Document:

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                                                                    EXHIBIT 10.1
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                            IMPAX LABORATORIES, INC.
                 2001 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN

1. Purpose of Plan.

The purpose of the Impax Laboratories, Inc. 2001 Non-Qualified Employee Stock
Purchase Plan (the "Plan") is to enhance employee interest in the success and
progress of the Company by encouraging employee ownership of Common Stock, $.01
par value ("Common Stock"), of Impax Laboratories, Inc. (the "Company"). The
Plan provides the opportunity to purchase Impax Laboratories, Inc. Common Stock
at a 15% discount to the Fair Market Value (as defined herein) through payroll
deductions or lump-sum cash investments.

2. Eligible Employees.

Any employee (as determined by the Company in its sole discretion and without
reference to any definition of employee under the Internal Revenue Code or any
other statutory or regulatory definition) of the Company or its subsidiaries
designated by the Plan Committee (as defined below) for participation (except
such executive officers of the Company or its subsidiaries as the Plan Committee
may determine) is eligible to participate in the Plan, provided the employee:

   (a) has attained the age or 21;

   (b) is employed by the Company or any of its subsidiaries on the first day of
       each Purchase Period (as defined below);

   (c) has been continuously employed by the Company or any of its subsidiaries
       (or any predecessor) for one calendar year preceding the effective date
       of participation; and

   (d) has customary employment of a minimum of 20 hours per week during at
       least five months of the year.

Employee eligible to participate in the Plan as defined in this Section 2 are
referred to as "Eligible Employees."

3. Election to Participate.

Participation in the Plan is voluntary. Each employee who is an Employee may
participate in the Plan by completing and delivering to the Company's payroll
department an Enrollment/ Withdrawal Form. The completed Enrollment/Withdrawal
Form must be received by the Payroll department no later than fourteen days
prior to the beginning of a payroll period in order to participate in the Plan
for that payroll period and subsequent payroll periods. Employees who elect to
participate in the plan in accordance with this Section 3 are referred to herein
as "Participating Employees."

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An election to participate in the Plan authorizes the Company to withhold from
the Participating Employee's paycheck for the next and subsequent payroll
periods after timely submission of the Enrollment/Withdrawal Form. A
Participating Employee may at any time increase or decrease his or her payroll
deduction effective with the next payroll period by timely filing a new
Enrollment/Withdrawal Form. So long as the Plan remains in effect, once an
employee enrolls in the Plan, he or she will automatically continue
participation on the same basis, unless he or she elects to change deduction
amounts, withdraws from participation in the Plan, or becomes ineligible to
participate in the Plan. Changes in deduction amounts or participation in the
Plan must be communicated in writing to the Company's payroll department through
timely submission of a new Enrollment/Withdrawal Form

A Participating Employee also may make a lump-sum investment by completing and
delivering to the payroll department an Enrollment/Withdrawal Form accompanied
by a check or other monetary instrument acceptable to the Company at lease
fourteen days prior to the next payroll period in which the investment is to be
made.

4. Investing in the Plan.

Elections for Plan Investments must be made in whole dollar amounts and
specified on the Enrollment/Withdrawal Form. The minimum dollar amount for
payroll deductions is $10.00 per pay period for employees that are paid weekly
and $20.00 per pay period for employees that are paid bi-weekly or semimonthly.
If a Participating Employee elects to make a lump-sum investment, the minimum
investment is $100.00 per payroll period.

5. Use of Funds; No Interest Paid.

All funds received by the Company under the Plan will be included in the general
funds of the Company and may be used by the Company for any corporate purpose.
No separate account or trust fund will be established to hold funds received
under the Plan. No interest will be paid to any Participating Employee for
amounts invested in the Plan.

6. Purchases of Common Stock Under the Plan.

As of each Purchase Date (as defined in Section 7), each Participating Employee
will be deemed to have purchased, without any further action, a number of whole
and fractional shares of Common Stock determined by dividing the amount of his
or her payroll deductions and lump-sum investments for the preceding Purchase
Period (as defined below) by eighty-five percent (85%) of the Fair Market Value
of a share of Common Stock as of the Purchase Date. Fractional shares purchased
for a Purchase Period will be combined with purchases for subsequent Purchase
Periods to make whole shares.

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Purchase Periods begin on the first day of each of the Company's accounting
months beginning with the accounting month commencing on or after May 1, 2001,
and end on the day immediately preceding the commencement date of the following
Purchase Period, (each, a "Purchase Period"). The Plan Committee has the power
to change the commencement dates or duration of a Purchase Period with respect
to any future Purchase Period if the change is announced at least 14 days prior
to the scheduled beginning of the Purchase Period to be affected.

7. Purchase Price.

The purchase price for each whole or fractional share of Common Stock purchased
under the Plan will be eighty-five percent (85%) of the Fair Market Value of the
whole or fractional share on the first trading day of the Common Stock after the
end of each calendar month (as opposed to accounting month, if different) on
which it is administratively practicable to execute a purchase of shares of
Common Stock (the "Purchase Date").

"Fair Market Value" of the Common Stock as of a Purchase Date will be determined
by the Plan Committee by any fair and reasonable means, including (a) if the
Common Stock is listed for trading on a national securities exchange or is
quoted in the over-the-counter market on the basis of last sales prices, the
average of the high and low sales prices on the exchange or over-the-counter
market on the Purchase Date or (b) if the Common Stock is not listed for trading
on a national securities exchange or quoted in the over-the-counter market on
the basis of last sales prices, but is traded in the over-the-counter market,
the average of the bid and asked prices for the Common Stock at the close of
business on the Purchase Date.

8. Investment Accounts.

All shares purchased under the Plan will be maintained by the Company in
separate investment accounts ("Investment Accounts") for each Participating
Employee. Each Investment Account may be in the name of the employee or if he or
she so indicates on the Enrollment/Withdrawal form in the employee's name
jointly with a member of the employee's family, with right of survivorship. An
employee who is a resident of a jurisdiction that does not recognize a joint
tenancy may have an Investment Account as tenant in common with a family member,
without right of survivorship.

9. Sale or Transfer of Common Stock.

A Participating Employee may sell or transfer any Common Stock in the employee's
Investment Account at any time after purchase, subject to limitations, if any,
imposed by applicable laws and procedures instituted by the Company. A sale may
be made through the Company or outside of the Company by the employee's own
broker. Any sale or transfer is subject to any commission or other sales or
transfer charges, which must be paid by the Participating Employee.

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10. Limitation of Number of Shares that an Employee May Purchase.

No employee may invest in the Plan more than $25,000 through payroll deductions
or lump-sum investments to purchase Common Stock in one calendar year.

11. Shares Reserved for the Plan.

There will be reserved for issuance and purchase by employees under the Plan an
aggregate of 500,000 shares of Common Stock, subject to adjustment as provided
in Section 12. Shares subject to the Plan may be shares authorized but unissued,
or shares that were once issued and subsequently reacquired by the Company
("treasury shares"). If reserved shares are not purchased by a Participating
Employee for any reason or if a right to purchase terminates as provided in the
Plan, the unpurchased shares will again become available for issuance under the
Plan unless the Plan has been terminated, but the unpurchased shares will not
increase the aggregate number of shares reserved for purchase under the Plan.

12. Adjustment in Case of Changes Affecting the Common Stock.

If the outstanding shares of Common Stock are subdivided or split, or a stock
dividend is paid thereon, the number of shares reserved under this Plan will be
adjusted proportionately, and the other provisions of the Plan may be adjusted
as the Board of Directors of the Company may deem necessary or equitable. If any
other change affecting the Common Stock occurs, the Board of Directors may make
such adjustments as it deems equitable to give proper effect to such event.

13. Right as a Stockholder.

When at least one whole share of Common Stock is deemed purchased for a
Participating Employee's account, the employee will have all of the rights or
privileges of a stockholder of the Company with respect to whole or fractional
shares purchased under the Plan whether or not certificates representing full
shares are issued. Any cash or stock dividend or other distribution on Common
Stock held in a Participating Employee's Investment Account will be credited to
the account. Proxy information will be provided for each meeting of the
Company's stockholders so that each Participating employee may vote his or her
shares in accordance with his or her instruction. If no written instructions are
received on a timely basis, the voting of shares in the account will be governed
by the rules and policies of the NASDAQ Stock Market and the Securities and
Exchange Commission.

14. Rights Not Transferable.

The right to participate in the Plan is not transferable by a Participating
Employee and is exercisable during his or her lifetime only by him or her.

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15. Withdrawing from the Plan.

A Participating employee may withdraw from the Plan at any time by properly
completing and delivering an Enrollment/Withdrawal Form to the payroll
department at least 14 days prior to the payroll period in which participation
is to end, with the withdrawal being effective as of the end of that payroll
period and thereafter. After a Participant Employee properly withdraws from the
Plan, the Company will deliver to the withdrawing employee the whole shares of
Common Stock credited to the employee's Investment Account under the Plan and
will sell any fractional shares in the open market and remit the net proceeds by
check. A withdrawing employee may not participate in the Plan again until two
Purchase Periods after the one in which the employee withdrew. To rejoin the
Plan, a new Enrollment/Withdrawal Form must be submitted.

16. Death, Retirement or Termination of Employment.

If a Participating Employee dies or retires or if his or her employment is
terminated for any reason, the Participating Employee's participation in the
Plan will end effective immediately and the amount of the employee's uninvested
payroll deductions and lump-sum investments will be refunded to the employee, or
in the case of death to his or her estate. The Company also will deliver to the
employee or his or her estate the whole shares of Common Stock credited to the
employee's Investment Account under the Plan and will sell any fractional shares
in the open market and remit the net proceeds by check.

17. Administration of the Plan.

The Plan will be administered, at the Company's expense, by the Compensation
Committee of the Board of Directors or any successor committee appointed by the
Board of Directors (the "Plan Committee"). Subject to the express provisions of
the Plan, the Plan Committee will have authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, and to make
all other determinations necessary or advisable in administering the Plan, all
of which determinations will be final and binding upon all persons unless
determined otherwise by the Board of Directors. The Plan Committee may delegate
the day-to-day administration of the Plan and may request advice or assistance
or employ such other persons as are necessary for proper administration of the
Plan.

18. Amendment of the Plan.

The Board of Directors may at any time, or from time to time, amend the Plan in
any respect, except that no amendment shall by made (a) decreasing the number of
shares to be reserved under the Plan (other than as provided in Section 12), or
(b) permitting person other than employees (as determined by the Company in its
sole discretion) to participate in the Plan.

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19. Termination of the Plan.

The Plan and all rights of employees under the Plan will terminate: (a) on the
Purchase Date that Participating Employees become entitled to purchase a number
of shares greater than the number of reserved shares remaining available for
purchase (and no such additional shares shall then be purchased); or (b) at any
time, at the discretion of the Board of Directors, after the completion of any
Purchase Period. If the Plan terminates under clause (a), reserved shares
remaining as of the termination date will be sold to Participating Employees on
a pro rata basis.

20. Effective Date of Plan.

The Plan is effective as of May 1, 2001.

21. Laws and Regulations.

The laws of the Commonwealth of Pennsylvania shall govern all matters relating
to this Plan, except to the extent it is superseded by the laws of the United
States. The Plan and all rights and obligation of the Company and Participating
Employees under the Plan are subject to all applicable federal, state and
foreign laws, rules and regulations, and to such approvals by and regulatory or
governmental agency as may, in the opinion of counsel for the Company, be
required. Restrictions may apply to the sale of shares of Common Stock by
certain officers of the Company and those having similar responsibilities whom
are subject to federal insider trading and short-swing profit rules.

22. Rules for Officers of the Company.

Because the federal securities laws and the Company's Insider Trading Policy
impose certain restriction on the ability of officers of the Company and its
subsidiaries to purchase Common Stock other than during certain "window
periods", these officers will be allowed to only make lump-sum investments in
the Plan, and the Plan will purchase Common Stock on their behalf, as follows:

     (a) Officers of the Company or its subsidiaries designated by the Plan
         Committee ("Designated Officer") will be entitled to make lump-sum
         investments to the Plan at any time during a "window period", as
         determined by the Plan Committee. An appropriate Enrollment/Withdrawal
         Form must be submitted to the Corporate Secretary.

     (b) The Plan will purchase Common Stock for those Designated Officers
         making a lump-sum investment during a "window period" as soon as
         practicable after receipt of a check or other monetary instruments
         acceptable to the Company.

     (c) Designated Officers may not make investments in the Plan other than as
         permitted in Section 22.

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     (d) Designated Officers may not sell or otherwise transfer any of the
         Common Stock purchased on their behalf except in full compliance with
         applicable securities laws and the Company's Insider Trading Policy.

     (e) Except as otherwise described in this Section 22, the other provisions
         of the Plan will apply to purchases of Common Stock under the Plan by
         Designated Officers.

23. Limitations Arising from Compliance with Nasdaq Stock Market Requirements.

The Company has represented to the Nasdaq Stock Market that (i) at least a
majority of the shares of Common Stock purchased under the Plan, during the
shorter of the three-year period commencing on the effective date of the Plan,
will be purchased by employees who are not officers of the Company, and (ii) if
the term of the Plan is greater than three years, the Company will administer
the Plan so that in each subsequent year a majority of the shares of Common
Stock purchased under the Plan are purchased by employees who are not officers
of the Company. The Company will monitor purchases made under the Plan for
purposes of making certain that the Company is in compliance with its
representations to the Nasdaq Stock Market. The Company may limit purchases by
officers of the Company under the Plan if the Company determines that purchases
need to be limited to assure that the Company maintains compliance with its
representations to the Nasdaq Stock Market.

24. Tax Status of Plan.

The purchase of shares of Common Stock under the Plan will be made with
"after-tax" dollars of Participating Employees. the amount deducted from a
Participating Employee's paycheck or invested in a lump-sum will have been
subject previously to withholding of applicable income and employment taxes.

The Plan is not a qualified plan under the Internal Revenue Code. Consequently,
Participating Employees will realize income equal to the amount of the
difference between the Fair Market Value of the Common Stock on the Purchase
Date and the purchase price. Participating employees also may realize a gain or
loss on the sale of any Common Stock purchased under the Plan. Each employee is
advised to consult with his or her own tax advisers prior to participation in
the Plan.

The Company may make such provisions as it deems appropriate for withholding by
the Company pursuant to federal or state tax laws of such amounts as the company
determines it is required to withhold in connection with the purchase or sale by
a Participating Employee of any Common Stock acquired pursuant to the Plan. The
Company may require a Participating Employee to satisfy any relevant tax
requirements before authorizing any issuance of Common Stock to the
Participating Employee.

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25. ERISA.

The Plan is not subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").

26. No Continued Employment.

The Plan does not confer any rights of continued employment upon any employee of
the Company or any of its subsidiaries and it shall not be deemed to interfere
in any way with the Company's or its subsidiaries' right to terminate, or
otherwise modify, an employee's employment at any time.

27. Effect of Plan.

The provisions of this Plan shall, in accordance with its terms, be binding
upon, and inure to the benefit of, all successors of each employee participating
in the Plan, including, without limitation, such employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such employee.

                                        8<PAGE>   1

                                                                 Exhibit 10.6(a)

                              EMPLOYMENT AGREEMENT

         This Agreement, effective as of November 30, 2000, is entered into by
and between Applied Graphics Technologies, Inc., a Delaware corporation ("AGT"),
and Joseph D. Vecchiolla, (hereinafter referred to as the "Employee"), an
individual presently residing at 2707 Royal Lytham Court, St. Charles, Illinois
60174. In consideration of the mutual covenants set forth herein, the parties
agree as follows:

         1. Employment Term. Subject to the further terms and conditions of this
Agreement, AGT shall employ Employee for the period beginning on November 30,
2000 (the "Commencement Date") and ending on November 29, 2002 (the "Term").
After the Term, Employee shall be an employee "At will" and may be terminated by
AGT at any time with or without cause.

         2.   Compensation.

                  a. AGT will pay Employee a salary at the rate of Three Hundred
and Seventy-Five Thousand Dollars ($375,000) per annum ("Base Salary"). The Base
Salary will be reviewed annually and may, in the sole discretion of the Board of
Directors, be increased but may not be reduced.

                  b. Employee shall be entitled to receive a cash bonus of One
Hundred Thousand ($100,000) as of the execution of this Agreement.

                  c. Employee will be eligible to receive a bonus for calendar
year 2001 up to a maximum of 50% of his Base Salary (the "Bonus"), subject to
the guideline that (i) fifty percent (50%) of the Bonus will be based upon the
Employee meeting certain objectives established in the sole discretion of the
Compensation Committee of the Board of Directors (the "Objectives"), and (ii)
fifty percent (50%) of the Bonus will be based upon the Employee exceeding the
Objectives.

                  d. The Base Salary and bonuses referred to above represent all
of Employee's cash compensation, and accordingly, Employee shall not be entitled
to any overtime, weekend or holiday compensation. All payments made pursuant to
this Agreement shall be less applicable withholdings and deductions.

                  e. Employee shall be eligible to participate in those
insurance, retirement and other benefits generally provided to AGT's other
senior executives of similar rank and tenure from time to time. Employee shall
be eligible to participate in the AGT 401(k) plan (or successor plan) on the
first enrollment date following satisfaction of the applicable waiting period.
<PAGE>   2

                  f. Employee shall be reimbursed for all reasonable travel and
entertainment expenses incurred in the furtherance of AGT's business, upon
submission by Employee of appropriate documentation in accordance with AGT's
policies as are in effect from time to time.

                  g. AGT shall provide Employee with an all inclusive automobile
allowance of $1,000 per month.

         3. Duties. Employee agrees to fulfill the duties of Chief Operating
Officer and Chief Financial Officer as such duties are defined by AGT's Board of
Directors. It is understood that the Company intends to commence a search for a
new Chief Executive Officer. In light of the foregoing and the requirements of
the Company as determined by the Board of Directors, it is understood that the
Employee's duties may be modified from time to time in the future. However, the
Employee's duties must, at a minimum, consist of those customarily performed by
either the Chief Financial Officer or the Chief Operating Officer (but not both
positions). Employee's reporting relationship shall be as determined by the
Board of Directors in its sole discretion, provided that, initially, Employee
shall report to the Executive Committee of the Board of Directors. Employee
shall devote all of his business efforts to the performance of his duties
hereunder and shall do so to the best of his abilities. It is currently intended
that the financial function of the Company will remain in New York. The
Employee's principal office, which is currently in New York, shall be in a
location determined by the Board of Directors, but it is presently anticipated
that Employee will be spending less time in New York, more time in Chicago and
will travel both in the United States and abroad as necessary and appropriate to
fulfill his duties.

         4. Vacation. Employee shall be entitled to four (4) weeks vacation
during each year of the Term, to be taken at such times as shall be agreed
between Employee and the entity or person to whom he reports. Vacation days will
accrue and be paid in accordance with AGT's policies as are in effect from time
to time.

         5.   Termination.

                  a. This Agreement shall terminate prior to the expiration
hereof, in the event of Employee's death, permanent disability, or discharge for
cause. "Cause" shall mean (i) indictment for, conviction of or pleas of guilty
or nolo contendre to any felony or business-related misdemeanor; (ii) theft,
fraud or embezzlement; (iii) excessive absenteeism not related to illness; (iv)
the intentional failure to perform assigned duties; (v) an act of gross neglect
or gross misconduct; (vi) a material breach of any of the provisions of this
Agreement; (vii) the commission of any other action with the intent to harm or
injure AGT, its parents, subsidiaries or affiliates; or (viii) habitual drug or
alcohol abuse. In the event that AGT terminates Employee for Cause, Employee
shall be entitled to Base Salary earned up to the date of termination, but no
other compensation (including without limitation any bonus set forth in
Paragraph 2(c)) and AGT reserves the right to seek appropriate relief
<PAGE>   3
for whatever damage may have resulted from the "Cause". Accordingly, without
limiting the foregoing, if the Employee is terminated for Cause, he is not
entitled to receive (i) any further payments or benefits pursuant to Paragraphs
2(a), 2(c), 2(e) or 2(g) above or (ii) any payment under Paragraph 2(c) for any
bonus which has been accrued but unpaid and AGT shall have no further obligation
to Employee pursuant to the Agreement. "Permanent disability" shall mean a
physical or mental illness, disability or disfigurement which renders Employee
incapable of performing his normal services hereunder for a continuous period of
8 weeks, or an aggregate of 16 weeks during any 52-week period. In the event
Employee is disabled for less than such 8 or 16 weeks, respectively, Employee
shall nonetheless be entitled to full compensation during such period. In the
event of Employee's permanent disability or death, Employee shall be entitled to
receive his Base Salary and benefits pursuant to Paragraph 2 herein until the
effective date of his termination, and AGT shall have no further obligation to
Employee pursuant to the Agreement, including but not limited to Paragraphs
2(a), 2(c), 2(e), or 2(g) above.

                  b. AGT shall be entitled to terminate this Agreement at any
time during the Term without Cause (as defined above). However, in the event AGT
exercises its rights under this Paragraph 5(b), except as provided in Paragraph
6, AGT's sole obligation pursuant to this Agreement shall be to continue to pay
Employee's Base Salary under Paragraph 2(a) for six (6) months.

                  c. Amounts payable to Employee pursuant to the Paragraph 5
shall be paid in accordance with AGT's usual payroll practices.

         6. Change of Control. In the event that a Change of Control (as defined
below) results in an adverse change in the compensation, reporting structure,
key responsibilities, or title of Employee, Employee shall be entitled to resign
his employment and AGT shall continue to pay Employee's Base Salary under
Paragraph 2(a) for the period of twelve months following the Change of Control.
In such event, AGT shall have no further obligation to Employee pursuant to this
Agreement, including but not limited to Paragraphs 2(a), 2(c), 2(e) or 2(g)
above. In the event that a Change of Control occurs and Employee's employment is
terminated without Cause, AGT shall continue to pay Employee's Base Salary under
Paragraph 2(a) through the end of the twelve month period following the Change
of Control. Any payment to Employee pursuant to this Paragraph 6 shall be in
lieu of any amounts owed to Employee pursuant to Paragraph 5(b) and AGT shall
have no further obligation to Employee pursuant to this Agreement, including but
not limited to Paragraphs 2(a), 2(c), 2(e) or 2(g) above.
<PAGE>   4

         For purposes of this Agreement, "Change of Control" shall be deemed to
have occurred if (i) a "person" or "group" as defined in Section 13(d) of the
Securities Exchange Act of 1934 (other than a person or group related to or
affiliated with Mortimer B. Zuckerman) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 of the Securities Exchange Act of 1934) of 50% or more of
the outstanding voting stock of AGT, (ii) AGT is to be merged into or
consolidated with another corporation not controlled, directly or indirectly, by
Mortimer B. Zuckerman, and/or (iii) AGT sells or otherwise disposes of
substantially all of its assets.

         7. Noncompetition, Nonsolicitation and Confidentiality. As a material
inducement to employ him, Employee agrees that the Noncompetition,
Nonsolicitation and Confidentiality Agreement attached hereto as Exhibit A, the
terms of which are incorporated herein by reference, shall continue in full
force and effect as if it had been executed simultaneously with this Agreement
except that paragraph 11 therein is hereby modified to provide that it shall be
governed by the laws of the State of New York without regard to its conflicts of
laws provisions.

         8. Absence of Restrictions. Employee represents and warrants that he is
not a party to any agreement or contract pursuant to which there is any
restriction or limitation upon him entering into this Agreement or performing
the duties called for by this Agreement.

         9. Options. Effective December 1, 2000, the Compensation Committee of
the Board of Directors has granted to Employee options to acquire 100,000 shares
of AGT's common stock (calculated on a pre-reverse stock split basis) under the
AGT Amended and Restated 1998 Incentive Compensation Plan. Such options will be
at the price the stock closed at on December 1, 2000 and subject to the other
terms and conditions set forth in AGT's customary Stock Option Agreement and as
are established by the Compensation Committee of the Board of Directors from
time to time. Notwithstanding anything to the contrary in AGT's customary Stock
Option Agreement, upon the occurrence of a Change of Control, all of the options
granted pursuant to this Paragraph 10, to the extent not already vested, shall
vest and be immediately exercisable if (i) Employee resigns in accordance with
Paragraph 6 hereof or is not offered employment with the successor corporation,
or (ii) in the event Employee continues to be employed by the successor
corporation, the successor corporation fails to assume the options granted
hereunder or substitute a reasonably comparable option or equity opportunity in
the successor corporation or a parent or subsidiary of such successor
corporation.

         10. Notices. All notices, consents and other communications required or
permitted to be given hereunder shall be in writing and delivered personally or
sent by certified or registered mail, postage prepaid, as follows:

                  a. if to Employee, to: Joseph Dennis Vecchiolla, 2707 Royal
Lytham Court, St. Charles, Illinois 60174

                  b. if to AGT, to: Chairman of the Board of Directors, , 450
West 33rd Street, New York, New York 10001-2681, with a copy to Martin D. Krall,
Chief Legal Officer, at 450 West 33rd Street, Third Floor, New York New York
10001-2681.

<PAGE>   5

         Any notice so given shall be deemed received when delivered personally,
or, if mailed, three days after it is deposited, postage prepaid, by certified
mail, in the United States mail. Either party may change the address to which
notices are to be sent by giving written notice of such change of address to the
other party in the manner herein provided for giving notice.

         11. General.

                  a. Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be subject to resolution in the state or
federal courts in New York and shall be governed by and construed and enforced
in accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely in New York without giving effect to
principles of conflicts of laws thereof.

                  b. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. This Agreement sets forth the entire agreement and understanding
of the parties hereto concerning the subject matter hereof, and supersedes all
prior agreements, arrangements and understandings between the parties hereto,
including without limitation the employment agreement between AGT and Employee
dated May 1, 2000.

                  c. AGT may assign its rights and obligations under this
Agreement to any successor thereto or to any corporation or other entity
controlled, or under common control with AGT or any of its affiliates. This
Agreement is personal to employee, and neither this Agreement nor any of
Employee's rights or obligations hereunder may be assigned, pledged or
encumbered by him, without the prior written approval of AGT.

                  d. This Agreement may be amended, modified, superseded or
canceled, and the terms or covenants hereof may be waived, only by a written
instrument executed by both parties hereto, or, in the case of a waiver, by the
party waiving compliance. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver by either party of the breach of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed as
a further or continuing waiver of any such breach or waiver of the breach of any
other term or covenant in this Agreement.

                  e. In the event that any one or more of the provisions of this
Agreement shall be determined to be invalid or unenforceable in any respect, the
validity and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.

                  f. This Agreement may be executed in counterparts; each of
which shall be deemed to be an original but all of which together shall be
deemed to be one and the same instrument.
<PAGE>   6

                  g. Except with regard to employee's obligations under the
Noncompetition, Nonsolicitation and Confidentiality Agreement attached hereto as
Exhibit A, and with regard to AGT's obligations under Paragraphs 5(b) and 6,
this Agreement shall be of no further force and effect and AGT shall have no
further obligations hereunder after the expiration or termination of this
Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
shown below.

JOSEPH D. VECCHIOLLA                APPLIED GRAPHICS TECHNOLOGIES, INC.

By:                                 By:
   -----------------------------       ----------------------------

Dated:                              Title:
      ---------------------------         -------------------------

                                    Dated:
                                           ------------------------
<PAGE>   7
                                    EXHIBIT A

                         Noncompetition, Nonsolicitation
                          and Confidentiality Agreement

In consideration for the agreement of Applied Graphics Technologies, Inc.,
("AGT") to employ Joseph D. Vecchiolla ("Employee") as Senior Vice President and
Chief Financial Officer (the "Employment Agreement") Employee hereby agrees as
follows:

         1. In this Agreement, the term AGT includes Applied Graphics
Technologies, Inc., as well as all of its parents, subsidiaries and affiliates.

         2. Employee acknowledges that he will be furnished, or may otherwise
receive or have access to, private information which relates to AGT's past,
present or anticipated customer lists or other compilations for marketing or
development, or which relates to administrative, management, financial,
marketing, sales or manufacturing activities of AGT and that such information is
not easily accessible from public sources. All such information, including any
materials or documents containing such information, shall be considered by AGT
and Employee as proprietary and confidential ("Proprietary Information").

         3. Both during and forever after the term of the Employment Agreement,
Employee agrees to preserve and protect the confidentiality of the Proprietary
Information and all physical forms thereof, whether disclosed to him before this
Agreement is signed or afterward. In addition, Employee shall not (i) disclose
or disseminate the Proprietary Information to any third party, including
employees of AGT, without a need to know, (ii) remove Proprietary Information
from AGT's premises without valid business purpose, or (iii) use Proprietary
Information for his own benefit or for the benefit of any third party.

         4. Employee acknowledges and agrees that all Proprietary Information
used or generated during the course of working for AGT is the property of AGT.
Employee agrees to deliver to AGT all documents and other tangibles (including
diskettes and other storage media) containing Proprietary Information, including
all copies of such documents or tangibles, immediately upon notice of the
termination of his employment with AGT.

         5. While working for AGT and for one year following termination of his
employment from AGT for any reason, Employee will not attempt, either directly
or indirectly, to solicit, induce, entice or attempt to influence any employee
of AGT to leave AGT's employ or directly or indirectly hire or cause any other
entity to hire any person who has been an AGT employee in the 12 months
preceding the contact.

         6. Noncompetition

         a. Employee acknowledges that his agreement to forego competition with
AGT was a material inducement to AGT to employ him. Employee also acknowledges
that he will acquire much Proprietary Information concerning AGT's financial
status, current and future marketing and advertising strategies, pricing, and
other confidential information as the result of his employment and that such
information is not easily accessible from other sources. Employee further
acknowledges that the businesses in which AGT engages, including but not limited
to pre-press and digital archiving are very competitive; that competition by him
in those businesses during his employment, or after his employment terminates,
would severely injure AGT; and that his agreements herein are demonstrably
necessary to protect those legitimate interests.
<PAGE>   8

         b. During the term of his employment with AGT, Employee (i) will devote
all his professional and business time and effort to and give undivided loyalty
to AGT and (ii) will not engage in any way whatsoever, directly or indirectly,
in any business that is competitive with AGT, nor directly or indirectly solicit
or in any other manner work for or assist any business which is competitive with
AGT.

         c. The "Restricted Period" shall mean the period beginning on the
Commencement Date of the Employment Agreement and ending on the later of the
second anniversary thereof or six months after Employee's employment is
terminated. During the Restricted Period, Employee shall not, whether alone or
in association with any other person, directly or indirectly (i) engage in any
business in the Specified Areas that is competitive with any aspect of the
business that is being conducted or planned by AGT at the time Employee's
employment with AGT terminates; or (ii) have any interest or association
(including, without limitation, as a shareholder, partner, director, officer,
employee, consultant, sales representative, supplier, distributor, agent or
lender) in or with any person engaged in a business in the Specified Areas that
Employee is prohibited from engaging in pursuant to clause (i) above; provided
however, that the foregoing shall not prohibit Employee from owning securities
of any publicly traded company that is engaged in any such business as long as
Employee does not own at any time 5% or more of any class of the equity
securities of such company.

         For purposes of the foregoing, the "Specified Areas" means each state
or country in which AGT makes any sales or performs any services during the 12
month period preceding the date on which Employee's employment with AGT
terminates.

         d. If any provision of this Agreement is determined by a court to be
overly broad thereby making the provision unenforceable, Employee agrees that
such court shall substitute a reasonable, judicially enforceable limitation in
place of the invalid part of the provision and that as so modified the provision
shall be as fully enforceable as if set forth herein in the modified form. If it
is not possible to restate the provision in a valid or legal manner, then that
invalid or illegal portion shall be deemed not a part of the Agreement and the
remaining provisions shall remain in full force and effect.

7.       Employee acknowledges and agrees that:

         a. (i) his contractual obligations under paragraphs 3, 4, 5, and 6
hereof have a unique and very substantial value to AGT, (ii) he has sufficient
assets and other skills to provide a reasonable livelihood for himself while
such paragraphs are in force, and (iii) he is subject to immediate dismissal by
AGT for any breach of those provisions and that such dismissal shall not relieve
him from his continuing obligations under this Agreement or from the imposition
by a court of any judicial remedies, such as money damages or equitable
enforcement of those provisions.

         b. the terms and provisions of this Agreement are applicable to all
information and materials developed for, received from or any advice provided
to, AGT prior to or after the signing of this Agreement; and

         c. the termination of his employment with AGT for any reason, shall not
relieve him from complying with the undertakings and agreements contained
herein, which call for performance prior or subsequent to the termination date,
including, but not limited to those undertakings and agreements set forth in
paragraphs 3, 4, 5 and 6 hereof.

         d. in the event of his breach of any of the undertakings or agreements
set forth in paragraphs 3, 4, 5, and 6 of this Agreement, AGT shall have the
right to obtain an injunction or decree of specific performance from any court
of competent jurisdiction to restrain him from violating such undertakings or
agreements or to compel him to perform such undertakings or agreements. Nothing
herein contained shall in any way limit or exclude any and all other rights
granted by law or equity to AGT.
<PAGE>   9

         8. No act or failure to act by AGT will waive any right contained
herein. Any waiver by AGT must be in writing and signed by the Chairman of AGT
to be effective.

         9. In the event that any provision of this Agreement conflicts with the
law under which this Agreement is to be construed or if any such provision is
held invalid by a court or other authority with jurisdiction over the parties to
this Agreement, such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the parties in accordance with
applicable law, and the remainder of this Agreement shall remain in full force
and effect. If it is not possible to restate the provision in a valid or legal
manner, then that invalid or illegal portion shall be deemed not a part of the
Agreement and the remaining provisions shall remain in full force and effect.

         10. This Agreement shall be construed according to its terms and not
strictly for or against either party.

         11. This Agreement shall be governed by the laws of the State of
Illinois without regard to its conflicts of laws provisions.

         12. All remedies provided herein are cumulative and in addition to all
other remedies which may be available at law or in equity.

         13. This Agreement shall be binding on both parties successors, heirs
and assigns.

Employee:                                   Applied Graphics Technologies, Inc.:

/s/ Joseph D. Vecchiolla                            /s/ Marty Krall
------------------------                            ---------------------------
Joseph D. Vecchiolla                                By: Martin D. Krall
                                                    Title: Executive Vice
                                                    President, Chief Legal
                                                    Officer and
                                                    Secretary

May 18, 2000                                        May 18, 2000
------------------------                            ---------------------------
Date                                                Date

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