EXHIBIT 99.1
November 24, 2004
Xxxxxx Xxxx Xxxxxxx
00, Xxxxxx Xxxxxxxx
00000 Xxxxx
Xxxxxx
Re: Transition Agreement and Release
Dear Xxxx:
This letter confirms the terms of the transition of your employment as we
have discussed. This Transition Agreement and Release, except as specifically
noted herein, supercedes and replaces the Executive Employment Agreement dated
September 1, 2002, and the Contrat de Travail dated April, 2003. The parties
agree that the Executive Employment Agreement, in accordance with Article III,
Section 3.01 of such Agreement, terminated by mutual agreement effective June 9,
2004. By your signature at the end of this Transition Agreement and Release
("Agreement"), you agree to the following:
1. Compensation.
------------
a. Salary. Effective June 9, 2004, you will continue to be paid for a
period of four months, through October 8, 2004, at the rate of Eleven Thousand
Eight Hundred Seventy Eight and 42/100 Euros ((euro)11,878.42) per month to be
paid in U.S. dollars, and at the rate of Three Thousand Five Hundred Forty Eight
and 01/100 Euros ((euro)3,548.01) to be paid in Euros. Effective October 9,
2004, you will be paid for a period of four months, through February 8, 2005, at
the rate of Five Thousand Nine Hundred Thirty Nine and 21/100 Euros
((euro)5,939.21) per month to be paid in U.S. dollars, and at the rate of One
Thousand Seven Hundred Seventy Four and 01/100 Euros ((euro)1,774.01) to be paid
in Euros. During this second four-month period, we anticipate that you will work
at 10% of regular time. The monthly payments are reflected in the Compensation
Spreadsheet attached as Exhibit A. It is understood that in the event that you
begin full-time employment with another company before February 8, 2005, that
these payments will stop on the first day of such employment regardless of the
salary level.
b. Bonuses. You are eligible for the potential bonuses set forth in this
subpart b provided that your results and those of the company meet the
objectives set out in Exhibit B, which have been determined by mutual agreement.
You are eligible for the following bonuses for the calendar year 2004: (i) a
bonus of (euro)22,887.76 [this includes both 2004 and 2005 amounts] to be paid
in Euros, and (ii) a bonus of (euro)76,686.72 [this includes both 2004 and 2005
amounts] to be paid in U.S. dollars. These bonus amounts shall be paid no later
than March 31, 2005. The bonus payments for which you are eligible are reflected
on the Compensation Spreadsheet attached as Exhibit A. It is understood that the
eligible bonus amounts will be adjusted on a prorata earned salary basis if you
begin full-time employment with another company before February 8, 2005, as
described in 1a above.
c. Miscellaneous. Your last day of employment will be February 8, 2005.
Your regular benefits will continue through February 8, 2005. You will not
receive any salary or benefits beyond your last date of employment. The payments
made under this Transition Agreement and Release are subject to withholdings
required by law. Payments under this Section 1 include, and are not in addition
to, any notice pay, severance indemnity, holiday pay or any other amounts, if
any, owed under French law. You agree that you are not entitled to any payments
or benefits other than those reflected in this Agreement.
2. Board of Directors. Effective February 8, 2005, you will be paid a
monthly fee for Board service of $1,500 per month. Your service is at the
discretion of the Board and you may be removed as Chairman and as a member of
the Board at any time for any reason in the discretion of the Board. You will
not receive a Board service fee during the time you are receiving payments under
Section 1.
3. Stock Options. In further consideration of this Transition Agreement,
the Stock Option Agreement with you dated July 7, 2003 shall be amended as
follows:
a. Section 1 of the above-referenced Stock Option Agreement shall be
amended to provide that the total number of shares eligible for purchase by you
is 115,561 shares, which reflects a cancellation of 79,439 shares.
b. The Schedule to the above-referenced Stock Option Agreement shall be
amended to read as follows:
"The time vested options will represent 43,355 shares, of which 23,920
shares are vested as of the effective date of this Transition Agreement,
1,495 shares will vest monthly until June 9, 2005 and thereafter 747.5
shares will vest monthly until June 6, 2006. Vesting shall continue on the
terms set forth in the preceding sentence until the later of June 9, 2005
and the time at which Xx. Xxxxxxx ceases to serve as a member of the Board
of Directors of the Company, at which time vesting shall cease and Xx.
Xxxxxxx shall have three months in which to exercise his then-vested
options consistent with Section 9 of the Stock Option Agreement. These time
vested options shall expire on July 6, 2010, seven years from the date of
grant.
"The time accelerated options will represent 72,206 shares and will expire
on July 6, 2009, six years from the date of grant. Vesting shall continue
on the terms set forth below until the later of June 9, 2005 and the time
at which Xx. Xxxxxxx ceases to serve as member of the Board of the Company,
at which time vesting shall cease and Xx. Xxxxxxx shall have three months
in which to exercise his then-vested options, consistent with Section 9 of
the Stock Option Agreement. The time accelerated options will vest based on
the Company's closing share price as follows:
o If MM stock exceeds $4.00 in the year ending July 6, 2005, 18,052 shares
vest immediately.
o If MM stock exceeds $6.00 in any of the years ending July 6, 2005 or July
6, 2006, 18,052 shares vest immediately.
o If MM stock exceeds $8.00 in any of the years ending July 6, 2005, July 6,
2006, or July 6, 2007, 18,052 shares vest immediately.
o If MM stock exceeds $10.00 in any of the years ending July 6, 2005, July 6,
2006, July 6, 2007 or July 6, 2008, 18,052 shares vest immediately.
If the shares do not time accelerate according to the foregoing triggers, the
aggregate of 72,206 shares will vest on July 5, 2009. The vesting trigger price
for the time accelerated options is a 30-day average per share closing price
which must exceed the target price for three months."
4. Release of Claims. Specifically in consideration of this Transition
Agreement and the payments and benefits set forth in Sections 1 and 2 above to
which you would not otherwise be entitled, and reserving your rights under
Section 3 above, by signing this Agreement, you agree to the following:
a. You, for yourself, your heirs, representatives, agents, successors and
assigns, hereby release and forever discharge MakeMusic! Inc. ("MakeMusic!"),
and any parent, subsidiary, affiliate or related entities, and all present and
past officers, directors, shareholders, employees, insurers, the administrators
or trustees of any benefit plan, agents and representatives of MakeMusic!, and
of any parent, subsidiary, affiliate, or related entities, both individually and
in their corporate or official capacity, and the predecessors, successors and
assigns of each, from any and all manner of past, present, or future claims,
demands, actions, causes of action, administrative claims, liability, damages,
claims for punitive or liquidated damages, claims for attorney's fees, costs and
disbursements, any individual or class action claims, or demands of any kind
whatsoever, including but not limited to any claims for salary, vacation,
severance, benefits, bonus, commission, any claims arising by statute, in tort
or contract, any federal or state constitutional claims, any claims arising
under Title VII of the Civil Rights Act, 42 U.S.C. ss. 2000e et seq., the Age
Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq., the Americans with
Disabilities Act, 42 U.S.C. ss. 12101, et seq., the Employee Retirement Income
Security Act (ERISA), 29 U.S.C. ss.1001, et seq., the Family and Medical Leave
Act, 29 U.S.C. ss. 2601, et seq., the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. ss.2101, et seq., the Minnesota Human Rights Act,
Minnesota Statutes Chapter 363A, any other claims arising under Minnesota law,
any other claims arising under federal, any state or local law or regulation, or
any claims in any manner relating to your employment or your association with or
separation from MakeMusic!, arising in law or equity, whether known, suspected
or unknown, and however originating or existing, from the beginning of time to
the date of the signing of this Transition Agreement and Release.
b. You agree to and hereby do release and discharge MakeMusic!, and any
parent, subsidiary, affiliate, or related entities, and all present and past
officers, directors, employees, insurers, the administrators or trustees of any
benefit plan, agents and representatives of MakeMusic!, and of any parent,
subsidiary, affiliate, or related entities, both individually and in their
corporate or official capacity, and the predecessors, successors and assigns of
each, not only from any and all claims that you could make on your own behalf,
but also those that may or could be brought by any other person, entity or
organization on your behalf or for your benefit, and you specifically waive any
right to become, and agree not to become, a member of any class in any
proceeding or case in which a claim or claims against MakeMusic!, or any parent,
subsidiary, affiliate, or related entities, or any present or past officers,
directors, employees, insurers, the administrators or trustees of any benefit
plan, agents or representatives of MakeMusic!, or any parent, subsidiary,
affiliate, or related entities, or the predecessors, successors and assigns of
each, arise, in whole or in part, from any event which occurred from the
beginning of time to the date of this Agreement.
c. You further agree that, to the fullest extent allowed by law, you will
not, directly or indirectly, institute any civil action, administrative
proceeding or other legal proceeding of any nature against MakeMusic!, any
parent, subsidiary, affiliate, or related entities, or any present or past
officers, directors, shareholders, employees, insurers, the administrators or
trustees of any benefit plan, agents or representatives of MakeMusic!, or of any
parent, subsidiary, affiliate, or related entities, or the predecessors,
successors and assigns of each, including but not limited to any action or
proceeding involving any claims for salary, vacation, severance, benefits,
bonus, commission, any claims arising by statute, in tort or contract, any
federal or state constitutional claims, any claims arising under Title VII of
the Civil Rights Act, 42 U.S.C. ss. 2000e et seq., the Age Discrimination in
Employment Act, 29 U.S.C. ss. 621 et seq., the Americans with Disabilities Act,
42 U.S.C. ss. 12101, et seq., the Employee Retirement Income Security Act
(ERISA), 29 U.S.C. ss. 1001, et seq., the Family and Medical Leave Act, 29
U.S.C. ss. 2601, et seq., the Worker Adjustment and Retraining Notification Act,
29 U.S.C. ss.2101, et seq., the Minnesota Human Rights Act, Minnesota Statutes
Chapter 363A, any other claims arising under Minnesota law, any other claims
arising under federal, any state or local law or regulation, arising in law or
equity, whether known, suspected or unknown, and however originating or
existing, from the beginning of time to the date of the signing of this
Agreement. If, for any reason, an administrative or other legal proceeding
results in any relief to you based on any claims or demands noted in this
Agreement, you further agree that the payments noted in this Transition
Agreement and Release shall be in full satisfaction of any such claims or
demands and that you will not be entitled to any further relief of any kind.
d. You do not, by signing this Transition Agreement and Release, release or
waive (1) any vested interest you may have in any 401(k) or pension plan by
virtue of your employment, (2) any rights or claims that may arise after it is
signed, (3) the payments and benefits specifically promised to you under this
Transition Agreement and Release, or (4) the right to institute legal action for
the purpose of enforcing the provisions of this Transition Agreement and
Release.
5. Notification of Rights under the Minnesota Human Rights Act (Minnesota
Statutes Chapter 363) and the Federal Age Discrimination in Employment Act (29
U.S.C. ss. 621 et seq.). You are hereby notified of your right to rescind the
release of claims in regard to claims arising under the Minnesota Human Rights
Act, Minn. Stat. Chapter 363A, within fifteen (15) calendar days of your signing
of this Transition Agreement and Release, and to rescind the release of claims
in regard to claims arising under the Federal Age Discrimination in Employment
Act, 29 U.S.C. ss. 621, et seq., within seven (7) calendar days of your signing
of this Agreement. The rescission periods shall run concurrently. The rescission
must be in writing and delivered or mailed to: Xxxxxxx X. Xxxxx, MakeMusic!
Inc., 0000 Xxxx Xxxxx, Xxxx Xxxxxxx, XX 00000. If delivered by mail, the
rescission must be post-marked within the required period, properly addressed to
the individual noted above at the above address, and sent by certified mail,
return receipt requested. It is further understood that, if you rescind the
release of claims in accordance with this Section, you will not be entitled to
the payments and benefits as set forth in Sections 1 and 2 above, and you must
immediately reimburse MakeMusic! for any such payments if they have already been
made to you or on your behalf. This Agreement will be effective upon the
expiration of the 15-day period noted in this Section without rescission.
6. Nonadmission. It is expressly understood and agreed that this Agreement
does not constitute, nor shall it be construed, as an adjudication or finding on
the merits of any claim or potential claim by you or as an admission of any
wrongdoing by you, nor does this Agreement constitute, nor shall it in any
manner be construed, as an admission of any wrongful conduct or liability on the
part of MakeMusic!, or any parent, subsidiary, affiliate, or related entity, or
any present or past officers, directors, employees, insurers, the administrators
or trustees of any benefit plan, agents or representatives of MakeMusic!, or of
any parent, subsidiary, affiliate, or related entity, or the predecessors,
successors and assigns of each.
7. Confidentiality of Agreement. You understand and warrant that the fact
of, the terms of, and any negotiations relating to this Transition Agreement and
Release shall remain confidential, and that you will not disclose any such
information to any person or entity, other than your counsel, your spouse, tax
advisor, or the taxing authorities unless specifically compelled by subpoena,
summons or court order, or as otherwise required by law, without the express
written consent of MakeMusic!. You specifically acknowledge and agree that this
Section 7 prevents you, among other matters, from sharing any information
relating to this Transition Agreement and Release with any current or past
employee of MakeMusic! or any related entity. You further understand and agree
that any individual to whom information is disclosed in accordance with this
Section 7 shall be informed and agree in writing to be bound by these
confidentiality obligations. You specifically warrant, by your signature to this
Transition Agreement and Release, that you have not made any disclosures beyond
those authorized by this Section 7.
8. Executive Agreement. MakeMusic! and you agree that Articles IV, V and VI
and the corresponding provisions of Articles VII, VIII, IX and X of the
Executive Agreement dated September 1, 2002, remain in full force and effect
according to their terms and that such provisions survive the termination of
your employment.
9. Return of Property. You warrant by your signature below that you have
returned to MakeMusic! all property, documents, materials and other items,
whether on computer disc or tape or otherwise, including all copies thereof,
belonging to MakeMusic!, or any parent, subsidiary, affiliate or related entity,
or in any way related to the business of MakeMusic!, or of any parent,
subsidiary, affiliate or related entity, or the services you performed for
MakeMusic!, or any parent, subsidiary or related entity, including but not
limited to any documents, materials or items containing trade secret,
proprietary, or confidential information. You further acknowledge that you are
not authorized to retain and have not retained any copies or summaries of any
kind of property, documents, materials or items which you return in accordance
with this Section 9. Nothing herein shall preclude you from retaining any such
materials as you may consider appropriate for the performance of any services or
duties to be carried out by you for MakeMusic! after the date hereof.
10. Nondisparagement. You agree that you will not make any disparaging or
negative remarks, whether oral or in writing, regarding MakeMusic!, its
officers, directors or employees. MakeMusic! agrees that it will not make any
disparaging or negative remarks, whether oral or in writing, regarding you.
11. Successors and Assigns. This Agreement shall inure to the benefit and
burden of the successors and assigns of MakeMusic!.
12. Entire Agreement. This Agreement states the entire agreement of the
parties with respect to the subject matter hereof, and supercedes and merges all
prior negotiations, agreements, and understandings, if any, save as otherwise
expressly set forth herein. No modification, release, discharge, or waiver, of
any provision of this Agreement shall be of any force or effect unless made in
writing and signed by the parties hereto, and specifically identified as a
modification, release, or discharge, of this Agreement. If any term, clause, or
provision of this Agreement shall for any reason be adjudged invalid,
unenforceable, or void, the same shall not impair or invalidate any of the other
provisions of the Agreement, all of which shall be performed in accordance with
their respective terms. You acknowledge that you have not relied on any
representations or statements, whether oral or written, other than the express
statements of this Agreement, in signing this Agreement.
13. Period for Consideration. By your signature to this Agreement, you
acknowledge that MakeMusic! has informed you that you have 21 days from the date
of receipt of this Agreement to consider whether its terms are acceptable to
you, and that you have had the benefit of the 21-day period, or have chosen, of
your own volition, to waive the 21-day period.
14. Acknowledgment of Reading and Understanding/Consultation with Counsel.
You acknowledge and agree, by your signature to this Agreement, that you have
carefully read and understood all provisions of this Agreement, and that you
have entered into this Agreement knowingly and voluntarily. You further
acknowledge that MakeMusic! has advised you to consult with counsel prior to
signing this Agreement, and that you have done so, or chosen not to do so of
your own accord.
Sincerely,
/s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
ACCEPTANCE AND SIGNATURE
------------------------
By signing below, I acknowledge and agree that I have read this Transition
Agreement and Release carefully, and that I understand, accept and agree to be
bound by all of its terms. In signing this Agreement, I have not relied on any
statements or explanations made by MakeMusic! except as specifically set forth
in this Agreement. I have had adequate time to consider whether to sign this
Agreement, and am voluntarily and knowingly releasing any claims as set forth in
Section 4 of this Agreement. I intend this Agreement to be legally binding.
Date: November 22, 2004. /s/ Xxxxxx Xxxx Xxxxxxx
-------------------------
Xxxxxx Xxxx Xxxxxxx
Exhibit A
Bonus - EUR
EUR need Bonus - need to be
Paid in to be paid France EUR paid in US $
France EUR in US $ 57.30% 57.30%
--------------------------------------------------------------------------------
2004
January 3,548.01 (EUR) 11,878.42 (EUR)
February 3,548.01 (EUR) 11,878.42 (EUR)
March 3,548.01 (EUR) 11,878.42 (EUR)
April 3,548.01 (EUR) 11,878.42 (EUR)
May 3,548.01 (EUR) 11,878.42 (EUR)
June 3,548.01 (EUR) 11,878.42 (EUR)
July 3,548.01 (EUR) 11,878.42 (EUR)
August 3,548.01 (EUR) 11,878.42 (EUR)
September 3,548.01 (EUR) 11,878.42 (EUR)
October 1-8 915.62 (EUR) 3,065.40 (EUR)
October 9-15 429.19 (EUR) 1,436.91 (EUR)
October 16-31 887.01 (EUR) 2,969.60 (EUR)
November 1,774.01 (EUR) 5,939.21 (EUR)
December 1,774.01 (EUR) 5,939.21 (EUR)
----------------- ------------------------------------------------
37,711.91 (EUR) 126,256.11 (EUR) 21,608.93 (EUR) 72,344.75 (EUR)
--------------------------------------------------------------------------------
2005
January 1,774.01 (EUR) 5,939.21 (EUR)
February 1-8 457.81 (EUR) 1,638.40 (EUR)
----------------- ------------------------------------------------
2,231.81 (EUR) 7,577.61 (EUR) 1,278.83 (EUR) 4,341.97 (EUR)
--------------------------------------------------------------------------------
Exhibit B
Xxxx Xxxxxxx'x Bonus Objectives
--------------------------------------------------------------------------------
Bonus Potential
--------------------------------------------------------------------------------
Executive Management Company Performance 75%
--------------------------------------------------------------------------------
Japan's Agreement 25%
--------------------------------------------------
French Legal Clean up
--------------------------------------------------
Assist in Transition for new CEO
--------------------------------------------------
European Investor Relations
--------------------------------------------------------------------------------
Total Bonus Potential 100%
--------------------------------------------------------------------------------
