EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.1
| Executive Name: | Xxxxxx X. Xxxxxxx, Xx | ||
| Title(s): | Chief Executive Officer | ||
| Effective Date: | June 1st, 2008 |
For good
consideration, the Company employs Xxxxxx X. Xxxxxxx, Xx. 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. The Company shall retain full
direction and control of the manner, means and methods by which Executive
performs the services for which he is employed hereunder and of the place or
places at which such services shall be rendered. Executive shall report to the
Board of Directors of the Company.
1.2. Term. This Agreement
shall commence on the Effective Date, June 1' , 2008 and shall continue
thereafter, unless terminated pursuant to this Section 3, for a period of thirty
six (36) months from the date thereof.
1.3. Time and Effort.
Executive shall use his best efforts to carry out the duties and
responsibilities that are consistent with his title 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 to the Board of Directors. The executive will provide information
and services to the Board of Directors and its Committees as needed to support
company business. During the Term of employment, the Company shall use its
reasonable, good faith efforts to cause Executive to be elected and re-elected
as a member of the Board of Directors. The termination of Executive's employment
with the Company for any reason, and regardless of whether such termination is
initiated by Executive or by Company, shall be considered a contemporaneous
resignation by the Executive from the position of Company's President and, Chief
Executive Officer and as a member of the Board of Directors of the Company and
all Company affiliated entities and shall be deemed a termination from
employment with all such Company affiliated entities.
2. COMPENSATION
2.1. Base Salary. As
compensation for performing services for the Company, Executive shall be
entitled to an annual salary of $300,000.00, payable in bi-weekly installments
consistent with the Company's payroll practices. The salary will increase to
$310,000, per annum, after six months and to $320,000, per annum at the end of
the first year. 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.
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2.2.
Bonus. The Board of
Directors or Compensation Committee of the Board will work on a bonus plan for
the top management of the company. The plan will be completed by July 2008. It
will include goals that have a range of probabilities of
achievement.
2.3. Time Off. Executive shall
accrue personal time off for sick leave, personal reasons, and holidays
according to applicable company policy, except that Executive shall accrue
personal time off for vacation in accordance with the Executive's accrual rate
of 30 days per each calendar year, with a maximum of 45 days of unused vacation
rolled over to the subsequent year in addition to each calendar's year accrual.
The limits for accrual and rollover of personal time, other than vacation policy
specified herein, shall be pursuant
to Company policy, as may be modified company-wide from time to
time.
2.4. 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.
2.5. 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.
2.6.
Stock Options and Grants. Executive and the Company shall enter into an
agreement whereby, among other things, Executive shall be entitled to receive
500,000 qualified stock options (the "Options"), which shall entitle Executive
to purchase 500,000 shares of common stock of the Company priced at the closing
price of the stock on the date of grant. The Options shall vest as follows: 1/3
shall vest on the date of this Agreement, 1/3 shall vest on 1st annual
anniversary of this Agreement, and 1/3 shall vest on the 2'" annual anniversary
of this Agreement. Executive shall be eligible to participate in the Company's
Stock Option and Stock Purchase Plans, as determined in the sole discretion of
the Board of Directors. The Board or Compensation Committee of the Board may
provide additional awards of stock options or stock grants from time to time or
on an incentive plan as deemed appropriate.
3.
TERMINATION OF EMPLOYMENT
3.1. Voluntary. If Executive
voluntarily terminates Executive's employment with the Company, other than for
Good Reason as defined in Section 3.4 herein, Executive shall cease to accrue
salary, personal time off, benefits and other compensation on the date of
voluntary termination. Accrued benefits, if any, will be payable in accordance
with applicable benefit plan provisions.
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; (1)
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, personal time off, 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.
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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, at the
Company's sole discretion, be entitled to either (i) monthly salary payments for
twelve (12) months, based on Executive's monthly rate of base salary at the date
of such termination, or (ii) a lump-sum payment of Executives salary for such 12
month period, based on Executive's monthly rate of base salary at the date of
such termination. Executive shall also be entitled to receive (1) payment for
accrued and unpaid vacation pay and (ii) all bonuses that have accrued during
the term of the Agreement, but not been paid. Any non-vested Options pursuant to
Section 2.6 of this Agreement shall vest immediately. 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.
The
executive will be able to retain all electronic equipment, media, and supplies
provided by the company for use primarily by the employee off site, on loan for
up to one year from the termination date, after which the executive will return
the equipment. Copies of data files relevant to the company will be downloaded
on additional over 100GB capacity bulk storage media provided by the company.
All company proprietary files will be deleted from such equipment.
3.4. 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.
3.5. 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
3.6. 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
(other than a change of 50% or more in the ownership of the Company's stock
resulting from the issuance of equity securities by the Company the primary
purpose of which is to raise capital and which results in the pro rata dilution
of the equity interests of all holders of common stock immediately prior to such
issuance), Executive 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.
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3.7.
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 60 consecutive days. Upon such termination, Executive shall
be entitled to all accrued but unpaid Base Salary, accrued bonus (if any), and
accrued but unused paid time off. 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.
3.8. 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 but unused vacation pay 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.
4.
Non Competition, Non Solicitation, Bankruptcy
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.
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5.
General Provisions
S.I. Modification: No Waiver.
No modification, amendment or discharge of this Agreement shall be valid
unless the same is in writing and signed by all parties hereto. Failure of any
party at any time to enforce any provisions of this Agreement or any tights or
to exercise any elections hall in no way be considered to be a waiver of such
provisions, rights or elections and shall in no way affect the validity of this
Agreement. The exercise by any party of any of its rights or any of this
elections under this Agreement shall not preclude or prejudice such party from
exercising the same or any other right it may have under this Agreement
irrespective of any previous action taken.
5.2. Notices. All notices and
other communications required or permitted hereunder or necessary or convenient
in connection herewith shall be in writing and shall be deemed to have been
given when hand delivered or mailed by registered or certified mail as follows
(provided that notice of change of address shall be deemed given only when
received):
If
to the Company, to:
eMagin
Corporation
10500
X.X. 0xx
Xxxxxx, Xxxxx 0000
Xxxxxxxx,
XX 00000
If
to Executive, to:
Xxxxxx X.
Xxxxxxx, Xx.
000 Xxxxx
Xxxxx
Xxxxxxxx, XX 00000
Or to
such other names or addresses as the Company or Executive, as the case may be,
shall designate by notice to each other person entitled to receive notices in
the manner specified in this Section.
5.3. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
5.4. Further Assurances. Each
party to this Agreement shall execute all instruments and documents and take all
actions as may be reasonably required to effectuate this Agreement.
5.5. Severability. Should any
one or more of the provisions of this Agreement or of any agreement entered into
pursuant to this Agreement be determined to be illegal or unenforceable, then
such illegal or unenforceable provision shall be modified by the proper court or
arbitrator to the extent necessary and possible to make such provision
enforceable, and such modified provision and all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
shall be given effect separately from the provisions or portion thereof
determined to be illegal or unenforceable and shall not be affected
thereby.
5.6. Successors and Assigns.
Executive may not assign this Agreement without the prior written consent
of the Company. The Company may assign its rights without the written consent of
the executive, so long as the Company or its assignee complies with the other
material terms of this Agreement. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company, and the Executive's rights
under this Agreement shall inure to the benefit of and be binding upon his heirs
and executors. The Company's subsidiaries and controlled affiliates shall be
express third party beneficiaries of this Agreement.
5.7. Entire Agreement. This
Agreement supersedes all prior agreements and understandings between
the
parties, oral or written. No modification, termination or attempted waiver shall
be valid unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.
5.8. Counterparts; Facsimile.
This Agreement may be executed in one or more counterparts, each of which shall
for all purposes be deemed to be an original, and all of which taken together
shall constitute one and the same instrument. This Agreement may be executed by
facsimile with original signatures to follow.
IN WITNESS WHEREOF, the
undersigned, intending to be legally bound, have executed this Agreement as of
the date first written above.
[signature
page follows]
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| eMagin Corporation | |||
|
|
By:
|
/s/ Xxxxxx Xxxxxxx | |
| Xxxxxx Xxxxxxx | |||
| Chairman of the Board on behalf of the Company | |||
| Date: May 13, 2008 | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxx, Xx. | |
| Xxxxxx X. Xxxxxxx, Xx. | |||
| Date: May 13, 2008 | |||
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