Document:

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                                                                 EXHIBIT 10.6(a)

                              EMPLOYMENT AGREEMENT

         This Agreement, effective as of May 1, 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 May 1,
         2000 (the "Commencement Date") and ending on April 30, 2001 (the
         "Term"). This Agreement will be automatically renewed for one
         additional twelve-month period (also the "Term"), unless either party
         provides notice no less than 180 days prior to the expiration of the
         initial Term that it does not want to extend this Agreement for said
         twelve month period. 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.

         (1)      AGT will pay Employee a salary at the rate of Two Hundred and
                  Seventy-Five Thousand Dollars ($275,000) per annum.

         (2)      Employee shall be paid a cash bonus at the end of twelve
                  months of employment with AGT equal to One Hundred and Ten
                  Thousand Dollars ($110,000). The bonus set forth in the
                  preceding sentence shall accrue ratably during the Term. No
                  bonus shall be paid if Employee resigns his employment prior
                  to April 30, 2001. In the event this Agreement is renewed
                  beyond April 30, 2001, Employee shall be eligible to earn a
                  bonus calculated on such basis as the Board of Directors of
                  AGT, in its sole discretion, may annually determine consistent
                  with Employee's position in senior management.

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         (3)      In addition to the bonus set forth in subparagraph 2(b) above,
                  the Employee will receive a signing bonus of $37,500 payable
                  on or around May 30, 2000.

         (4)      The 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.

         (5)      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 after 30 days of employment. 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.

         (6)      Employee shall be reimbursed for all reasonable travel and
                  entertainment expenses incurred in the furtherance of AGT's
                  business, including but not limited to any amounts incurred by
                  Employee for pre-employment related interviews, upon
                  submission by Employee of appropriate documentation in
                  accordance with AGT's policies as are in effect from time to
                  time.

         (7)      AGT shall provide Employee with an all inclusive automobile
                  allowance of $800 per month.

3.       Duties. Employee agrees to fulfill the duties of Senior Vice President
         during the Term and the additional duties of Chief Financial Officer
         from May 18, 2000 through the end of the Term, as such duties are
         defined by AGT's Board of Directors or Chief Executive Officer.
         Employee shall report to the Chief Executive Officer of AGT, and shall
         devote all of his business efforts to the performance of his duties as
         Chief Financial Officer, and shall do so to the best of his abilities.
         It is expected that Employee's office will ultimately be located in
         Chicago following the successful transition of the finance function
         from New York to Chicago and Employee 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

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         at such times as shall be agreed between Employee and the Chief
         Executive Officer of AGT. Vacation days will accrue and be paid in
         accordance with AGT's policies as are in effect from time to time.

5.       Termination.

         (1)      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 salary earned up to the date of termination, but no other
                  compensation (including without limitation any bonus set forth
                  in Paragraph 2(b)) and AGT reserves the right to seek
                  appropriate relief 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(b), 2(e) or 2(g) above or (ii) any payment
                  under Paragraph 2(b) 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
                  salary and benefits pursuant to Paragraph 2 herein until the
                  effective date of his termination, including any accrued but
                  unpaid pro rata bonus under the first sentence of Paragraph
                  2(b), and AGT shall have no further obligation to Employee
                  pursuant to the Agreement, including but not limited to

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                  Paragraphs 2(a), 2(b), 2(e), or 2(g) above.

         (2)      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 (i) to continue to pay
                  Employee's salary under Paragraph 2(a) for six (6) months and
                  (ii) to pay any accrued but unpaid pro rata bonus determined
                  under the first sentence of Paragraph 2(b) and the bonus
                  provided for in Paragraph 2(c) if it has not previously been
                  paid.

         (3)      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, or if Employee
         is required permanently to move his primary office location out of the
         Chicago metropolitan area, Employee shall be entitled to resign his
         employment and AGT shall continue to pay Employee's 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(b), 2(e) or 2(g) above except to pay any accrued but
         unpaid pro rata bonus determined under the first sentence of Paragraph
         2(b). In the event that a Change of Control occurs and Employee's
         employment is terminated without Cause, AGT shall continue to pay
         Employee's salary under Paragraph 2(a) for the period of twelve months
         following the Change of Control. Payment of twelve months salary 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(b), 2(e) or 2(g) above except to
         pay any accrued but unpaid pro rata bonus determined under the first
         sentence of Paragraph 2(b).

                  For purposes of this Agreement, "Change of Control" means the
         sale of more than 50% of the outstanding voting shares of AGT in a
         single transaction and Derek Ashley is no longer Chief Executive

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         Officer of AGT. The provisions of this Paragraph 6 shall not be
         effective if, prior to the Change of Control, Employee has given notice
         as provided in Paragraph 1 of an intention not to extend this Agreement
         for an additional twelve-month period.

7.       Noncompetition, Nonsolicitation and Confidentiality. As a material
         inducement to employ him, Employee agrees to execute the
         Noncompetition, Nonsolicitation and Confidentiality Agreement attached
         hereto as Exhibit A, the terms of which are incorporated herein by
         reference.

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. The Chief Executive Officer of AGT intends to recommend to the
         Compensation Committee of the Board of Directors that options to
         acquire 60,000 shares of AGT's common stock be granted to Employee,
         under the AGT Amended and Restated 1998 Incentive Compensation Plan.
         For purposes of vesting, Employee will receive credit retroactive to
         the Commencement Date. Such options will be at a price determined by
         the Compensation Committee 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.

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:

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

         (2)      if to AGT, to: Derek Ashley, Chief Executive Officer, at 225
                  West Superior Street, Chicago, Illinois 606710, with a copy to
                  Martin D. Krall, Chief Legal Officer at 450 West 33rd Street,
                  New York NY 10001-2681.

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                  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.

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

         (2)      The section headings contained herein are for reference
                  purposes only and shall not in any way affect the meaning or
                  interpretation of this Agreement.

         (3)      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.

         (4)      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.

         (5)      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 parities 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

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                  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.

         (6)      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.

         (7)      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.

         (8)      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 above.

                                             Applied graphics Technologies, Inc.

                                             By_____________________________

                                             Title:_________________________

                                             _______________________________
                                             Joseph D.  Vecchiolla

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                                    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 business 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.

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         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) 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.

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         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
                  paragraph 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.

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.

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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.:

________________________            _____________________________
Joseph D. Vecchiolla
                                        By: ____________________________

                                        Title: _________________________

________________________            _____________________________
Date                                    Date<PAGE>   1
                                                                 EXHIBIT 10.6(b)

                          AGREEMENT AND GENERAL RELEASE

On this ___ day of June, 2000, Applied Graphics Technologies, Inc. ("AGT" or the
"Company") and Louis Salamone, Jr. ("Employee"), agreed on terms and conditions
as set forth below:

1. (a) Employee's employment with the Company will terminate effective August 3,
2000 (the "Termination Date").

(b) Immediately following expiration of the revocation period referred to in
Paragraph 9 below, the Company shall pay to Employee the total gross sum of Four
Hundred Thousand dollars ($400,000.00), less applicable withholdings and other
payroll deductions (the "Termination Pay").

(c) Effective June 4 through August 3, 2000, Employee will be employed by the
Company on a part-time basis as described below (the "Extended Employment
Period"):

         (i)      Employee will be available to work on the following projects
                  as well as any other projects mutually agreed upon:

                  (A)      disposition or closure of AmuseMatte;

                  (B)      preparation and resolution of Net Asset Statement in
                           connection with sale of PhotoLabs business and other
                           activities related thereto;

                  (C)      assistance with respect to the proposed sale of Devon
                           Publishing Group;

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                  (D)      bonusable services (set forth in the attached minutes
                           of the Compensation Committee of the Board of
                           Directors) related to the potential sale of AGT with
                           respect to either groups led by Perseus and/or
                           CitiGroup or affiliates thereof; and

                  (E)      mutually agreed to bonusable services (set forth in
                           the attached minutes of the Compensation Committee of
                           the Board of Directors) related to the potential sale
                           of AGT with respect to any other potential buyer.

         (ii)     Employee will be available to perform services for the Company
                  pursuant to Paragraphs 1(c)(i)(A), 1(c)(i)(B), and 1(c)(i)
                  (C), up to a maximum of ten (10) days between June 4 and July
                  3 and up to a maximum of six (6) days between July 4 and
                  August 3. Employee will also be available to perform services
                  for the Company pursuant to Paragraphs 1(c)(i)(D) and
                  1(c)(i)(E) at the Company's request both during and after the
                  Extended Employment Period.

         (iii)    Employee's sole wages for services performed hereunder during
                  the Extended Employment Period (or thereafter pursuant to
                  Paragraphs 1(c)(i)(D) and 1(c)(i)(E)) will be $1,538.46, less
                  applicable deductions and employee withholdings, for each day
                  actually worked.

         (iv)     Employee will be reimbursed for all normal and reasonable
                  expenses incurred in performing services hereunder including
                  air fare to and from Atlanta, Georgia (or whatever city
                  Employee may be working in at the time) to whatever location
                  required unless the need to perform services for the Company
                  coincides with Employee being in the New York Metropolitan
                  area. Employee will use his best efforts to perform his duties
                  with AGT when he is otherwise in the New York Metropolitan
                  area.

<PAGE>   3
         (v)      Employee will have the opportunity to continue during the
                  Extended Employment Period the medical and life insurance
                  coverage he currently enjoys pursuant to the Company's
                  policies at the same cost to the Employee as immediately prior
                  to the date of this Agreement and General Release unless
                  Employee's subsequent employer provides Employee with such
                  coverage. Towards that end, Employee will take whatever steps
                  are necessary and appropriate to continue said coverage, (i.e.
                  electing continued coverage under the Consolidated Omnibus
                  Budget Reconciliation Act of 1985, as amended, and converting
                  his current life insurance coverage), and the Company will
                  reimburse the Employee to the extent required so that the
                  Employee's cost for said coverage will be the same as
                  immediately prior to the date of this Agreement and General
                  Release.

         (vi)     Employee's title will be Senior Vice President and he will be
                  provided with office space comparable with what he had as of
                  June 2, 2000, to the extent such space is available. To the
                  extent she is still employed by the Company, Marina Dudash
                  will be available to assist Employee on AGT business provided
                  that it is understood that performing her duties with respect
                  to the current Chief Financial Officer will take precedence.
                  Employee will continue to be permitted to utilize the computer
                  he currently utilizes and will have access to the extent
                  needed to the computer network.

(d) Employee will receive whatever payments, if any, he may become entitled to
receive pursuant to the minutes of the meeting of the Compensation Committee of
the Board of Directors dated May 8, 2000, the relevant part of which is attached
hereto as Exhibit A (the "Minutes").

<PAGE>   4
(e) Employee shall not be entitled to any other payments or benefits, except for
any rights he may have pursuant to any stock option agreement between him and
the Company.

2. In exchange for the consideration provided for by this Agreement and General
Release, including the consideration provided for by Paragraph 1 above, which
Employee acknowledges exceeds that to which he would be entitled under any
applicable Company plan, policy, or practice:

<PAGE>   5
(a) Employee, for himself and for his heirs, executors, administrators, and
assigns (hereinafter referred to collectively as "Releaser"), forever releases
and discharges the Company and any and all of its respective parent
corporations, partners, subsidiaries, divisions, affiliated entities, successors
and assigns, and any and all of their past and/or present officers, directors,
partners, agents and employees (hereinafter referred to collectively as the
"Releasees"), from any and all claims, demands, charges, complaints, causes of
actions, obligations, promises, agreements, debts, expenses, fees and
liabilities of any kind whatsoever, whether known or unknown, foreseen or
unforeseen, which Releasor ever had or now has against Releasees by reason of
any actual or alleged act, omission, transaction, agreement, practice, policy,
conduct, occurrence, or other matter from the beginning of the world up to and
including the date of this Agreement and General Release, including, but not
limited to: (i) any claim under the Age Discrimination in Employment Act, as
amended; (ii) any claim under Title VII of the Civil Rights Act of 1964, as
amended, the New York State Human Rights Law, as amended, and the New York City
Human Rights Law, as amended; (iii) any claim under the Employee Retirement
Income Security Act of 1974, as amended; (iv) any other claim of discrimination
in employment (whether based on federal, state or local law, statute, rule,
regulation or common law); (v) any claim arising out of Employee's employment
with the Company, the terms and conditions of Employee's employment with the
Company, the termination of such employment, and/or any of the events relating
directly or indirectly to or surrounding that termination; (vi) any claim for
severance pay under any purported severance pay policy, or any claim for other
benefits; (vii) any claim under the Employment Agreement between the Employee
and the Company dated April 16, 1996 and the Employment Agreement Extension
between said parties dated March 23, 1998 (collectively, the "Employment
Agreement"); and (viii) any claim for attorney's fees, costs, disbursements
and/or the like.

(b) Employee represents, warrants and covenants that he has not and will not, in
any way, disparage, discredit, defame or belittle the Company, its employees or
products, officers or affiliates or any of their respective parent corporations,
partners, subsidiaries, divisions, affiliated entities, successors and assigns,
and any and all of their past and/or present officers, directors,

<PAGE>   6
partners, agents and employees, except in conversations with the Company's
senior officers and directors in the course of performing his duties hereunder.

3. Employee represents and warrants that he has not commenced, maintained,
prosecuted or participated in any action, suit, charge, complaint or proceeding
of any kind against Releasees that is pending in any court or before any
administrative or investigative body or agency. To the extent permitted by
applicable law, Employee covenants that he shall not at any time hereafter
commence, maintain, prosecute, participate in, or permit to be filed by any
other person on his behalf, any action, suit, charge, complaint or proceeding of
any kind (other than filing for unemployment) against Releasees with respect to
any act, omission, transaction or occurrence up to and including the date of the
execution of this Agreement and General Release.

4. Employee agrees that he will not, for himself or any other person or entity,
directly or indirectly divulge, communicate or in any way make use of any
confidential, sensitive, or proprietary information ("Confidential Information")
acquired in the performance of Employee's services for the Company without the
prior written consent of a duly designated representative of the Company; such
Confidential Information may include, but is not limited to, financial,
advertising information, business strategies, systems, methods and procedures,
reports, specifications, computer data, intellectual property, and other
business and technical information. Employee acknowledges that the Confidential
Information constitutes a valuable asset of the Company, embodying substantial
business and creative efforts, and that any disclosure of Confidential
Information by Employee will result in irreparable injury to the Company; by
means of such disclosure, Employee consents to the grant by any court of
equitable relief, including specific performance, restraining order and/or
injunction, in favor of the Company, without prejudice to any and all other
rights or remedies to which the Company may be entitled. Employee also agrees
that he will not disclose to any other person or entity the terms and conditions
of this Agreement and General Release, without the prior written consent of a
duly designated representative of the Company, except that Employee may disclose
the terms and conditions of this Agreement and General Release to his spouse,
attorney, financial advisor and/or accountant, provided that they agree to
maintain the confidentiality of this Agreement and General Release.

<PAGE>   7
5. In the event Employee breaches any representation, warranty, covenant or
agreement of this Agreement and General Release, including, but not limited to,
Paragraphs 2, 3, 4 and 7, the Company shall be entitled to recover from Employee
any amount paid to him by the Company pursuant to Paragraph 1(b) and/or 1(d) at
the time of breach. Employee hereby agrees that the Company may bring an action
(or counterclaim) to recover such amount. The Company shall be entitled to
recover from the Employee (in addition to any other sum determined to be due and
owing) its reasonable attorney's fees and costs incurred in such action.
Employee further acknowledges and agrees that any breach by him of the covenants
herein will cause irreparable harm to the Company. Accordingly, in the event of
any such breach, or anticipated breach, the Company shall be entitled to
injunctive relief.

6. If any part, term, or provision of this Agreement and General Release is
declared by any court of competent jurisdiction in a final, non-appealable
judgment to be illegal, void, unenforceable or invalid, such provision shall
have no effect upon, and shall not impair the legality, enforceability or
validity of, any other provision of this Agreement and General Release;
provided, however, that, upon any finding by such court of competent
jurisdiction that a release or waiver of claims or rights, or a covenant
provided for by Paragraphs 2, 3 or 4 above, is illegal, void, unenforceable or
invalid, Employee agrees at the Company's option, either to return promptly to
the Company any amount paid to him by the Company pursuant to Paragraph 1(b)
and/or 1(d) or to execute a release, waiver and/or covenant that is legal, valid
and enforceable to the maximum extent permitted by applicable law.

7. This Agreement and General Release constitutes the complete understanding
between the parties and may not be changed orally. Employee acknowledges that no
representative of the Company has made any representation or promise to him
concerning the terms and conditions of this Agreement and General Release or the
termination of his employment with the Company other than those expressly set
forth in this Agreement and General Release. It is understood and agreed that
the Employment Agreement is null and void and of no further force and effect.
Notwithstanding the foregoing, the Noncompetition,

<PAGE>   8
Nonsolicitation and Confidentiality Agreement attached as Exhibit A to the
Employment Agreement will continue in full force and effect. It is understood
and agreed that the expiration of the Employment Agreement will not be
considered to be a "termination" of the Employment Agreement within the meaning
of Paragraph 6(b) therein.

8. Employee hereby acknowledges and represents that: (i) the Company has advised
him that he should consult with independent legal counsel before executing this
Agreement and General Release; (ii) Employee has had the opportunity to
consider, for at least twenty-one (21) days, this Agreement and General Release;
and (iii) Employee has carefully read this Agreement and General Release in its
entirety, has discussed it or had reasonable opportunity to discuss it with any
advisor of his choice, fully understands it, voluntarily assents to all of its
terms and conditions and is signing it of his own free will.

9. This Agreement and General Release shall not become effective until the
eighth (8th) day following Employee's signing of this Agreement and General
Release (the "Effective Date"), and Employee may at any time prior to the
Effective Date revoke this Agreement and General Release by delivering a written
notice of such revocation to Marty Krall, Applied Graphics Technologies, Inc.,
450 West 33rd Street, New York, New York 10001-2681.

10. This Agreement and General Release shall be governed by, and construed and
enforced in accordance with the laws of the State of New York.

APPLIED GRAPHICS TECHNOLOGIES, INC.

By: _______________________________
      Louis Salamone, Jr.

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