Exhibit 10.1
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
Executive Name:  
Jerome T. Carollo
Title(s):  
Senior Vice President, Business Development
Effective Date:  
May 13, 2014

 
For good consideration, the Company continues to employ Jerome T. Carollo on the
following terms and conditions (the “Agreement”) as of the above date pursuant
to this Amended and Restated Employment Agreement by and between EMAGIN
CORPORATION, a Delaware corporation (the “Company”), and the above named
executive (“Executive”).  This Agreement amends and restates in its entirety the
Executive Employment Agreement, effective as of March 21, 2011, by and between
Company and Executive (the “Original Agreement”).
 

   1. EMPLOYMENT AGREEMENT

 
1.1. Employment, Duties, and Responsibilities.  The Company shall continue to
employ Executive as its Senior Vice President, Business Development and
Executive accepts such continued 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
Company’s Chief Executive Officer at the Company’s facilities in Hopewell
Junction, New York.  In addition, Executive shall be required to conduct a
significant amount of Company business outside of the State California.  More
specifically, Executive shall be required to travel, on an as needed basis, to
(among other locations): (i) the Company’s current headquarters in Bellevue, WA
(where Executive’s marketing and sales staff are located); (ii) the State of New
York for board meetings, management meetings, and to visit the Company’s
manufacturing facility in Hopewell Junction, NY; (iii) Washington D.C. and
Virginia for meetings with government officials and defense contractor
customers; and (iv) Europe and Asia for meetings with both existing and
potential customers.  Executive acknowledges that his reporting obligations are
entirely outside of the State of California, that Executive is not obligated to
perform any services for the Company hereunder or otherwise from any location
within the State of California, and that, other than the Company’s design team
currently located in Santa Clara, California, the Company has no operations
located within the State of California.
 
1.2. Term.  This Agreement shall commence as of the date hereof (and shall be
deemed to have governed the employment of the Executive with the Company from
and after the expiration of the Original Agreement) and shall continue
hereafter, unless terminated pursuant to Section 3, until the second anniversary
of the Effective Date (the “Employment Period”).
 
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.  Executive will provide information and
services to the Chief Executive Officer, the Board of Directors and its
Committees as needed to support the Company’s business.  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 all positions at
the Company held by Executive, and any positions held by the Executive at any
subsidiary of the Company, and shall be deemed a termination from employment
with all such affiliated entities.
 
 
 
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  2. COMPENSATION

 
2.1. Base Salary.  As compensation for performing services for the Company,
Executive shall be entitled to an annual salary of $292,000, payable in
bi-weekly installments consistent with the Company’s payroll practices. The
annual base salary will be reviewed annually by the Compensation Committee. 
 
2.2. Bonus.  The Board of Directors or Compensation Committee of the Board of
Directors may provide Executive with a bonus from time to time at their
discretion.  For purposes of this Agreement, a bonus shall only be considered
“accrued” on the date that such bonus is duly approved by resolution of the
Board of Directors or the Compensation Committee in its sole discretion.

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 20 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 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’s Travel and Expense Policy, 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. Equity-Related Instruments.

(a)           Promptly following the Effective Date, Executive and the Company
shall enter into a stock option agreement whereby, among other things, Executive
shall be entitled to receive an option to purchase such number of shares (the
“Shares”) of the Company’s common stock equal to $50,000 (using the Black-Sholes
method of valuing such option based on the closing price of the Company’s common
stock on the date of grant), which option shall terminate on the earlier to
occur of 5 years from its grant or upon the other applicable termination
provisions contained in the option agreement between the Executive and the
Company. The option agreement shall entitle Executive to purchase the Shares at
the closing price of the stock on the date of grant. Subject to the terms and
conditions of this Agreement and the stock option agreement, the Shares shall
vest as follows: 1/2 shall vest one year from the date of grant, and the
remaining 1/2 shall vest two years from the date of grant.

(b)           Executive may receive additional equity-related instruments on an
annual basis in amounts and subject to vesting and other terms and conditions as
the Board of Directors or Compensation Committee of the Board of Directors may
determine.  All other terms and conditions of such awards shall be governed by
the terms and conditions of the applicable equity plan and the applicable award
agreements, and as determined by the Compensation Committee.  The annual awards
of equity-related instruments shall be made in accordance with the Company’s
performance-based compensation plan as approved by the Compensation Committee
from time to time.  Executive shall be eligible to participate in the Company’s
equity and stock purchase plans, as determined in the sole discretion of the
Compensation Committee.   The Board or Compensation Committee may provide
additional awards of equity-related instruments from time to time or on an
incentive plan as they deem appropriate.
 

  3. TERMINATION OF EMPLOYMENT

 
3.1. Voluntary Termination.  If Executive voluntarily terminates Executive’s
employment with the Company, other than for Good Reason as defined in Section
3.5 herein, Executive’s rights to salary, paid time off, employee benefits, and
other compensation which would have accrued or become payable after the date of
Executive’s voluntary termination shall cease upon such date, other than those
expressly required under applicable law (such as COBRA).  Accrued benefits, if
any, will be payable in accordance with applicable benefit plan provisions.
 
 
 
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3.2. Termination With Cause.  Notwithstanding anything herein to the contrary,
the Company may terminate Executive’s employment hereunder for Cause.  For
purposes of this Agreement, “Cause” shall mean the termination of Executive’s
employment by the Company due to:

(a) Executive’s 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 after the Company provides
Executive with notice of the failure and a reasonable opportunity to cure it;
(b) Executive’s 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) Executive’s willful, deliberate, and persistent failure by Executive to
reasonably perform the duties and obligations of Executive’s employment which
are not remedied after the Company provides Executive with notice of the failure
and a reasonable opportunity to cure it;
(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) Executive’s material breach of a fiduciary or contractual duty to the
Company;
(f) conviction of a felony, or
(g) Executive’s commission of an act that results in material long term harm to
the goodwill or reputation of the Company.

Executive’s rights to salary, paid time off, employee benefits, and other
compensation which would have accrued or become payable after the termination of
Executive’s employment shall cease upon Executive’s termination, other than
those expressly required under applicable law (such as COBRA).  Accrued
benefits, if any, will be payable in accordance with the applicable benefit plan
provisions of the Company. 
 
3.3. Termination 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 the lesser of (i) the total
amount of the Executive’s base salary that remains unpaid under this Agreement,
which shall be paid monthly or (ii) monthly salary payments for twelve (12)
months, based on Executive’s monthly rate of base salary at the date of such
termination, provided, however in lieu of the aforementioned monthly payments,
the Company may in its sole  discretion pay such payments in a
lump-sum.  Payment by the Company of the foregoing severance amounts shall be
contingent upon Executive executing and delivering to the Company a release
agreement substantially in the form and substance set forth in Exhibit A hereto
and such release becoming effective, and only so long as Executive does not
revoke or breach the provisions of the General Release or Sections 4 and 5
herein (provided, that Executive’s breach of such Sections or termination of
severance payments shall not relieve Executive of his obligations
thereunder).  Executive shall also be entitled to: (i) payment for accrued and
unused vacation; (ii) the immediate vesting of any non-vested equity-related
instruments granted pursuant to Section 2.6 of this Agreement; and (iii) any
bonuses which have accrued prior to the date of Executive’s
termination.  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 Executive’s termination.  All of Executive’s
rights to salary, paid time off, employee benefits, and other compensation which
would have accrued or become payable after the termination of Executive’s
employment shall cease upon Executive’s termination, other than those expressly
required under applicable law (such as COBRA).  Accrued benefits, if any, will
be payable in accordance with the applicable benefit plan provisions of the
Company. 

Upon the termination of Executive’s employment with the Company for any reason,
Executive shall within one calendar week of such termination return to the
Company all electronic equipment, media, and supplies provided by the Company to
the Executive.  Furthermore, within one calendar week of Executive’s termination
of employment with the Company,  Executive shall also return to the Company, all
Company files used by the Executive and shall not retain any copies of such
files. 

3.4. Effect of Termination without Cause on Equity-Related Instruments.  The
Company hereby irrevocably offers to amend any equity-related instruments
granted to Executive to permit the full exercise thereof following the
termination of Executive’s employment without Cause, or because of Executive’s
Disability (as defined in Section 3.7) or death.  The Company hereby also
irrevocably offers to amend any equity-related instruments 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 Executive’s
Disability or death, 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 equity-related instruments
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.
 
 
 
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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 a termination without cause, Executive
shall be entitled to the severance and vesting benefits set forth in Section
3.3.  For purposes of this Agreement, “Good Reason” shall mean any of the
following unless such change was initiated, 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 is significantly changed or salary decreased as a result of a Change of
Control (as defined below), Executive shall be entitled to the severance and
vesting benefits set forth in Section 3.3.  For purposes of this Agreement,
“Change of Control” means the acquisition of the Company by merger, sale of all
or substantially all of the Company’s assets, or other reorganization which
results in the stockholders of the Company immediately prior to such transaction
owning less than 50% of the aggregate voting power of the Company’s securities
immediately after such transaction (other than as a result of the issuance of
equity securities by the Company in connection with a capital raise which
results in the pro rata dilution of the equity interests of all holders of
common stock immediately prior to such issuance).

3.7. Disability.  The Company may terminate this Agreement without liability
(other than as provided in Section 3.4 hereof) in the event of Executive’s
Disability.  For purposes of this Agreement “Disability” shall mean that
Executive has been 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 bonuses, and accrued but unused vacation.  In the event Executive’s
employment terminates under this Section 3.7, 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 (other than as provided in
Section 3.4 hereof); provided, however, that within 15 days of the Company’s
notice of such death, the Company shall pay to Executive’s heirs or personal
representatives Executive’s base salary and accrued but unused vacation to the
date of death.  Accrued benefits, if any, will be payable in accordance with the
applicable benefit plan provisions of the Company. 

3.9. Notice of Termination.  In the event of Executive’s termination hereunder,
the Company shall provide Executive with written notice setting forth the
reason(s) for such termination. 

 
4. Confidential Information and Intellectual Property

4.1. Obligation to Maintain Confidentiality.  Executive acknowledges that the
continued success of the Company depends upon the use and protection of a large
body of confidential and proprietary information.  All of such confidential and
proprietary information now existing or to be developed in the future will be
referred to in this Agreement as “Confidential Information.”  Confidential
Information will be interpreted as broadly as possible to include all
information of any sort (whether merely remembered or embodied in a tangible or
intangible form), including, but not limited to:

a.  
corporate information, including operations, plans, strategies, policies,
resolutions, drawings, designs, proposals, suppliers, business methods and any
litigation or negotiations;

b.  
marketing information, including marketing and sales plans, strategies, methods,
customer and/or supplier information, customer lists, pricing information and
formulae, customer purchasing patterns, customer bases and territories,
prospects, products or market research data;

c.  
financial information, operational and scientific information, including trade
secrets, confidential processes, systems, technologies, structures or formulae,
data and know-how, improvements, manufacturing processes, specifications,
expertise, techniques, inventions, product concepts or designs, techniques,
forecasts, research, development and experimental activities, efficacy testing,
analysis of competitive products, ideas and technical information; and

d.  
personnel information, including personnel lists, resumes, personnel data,
organizational structure, compensation structure and performance evaluations.

 
 
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Executive agrees that he shall not disclose to any unauthorized person or use
for his own account any Confidential Information without the Board of Director’s
prior written consent, unless and to the extent that any Confidential
Information:

(i) becomes generally known to and available for use by the public other than as
a result of Executive’s acts or omissions to act, or
(ii) is required to be disclosed pursuant to any applicable law or court order.

Executive agrees that before, during and after Executive’s employment by the
Company, all Confidential Information will remain the Company’s property, and
Executive must deliver any Confidential Information in tangible or electronic
form or copies thereof that are in Executive’s possession or control to the
Company upon the termination of Executive’s employment, or at any earlier time
requested by the Company.

4.2. Ownership of Intellectual Property.  Executive agrees to make prompt and
full disclosure to the Company of all ideas, discoveries, trade secrets,
inventions, innovations, improvements, developments, methods of doing business,
processes, programs, designs, analyses, drawings, reports, data, software,
firmware, logos and all similar or related information (whether or not
patentable and whether or not reduced to practice) that relate to the Company or
their affiliates’ actual or anticipated business, research and development, or
existing or future products or services and that are conceived, developed,
acquired, contributed to, made, or reduced to practice by Executive (either
solely or jointly with others) while employed by the Company (collectively,
“Work Product”).

Any copyrightable work falling within the definition of Work Product shall be
deemed a “work made for hire” under the copyright laws of the United States, and
ownership of all rights therein shall vest in the Company.  To the extent that
any Work Product is not deemed to be a “work made for hire,” Executive hereby
assigns and agrees to assign to the applicable Company Entities all right, title
and interest, including without limitation, the intellectual property rights
that Executive may have in and to such Work Product.

Executive shall promptly perform all actions reasonably requested by the Board
of Directors (whether during or after the Employment Period) to establish and
confirm the Company’s ownership (including, without limitation, providing
testimony and executing assignments, consents, powers of attorney, and other
instruments).  Executive understands, however, that there is no obligation being
imposed on him to assign to the Company any invention falling within the
definition of Work Product for which no equipment, supplies, facility, or trade
secret information of the Company or its affiliates was used and that was
developed entirely on his own time, unless:

(i) such Work Product relates (A) to the Company’s or its affiliates’ businesses
or (B) to their actual or demonstrably anticipated research or development, or
(ii) the Work Product results from any work performed by him for them under this
Agreement.

4.3. Third Party Information.  Executive understands that the Company will
receive from third parties confidential or proprietary information (“Third Party
Information”) subject to a duty on the Company’s and their affiliates’ part to
maintain the confidentiality of such information and to use it only for certain
limited purposes.  During the Employment Period and thereafter, and without in
any way limiting the provisions of Section 4.1, Executive will hold Third Party
Information in the strictest confidence and will not disclose it to anyone
(other than personnel of the Company who need to know such information in
connection with their work for the Company) or use, except in connection with
his work for the Company, Third Party Information unless expressly authorized in
writing by the Board of Directors.

4.4. Use of Non-Company Information.  During the Employment Period, Executive
shall not use or disclose any confidential information or trade secrets, if any,
of any former employers or any other person to whom Executive has an obligation
of confidentiality, and shall not bring onto the premises of the Company or its
affiliates any unpublished documents or any property belonging to any former
employer or any other person to whom Executive has an obligation of
confidentiality unless consented to in writing by the former employer or person.
 
 
 
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  5. Non-Competition, Non-Solicitation, Bankruptcy

5.1. Non-Competition and Non-Solicitation. In further consideration of the
Company’s continuing the employment of Executive and the compensation to be paid
to Executive hereunder (including severance, if any), Executive acknowledges
that during the Employment Period he shall become familiar with the Company’s
trade secrets and with other Confidential Information concerning the Company,
and that his services shall be of special, unique and extraordinary value to the
Company, and therefore, Executive hereby covenants and agrees that during the
Employment Period and thereafter during the applicable Restrictive Period,
Executive will not, without the prior written consent of the Company, directly
or indirectly, on his own behalf or in the service or on behalf of others,
whether or not for compensation:

(i) 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 venture, 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;
(ii) induce or attempt to induce any customer, supplier, licensee or other
business relation of the Company to cease doing business with the Company, or in
any way interfere with the relationship between the Company and any customer,
supplier, licensee or other business relation thereof (including, without
limitation, by inducing or attempting to induce any such person or entity to
reduce the amount of business it does with the Company);
(iii) directly or indirectly, hire (or attempt to hire), or make or offer (or
attempt to make or offer), or solicit, induce or recruit (or attempt to solicit,
induce or recruit) any person who, at any time during the term of Executive’s
employment and for a period of three (3) months thereafter, is or was an
employee of the Company or any affiliate thereof to apply for, enter into or
accept, any written or oral arrangement, agreement or understanding regarding
employment or retention as a consultant with any person or entity; or
(iv) call upon any providers of the Company’s Technology for the purpose of
obtaining or using the Technology in any Competing Business.

For purposes of this Section 5.1: 

a.  
“Competing Business” means any Microdisplay Company or any Systems Company.

b.  
“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.

c.  
“Microdisplay Company” means any company engaging in the design, development,
manufacturing, or marketing of microdisplays.

d.  
“Restrictive Period” means (i) with respect to a Microdisplay Company, two (2)
years following the Employment Period, and (ii) with respect to a Systems
Company, one (1) year following the Employment Period.

e.  
“Systems Company” means any company engaging in the design, development,
manufacturing, or marketing of any product or system incorporating
microdisplays, which product or system is substantially similar to any product
or system designed, developed (at least to prototype stage), and marketed by or
on behalf of the Company or any affiliate of the Company at the time of
Executive’s separation from the Company.

f.  
“Technology” means microdisplay technology, virtual or augmented reality
technology or other technology disclosed in the patents owned or applied for by
the Company or considered trade secret property of the Company.

5.2. Acknowledgments and Representations.  Executive acknowledges that the
Company’s business is conducted worldwide and agrees that the time periods
referred to in Section 5.1 are reasonable and valid in duration and scope and in
all other respects in light of the nature and extent of the business conducted
by the Company.  Executive also represents that his experience and capabilities
are such that the enforcement of the foregoing covenants will not prevent
Executive from working in his occupation, from earning a livelihood, and
acknowledges that it would cause the Company serious and irreparable injury and
cost if Executive were to use the Company’s knowledge in competition with the
Company or otherwise breach the obligations contained in this
Agreement.  Executive acknowledges that this Agreement shall be given full force
and effect whether Executive’s employment is terminated voluntarily or
involuntarily, and/or with or without Cause or Good Reason.  Executive hereby
acknowledges that he has been advised to consult with an attorney before
executing this Agreement and that he has done so or, after careful reading and
consideration, he has chosen not to do so of his own volition.
 
 
 
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5.3. Enforcement.  If, at the time of enforcement of Sections 4 or 5, a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area, and the covenants should be interpreted and
enforced to the maximum extent which such court deems reasonable.  Because
Executive’s services are unique and because Executive has access to Confidential
Information and Work Product, the parties hereto agree that money damages would
not be an adequate remedy for any breach of this Agreement, and any breach of
the terms of Sections 4 or 5 would result in irreparable injury and damage to
the Company for which the Company would have no adequate remedy at
law.  Therefore, in the event a breach or threatened breach of Sections 4 or 5,
the Company, or its successors or assigns, in addition to other rights and
remedies existing in their favor, shall be entitled to specific performance
and/or immediate injunctive or other equitable relief from a court of competent
jurisdiction in order to enforce, or prevent any violations of, the provisions
hereof (without posting a bond or other security), without having to prove
damages in addition to any other remedies to which the Company may be entitled
at law or in equity.

In addition, in the event of an alleged breach or violation by Executive of
Section 5, the non-competition and non-solicitation period shall be tolled until
such breach or violation has been duly cured.  The terms of this Section shall
not prevent the Company from pursuing any other available remedies for any
breach or threatened breach hereof, including but not limited to the recovery of
damages from Executive.

  6. General Provisions

6.1. Non-Disparagement.  Except as necessary to enforce rights under this
Agreement, during Executive’s employment with the Company and following the
termination of Executive’s employment with the Company for any reason, Executive
shall not disparage, either orally or in writing, the Company or the Company’s
Technology (as defined in Section 5.1), products, services, officers,
executives, agents or employees.

6.2  Executive’s Cooperation.  During the Employment Period and thereafter,
Executive shall cooperate with the Company in any internal investigation, any
administrative, regulatory or judicial proceeding or any dispute with a third
party as reasonably requested by the Company (including, without limitation,
Executive being available to the Company upon reasonable notice for interviews
and factual investigations, appearing at the Company’s request to give testimony
without requiring service of a subpoena or other legal process, volunteering to
the Company all pertinent information and turning over to the Company all
relevant documents which are or may come into Executive’s possession, all at
times and on schedules that are reasonably consistent with Executive’s other
permitted activities and commitments).  If the Company requires Executive’s
cooperation in accordance with this Section, the Company shall provide Executive
with a reasonable per diem payment to be determined in the sole discretion of
the Company, and shall reimburse Executive solely for reasonable travel expenses
(including lodging and meals) upon submission of receipts.

6.3. 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 shall 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.

6.4. 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:

(a) on the date of delivery when hand delivered,
(b) on the earlier of confirmed receipt or the fifth business day following the
date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid, or
(c) on the first business day following the date of dispatch if delivered
utilizing a next-day service by a recognized next-day courier (provided that
notice of change of address shall be deemed given only when received).
 
 
 
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All such notices and communications shall be sent to the following addresses (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):

If to the Company, to:

eMagin Corporation
2070 Route 52, Bldg 334
Hopewell Junction, NY 12533
Attn:  Chief Executive Officer

With a copy to:

eMagin Corporation
2070 Route 52, Bldg 334
Hopewell Junction, NY 12533
Attn:  General Counsel
 
If to Executive, to Executive’s home address as reflected in Company’s personnel
files for Executive.
 
6.5. Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof or to the actual domicile of the parties,
and any action to enforce this Agreement must be brought and heard in a court
within the State of New York.  The parties to this Agreement consent to personal
jurisdiction in New York in any action commenced to enforce its terms.  Each of
Executive and the Company acknowledge and agree that this Agreement was
prepared, reviewed and executed within the State of New York.

6.6. Waiver of Jury Trial.  AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH
OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY
TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR
PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS
CONTEMPLATED HEREBY.

6.7. 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.

6.8. 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.

6.9. 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.

6.10. 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.

6.11. 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.

[Signature Page Follows]
 
 
 
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first written above.

         
By:
/s/ Andrew G. Sculley      
Andrew G. Sculley
     
Chief Executive Officer
                      /s/ Jerome T. Carollo      
By: Jerome T. Carollo
         

 
 
 
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Exhibit A
 
SEPARATION AGREEMENT AND GENERAL RELEASE
 
1. This Separation Agreement and General Release (“Agreement”) is between Jerome
T. Carollo (“Employee”) and eMagin Corporation (“Company”) to resolve any and
all outstanding issues between the parties and to set forth all of the
obligations between the parties.
 
2. Employee’s employment with the Company terminated effective [INSERT DATE]
(“Release Date”).  Employee acknowledges that he has been paid his regular rate
of pay in equal biweekly installments, less applicable deductions through the
Release Date.  Employee also acknowledges that he has been paid ___________
($__________), which represents _________ (   ) days of Employee’s accrued, but
unused, vacation, less applicable deductions, through the Release Date.
 
3. In exchange for Employee’s execution and non-revocation of this Agreement and
in exchange for the other obligations that Employee owes to the Company under
this Agreement, the Company agrees to pay to Employee the total amount of
___________ ($__________), less applicable deductions.  Such amount represents
_________ (   ) weeks of Employee’s base salary, less applicable
deductions.  The amount recited in this Section 3 will be paid to Employee in
the same manner as Employee has been receiving his biweekly salary (that is, by
direct deposit or check, as applicable) beginning within __ days after Employee
signs and does not revoke this Agreement.
 
4. Employee acknowledges that he has been advised that he may be able to
continue his health benefits pursuant to COBRA and that Employee will receive
additional information regarding COBRA under separate cover.
 
5. Employee agrees that he is not entitled to and will not seek any further
consideration, including but not limited to, any wages, vacation pay, sick pay,
disability pay, bonus, compensation, profit sharing contributions, restricted
stock, stock options, other equity-related instruments, payment or benefit from
Releasees (as defined in Section 6) other than that to which he is entitled
pursuant to this Agreement.  The Company will not oppose Employee’s claim for
unemployment insurance.
 
6. In consideration of the payments and benefits to Employee provided herein,
Employee agrees to and hereby does release and discharge the Company, its
parents, subsidiaries, affiliates and their successors or assigns, directors,
officers, consultants, attorneys, representatives and employees (collectively
“Releasees”) from any and all claims, causes of action, arbitrations and
demands, whether known or unknown, which he has or ever has had, which are based
on acts or omissions occurring up to and including the date this Agreement is
fully executed, except as to the enforcement of this Agreement and any rights
which cannot be waived as a matter of law.  In this release, Employee further
releases the Company and its parents, subsidiaries and affiliated entities from
any and all compensation owed to him, including vacation pay and any attorneys’
fees, damages and costs Employee could recover under any statute or common law
theory.  Included within this release, without limiting its scope, are claims
arising out of Employee’s employment or the termination of his employment based
on Title VII of the Civil Rights Acts of 1964 as amended, the Civil Rights Act
of 1870, the Americans with Disabilities Act of 1990 as amended, the Americans
with Disabilities Act Amendments Act of 2008, the Age Discrimination in
Employment Act, as amended, the Older Workers Benefit Protection Act, the Fair
Labor Standards Act of 1938 as amended by the Equal Pay Act of 1963, the Family
and Medical Leave Act, the Employee Retirement Income Security Act of 1974, the
Civil Rights Act of 1991, the Genetic Information Nondiscrimination Act of 2008,
the Lilly Ledbetter Fair Pay Act of 2009, the New York State Human Rights Law,
the New York City Human Rights Law, the New York Labor Law, the New York Wage
Theft Prevention Act, the U.S. Patriot Act, the Sarbanes-Oxley Act of 2002, the
Dodd–Frank Wall Street Reform and Consumer Protection Act, and any other
federal, state or local civil rights, disability, discrimination, retaliation or
labor law, or any theory of contract, criminal, arbitral or tort law.
 
7. Employee agrees to abide by Sections 4, 5, 6.1 and 6.2 of the Amended and
Restated Employment Agreement into which he entered with the Company on [INSERT
DATE] (the “Employment Agreement”), in addition to any other sections of the
Employment Agreement which expressly survive the termination of Employee’s
employment with the Company.
 
8. This Agreement is not an admission by the Company of any liability.  The
Company specifically denies and disclaims any discrimination or injury to any
person.
 
 
 
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9. The parties agree that this Agreement may not be introduced in any
proceeding, except to establish the settlement and release, the breach of this
Agreement, or as may be required by law or judicial directive.
 
10. Employee agrees not to directly or indirectly take, support, encourage or
participate in any activity or attempted activity which in any way would
disparage the Company, its parents, subsidiaries and affiliated
entities.  Employee agrees not to write or speak about the Company, its parents,
subsidiaries and affiliated entities in negative terms.
 
11. Employee agrees that Employee will not disclose the existence or terms of
this Agreement except to his immediate family, tax advisor and attorney, federal
or state taxing authorities, or as compelled by court process.
 
12. This Agreement contains the complete understanding of the parties.  No other
promises or agreements shall be binding or shall modify this Agreement unless
reduced to writing and signed by the parties hereto or counsel for the parties.
 
13. This Agreement shall be governed by New York law without regard to conflicts
of laws principles, and any action to enforce this Agreement must be brought and
heard in a court within the State of New York.  The parties to this Agreement
consent to personal jurisdiction in New York in any action commenced to enforce
its terms.
 
14. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO
ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH
COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING
TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.
 
15. Employee shall not institute nor be represented as a party in any lawsuit,
claim, complaint or other proceeding against or involving the Company, its
parents, subsidiaries or affiliated entities based on Employee’s employment with
the Company or upon any act or omission occurring up to and including the date
this Agreement is fully executed, whether as an individual or class action,
under any federal, state or local laws, rules, regulations or any other
basis.  Further, Employee shall not seek or accept any award or settlement from
any such source or proceeding (not including unemployment insurance
proceedings).  In the event that Employee institutes, is a knowing participant,
or is a willing member of a class that institutes any such action, Employee’s
claims shall be dismissed or class membership terminated with prejudice
immediately upon presentation of this Agreement.  This Agreement does not affect
Employee’s right to file a charge with the Equal Employment Opportunity
Commission (“EEOC”), or any similar state or local agency, or to participate in
any investigation conducted by the EEOC, or any similar state or local agency,
but Employee acknowledges that he is not entitled to any other monies other than
those payments described in this Agreement.
 
16. This Agreement is intended to comply with the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (“409A”).  Employer shall
undertake to administer, interpret and construe the provisions of the Agreement
in a manner that does not result in the imposition of any additional tax,
penalty or interest under 409A.
 
17. Employee warrants that he is fully competent to enter into this Agreement
and Employee acknowledges that he has been afforded the opportunity to review
this Agreement with his attorney for at least twenty-one (21) days, that
Employee has been advised to consult with an attorney of his choice before
signing this Agreement, that Employee has consulted with his attorney prior to
executing this Agreement, that Employee has read and understands this Agreement
and that Employee has signed this Agreement freely and voluntarily.  Further,
Employee understands that he has the opportunity to revoke such Agreement within
seven (7) days of signing it.  Employee understands that if he does revoke this
Agreement, Employee must notify the Company in writing within seven (7) days of
signing this Agreement and must return any amount he has received hereunder in
such event.
 
 
 
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PLEASE READ CAREFULLY.  THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.  To signify the parties’ agreement to the terms of this
Agreement, the parties have executed this Agreement on the date set forth
opposite their signatures which appear below.
 

EMPLOYEE     EMAGIN CORPORATION                                
 
   
By:
 
Jerome T. Carollo
   
Name:
 
Date:
   
Title:
        Date:  

 
 

 
 
 
 
 
 
 
 
 
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