Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of
February 20, 2007, between MakeMusic, Inc., a Minnesota
corporation (hereinafter called “MakeMusic”), and
Ronald B. Raup (hereinafter called “Executive”):
RECITALS
l. The
following recitals shall be considered a part of this Agreement and
explain the parties’ rights and obligations under this
Agreement. Any interpretation or construction of this Agreement
shall be considered in light of these recitals.
2.
Executive desires to be employed by MakeMusic as its President and
Chief Operating Officer and MakeMusic desires to employ Executive
as its President and Chief Operating Officer on the terms stated in
this Agreement.
3.
Executive recognizes, agrees and understands that execution of this
Agreement is an express condition of becoming and remaining
employed by MakeMusic as its President and Chief Operating
Officer.
NOW, THEREFORE, in consideration of
MakeMusic employing Executive as its President and Chief Operating
Officer under this Agreement, increases in compensation, and/or
other benefits now or hereafter paid or made available to Executive
by MakeMusic, Executive and MakeMusic agree as follows:
ARTICLE I
DEFINITIONS
1.01
Confidential Information . For the purposes of
this Agreement, “Confidential Information” means any
information not generally known to the public and proprietary to
MakeMusic and includes, without limitation, trade secrets,
inventions, and information pertaining to research, development,
purchasing, marketing, selling, accounting, licensing, business
systems, business techniques, customer lists, prospective customer
lists, price lists, business strategies and plans, pending
patentable materials and/or designs, design documentation,
documentation of meetings, tests and/or test standards, or manuals
whether in document, electronic, computer or other form. For
example, Confidential Information may be contained in
MakeMusic’s customer lists, prospective customer lists, the
particular needs and requirements of customers, the particular
needs and requirements of prospective customers, and the identity
of customers or prospective customers. Information shall be treated
as Confidential Information irrespective of its source and any
information which is labeled or marked as being
“confidential” or “trade secret” shall be
presumed to be Confidential Information.
1.02
Invention . For purposes of this Agreement,
the term “Invention” means ideas, discoveries, and
improvements whether or not shown or described in writing or
reduced to practice and whether patentable or not, relating to any
of MakeMusic’s present or future sales, research, or other
business activities, or reasonably foreseeable business interests
of MakeMusic.
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ARTICLE II
EMPLOYMENT, COMPENSATION AND BENEFITS
2.01
Employment With MakeMusic . MakeMusic hereby
employs Executive in the position of President and Chief Operating
Officer of MakeMusic and Executive hereby accepts such employment
with MakeMusic.
2.02
Duties .
(a)
Executive agrees, during his employment, to devote his full time
and best efforts to the businesses of MakeMusic, including, without
limitation, the performance of those duties and responsibilities
reasonably and customarily associated with his positions; provided,
however, that Executive’s duties and responsibilities shall
be subject to determination by MakeMusic’s Chief Executive
Officer or his designee. Executive shall be granted such powers and
authority as are reasonably and customarily associated with his
position.
(b)
Executive shall report to, and at all times shall be subject to the
direction of MakeMusic’s Chief Executive Officer or his
designee.
(c)
Executive, at all times during his employment with MakeMusic, shall
comply with MakeMusic’s reasonable standards, regulations and
policies as determined or set forth by the MakeMusic from time to
time and as applicable to executive employees of MakeMusic.
(d)
Executive shall maintain and improve his managerial skills and
knowledge of MakeMusic’s businesses by attending appropriate
conventions and seminars, and participating in other activities
reasonably related thereto. MakeMusic shall pay and/or reimburse
those expenses of Executive, approved by MakeMusic, which are
reasonably related to this subparagraph 2.02(d).
2.03
Outside Activities . MakeMusic acknowledges
and agrees that from time to time Executive may serve as a member
of the Board of Directors of one or more nonprofit entities or
businesses other than MakeMusic; provided, however, that Executive
provides MakeMusic’s Chief Executive Officer with information
about each proposed directorship, including time required by such
directorship, whether such directorship may involve conflicts of
interest with MakeMusic or their businesses, the types of risks
which such directorship may involve, and any other factors
Executive or MakeMusic’s Chief Executive Officer considers
material respecting such directorship. MakeMusic’s Chief
Executive Officer shall promptly consider all submissions by
Executive pursuant to this Paragraph 2.03. MakeMusic’s
Chief Executive Officer may request in good faith that Executive
not accept a particular directorship, or more than a specific
number of directorships, or that Executive resign from a particular
directorship, and Executive agrees to honor such requests.
2.04
Base Salary . Beginning February 20,
2007, Executive’s initial annual base salary shall be
calculated on the gross amount of $185,000 per year, less
withholding for income and FICA
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taxes
and any other proper deductions. Executive’s base salary will
be paid to him in accordance with MakeMusic’s normal payroll
practices. Future increases, if any, to annual base salary may be
negotiated between the Executive and MakeMusic. Executive may be
entitled to bonuses as determined in the sole discretion of
MakeMusic.
2.05
Stock Options . Executive shall be entitled to
receive stock options to purchase an aggregate of 85,000 shares of
the MakeMusic’s Common Stock pursuant to the terms and
conditions set forth in the specific stock option agreements
executed contemporaneously with the execution of this
Agreement.
2.06
Fringe Benefits From MakeMusic .
(a) In
addition to cash compensation, Executive shall be eligible to
receive fringe benefits as they may be made available to executive
employees of MakeMusic and offered to Executive from time to time
in the exclusive discretion of MakeMusic. Such benefits may
include, but are not limited to, bonuses, qualified pension or
retirement plans, health insurance and disability plans and
deferred compensation agreements.
(b)
Executive shall be eligible to participate in any and all other
employee benefit plans and programs offered by MakeMusic from time
to time, including, but not limited to, any medical, dental,
short-term disability and life insurance coverage, stock option, or
retirement plans, in accordance with the terms and conditions of
those benefit plans and programs and on a basis consistent with
that customarily provided to MakeMusic’s executive
employees.
2.07
Vacation . In addition to the foregoing
compensation and fringe benefits, Executive shall be entitled to a
paid vacation of a duration to be determined by MakeMusic. At
present, Executive shall be entitled to four (4) weeks paid
vacation per year. Such vacation shall be subject to
MakeMusic’s paid vacation policies as they may exist from
time to time.
2.08
Expenses . During the term of this Agreement,
Executive shall be entitled to prompt reimbursement by MakeMusic
for all reasonable, ordinary and necessary travel, entertainment
and other business related expenses incurred by Executive (in
accordance with the policies and procedures established by
MakeMusic for executive employees from time to time) in the
performance of his duties and responsibilities under this
Agreement; provided, however, that Executive shall properly account
for such expenses in accordance with federal, state and local tax
requirements and MakeMusic’s policies and procedures.
ARTICLE III
TERMINATION
3.01
Events of Termination . Executive’s
employment with MakeMusic:
(a) May
be terminated by mutual written agreement of MakeMusic and
Executive.
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(b)
Shall terminate immediately upon the death of Executive.
(c) May
be terminated upon written notice from MakeMusic to Executive for
cause, which shall mean the following:
(i)
Failure of Executive to (a) faithfully, diligently or
competently perform the material duties, requirements and
responsibilities of his employment as contemplated by this
Agreement or as assigned by MakeMusic’s Chief Executive
Officer of Board of Directors, or (b) take reasonable
direction consistent with his position from the MakeMusic’s
Chief Executive Officer or Board of Directors; or
(ii)
Failure of Executive to comply with the material, reasonable
policies, regulations and directives of MakeMusic as in effect from
time to time; or
(iii)
Any act or omission on the part of Executive which constitutes a
failure to comply with material provisions of this Agreement;
or
(iv)
Any act or omission on the part of Executive which is clearly and
materially harmful to the reputations or businesses of MakeMusic,
including, but not limited to, personal conduct of Executive which
is inconsistent with federal and state laws respecting harassment
of, or discrimination against, one or more of MakeMusic’s
employees; or
(v)
Conviction of Executive of, or a guilty or nolo contendere plea by
Executive with respect to, any crime punishable as a felony.
(d) May
be terminated by MakeMusic or Executive upon 60 days’
written notice to the other upon the commencement of a bankruptcy
case filed by or against MakeMusic under the United States Code or
other similar law.
(e)
Shall terminate at the end of the month during which Executive
reaches the normal retirement date established by MakeMusic for
management employees of MakeMusic, but in no event earlier than the
compulsory retirement age permitted under federal or similar law
for management employees.
(f) May
be terminated upon 60 days’ written notice from
MakeMusic to Executive without cause.
(g) May
be terminated by Executive on 60 days’ written notice to
MakeMusic.
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3.02
Compensation Upon Termination of Executive’s
Employment . In the event that Executive’s
employment with MakeMusic terminates the following provisions shall
govern as applicable:
(a) If
termination occurs pursuant to subparagraph 3.01(a), the agreement
of the parties shall control.
(b) If
termination occurs pursuant to subparagraphs 3.01(b), (c),
(e) or (g), all benefits and compensation shall terminate as
of the end of the month in which the termination occurs.
(c) If
the termination occurs pursuant to subparagraph 3.01(d), all
benefits and compensation shall terminate as of the termination
date.
(d) If
termination occurs pursuant to subparagraphs 3.01(f), Executive
shall receive cash payments equal to Executive’s annual base
salary in effect at the time of termination of employment. Such
payments shall be paid to Executive monthly over the course of a
one-year period. As a condition to Executive’s receipt of
such payments, Executive shall be required to execute, return and
not rescind a full and final release of any and all claims in favor
of MakeMusic. Such release agreement shall be prepared by
MakeMusic.
(e) All
payments made to Executive under this Paragraph 3.02 shall be
reduced by amounts (i) required to be withheld in accordance
with federal, state and local laws and regulations in effect at the
time of payment, or (ii) owed to MakeMusic and by Executive
for any amounts advanced, loaned or misappropriated.
3.03
Return of MakeMusic Property . In the event of
termination of Executive’s employment all corporate
documents, records, files, credit cards, computer disks and tapes,
computer access cards, codes and keys, file access codes and keys,
building and office access cards, codes and keys, materials
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