eMagin Reports Awards Of Stock Based Compensation For CFO And New Employees

Business Wire, June 22, 2004

HOPEWELL JUNCTION, N.Y. -- eMagin Corporation (AMEX:EMA) is today releasing information relating to stock and option compensation awards for new employees. These awards are outside of the awards related to existing employees under the employee stock option compensation plan as approved in July 2003, and relate only to new employees.

"Stock options as part of compensation are designed to align the interests of our employees with those of our shareholders," said Gary Jones, president and chief executive officer of eMagin. "An important part of our planned growth, gearing to ramp up for production and providing customer support, is to bring on excellent people to join our team. We have been fortunate to be able to attract such high quality staff to help us to achieve our success, and we want all members of our team to share in that success."

John Atherly, eMagin's new chief financial officer announced today, was awarded options for 500,000 shares exercisable at $1.69 per share, vesting over 5 years. In addition, the Company agreed to issue an additional 250,000 options which vest upon completion of the first cumulatively positive EBITDA reporting for 4 consecutive quarters, exclusive of extraordinary events, with the options priced at the most recent closing price of the stock before the accomplishment is reported in a Form 10-K or 10-Q, provided the positive EBITDA event is accomplished in under 30 months from the employment start date.

Other new senior management personnel receiving options in 2004 include: Olivier Prache, Vice President, Display Design (250,000 at $2.10); Dr. Joseph Runde, Director, Media Communications (150,000 at $2.30); and Dr. Kia Low, Manager, Display Characterization (90,000 at $1.62).

New employees in engineering, manufacturing, and accounting departments receiving options are: Dean Bryk (35,000 at $1.60); Michele Memoli (50,000 at $2.03); Stefanie Tejada (35,000 at $2.48); Jaclyn Makarevich (35,000 at $2.48);Terry Tavares (40,000 at $2.58); Paul Richer (80,000 at $2.77); John Grey (75,000 at $2.21); Kelly Petlig (70,000 at $1.96); and Michael McQueen (55,000 at $1.96).

All options vest over a 5-year period, and exercise price is based on the price at the date of hire. As the total number of time vested options discussed above is equal to 1,465,000 options, the result is that 293,000 options from the above awards would vest in each year over the next 5 years provided that the people continued to be employees of the Company. The weighted average exercise price is $2.00 per share. This calculation does not include the performance warrants awarded to John Atherly where the vesting date and exercise price are variable.

The Company notes that the grants of the options to all of the new employees were made in accordance with the provisions of Section 711 of the AMEX Company Guide which requires shareholder approval with respect to the establishment of an equity compensation arrangement involving an officer, director, employee or consultant, except for issuances to an individual, not previously an employee of the company, as an inducement material to entering into employment with the Company. The Company further notes that, in accordance with the provisions of Section 711, the Company's independent compensation committee approved the issuance of such options.