Chief Operating Officer Employment Agreement

EXHIBIT 10.2


EMPLOYMENT AGREEMENT


This Employment Agreement (the "Agreement") is made and entered into effective as of August 1, 2003, by and between Fred Rosenzweig (the "Executive") and Electronics for Imaging, Inc., a Delaware corporation (the "Company").


RECITALS


A. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the "Board") recognizes that such consideration can be a distraction to the Executive and can cause the Executive to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company.


B. The Board believes that it is in the best interests of the Company and its stockholders to provide the Executive with an incentive to continue his employment and to motivate the Executive to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.


C. The Board believes that it is imperative to provide the Executive with certain benefits upon a Change of Control and, under certain circumstances, upon termination of the Executive's full-time employment in connection with a Change of Control, which benefits are intended to provide the Executive with financial security and provide sufficient incentive and encouragement to the Executive to remain with the Company notwithstanding the possibility of a Change of Control.


D. Further, the Board believes that it is in the best interest of the Company and its stockholders to provide additional benefits to the Executive in the event the Executive's employment terminates for any reason other than a Change in Control. Such benefits are intended to provide the Executive with financial security and provide sufficient incentive and encouragement to the Executive to remain with the Company notwithstanding the possible termination of employment.


E. To accomplish the foregoing objectives, the Board of Directors has directed the Company, upon execution of this Agreement by the Executive, to agree to the terms provided herein.


F. Certain capitalized terms used in the Agreement are defined in Section 6 below.


In consideration of the mutual covenants herein contained, and in consideration of the continuing employment of the Executive by the Company, the parties agree as follows:


1. Term of Agreement. This Agreement shall commence on the date of this Agreement and shall have a term of three (3) years ("Initial Term") and will automatically be renewed for one (1) year periods unless terminated by either party upon sixty (60) days written notice prior to the expiration of the Agreement and unless otherwise terminated earlier in accordance with the terms hereof.


2. Duties and Scope of Employment. The Company shall employ the Executive in the position of President and Chief Operating Officer, as such position is defined in terms of responsibilities and compensation as of the effective date of this Agreement; provided, however, that the Board of


Directors by mutual agreement with the Executive shall have the right, at any time prior to the occurrence of a Change of Control, to revise such responsibilities and compensation. The Executive shall continue to devote his full business efforts and time to the Company and its subsidiaries. The Executive shall comply with and be bound by the Company's operating policies, procedures and practices from time to time in effect during his employment. During the term of the Executive's employment with the Company, the Executive shall devote his full-time, skill and attention to his duties and responsibilities, and shall perform them faithfully, diligently and competently, and the Executive shall use his best efforts to further the business of the Company and its affiliated entities. Subject to the Executive's fiduciary duties to the Company, this Agreement shall not prohibit the Executive from serving on the board of directors or any advisory board of other companies.


3. Base Compensation.


(a) Annual Salary. The Company shall pay the Executive as compensation for his services a base salary at an annualized rate that is not less than his base salary as of the effective date of this Agreement (the "Annual Salary"). The Annual Salary may be subject to annual increases as the Board may authorize from time to time in connection with Executive's annual review. The Annual Salary shall be paid periodically in accordance with normal Company payroll procedures. The Annual Salary and Bonus, as well as any increases in such compensation that the Board of Directors may grant from time to time, is referred to in this Agreement as "Base Compensation."


(b) Bonus. In addition to the Annual Salary, the Executive will be eligible to receive an annual bonus under the Company's Executive Bonus Plan as determined by the Board in its discretion.


4. Executive Benefits. The Executive shall be eligible to participate in the employee benefit plans and executive compensation programs maintained by the Company applicable to other key executives of the Company, including (without limitation) retirement plans, savings or profit-sharing plans, stock option, incentive or other bonus plans, life, disability, health, accident and other insurance programs, paid vacations, and similar plans or programs, subject in each case to the generally applicable terms and conditions of the applicable plan or program in question and to the determination of any committee administering such plan or program. In addition, the Executive shall continue to be entitled to receive any other benefits currently received by the Executive such as automobile allowance benefits.


5. At-Will Employment. The Company and the Executive acknowledge that the Executive's employment is and shall continue to be at-will, as defined under applicable law. If the Executive's employment terminates for any reason, including, without limitation, any termination prior to and not in connection with a Change of Control, the Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company's established employee plans and policies at the time of termination.


6. Severance Benefits.


(a) Termination in Connection with a Change of Control. Subject to Section 7 if the Company terminates the Executive's employment at any time during the period beginning upon (i) the execution of a binding letter of intent regarding a Change of Control, and (ii) ninety (90) days before a Change of Control, and ending twenty four (24) months after a Change of Control, and the Executive


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signs and does not revoke a standard release of claims with the Company attached hereto as Exhibit A, then the Executive shall be entitled to receive severance benefits as follows:


(i) Involuntary or Constructive Termination. If the Executive's employment terminates as a result of Involuntary or Constructive Termination (defined in section 7(c)) other than for Cause (defined in section 7(a)), then the Executive shall be entitled to receive (i) the Executive's Annual Salary for twenty-four (24) months plus an amount equal to the bonus the Executive would have earned had he been employed by the Company at the end of the calendar year multiplied by a fraction (x) the numerator of which is the number of completed months in that year, and (y) the denominator of which is twelve (12) (the "Current Bonus") and (ii) in addition to the Executive's stock options that were exercisable immediately prior to such termination, the vesting of additional options shall accelerate in full and become exercisable by the Executive or the Executive's representative, as the case may be for one year from the Executive's termination date and (iii) COBRA coverage (Medical, Dental and Vision) paid for the Company for eighteen (18) months from the Executive's termination date if the Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), within the time period prescribed pursuant to COBRA.


(ii) Voluntary Resignation; Termination For Cause. If the Executive voluntarily resigns from the Company (other than as an Involuntary or Constructive Termination described in subsection 6(a)(i)), or if the Company terminates the Executive's employment for Cause, then the Executive shall not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company's then existing benefit plans at the time of such termination.


(b) Termination Apart from Change of Control. Subject to Section 7, if the Company terminates the Executive's employment at any time, either before the earlier to occur of (i) the execution of a binding letter of intent regarding a Change of Control, and (ii) ninety (90) days before a Change of Control, or after the twenty-four (24) month period following a Change of Control, and the Executive signs and does not revoke a standard release of claims with the Company attached hereto as Exhibit A, then the Executive shall be entitled to receive severance benefits as follows:


(i) Involuntary or Constructive Termination. If the Executive's employment terminates as a result of Involuntary or Constructive Termination (defined in section 7(c)) other than for Cause (defined in section 7(a)), then the Executive shall be entitled to receive (i) the Executive's Annual Salary for twelve (12) months plus an amount equal to the bonus the Executive would have earned had he been employed by the Company at the end of the calendar year multiplied by a fraction (x) the numerator of which is the number of completed months in that year, and (y) the denominator of which is twelve (12) (the "Current Bonus") and (ii) in addition to Executive's stock options that were exercisable immediately prior to such terminatio ...