Exhibit 10.3
EMAGIN CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
Executive Name: Xxxx X. Xxxxx
Address: 0 Xxxxxxx Xxxx Xxxxx
XxXxxxxxxxxxx, XX 00000
Title: Chief Executive Officer/President
Starting Salary: See Section 2.1 below
Starting Date: March 16, 2000
This Executive Employment Agreement (the "Agreement") is made at Hope Junction,
New York as of the above date between EMAGIN CORPORATION, a Nevada corporation
(the "Company"), and the above named executive ("Executive").
1. EMPLOYMENT
1.1. Time and Effort.
The Company hereby employs Executive and Executive accepts such employment on
the terms contained in this Agreement. Executive shall serve as President until
a candidate suitable to both the Board of Directors and Executive can be
identified to run the day to day operations of the Company and at such time as
the Board of Directors and Executive deem it appropriate. Executive shall have
those responsibilities, duties, and authorities that are consistent with his
title(s). Subject to the foregoing, Executive shall perform such duties as the
Company may direct. Executive shall report to the Board of Directors. Executive
shall devote Executive's best efforts and entire time during normal business
hours to the performance of Executive's duties under this Agreement. 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.
1.2. 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 a member of the Company's Board of
Directors.
2. COMPENSATION
2.1. Base Salary.
As compensation for performing services for the Company, Executive shall be
entitled to retain his current salary as of the date of this Agreement.
Executive will additionally receive annual salary increases based on no less
than the average percent annual rates of salary increase given to Company
employees who received salary increases during the preceding twelve (12) months.
The first date of increase will be the choice of the Executive, but will remain
that date in future years after selection. The formula for Executive's
percentage salary increase shall be:
(Sum of Annual Base Percentage Rate of
Salary Increases for Staff Receiving Raises)
divided by
(Number of Staff Receiving Raises)
2.2. Time Off.
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 applicable Company policies.
2.3. Fringe Benefits.
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. Executive consents to the Company
obtaining "key man" insurance on Executive for the Company's benefit and agrees
to take any medical examinations required to obtain such insurance.
2.4. Business Expenses.
The Company shall pay or reimburse Executive for reasonable expenses incurred in
connection with Executive's employment in accordance with applicable Company
policies.
2.5. Stock Options.
Executive shall be eligible to participate in the Company's 2000 Stock Option
Plan, as determined in the sole discretion of the Board of Directors or, if
applicable, a stock option committee established thereby.
2.6. Bonus.
A performance bonus structure for Executive will be established on two criteria:
(1) predetermined operating milestones, and (2) public market valuations. The
exact terms and measurement criteria are subject to approval by the Company's
Board of Directors.
3. TERM AND TERMINATION
3.1. Term
This Agreement shall commence on the date hereof and shall continue hereafter
unless terminated pursuant to this Section 3 for a period of twenty-four (24)
months.
3.2. Voluntary Termination.
If Executive voluntarily terminates Executive's employment with the Company,
Executive shall cease to accrue salary, vacation, benefits and other
compensation on the date of voluntary termination. Accrued benefits, if any,
will be payable in accordance with applicable benefit plan provisions.
3.3. Termination Without Cause.
The Company may terminate the employment of Executive at any time without notice
and without cause. In such event, Executive shall be entitled to twelve (12)
months salary, based on
-2-
Executive's monthly rate of base salary at the date of such termination.
Executive will otherwise cease to accrue salary and other benefits upon the date
of termination. Accrued benefits, if any, will be payable in accordance with
applicable benefit plan provisions. 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. Disability.
Executive's employment shall terminate if Executive has been unable to perform
substantially all duties assigned to Executive because of Executive's
disability, illness, or other incapacity (other than a disability or incapacity
that may exist on the date of this Agreement) and such inability has continued
for 90 days or such longer period as the Company in its sole discretion may
determine ("Disability"). In such event, Executive will cease to accrue salary,
benefits or other compensation on the 90th day of disability, illness, or other
incapacity (or such later day as the Company has determined in its sole
discretion). Executive shall be paid all earned salary, vacation, and other
compensation on the 90th day (or such later day as the Company has determined in
its sole discretion). Accrued benefits, if any, will be payable in accordance
with applicable benefit plan provisions. In the event Executive's employment
terminates under this Section 3.4, Executive may pursue long term disability
benefits, if eligible, under any plan which the Company has provided for
Executive.
3.5. Death.
Executive's employment shall terminate at death and Executive's estate shall not
thereafter accrue salary or any other benefits or rights. All amounts due
Executive shall be paid to Executive's estate in accordance with applicable
Company policies and benefit plan provisions.
3.6. 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 3.7) or because of
death or Disability. The Company hereby also irrevocably offers to amend any
stock options granted to Executive to permit the full 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.
3.7. Cause.
"Cause" means
(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;
-3-
(b) breach of the terms or conditions of Executive's confidentiality
agreement with the Company, which breach is not cured within two weeks
after the Company gives Executive written notice of the breach;
(c) unexcused absences in excess of five (5) days in the aggregate within
any one-year period (with absences for bona fide illness considered
excused);
(d) inducement of any customer, consultant, employee, or supplier of the
Company to breach any contract with the Company or cease its business
relationship with the Company or any competition with the Company;
(e) willfully exceeding the scope of Executive's authority as a
specifically delegated in writing from time to time by the Company's
Board of Directors;
(f) willful, deliberate, and persistent failure by Executive to perform the
duties and obligations of Executive's employment which are not remedied
in a reasonable period of time after receipt of written notice from the
Company;
(g) an act or acts of dishonesty undertaken by Executive intended to result
in substantial gain or personal enrichment of Executive at the expense
of the Company;
(h) material breach of a fiduciary or contractual duty to the Company;
(i) commission of an act that results in material harm to the goodwill or
reputation of the Company; or
(j) conviction of any felony.
3.8. Termination for Cause.
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. Pending
a hearing to determine whether Cause exists, the Company may suspend Executive
with pay.
4. CONFIDENTIAL INFORMATION AND EMPLOYEE WORK PRODUCT
4.1. Non-Disclosure of Confidential Information and Materials.
Executive recognizes that the nature of Executive's employment and relationship
with Company is such that Executive will have access to, and that there will be
disclosed to Executive during the course of such relationship, Confidential
Information owned by Company and its current and future affiliates (collectively
referred to as "Affiliates"). Company and its Affiliates are collectively
referred to in this Agreement as "Company Parties." Executive acknowledges that,
except for Executive's relationship with Company and the duties assigned to
Executive, Executive would not otherwise have access to Confidential
Information.
4.2 Confidential Information.
As used in this Agreement, "Confidential Information" means all information,
data, and materials relating to any business or other activity of Company
Parties (and any third party which the Company is under an obligation to keep
confidential and that is maintained by the
-4-
Company as confidential) or used by Company Parties or such third parties in
their business or other activity, either now or in the future, including without
limitation: (i) trade secrets, inventions, mask works, ideas, formulas, methods,
processes, prototypes, models, source and object codes, data, know-how,
improvements, discoveries, designs, and techniques developed, created, used or
practiced by, conceived of, or reduced to practice by any employee or contractor
of Company Parties (including by Executive in the course of Executive's
employment with Company); (ii) information pertaining to development and
business plans for Company Parties; information relating to relationships
between Company Parties and other entities, including licenses and other
contracts; information relating to released or unreleased products, marketing or
promotional information; and any confidential or proprietary information that is
circulated within Company Parties; (iii) reports and data developed or acquired
by Company Parties; and (iv) forms, policies, and other forms of written and
non-written (including intangible) data, experience, and information, whether of
a technical, operational, or economic nature relating to Company's business,
services and employees. "Confidential Information" includes the Confidential
Information of third parties that Company Parties are required to keep
confidential. "Confidential Information" shall not include that information
defined as Confidential Information above that: (i) entered the public domain
without any breach of any obligation owed to Company Parties under this
Agreement; (ii) became known to Executive from a source other than Company
Parties and other than by the breach of an obligation of confidentiality owed to
Company under this Agreement or under an agreement between Company and a third
party; or (iii) was disclosed by Company to a third party without any obligation
of confidence; provided, however, that (a) Executive agrees that if Executive
has any questions as to what comprises such Confidential Information, or to
whom, if anyone, outside Company it may be disclosed, Executive will consult
with Executive's manager at Company and (b) in the event of a disputed
disclosure, Executive shall bear the burden of proof of demonstrating that the
Confidential Information falls within one of the above exceptions.
4.3 Irreparable Harm.
Executive expressly acknowledges and agrees that disclosure of the Confidential
Information of Company Parties would severely affect Company's business and/or
the business of Company's clients and provide the recipient of the Confidential
Information with a substantial and unfair competitive advantage. Therefore,
during the term of Executive's relationship with Company and at all times
thereafter, regardless of the circumstances surrounding any termination of this
relationship, Executive shall keep secret all matters entrusted to Executive and
shall not use or attempt to use for any purpose (other than the furtherance of
Company's business while Executive am in the employ of Company), or disclose to
any person, any Confidential Information of Company Parties.
4.4 Return of Materials Upon Termination of Employment.
Upon termination of Executive's relationship with Company for whatever reason or
at anytime prior to termination at Company's request, Executive shall
immediately surrender and turn over to Company all tangible Confidential
Information, including without limitation any and all Company Parties'
documents, any and all computer programs (whether or not completed or in use),
any and all lab notebooks created by me in the course of Executive's employment,
any and all operating manuals or similar materials which constitute the systems,
policies, and procedures, and methods of doing business developed by Company
Parties, any other material on any media
-5-
containing or disclosing any Confidential Information. In addition, Executive
shall turn over all keys, equipment, identification or credit cards and all
other property belonging to Company Parties. Executive understands that all such
documents and materials are the sole property of Company Parties and that
Executive shall not make or retain any copies thereof on any media. Executive
will carry out all of the foregoing obligations no later than the first business
day after Executive leaves the employ of Company.
5. ASSIGNMENT OF INVENTIONS
5.1 Assignment of Inventions.
Executive agrees to make prompt and full disclosure to Company (or any persons
designated by it), will hold in trust for the sole benefit of Company, and,
without further compensation, will assign exclusively to Company worldwide all
Executive's right, title, and interest in and to any and all inventions,
discoveries, designs, developments, improvements, copyrightable material, and
trade secrets (collectively herein "Inventions") that Executive, solely or
jointly, may conceive, develop, or reduce to practice that (a) relates to the
business of the Company or any customer of or supplier to the Company; (b)
results from tasks assigned to Executive by the Company; or (c) results from the
use of premises or personal property owned, leased or contracted by the Company.
In addition, Executive agrees that "Works" means all tangible work product,
whether patentable or copyrightable or not, developed or under development by
Executive, solely or jointly with others, at any time during Executive's
employment by Company, including but not limited to Invention descriptions,
specifications, compilations, programs, documentation, manuals, flow charts,
diagrams, drawings, photographs, designs, business or marketing plans, articles
for publication, contracts and reports. Executive agrees that the Works are to
be deemed "works-made-for-hire," and that Company shall be deemed the author
and, shall own all proprietary rights in the Works. Executive hereby irrevocably
assigns and agrees to assign to Company all of Executive's right, title and
interest in the Works worldwide.
Executive further agrees to cooperate with Company as may be necessary or useful
to obtain copyright, patent, and other proprietary property rights protection
for the foregoing and to execute and deliver to Company such instruments as may
reasonably be required to carry out the intent and purpose of this Agreement.
Executive hereby waives and quitclaims to Company any and all claims of any
nature whatsoever that Executive now or hereafter may have for infringement of
any patent resulting from any patent applications for any Inventions or Works so
assigned to Company.
Executive's obligation to assign shall not apply to any Invention about which
Executive can prove all of the following: (a) it was developed entirely on
Executive's own time; (b) no equipment, supplies, facility, or trade secret
information of Company was used in its development; (c) it does not relate (i)
directly to the business of Company or (ii) to the actual or demonstrably
anticipated research or development of Company; and (d) it does not result from
any work performed by Executive for Company. Executive will assign to Company or
its designee all Executive's right, title, and interest in and to any and all
Inventions full title to which may be required to be in the United States by any
contract between Company and the United States or any of its agencies.
-6-
5.2 Existing Inventions.
Executive has attached as Exhibit A hereto a list to this Agreement describing
all inventions belonging to Executive and made by Executive prior to Executive's
employment with Company that Executive wishes to have excluded from this
Agreement; provided, however, that Executive shall not include, and hereby
represents and warrants that Executive has not included any information on
Exhibit A which, by its disclosure to Company, would violate any confidentiality
obligation owed by Executive to any third party, including a prior employer. If
such confidentiality obligations exist with respect to certain prior inventions,
Executive shall inform Company in writing that Executive has not listed all
prior inventions on Exhibit A for that reason. If no such list is attached,
Executive represents, by Executive's signature below, that there are no such
prior inventions. If, in the course of Executive's employment at Company,
Executive uses or incorporates into any Company product, process, or machine, an
invention owned by Executive or in which Executive has an interest, Employer is
hereby granted and shall have an exclusive, royalty-free, irrevocable, worldwide
license to make, have made, use, sell and import that invention without
restriction as to the extent of Executive's ownership or interest. Executive
represents that Executive has the full and exclusive right and power to grant to
Company all of the foregoing license rights to all applicable inventions, and
that Company's use of any such inventions will not violate any copyright, trade
secret, or other proprietary right of any third party. Executive further agrees
to indemnify, pay the defense costs of, and hold Company harmless from any
damages or loss arising from a breach of the foregoing representation.
5.3 Documentation.
Executive will execute any proper oath or verify any proper document in
connection with carrying out the terms of this Agreement. If, because of
Executive's mental or physical incapacity or for any other reason whatsoever
Company is unable to secure Executive's signature to apply for or to pursue any
application for any United States or foreign patent or copyright covering
inventions assigned to Company as stated above, Executive hereby irrevocably
designates and appoints Company and its duly authorized officers and agents as
Executive's agent and attorney in fact, to act for Executive and in Executive's
behalf and stead to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of U.S. and
foreign patents and copyrights thereon with the same legal force and effect as
if executed by Executive.
6. CONFIRMATION OF DISCLOSURES REQUIRED UNDER SECURITIES LAWS
Since January 1, 1995, 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
-7-
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. NON-SOLICITATION AND NON-COMPETITION
7.1 Non-Solicitation.
While employed at Company and for a period of one (1) year from the termination
of Executive's employment, Executive will not solicit or assist in the
solicitation, induce or attempt to influence directly or indirectly any employee
of Company to work for Executive or any other person or entity. For purposes of
this Section 7.1, to "solicit or assist in the solicitation" shall include
without limitation the following acts: (a) disclosing to any third party the
names, backgrounds or qualifications of any of Company's employees or otherwise
identifying them as potential candidates for employment, or (b) personally or
through any other person approaching, recruiting, or otherwise soliciting
employees of Company to work for any other Company.
7.2 Non-Competition Agreement.
Executive agrees that because of the nature of Executive's association with
Company Parties, Executive has and will have access to, have and will acquire,
and will assist in developing confidential and proprietary information relating
to the business and operations of Company Parties, which take place in every
state of the United States. Executive acknowledge that such information is and
will continue to be of central importance to the business of Company Parties,
and that disclosure of such confidential information to others or the
unauthorized use of such information by others would cause substantial loss and
harm to Company Parties. Executive also acknowledges and agrees that an
important part of Executive's duties will be to develop goodwill for Company
through personal contacts with others and potential clients and affiliates, and
there is a danger that this goodwill, a proprietary asset of Company, may follow
Executive if and when Executive's relationship with Company is terminated.
Executive accordingly agrees that in the event Executive's employment
relationship expires or is terminated for any reason under Section 3 of this
Agreement ("Termination"), Executive shall comply with the provisions of this
Section 7.2.
Executive agrees that Executive shall not, during the term of Executive's
employment with Company and for a period of one (1) year after Termination,
directly or indirectly seek, solicit, enter into, or engage in, any employment,
business, enterprise, agreement, or consulting arrangement with any other person
or entity, that is at that time engaged in, or that Executive has reason to know
has plans for future engagement in any direct or indirect competition with the
business of Company or the demonstrated areas of future business interest of
Company at any time during Executive's employment with Company, including,
without limitation database design, delivery systems, customization routines,
advertising sales and marketing techniques and
-8-
development of business plans within the United States. This noncompetition
agreement shall apply throughout the United States.
Executive agrees that the provisions of this Section 7.2 do not impose an undue
hardship on Executive and are not injurious to the public; that this provision
is necessary to protect the business of Company Parties; that Company would not
hire or continue to employ Executive if Executive did not agree to the
provisions of this Section 7.2; that the scope of this Section 7.2 is reasonable
in terms of length of time and geographic scope; and that adequate consideration
supports this Section 7.2.
8. 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 Board
of Directors or by the signature of an officer to whom authority to modify this
Agreement has been delegated.
9. 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. Arbitration shall take
place in New York, New York. 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. The award of the arbitrator shall be
enforceable according to the applicable provisions of New York law.
Notwithstanding the foregoing, a party may apply to a court of competent
jurisdiction or the arbitrator for prejudgment remedies and emergency relief in
the form of a temporary restraining order pending final determination of a claim
through arbitration in accordance with this Section 8. The parties shall share
the costs of arbitration equally. The arbitrator shall not have the power to
award punitive, consequential, indirect, or special damages.
10. 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.
-9-
11. 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. All promises,
conditions and terms of employment are only those as set forth herein. In
addition, Executive hereby waives any right Executive may have to seek
involuntary dissolution of the Company, and shall not join with any other
shareholders of the Company to seek such relief.
IN WITNESS WHEREOF, the undersigned have executed this Executive Employment
Agreement as of the date first referenced above.
"COMPANY" "EXECUTIVE"
eMagin Corporation,
a Nevada corporation
By
-------------------------------------------- ------------------------------------------------
(sign name) (sign name)
Xxx Xxxxxx, President Xxxx X. Xxxxx
-------------------------------------------- ------------------------------------------------
(print name and title) (print name)
By Executive's signature below, Executive represents that he does not, as of the
Starting Date, hold any existing Inventions, as that term is defined in Section
5.1 of this Agreement.
---------------------------------
(sign name)
Xxxx X. Xxxxx
---------------------------------
(print name)
