EXHIBIT 99.1
SECOND AMENDMENT AGREEMENT
This Second Amendment Agreement is made by and between MicroIslet,
Inc., a Nevada corporation ("MicroIslet"), and Xxxxxxx Xxxxxxxxxx
("Xxxxxxxxxx"), on June 16, 2005, with intended effect as of May 1, 2005 (the
"Effective Date"). MicroIslet and Xxxxxxxxxx may be referred to in this
Agreement individually as a "Party" and collectively as the "Parties."
RECITALS
The parties desire to further amend that letter agreement dated June
23, 2000 by and between MicroIslet and Xxxxxxxxxx and attached as Exhibit 1 and
that Amendment to the letter agreement dated January 30, 2004 between MicroIslet
and Xxxxxxxxxx, attached as Exhibit 2, which letter agreement and Amendment
shall be referred to herein as the First Amended Agreement. The parties agree
that the terms of the First Amended Agreement remain in effect, but the parties
agree to the following additional terms for a limited period of time:
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree to the
above Recitals and as follows:
1. BONUS. If Xxxxxxxxxx remains in his position as President and Chief
Operating Officer of MicroIslet for twelve (12) months from the Effective Date
of this Second Amendment Agreement, Xxxxxxxxxx shall at the conclusion of such
period earn, and MicroIslet shall pay or provide to Xxxxxxxxxx, a bonus equal to
fifty percent (50%) of the amount of the bonus paid to Xxxxxxxxxx for the 2005
calendar year under MicroIslet's Performance Cash Bonus Plan.
2. TERM. If Xxxxxxxxxx remains employed with MicroIslet after May 1,
2006, this Second Amendment Agreement ceases to be operative (except for
MicroIslet's obligation to pay the bonus specified in paragraph 1, above) and
Xxxxxxxxxx'x employment will be governed by the First Amended Agreement.
3. AMENDMENT AND RESTATEMENT OF SECTION 2.3. For the term of this
Second Amendment Agreement, Section 2.3 of the First Amended Agreement is hereby
amended and restated in its entirety to read as follows:
2.3 VOLUNTARY TERMINATION In the event that you voluntarily
leave the employment of the Company, you agree to provide the Company with 30
days advance written notice. Upon your furnishing to the Company an executed
waiver and release of claims you will be entitled to the following:
o The Company shall pay to you, in addition to earned
compensation, unused PTO and reimbursable expenses
through the date of termination, an amount equal to
six months base Salary (the "Severance").
-1-
o You will be provided twelve months within which you
may exercise that portion of any of your Options and
any additional stock options granted by the Company
that are vested at the date of termination. All
remaining Options will be terminated and there will
be no further vesting, unless the Board of Directors
determines to continue your services as a consultant,
and in connection therewith, to continue the term and
vesting of your options. In the event of a Change of
Control, you agree that the Company may, but shall
not be required to, immediately purchase your options
at the difference between recognized market value of
the shares and the exercise price.
o 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 (a) twelve (12) months from the date of
termination, or (b) the date on which you begin
full-time employment with another company or business
entity. You will be responsible for the balance of
the COBRA health premium.
4. AMENDMENT. Except as set forth in paragraph 11 below, this Second
Amendment Agreement may not be altered, amended, modified, or otherwise changed
in any respect, except by a writing executed by an authorized representative of
each Party.
5. AUTHORIZATION. The undersigned, by their signatures, represent and
warrant that they are authorized agents of their respective entities and are
authorized to execute this Second Amendment Agreement.
6. DEFINED TERMS. Except as otherwise defined herein, all capitalized
terms used herein shall have the respective meanings ascribed to them in the
Agreement.
7. RATIFICATION. The First Amended Agreement, as hereby amended, is
ratified and confirmed as being in full force and effect.
8. GOVERNING LAW. This Second Amendment Agreement shall be interpreted
and enforced under the laws of the State of California.
9. ENTIRE AGREEMENT. This Second Amendment Agreement contains the
entire agreement between the parties regarding the matters covered in this
Second Amendment Agreement. There have been no other statements, promises, or
representations made by the Parties that are intended to alter, modify, or
complement this Second Amendment Agreement.
10. COUNTERPARTS; FACSIMILE SIGNATURES. This Second Amendment Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, and all taken together, shall constitute one and the same instrument.
Facsimile signatures shall be deemed originals for all purposes.
-2-
11. NO DEFERRED COMPENSATION. It is the intention of the parties that
the benefits hereunder shall not be deemed deferred compensation arrangements
under Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"), as interpreted by regulations or administrative guidance issued by the
Treasury Department or Internal Revenue Service ("Section 409A"). To the extent
that any such benefits would be deemed a deferred compensation arrangement under
Section 409A, this Second Amendment Agreement shall be amended by MicroIslet's
Board of Directors, or the Compensation Committee thereof, in its reasonable
discretion so that the benefits hereunder will not be deemed deferred
compensation arrangements under Section 409A.
12. EFFECT ON INCENTIVE STOCK OPTIONS. Xxxxxxxxxx understands that by
entering into this Second Amendment Agreement, any incentive stock options (as
defined under Section 422(b) of the Code) held by Xxxxxxxxxx with an exercise
price lower than the Fair Market Value (as defined in MicroIslet's 2000 Stock
Option Plan) of MicroIslet's common stock on the date this Second Amendment
Agreement is executed by Xxxxxxxxxx following approval hereof by Microlslet's
Board of Directors, or the Compensation Committee thereof, will no longer be
deemed incentive stock options, and accordingly, MicroIslet will be required to
withhold payroll taxes upon the exercise of such options in accordance with the
tax withholding provisions of such stock option agreements.
13. AT-WILL STATUS. Nothing in this Second Amendment Agreement shall be
deemed to alter the status of Xxxxxxxxxx'x employment as at-will with no
specified period or term of employment. Either Xxxxxxxxxx or MicroIslet may
terminate employment at any time, with or without reason, subject to the
termination provisions of the First Amended Agreement as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this SECOND AMENDMENT
AGREEMENT with intended effect as of the Effective Date.
MICROISLET, INC., a Nevada Corporation
Date: June 16, 2005
By /s/ Xxxx X. Steel IV
------------------------------------
Xxxx X. Steel IV
Chairman and Chief Executive Officer
Date: June 16, 2005 By /s/ Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxxx
Chairman, Compensation Committee
Date: June 16, 2005 By /s/ Xxxxxxx Xxxxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxxxxx
-3-
