending it to be effective as of the date set forth below.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Ph.D.
DATE OF EXECUTION:
February 17, 2006
