Exhibit 10.1
EMPLOYMENT AGREEMENT
with
Matthew Cohen
AGREEMENT entered into as of the 1st day of June 2001 between Matthew
Cohen (the "Employee") and TTR Technologies, Inc., a Delaware corporation ("TTR"
or the "Company").
W I T N E S S E T H
WHEREAS, the Company desires to engage the Employee for the Company upon
the terms and conditions contained herein; and
NOW THEREFORE, in consideration of the promises and mutual agreements
hereinafter contained, the parties hereto agree as follows:
ARTICLE I.
Employment
Position; Responsibilities
1.1 With effect from the effective date (as defined in Section 2), the
Company employs Employee and Employee accepts employment with the Company as its
Chief Financial Officer and Executive Vice President for Business Development,
upon the terms and conditions set forth herein. The Employee shall perform
faithfully and diligently the duties customarily performed by persons in the
position for which Employee is engaged. Employee shall devote Employee's full
business time and efforts to rendition of such services and to the performance
of such duties as are set forth herein.
1.2 The Employee's authority shall be subject to the authority of the
Chief Executive Officer to whom the Employee shall report.
1.3 The Employee shall perform his services out of the Company's offices
in New York City, which offices the Company is in the process of opening.
Employee acknowledges and agrees that the nature of the Employee's duties
hereunder may require substantial domestic and possible international travel.
1.4 The Employee shall duly and faithfully perform all of the duties
assigned to him to the best of his abilities, and Employee's services to the
Company shall be full-time and exclusive.
ARTICLE II.
Term; Termination
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2.1 Employee's employment under this Agreement shall commence on June 1,
2001 (the "Effective Date") and shall end on the earlier of: (i) the death or
disability (as defined herein) of the Employee, (ii) termination of Employee's
employment with cause (as defined herein); (iii) termination of Employee's
employment without cause by the Company or the Employee upon two (2) months
prior written notice; and (iv) second anniversary from the Effective Date. After
the expiration of such initial term (other than for reasons set forth in clauses
(i), (ii) and (iii), this Agreement shall automatically renew (unless either
party gives notice of its intention to terminate this Agreement at the end of
such term at least 60 days prior to the end of such term) for an additional one
(1) year term without the need for any action by the parties.
Notwithstanding the foregoing, in the event that Company or Employee shall
have terminated this Agreement without cause, upon the request of the Company
the Employee shall vacate his position and the Company's premises (if
applicable) on a date specified by the Company which is earlier than the end of
the notice period specified in (iii) above upon payment to Employee, in one lump
sum on the effective date of termination, the amount of Gross Salary payable
under Section 3.1 from the effective date of termination until the end of such
notice period.
2.2 For the purpose of this paragraph 2, "disability" shall mean any
physical or mental illness or injury as a result of which Employee remains
absent from work for a period of two (2) successive months, or an aggregate of
two (2) months in any twelve (12) month period. Disability shall occur at the
end of any such period.
2.3 The Company shall have the right to terminate for "Cause" upon notice
to the Employee only in the event of (a) a failure by the Employee substantially
to perform his duties hereunder, or (b) a failure by the Employee to
substantially comply with the lawful and proper instructions of the Chief
Executive Officer or the Company's Board of Directors (hereinafter, the
"Board"), or (c) Employee's illegal or unethical acts or conduct which causes
material harm or loss to the Company or otherwise brings notoriety to the
Company or has a material adverse effect on the name or public image of the
Company, provided, however that with respect to clauses (a) and (b) the
foregoing shall not constitute "Cause" if Employee, after being notified in
writing by the Company of the particular acts or circumstances of such material
breach, cures such failure within 30 days after receipt of such notice (if such
failure is reasonably susceptible to cure).
2.4 Commencing at the end of the sixth (6th) month following the Effective
Date, upon termination of Employee by the Company for any reason whatsoever
other than as set out in Section 2.3 above, the Employee shall be paid a one
time payment (severance) in an amount equal to six months' gross salary then
payable hereunder, which payment shall be made, at the sole discretion of the
Company, in one-lump sum payment at the time on which the termination shall
become effective or in periodic installments over a period of time not exceeding
6 months following the effective date of termination (but not less than once a
month) until such amount is paid in full.
2.5 During the period following notice of termination until the effective
date of termination by either party for whatever reason, the Employee shall
cooperate
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with the Company and use his best efforts to assist the integration into the
Company the person or persons who will assume the Employee's responsibilities.
ARTICLE III.
Remuneration
3.1 Salary. During the term hereof, and subject to the satisfactory
performance of the services required to be performed hereunder by Employee, the
Company shall pay to the Employee for all services rendered hereunder as salary
payable in accordance with the Company's normal payroll practices, the amount of
$180,000 per annum (the "Gross Salary"), less required deductions for state and
federal withholding tax, social security and other employee taxes.
3.2 Review and Adjustment. Employee shall be entitled to a performance and
compensation review in December 2001. At such review Employee will be notified
whether he will be entitled to a bonus for calendar year 2001 (the "2001
Bonus"). The parties acknowledge and agree that the Company shall decide in its
sole discretion whether a 2001 Bonus shall be paid to the Employee, and that in
all cases such 2001 Bonus, if payable, will not exceed in the aggregate 6.7% of
the Gross Salary payable under Section 3.1 above. In the event that the Company
elects to pay the 2001 Bonus, such bonus shall be paid prior to December 31,
2001, pro-rated to the period from the Effective Date through December 31, 2001.
At the time of the review in 2001, Employee will also be notified if the
Gross Salary payable under Section 3.1 is to be adjusted In the event the
Company then determines that such adjustment is due, the Gross Salary, as
adjusted, shall go into effect as of January 1, 2002.
3.3 If upon a "Change in Control" occurring on or after the sixth (6th)
month after the Effective Date Employee is not retained in a substantially
similar position of the Company or the surviving entity, as applicable, under
terms and conditions substantially similar to those herein (including but not
limited to an office in New York City or within 30 miles of New York City if
travel allowance is provided), then Employee shall be eligible to receive a
one-time bonus equal to 6 months' salary. All of Employee's unvested stock
options shall vest immediately upon a "Change in Control." The term "Change in
Control" shall mean and refer to the following: (i) a person (other than a
person who is an officer or a Director of the Company on the effective date
hereof), including a "group" as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, becomes, or obtains the right to become, the beneficial
owner of securities of the Company having 30% or more of the combined voting
power of the then outstanding securities of the Company that may be cast for the
election of directors of the Company; (ii) at any time, a majority of the
Board-nominated slate of candidates for the Board of the Company is not elected;
(iii) the Company consummates a merger in which it is not the surviving entity;
(iii) substantially all the Company's assets are sold; or (iv) the Company's
stockholders approve the dissolution or liquidation of the Company.
ARTICLE IV.
Stock Options
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As additional consideration, upon (and subject to) the ratification by the
Compensation Committee of the Company's Board of Directors, the Company shall
cause to be issued to the Employee, options (hereinafter, the "Option") to
purchase up to 100,000 shares of the Company's Common Stock, par value $0.001
per share (the "Common Stock"), at a per share purchase price equal to the
Market Price (as defined below) on the date of the grant of the Option and shall
be for a term of ten years. The Options shall vest in equal installments over
three (3) years, with the first installment for 33,336 shares of Common Stock
vesting on the first anniversary of the Effective Date, and the Option for 8,333
shares of Common Stock vesting on each subsequent quarterly anniversary of the
Effective Date. The terms of such options shall be reflected in a separate
option agreement to be entered into by the parties. As used herein, the term
"Market Price" shall mean the average sale price of the Company's Common Stock
on the business day preceding the date of grant, as quoted on the Nasdaq
National Market.
ARTICLE V.
Benefits
5.1 Vacation. Employee shall be entitled to an aggregate of 15 business
days of paid vacation per year, during the term hereof, prorated for any portion
of a year to date of termination, as well as all United States federal holidays
and Company recognized Jewish holidays. The timing and duration of any vacation
shall be as agreed upon by the parties.
5.2 No Accumulation. The Employee shall not be entitled to accumulate
unused vacation or sick leave or other fringe benefits from year to year without
the written consent of the Company. Further, Employee shall not be entitled to
receive payments in lieu of any compensation or payment for or in lieu of said
fringe benefits prorated to the date of termination of this Agreement.
5.3 Health Insurance. The Company intends to establish a Company-wide
health insurance plan under which its employees may participate. Pending the
establishment of a plan that affords coverage to the Employee in New York, the
Employee shall be entitled to be reimbursed monthly, for medical insurance
payments made by the Employee to a bona fide health and dental insurance
provider, in accordance with the Company's policy as it might change from time
to time, up to a maximum monthly amount of [$1,000] payable by the Company. The
Company may in its sole discretion and at any time during the course of this
agreement and in compliance with applicable law, substitute a Company sponsored
health and dental insurance program including without limitation, medical
insurance plan for the medical reimbursement payments specified herein. The
employee's participation in such plans shall be on the same terms and conditions
as other United States-based employees' of the Company.
5.4 Mobile Phone. The Company shall provide for the Employee's use of
mobile phone and shall pay all reasonable amounts in connection with Employee's
use thereof.
ARTICLE VI.
Development Rights
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The Employee agrees and declares that all proprietary information
including but not limited to trade secrets, know-how, patents and other rights
in connection therewith developed by or with the contribution of Employee's
efforts during his employment with the Company shall be the sole property of the
Company. Upon the Company's request (whenever made), Employee shall execute and
assign to the Company all the rights in the proprietary information.
ARTICLE VII.
Employee Representations & Undertakings
The Employee represents and warrants to the Company that the execution and
delivery of this Agreement and the fulfilment of the terms hereof (i) will not
constitute a breach of any agreement or other instrument to which Employee is
party, (ii) does not require the consent of any person, and (iii) shall not
utilize during the term of his employment any proprietary information of any
third party, including prior employers of the Employee.
ARTICLE VIII.
Confidentiality
8.1 The term "Information" as used in this section means any and all
confidential and proprietary information including but not limited to any and
all specifications, formulae, prototypes, software design plans, computer
programs, and any and all records, data, methods, techniques, processes and
projections, plans, marketing information, materials, financial statements,
memoranda, analyses, notes, and other data and information (in whatever form),
as well as improvements and know-how related thereto, relating to the Company or
its products. Information shall not include information that (a) was already
known to or independently developed by the Employee prior to its disclosure as
demonstrated by reasonable and tangible evidence satisfactory to the Company;
(b) shall have appeared in any printed publication or patent or shall have
become part of the public knowledge except as a result of breach of this
Agreement by the Employee or similar agreements by other Company employees (c)
shall have been received by the Employee from another person or entity having no
obligation of confidentiality to the Company or (d) is approved in writing by
the Company for release by the Employee.
8.2 The Employee agrees to hold in trust and confidence all Information
disclosed to Employee and further agrees not to exploit or disclose the
Information to any other person or entity or use the Information directly or
indirectly for any purpose other than for Employee's work with the Company.
8.3 The Employee agrees to disclose the Information only to persons
necessary in connection with Employee's work with the Company and who have
undertaken the same confidentiality obligations set forth herein in favor of the
Company. The Employee agrees to assume full responsibility for the
confidentiality of the Information disclosed to Employee and to prevent its
unauthorized disclosure, and shall take appropriate measures to ensure that such
persons acting on his behalf are bound by a like covenant of secrecy.
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8.4 The Employee acknowledges and agrees that the Information furnished
hereunder is and shall remain proprietary to the Company. Unless otherwise
required by statute or government rule or regulation, all copies of the
Information, shall be returned to the Company immediately upon request without
retaining copies thereof.
ARTICLE IX.
Non-Compete
9.1 Employee will not, directly or indirectly, for his own account or as
an employee, officer, director, consultant, joint venturer, shareholder,
investor, or otherwise (except of as an investor in a corporation whose stock is
publicly traded and in which the Employee holds less than 5% of the outstanding
shares) interest him/herself or engage, directly or indirectly, in the design,
development, production, sale or distribution of any product or component that
directly or indirectly competes with a product or component (i) being designed,
produced, sold or distributed by the Company or any of its affiliates (ii) or to
which the Company or any of its affiliates shall then have proprietary rights;
provided such affiliates operate in a field directly related to the business of
the Company or involve distribution or promoting of the Company's products or
technology.
9.2 Employee will not hire or otherwise contract the services of, whether
directly or indirectly (i) an employee of the Company (ii) a former employee of
the Company whose employment with the Company ended less than six months prior
to the date of such hiring, or (iii) any corporation or entity in which such
employee or former employee is an officer, director or shareholder holding 25%
of the equity or is employed providing service to that corporation or entity.
9.3 Employee's undertakings herein under section 9 shall be binding upon
Employee's successors, heirs or assigns, and shall continue until the later of
(i) the expiration of one year from the date of execution of this Agreement or
(ii) the expiration of one year from the date the Employee last represented
him/herself as an employee, agent or representative of the Company or any of its
affiliates, subsidiaries or successors.
9.4 Employee acknowledges that the restricted period of time specified
under this section 9 are reasonable, in view of the nature of the business in
which the Company is engaged and Employee's knowledge of the Company's business
and products. If such a period of time or geographical location should be
determined to be unreasonable in any judicial proceeding, then the period of
time and area of restriction shall be reduced so that this Agreement may be
enforced in such an area and during such a period of time as shall be determined
to be reasonable by such judicial proceeding.
ARTICLE X.
Miscellaneous
10.1 Benefit & Assignment. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns. The rights and
obligations of the Employee under this Agreement may not be assigned by the
Employee.
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10.2 Entire Agreement. This Agreement constitutes the entire understanding
and agreement between the parties, and supersedes any and all prior discussions
and agreements and correspondence, and may not be amended or modified in any
respect except by a subsequent writing executed by both parties.
10.3 Notices. All notices or other communications hereunder shall be in
writing and shall be sent to either party by hand or by Registered or Certified
mail, postage prepaid, return receipt requested, or sent by telegram or
facsimile to the address set forth in the Preamble to this Agreement or to such
other address as the recipient may designate by notice in accordance with the
provisions of this section.
10.4 Severability. Any term or provision of this Agreement which is found
by a court, tribunal or arbitration panel to be invalid or unenforceable shall
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the other terms
or provisions of this Agreement. In the event that any term or provision of this
Agreement is found to be unenforceable or ineffective, then the reviewing court,
tribunal or arbitration panel may modify such term or provision to the extent
necessary to render it enforceable and the parties agree to be bound by and
perform this Agreement as modified.
10.5 Applicable Law. This Agreement shall be interpreted, governed,
construed and enforced according to the internal laws of the State of Delaware,
without giving effect to its conflict of laws provisions. Each of the parties
consents to the jurisdiction of the appropriate federal court sitting in the
Southern District of New York or the state courts of the State of New York
sitting in Manhattan County, in connection with any dispute arising under this
Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
signed as of the date stated above.
TTR Technologies Inc.
By: /s/ Marc D. Tokayer /s/ Matthew L. Cohen
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Title: Chief Executive Officer Matthew L. Cohen