EMAGIN CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT
EMAGIN
CORPORATION
_______________________________________
| Executive Name: | Xxxx Xxxxx |
| Title(s): | Chief Executive Officer; President |
| Effective Date: | January 1, 2006 |
For
good
consideration, the Company employs the Employee on the following terms
and
conditions (the “Agreement”)
as of
the above date between EMAGIN CORPORATION, a Delaware corporation (the
“Company”),
and
the above named executive (“Executive”).
1.
EMPLOYMENT
AGREEMENT
| 1.1. |
Employment;
Duties and Responsibilities
|
The
Company hereby employs Executive as its President and Chief Executive Officer
and Executive accepts such employment on the terms contained in this Agreement.
Within limitations established by the Bylaws of the Company, Executive
shall
have each and all of the duties, responsibilities and authorities that
are
consistent with his title(s). Executive shall report to the Board of Directors.
| 1.2 |
Term
|
This
Agreement shall commence on the date hereof and shall continue hereafter
unless
terminated pursuant to this Section 3 for a period of thirty six (36) months
beginning on January 1, 2006.
| 1.3. |
Time
and Effort.
|
Executive
shall use his best efforts to carry out the duties and responsibilities
that are
consistent with his title(s) and devote the substantial portion of his
entire
business time, attention, and energy exclusively to the business and affairs
of
the Company. During Executive’s employment Executive shall not engage in any
business activities outside those of the Company to the extent that such
activities would interfere with or prejudice Executive’s obligations to the
Company. Executive may serve as a member of the Board of Directors of other
organizations that do not compete with the Company, and may participate
in other
professional, civic, governmental organizations and activities that do
not
materially affect his ability to carry out his duties.
| 1.4 |
Service
on Board of Directors.
|
For
as
long as Executive is an employee of the Company, Executive shall receive
no
additional compensation for serving as Chairman or a member of the Company’s
Board of Directors.
| 1.5. |
Location
|
Unless
otherwise voluntarily agreed to, the locations at which Executive shall
perform
services for the Company shall be Bellevue, Washington and Hopewell Junction,
New York.
2.
COMPENSATION
| 2.1. |
Base
Salary.
|
2.1.1
As
compensation for performing services for the Company, Executive shall be
entitled to retain his current salary as of the date of this Agreement,
payable
in bi-weekly installments consistent with the Company’s payroll practices. The
annual base salary will be reviewed on or before January 1 of each year
by the
Compensation Committee to determine if such base salary should be increased
due
to inflation or in recognition of Executive’s services to the Company.
| 2.1.2 |
The
Board or Compensation Committee of the Board may provide additional
bonuses for accomplishment of various objectives from time
to time, at
their discretion.
|
2.1.3 Executive
shall accrue personal time off for vacation, sick leave, or personal reasons
upon completion of each month following the date of this Agreement in accordance
with his current accrual rates. The limits for this personal time shall
be
subject to an annual review by the Board or Compensation Committee of the
Board.
| 2.2. |
Benefit
Plans.
|
During
Executive’s employment, Executive shall be entitled to participate, to the
extent of Executive’s eligibility, in the employee fringe benefits made
available by the Company to its employees. Nothing in this Agreement
shall
preclude the Company from terminating or amending any employee benefit
plan or
program as a whole from time to time.
| 2.3. |
Business
Expenses.
|
Upon
submission of itemized expense statements in the manner specified by the
Company, Executive shall be entitled to reimbursement for reasonable travel,
relocation, and other reasonable business expenses incurred by the Executive
in
the performance of his duties under this Agreement, or as agreed to by
the Board
of Directors.
| 2.4. |
Stock
Options and Grants
|
3.
TERMINATION OF EMPLOYMENT
| 3.1. |
Voluntary.
|
| 3.2. |
With
Cause
|
Notwithstanding
anything herein to the contrary, the Company may terminate Executive’s
employment hereunder for cause for any one of the following reasons: (a)
failure
to devote substantially all of Executive’s full professional time, attention,
energies, and abilities to Executive’s employment duties for the Company, which
failure is not cured within two weeks after the Company gives Executive
written
notice of the failure; (b) inducement of any customer, consultant, employee,
or
supplier of the Company to unreasonably breach any contract with the Company
or
cease its business relationship with the Company; (c) willful, deliberate,
and
persistent failure by Executive to reasonably perform the duties and obligations
of Executive’s employment which are not remedied in a 90 day period of time
after receipt of written notice from the Company; (d) an act or acts of
dishonesty undertaken by Executive resulting in substantial personal gain
by the
Executive at the expense of the Company; (e) material breach of a fiduciary
or
contractual duty to the Company; (f) conviction of a felony, or (g) commission
of an act that results in material long term harm to the goodwill or reputation
of the Company. To be deemed terminated for Cause, the Company shall have
given
Employee written notice stating the alleged Cause and shall have provided
Employee an opportunity to present evidence to the Board of Directors,
at the
Company’s offices on a date and time mutually convenient to the Board, no sooner
than one and not later than two weeks after the foregoing notice, to refute
the
claim of Cause. Executive shall cease to accrue salary, vacation, benefits
and
other compensation on the date of “with cause” termination by the Company.
Accrued benefits, if any, will be payable in accordance with applicable
benefit
plan provisions of the Company.
|
3.3
|
Without
Cause.
|
The
Company may terminate the employment of Executive at any time without notice
and
without cause (as defined in Section 3.2) In such event, Executive shall
be
entitled to (i) salary until the end of this agreement’s full term or twelve
(12) months, whichever is greater, based on Executive’s monthly rate of base
salary at the date of such termination, (ii) payment for accrued vacation
days,
including personal choice holidays and (iii) all bonuses that would otherwise
have been accrued during the term of this agreement. The Company shall
pay such
sum of salary and vacation accrual in one payment within thirty (30) business
days following the effective date of termination and shall pay merit or
revenue-based bonuses on the dates on which they would have normally occurred
throughout the full term of this agreement. Furthermore, shares of any
of the
Executive’s stock subject to any lockups will be immediately released from such
restrictions and registered by the company within 30 days of termination
without
cause. Executive will otherwise cease to accrue salary and other benefits
upon
the date of such final payment, other than the Company’s normal insurance
policies for terminated employees. Notwithstanding the foregoing, the Company
shall have no obligation to pay Executive any of such salary or such benefits
that may accrue after the Company ceases to do business, liquidates
substantially all of its assets (except in connection with a sale of
substantially all of the assets of the Company as a going concern), or
voluntarily or involuntarily becomes the subject of a proceeding under
the
Bankruptcy Code that is not dismissed within 60 days.
| 3.4. |
Termination
for Good Reason
|
If
Executive terminates his employment with the Company for Good Reason (as
hereinafter defined), such termination will be considered to be effectively
the
same as termination without cause; he shall be entitled to the severance
benefits set forth in Section 3.3 and vesting benefits set forth in Section
3.8.
For purposes of this Agreement, “Good Reason” shall mean any of the following
unless such change was initiated by or voluntarily agreed to by Executive:
(a)
any significant change in the Executive’s title, or position, or duties and
responsibilities not voluntarily made; (b) any involuntary decrease in
base
salary (other than any which may be assessed on a percentage basis to the
company as a whole); or (c) any material breach by the Company of this
Agreement.
| 3.5. |
Change
of Control
|
If
the
Executive’s employment is terminated or his position significantly changed or
salary decreased as a result of the acquisition of the Company by merger,
sale
of all or substantially all of the Company’s assets, or other reorganization
resulting in a change of 50% or more in the ownership of the Company’s stock, he
shall be entitled to the severance benefits set forth in Section 3.3 and
vesting
benefits set forth in Section 3.8. Neither this Agreement nor its incorporated
terms may be invalidated or deleted or altered as part of the terms of
any
Change of Control actions. The Company’s rights and obligations under this
Agreement will inure to the benefit and be binding upon the Company’s successors
and assignees.
| 3.6. |
Disability.
|
The
Company may terminate this Agreement without liability if Executive shall
be
permanently prevented from properly performing his essential duties with
reasonable accommodation by reason of illness or other physical or mental
incapacity for a period of more than 90 consecutive days. Upon such termination,
Executive shall be entitled to all accrued but unpaid Base Salary, accrued
bonus
(if any), and accrued vacation. In the event Executive’s employment terminates
under this Section 3.6, Executive may pursue long term disability benefits,
if
eligible, under any plan which the Company has provided for
Executive.
| 3.7. |
Death.
|
In
the
event of the death of Executive, the Company’s obligations hereunder shall
automatically cease and terminate; provided, however, that within 15 days
the
Company shall pay to Executive’s heirs or personal representatives Executive’s
Base Salary and accrued vacation accrued to the date of death. All other
amounts
due Executive, including bonuses, shall be paid to Executive’s estate in
accordance with the full term of this Agreement.
| 3.8. |
Effect
of Termination without “Cause” on Employee Stock
Options.
|
The
Company hereby irrevocably offers to amend any stock options granted to
Executive to permit the full exercise thereof following termination of
Executive’s employment without Cause (as defined in Section 3.3) or because of
death or disability. The Company hereby also irrevocably offers to amend
any
stock options granted to Executive to permit the immediate full vesting
and
exercise thereof at any time after termination of Executive’s employment without
Cause or because of death or Disability to the same extent as if Executive’s
employment had not terminated. Executive or Executive’s personal representative
may accept either or both of such offers at any time before such options
otherwise expire by giving written notice to the Company. To the extent
that any
options held by Executive are not incentive stock options within the meaning
of
Section 422 of the Internal Revenue Code, Executive hereby accepts both
such
offers.
4.
NON COMPETITION, NON SOLICITATION, BANKRUPTCY
| 4.1. |
Non
Compete
|
The
Executive hereby covenants and agrees that during the term of this Agreement
and
for a period of one year following the end of the employment term, the
Executive
will not, without the prior written consent of the Company, indirectly
or
directly, on his own behalf or in the service or on behalf of others, whether
or
not for compensation, engage in any business activity, or have any interest
in
any person, firm, corporation or business, through a subsidiary or parent
entity
or other entity (whether as a shareholder, agent, joint venturer, security
holder, trustee, partner, consultant, creditor lending credit or money
for the
purpose of establishing or operating any such business, partner or otherwise)
with any competing business of the Company in the Covered Area. For purposes
of
the Section 4.1 (i) “Competing Business” means any company engaging in the
design, development, manufacturing, and marketing of virtual imaging products
which utilize OLEDs, or organic light emitting diodes, OLED on silicon
micro
displays and related information technology solutions. For purposes of
Section
4.1 (ii) “Covered Area” means all geographical areas of the United States and
other Foreign jurisdictions where the Company has offices, manufactures
or may
contemplate offices or manufacturing of related products and/or sells its
products directly or in-directly through distributors and/or other sales
agents.
| 4.2. |
Non
Solicitation
|
The
Executive further agrees that the Executive will not divert any business
of the
Company and/or its affiliates or any customers or suppliers of the Company
and/or the Company’s and/or its affiliates’ business to any other person, entity
or competitor, or induce or attempt to induce, directly or indirectly,
any
person to leave his or her employment with the Company.
| 4.3. |
Bankruptcy
|
In
the
event that the Company voluntarily or involuntary files for bankruptcy
under the
Bankruptcy Code, the Executive shall use his best efforts in keeping the
Company
solvent and in assisting the Company emerge from bankruptcy as a reorganized
entity, unless the Company is liquidated.
| 4.4. |
Remedies
|
The
Executive acknowledges and agrees that his obligations provided herein
are
necessary and reasonable in order to protect the Company and its affiliates
and
their respective business and the Executive expressly agrees that monetary
damages would be inadequate to compensate the Company and/or its affiliates
for
any breach by the Executive of his covenants and agreements set forth herein.
Accordingly, the Executive agrees and acknowledges that any such violation
or
threatened violation of this Section 4 will cause irreparable injury to
the
Company and that in addition to any other remedies that may be available,
in
law, in equity or otherwise, the Company and its affiliates shall be entitled
to
obtain injunctive relief against the threatened breach of this Section
4 or the
continuation of any such breach by the Executive without the necessity
of
proving actual damages.
5.
ASSIGNMENT OF INVENTIONS
Executive
has executed a Confidential Information and Invention Assignment Agreement.
The
obligations under such Confidential and Invention Assignment Agreement
shall
survive the termination of this Agreement for any reason.
Following
the termination of Executive’s employment with the Company, Executive shall make
himself available to the Company in the defense of any patent owned by
the
Company in which he assisted, provided, however, that the Company shall
allow
Executive to fulfill any other obligations he may have at such time and
that the
Company shall pay the Executive compensation as an “expert,” as well as his
incurred expenses in assisting in such defense.
6.
CONFIRMATION OF DISCLOSURES REQUIRED UNDER SECURITIES LAWS
Since
January 1, 2000, Executive has not: (a) filed, or has had filed against
Executive, nor is Executive not presently contemplating a filing of, nor
is
Executive aware that anyone else is presently contemplating a filing against
Executive, of a petition under the federal bankruptcy laws or any state
insolvency laws, nor has Executive had a receiver, fiscal agent, or similar
officer appointed by a court for the business or property of Executive,
or any
partnership of which Executive was a general partner at or within two years
before the time of such filing, or of any corporation or business association
of
which Executive was an executive officer at or within two years prior to
such
filing; (b) been convicted in a criminal proceeding or been named as a
subject
of a pending criminal proceeding (excluding traffic violations and other
minor
offenses); (c) been subject to any order, judgment, or decree (not subsequently
reversed, suspended or vacated) of any court of competent jurisdiction
permanently or temporarily enjoining Executive from, or otherwise imposing
limits or conditions on Executive’s engaging in any securities, investment
advisory, banking, insurance or other type of business or acting as an
officer
or director of a public company; or (d) been found by a court of competent
jurisdiction in a civil action or by the Securities and Exchange Commission
or
the Commodity Futures Trading Commission to have violated any federal or
state
commodities, securities or unfair trade practices law, which such judgment
or
finding has not been subsequently reversed, suspended, or vacated.
7.
AMENDMENT AND WAIVER
This
Agreement shall not be changed except in a writing signed by the parties.
No
waiver shall be binding unless executed in writing by the party making
the
waiver. No waiver shall be deemed a waiver of any other provision or constitute
a continuing waiver. Any consent under this Agreement shall be in writing
and
shall be effective only to the extent specifically set forth in such writing.
The consent of the Company may only be manifested by a resolution of the
Compensation Committee of the eMagin Corporation Board of Directors or
by the
signature of an officer to whom authority to modify this Agreement has
been
delegated.
8.
ARBITRATION
The
parties shall use reasonable good faith efforts to resolve any dispute
relating
to the subject matter of this Agreement or otherwise by negotiations or
mediation. If negotiation and mediation fail, any party may submit any
dispute
concerning this Agreement to final and binding arbitration pursuant to
the
commercial rules of the American Arbitration Association. At the request
of any
party, the arbitrators, attorneys, parties to the arbitration, witnesses,
experts, court reporters, or other persons present at the arbitration shall
agree in writing to maintain the strict confidentiality of the arbitration
proceedings. Arbitration shall be conducted by a single, neutral arbitrator
appointed in accordance with the rules of the American Arbitration Association.
Judgment upon the award rendered may be entered in any court with
jurisdiction.
9.
ATTORNEY’S FEES
If
any
action at law or inequity is necessary to enforce or interpret the terms
of this
Agreement, the prevailing party shall be entitled to reasonable attorney’s fees,
costs, and necessary disbursements, in addition to any other relief to
which the
party may be entitled.
10.
ENTIRE AGREEMENT
This
Agreement constitutes the entire agreement respecting Executive’s employment
with the Company and supersedes the terms of any prior or contemporaneous
employment or other offer, oral or written, with the exception of separately
issued bonus or incentive plans which shall remain in effect during the
full
term of this Agreement.
IN
WITNESS WHEREOF, the undersigned have executed this Executive Employment
Agreement as of the date first referenced above.
|
“EXECUTIVE”
|
|
|
By /s/
Xxxx Xxxxx
Xxxx Xxxxx |
January 24, 2006
Date
|
|
“COMPANY”
|
|
|
eMagin
Corporation
|
|
|
By /s/
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx |
January 24, 2006
Date
|
| Compensation Committee | |
|
By /s/
Xxxx Xxxxxxx
Xxxx Xxxxxxx |
January 24, 2006
Date
|
| Compensation Committee |
