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EX-10.19
EMPLOYMENT AGREEMENT
Employment Agreement dated and effective as of March 15, 1999 (this
"AGREEMENT"), between NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation
(with its successors and assigns, referred to as the "COMPANY"), and Xx. Xxxxxx
Xxxxxxx (referred to as "EXECUTIVE").
PRELIMINARY STATEMENT
The Company desires to employ Executive, and Executive wishes to be
employed by the Company, upon the terms and subject to the conditions set forth
in this Agreement. The Company and Executive also wish to enter into the other
covenants set forth in this Agreement, all of which are related to Executive's
employment with the Company. Executive and the Company therefore agree as
follows:
AGREEMENT
1. EMPLOYMENT FOR TERM. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, beginning on or about
March 15, 1999, until terminated pursuant to Section 6 below (the "TERM").
2. POSITION AND DUTIES. During the Term, Executive shall serve as the
Vice-President, Sales and Marketing of the Company and shall report to the
President or Chief Executive Officer of the Company. During the Term, Executive
shall also hold such additional positions and titles as the Board of Directors
of the Company (the "BOARD") may determine from time to time. During the Term,
Executive shall devote substantially all of Executive's business time and best
efforts to Executive's duties as an employee and officer of the Company.
3. COMPENSATION.
(a) BASE SALARY. For Executive's service as an officer and employee of
the Company, the Company shall pay Executive a base salary, beginning on the
first day of the Term and ending on the last day of the Term, of not less than
$165,000 per annum, payable on the Company's regular pay cycle for professional
employees.
(b) BONUS PAYMENT. Executive will be eligible for additional bonuses of
up to fifty percent (50%) of his base salary for services to be performed as an
officer and employee of the Company in calendar year 1999 and subsequent years
based on performance milestones agreed upon by Executive and the Chief Executive
Officer of the Company and approved by the Board.
(c) STOCK OPTIONS AND PURCHASE RIGHTS. In connection with the execution
of this Agreement, the Company has granted to Executive options to purchase up
to 50,000 shares of the Company's common stock (the "INITIAL OPTIONS") under the
Company's Amended and Restated 1992 Stock Option Plan ("PLAN") with a grant date
on the first day of the Term. The Company further agrees that Executive shall
be eligible for additional option grants based on annual performance reviews and
awarded in the discretion of the Board.
(d) OTHER AND ADDITIONAL COMPENSATION. Sections 3(a), 3(b) and 3(c)
establish minimum salary, bonus and option grant levels for Executive during the
Term, and shall not preclude the Board from awarding Executive a higher salary
or more stock options at any time, nor shall they preclude the Board from
awarding Executive additional bonuses or other compensation in the discretion of
the Board.
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4. EMPLOYEE BENEFITS. During the Term, Executive shall be entitled to
the employee benefits made available by the Company generally to all other
employees of the Company, and shall be entitled to three weeks of vacation in
period ending December 31, 1999, and thereafter in accordance with in the
Company's vacation policy in effect from time to time applicable to the
Company's officers generally.
5. EXPENSES. The Company shall reimburse Executive for actual
out-of-pocket expenses reasonably incurred by Executive in the performance of
services as an officer and employee of the Company in accordance with the
Company's policy for such reimbursements applicable to employees generally, and
upon receipt by the Company of appropriate documentation and receipts for such
expenses.
6. TERMINATION.
(a) GENERAL. The Term shall end immediately upon Executive' death.
Either Executive or the Company may end the Term at any time for any reason or
no reason, with or without Cause, in the absolute discretion of Executive or the
Board (but subject to each party's obligations under this Agreement), provided
that Executive will provide the Company with at least thirty (30) days' prior
written notice of Executive's resignation from Executive's positions as an
officer and employee with, and director of, the Company.
(b) NOTICE OF TERMINATION. Promptly after it ends the Term, the Company
shall give Executive notice of the termination, including a statement of whether
the termination was for "Cause" (as defined in Section 7(a) below). The
Company's failure to give notice under this Section 6(b) shall not, however,
affect the validity of the Company's termination of the Term or Executive's
employment hereunder.
7. SEVERANCE BENEFITS.
(a) "CAUSE" DEFINED. "Cause" means (i) willful and gross malfeasance or
willful and gross misconduct by Executive in connection with Executive's
employment; (ii) Executive' gross negligence in performing any of Executive's
duties under this Agreement; (iii) Executive's conviction of, or entry of a plea
of guilty to, or entry of a plea of nolo contendere with respect to, any crime
other than a misdemeanor; (iv) Executive' willful and gross breach of any
written policy applicable to all employees adopted by the Company concerning
conflicts of interest, political contributions, standards of business conduct or
fair employment practices, procedures with respect to compliance with securities
laws or any similar matters, or adopted pursuant to the requirements of any
government contract or regulation; or (v) material breach by Executive of any of
the terms and conditions of this Agreement.
(b) TERMINATION WITHOUT CAUSE. If the Company ends the Term other than
for Cause, (i) the Company shall pay Executive an amount equal in annual amount
to Executive's base salary in effect at the time of termination during the
period (the "SEVERANCE PERIOD") of twenty six (26) full weeks after the
effective date of termination, payable in proportionate amounts on the Company's
regular pay cycle for professional employees and (if the last day of the
Severance Period is not the last day of a pay period) on the last day of the
Severance Period, and (ii) the Initial Options shall become fully vested, and
shall become exercisable in accordance with the applicable option grant
agreement and the Plan.
(c) TERMINATION FOR ANY OTHER REASON. If the Company ends the Term for
Cause, or if Executive resigns as an employee or officer of the Company, or if
Executive dies, then the Company shall have no obligation to pay Executive any
amount, whether for salary, benefits, bonuses, or other compensation or expense
reimbursements of any kind, accruing after the end of the Term, and such
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rights shall, except as otherwise required by law (or, with respect to the
Options, as set forth in the Plan or the applicable option grant agreements), be
forfeited immediately upon the end of the Term.
8. ADDITIONAL COVENANTS.
(a) CONFIDENTIALITY. Executive agrees to execute the Company's standard
form of Confidential Information and Proprietary Rights Agreement promptly upon
execution of this Agreement.
(b) "NON-COMPETITION PERIOD" DEFINED. "NON-COMPETITION PERIOD" means the
period beginning at the end of the Term and ending either (i) 365 days after the
end of the Severance Period, if the Company is obligated to make payments under
Section 7(b) above, or (ii) 365 days after the end of the Term, if the Company
is not obligated to make payments under Section 7(b) above.
(c) COVENANTS OF NON-COMPETITION AND NON-SOLICITATION. Executive
acknowledges that but for Executive's employment with the Company:
(i) Executive would not have had contact with the Company's customers, with
many of whom the Company enjoys a near permanent relationship;
(ii) Executive would not have had contact with many of the Company's
employees and officers, many of whom have information and expertise of
importance to the Company;
(iii) the Company's business is national in scope and cannot be confined to
any particular geographic area of the United States or the State of
Illinois.
Executive further acknowledges that Executive's services are unique and
extraordinary, that the Company will be dependant upon Executive for the
development and growth of its business and related functions, and that Executive
will develop personal relationships with significant customers, employees and
contractors of the Company and have control of confidential information
concerning, and lists of customers of, the Company. For the foregoing reasons,
and in consideration of the execution of this Agreement by the Company,
Executive covenants and agrees that during the Non-Competition Period Executive
shall not, without the prior written consent of the Company President, in any
manner, directly or indirectly, own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership, management,
operation or control of, any other business (conducted for profit or not for
profit) which is competitive with the nanophase and ultrafine powder production,
coating and forming businesses then engaged in by the Company or which are then
under development by the Company. For the reasons acknowledged by Executive at
the beginning of this Section 8(c), Executive additionally covenants and agrees
that during the Non-Competition Period, Executive shall not, directly or
indirectly, whether on Executive's own behalf or in behalf of any other person
or entity, in any manner (A) contact or solicit the trade or patronage of any
customer of the Company with respect to the nanophase and ultrafine powder,
coating and forming businesses then engaged in by the Company or which are then
under development by the Company, or (B) solicit, induce or attempt to induce
any employee or contractor of the Company (and any person who was an employee or
contractor of the Company at any time within the 180 days prior to the end of
the Term) to leave the Company's employ or engagement to become connected in any
way with, or employ, engage or otherwise utilize any such employee or contractor
in, any other business that is competitive with the nanophase and ultrafine
powder, coating and forming businesses then engaged in by the Company or which
are then under development by the Company.
(d) EXCLUSIONS. The restrictions on Executive's activities set forth in
this Section 8 shall not preclude Executive from the ownership of three percent
(3%) or less of the voting securities of any
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corporation whose voting securities are registered under Section 12(g) of the
Securities Exchange Act of 1934.
(e) INJUNCTIONS. In view of Executive's access to the Company's customer
base and employees, Executive agrees that the covenants set forth in this
Section 8 are necessary to protect the interests of the Company in such
relationships, and to protect and maintain near permanent customer
relationships, and other legitimate, proprietary interests of the Company, both
actual and potential, which Executive would not have had access to or any
involvement in but for Executive's employment relationship with the Company.
Executive confirms and agrees that enforcement of the covenants set forth in
this Section 8 would not prevent Executive from earning a livelihood. Executive
further agrees that in the event of an actual or threatened breach by Executive
of any of the covenants set forth in this Agreement, the Company would be
irreparably harmed and the full extent of injury resulting therefrom would be
impossible to calculate and the Company therefore will not have an adequate
remedy at law. Accordingly, Executive agrees that temporary and permanent
injunctive relief would be appropriate remedies against such breach, without
bond or security; provided, however, that nothing herein shall be construed as
limiting any other legal or equitable remedies available to the Company.
(f) EXPENSES. Executive shall pay all costs and expenses, including
without limitation court costs, investigation costs, expert witness fees, and
attorneys' fees, incurred by the Company in connection with the successful
enforcement by the Company of its rights under this Agreement. The Company
shall have the right to disclose the contents of this Agreement or to deliver a
copy of this Agreement bearing Executive's signature to any person to whom or
for whose benefit the Company reasonably believes the Executive has solicited,
or has or may disclose or use any confidential or proprietary information in
violation of this Agreement.
9. SUCCESSORS AND ASSIGNS.
(a) EXECUTIVE. This Agreement is a personal contract, and the rights and
interests that this Agreement accords to Executive may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by Executive. Executive shall not
have any power of anticipation, alienation or assignment of the payments
contemplated by this Agreement, all rights and benefits of Executive shall be
for the sole personal benefit of Executive, and no other person shall acquire
any right, title or interest under this Agreement by reason of any sale,
assignment, transfer, claim or judgement or bankruptcy proceedings against
Executive. Except as so provided, this Agreement shall inure to the benefit of
and be binding upon Executive and Executive's personal representatives,
distributees and legatees.
(b) THE COMPANY. This Agreement shall be binding upon the Company and
inure to the benefit of the Company and its successors and assigns, including
but not limited to any person or entity that may acquire all or substantially
all of the Company's assets or business or with which the Company may be
consolidated or merged. This Agreement shall continue in full force and effect
in the event the Company sells all or substantially all of its assets, merges or
consolidates, otherwise combines or affiliates with another business, dissolves
and liquidates, or otherwise sells or disposes of substantially all of its
assets. The Company's obligations under this Agreement shall cease, however, if
the successor to the Company, the purchaser or acquiror either of the Company or
of all or substantially all of its assets, or the entity with which the Company
has affiliated, shall assume in writing the Company's obligations under this
Agreement (and deliver an executed copy of such assumption to Executive), in
which case such successor or purchaser, but not the Company, shall thereafter be
the only party obligated to perform the obligations that remain to be performed
on the part of the Company under this Agreement.
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10. ENTIRE AGREEMENT. This Agreement and the other agreements referenced
herein represent the entire agreement between the parties concerning Executive's
employment with the Company and supersedes all prior negotiations, discussions,
understandings and agreements, whether written or oral, between Executive and
the Company relating to the subject matter of this Agreement.
11. AMENDMENT OR MODIFICATION, WAIVER. No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in writing
signed by Executive and by a duly authorized officer of the Company other than
Executive. No waiver by any party to this Agreement of any breach by another
party of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same time, any prior time or any subsequent time.
12. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested), sent by reputable overnight
courier service (charges prepaid), or by facsimile to the recipient at the
address below indicated:
To the Company: Nanophase Technologies Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxx
Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx, LLP
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
To Executive: Xx. Xxxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
or such other address or facsimile number, or to the attention of such other
person as the recipient shall have specified by prior written notice to the
sending party. Any notice under this Agreement shall be deemed to have been
given when so personally delivered, or one day after deposit, if sent by
courier, when confirmed received if sent by facsimile, or if mailed, five days
after deposit in the U.S. first-class mail, postage prepaid.
13. SEVERABILITY. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other that those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Company and
Executive that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period
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and such other constraints or conditions (although not greater than those
currently contained in this Agreement) as shall be valid and enforceable under
the applicable law.
14. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
15. HEADINGS. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience of reference, and no
provision of this Agreement is to be construed by reference to the heading of
any section or paragraph.
16. WITHHOLDING TAXES. Except as otherwise specifically set forth in
Section 3(d) above, all salary, benefits, reimbursements and any other payments
to Executive under this Agreement shall be subject to all applicable payroll and
withholding taxes and deductions required by any law, rule or regulation of any
federal, state or local authority.
17. APPLICABLE LAW: JURISDICTION. The laws of the State of Illinois
shall govern the interpretation, validity and performance of the terms of this
Agreement, without reference to rules relating to conflicts of law. Any suit,
action or proceeding against Executive with respect to this Agreement, or any
judgement entered by any court in respect thereof, may be brought in any court
of competent jurisdiction in the State of Illinois, as the Company may elect in
its sole discretion, and Executive hereby submits to the nonexclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding
or judgement and to service of process by means of delivery of notice pursuant
to Section 12 above.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
NANOPHASE TECHNOLOGIES CORPORATION
By: /s/ Xxxxxx Xxxxx
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Its: Chief Executive Officer
/s/ Xxxxxx Xxxxxxx
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Xx. Xxxxxx Xxxxxxx
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