Contract
EXHIBIT 10.11
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Executive
Name:
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Xxxxxx X. Xxxxxxx,
Xx.
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Title(s):
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Chief Executive
Officer
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Effective
Date:
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May 7,
2008
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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”).
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1.
EMPLOYMENT AGREEMENT
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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 date hereof and
shall continue hereafter, unless terminated pursuant to this Section 3, for a
period of thirty six (36) months from the date hereof.
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.
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2.
COMPENSATION
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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 2nd
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.
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3.
TERMINATION OF EMPLOYMENT
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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; (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, 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 (i) 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.
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4.
Non Competition, Non Solicitation,
Bankruptcy
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4.1. Non Competition. 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.
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5.
General Provisions
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5.1. 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 rights 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.
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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
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By:
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/s/ Xxxxxx Xxxxxxx | |
| Xxxxxx Xxxxxxx | |||
| e Chairman of the Board on behalf of the Company | |||
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/s/ Xxxxxx X. Xxxxxxx, Xx. | ||
| By: Xxxxxx X. Xxxxxxx, Xx. | |||
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