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Exhibit 10.4
EMPLOYMENT AGREEMENT
Employment Agreement dated and effective as of February 3, 1994 (this
"AGREEMENT"), between NANOPHASE TECHNOLOGIES CORPORATION, an Illinois
corporation (with its successors and assigns, referred to as the "COMPANY"),
and ROBERT CROSS (referred to as "CROSS").
PRELIMINARY STATEMENT
Cross is now employed as the president and chief executive officer of the
Company.
The Company desires to continue to employ Cross, and Cross wishes to
continue to be employed by the Company, upon the terms and subject to the
conditions set forth in this Agreement. The Company and Cross also wish to
enter into the other agreements set forth in this Agreement, all of which are
related to Cross's employment under this Agreement.
AGREEMENT
Cross and the Company therefore agree as follows:
1. EMPLOYMENT FOR TERM. The Company hereby employs Cross and Cross
hereby accepts employment with the Company for the period (the "TERM")
beginning as of January 1, 1994, and ending on December 31, 1994, or upon the
earlier termination of the Term pursuant to Section 6. Unless otherwise
terminated as set forth in this Agreement, the Term shall be automatically
renewed for successive one (1) calendar year periods after the first calendar
year of the Term unless written notice of termination shall be given by the
Company or by Cross to the other for any reason or for no reason at least
ninety (90) days prior to the end of the then current calendar year. The end
of the Term for any reason shall end Cross's employment under this Agreement,
but shall not terminate Cross's or the Company's other agreements in this
Agreement.
2. POSITION AND DUTIES. During the Term, Cross shall serve as the
president and chief executive officer of the Company. During the Term, Cross
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,
Cross shall devote substantially all of his business time and best efforts to
his duties as an employee of the Company.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay Cross a base salary,
beginning on the first day of the Term and ending on the last day of the Term,
of not less than $130,000 per annum, payable on the Company's regular pay cycle
for professional employees.
(b) BONUS PAYMENT. The Company shall pay Cross a bonus of
not less than $26,000 with respect to calendar year 1994 upon a determination
by the Board in its sole judgment of the acceptable achievement of milestones
set forth on the attached Exhibit A for
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calendar year 1994 ("MILESTONES"). Such bonus shall be payable in a lump sum
payment promptly upon such determination by the Board.
(c) STOCK OPTIONS. In connection with the execution of this
Agreement, the Company has granted to Cross options to purchase up to 125,000
shares of the Company's common stock (the "INITIAL OPTIONS") under the
Company's 1992 Stock Option Plan ("Plan"). The Company further agrees that the
Company will grant to Cross the additional options to purchase common stock
referred to in the Minutes of the Meeting of the Board held on February 3,
1994, upon a determination by the Board in its sole judgment of the acceptable
achievement of Milestones and the other events referred to in such Minutes (the
"ADDITIONAL OPTIONS", and together with the Initial Options, the "OPTIONS"),
such Options to be granted under and pursuant to the terms of the Plan.
(d) OTHER AND ADDITIONAL COMPENSATION. Sections 3(a), 3(b)
and 3(c) establish minimum salary and option grant levels for Cross during the
Term, and shall not preclude the Board from awarding Cross a higher salary or
more stock options at any time, nor shall they preclude the Board from awarding
Cross additional bonuses or other compensation in the discretion of the Board.
4. EMPLOYEE BENEFITS. During the Term, Cross shall be entitled to
the employee benefits (other than health and medical benefits) made available
by the Company generally to any other employee of the Company, including
reasonable vacation time in accordance with Company policy. In addition, the
Company will purchase and maintain for the benefit of Cross a term life
insurance policy payable to Cross of up to $500,000, provided that the Company
will not be obligated to pay monthly premiums in excess of $500.00.
5. EXPENSES. The Company shall reimburse Cross for actual
out-of-pocket expenses incurred by him in the performance of his services for
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, which expenses shall
include without limitation economy rate travel to and from, and economy rate
transportation and lodging in, the Chicago area.
6. TERMINATION.
(a) GENERAL. The Term shall end immediately upon Cross's
death. The Company may end the Term at any time for any reason or no reason,
in the absolute discretion of the Board (but subject to the Company's
obligations under this Agreement).
(b) NOTICE OF TERMINATION. Promptly after it ends the Term,
the Company shall give Cross 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
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under this Section 6(b) shall not, however, affect the validity of the
Company's termination of the Term.
7. SEVERANCE BENEFITS.
(a) "CAUSE" DEFINED. "Cause" means (i) willful and gross
malfeasance or willful and gross misconduct by Cross in connection with his
employment; (ii) Cross's gross negligence in performing any of his duties under
this Agreement; (iii) Cross'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) Cross's 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 Cross of any of
his agreements in this Agreement.
(b) TERMINATION WITHOUT CAUSE. If the Company ends the Term
other than for Cause, the Company shall pay Cross an amount equal in annual
amount to his 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.
(c) TERMINATION FOR ANY OTHER REASON. If the Company ends
the Term for Cause, or if Cross resigns as an employee or officer of the
Company, or if Cross dies, then the Company shall have no obligation to pay
Cross 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 rights shall, except as otherwise required by law (or, with respect to the
Options, as set forth in the Plan or the applicable Option Agreements), be
forfeited immediately upon the end of the Term.
8. ADDITIONAL COVENANTS.
(a) CONFIDENTIALITY. Cross agrees to execute the
Company's standard form of Confidentiality 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), or (ii) 365 days after the end of the Term,
if the Company is not obligated to make payments under Section 7(b).
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(c) COVENANTS OF NON-COMPETITION AND NON-SOLICITATION.
Cross acknowledges that his services pursuant to this Agreement are unique and
extraordinary, that the Company will be dependent upon Cross for the
development and growth of its business and related functions, and that he will
continue to develop personal relationships with significant customers of the
Company and to have control of confidential information concerning, and lists
of customers of, the Company. Cross further acknowledges that the business of
the Company is national in scope and cannot be confined to any particular
geographic area of the United States. For the foregoing reasons, Cross
covenants and agrees that during the Non-Competition Period Cross shall not,
directly or indirectly, engage in, be financially interested in, represent,
render any advice or services to, or be employed by, any other business
(conducted for profit or not for profit) that is competitive with the nanophase
and ultrafine powder production business of the Company within the United
States. For the reasons acknowledged by Cross at the beginning of this Section
8(c), Cross additionally acknowledges, covenants, and agrees that, during the
Non-Competition Period, Cross shall not, directly or indirectly, whether on his
own behalf or on behalf of any other person or entity, in any manner (A)
solicit the business of or otherwise contact in any commercial capacity any
person or entity that was a customer, supplier, or contractor of the Company
for the purpose of obtaining business of the type performed by the Company, or
(B) solicit for employment any persons who were officers or employees upon the
date of termination of his employment hereunder or at any time during a
ninety-day period preceding such date of the Company or aid any competitive
business organization in any attempt to hire any such officers or employees of
the Company.
(d) EQUITABLE REMEDIES. Cross acknowledges, covenants and
agrees that, in the event he shall violate any provisions of this Section 8,
the Company will not have an adequate remedy at law and will therefore be
entitled to enforce each such provision by temporary or permanent injunctive or
mandatory relief obtained in an action or proceeding without the necessity of
proving damage and without prejudice to any other remedies that may be
available at law or in equity. The foregoing restrictions shall not preclude
Cross from the ownership of not more than three percent (3%) of the voting
securities of any corporation whose voting securities are registered under
Section 12(g) of the Securities Exchange Act of 1934, even if its business
competes with that of the Company.
9. SUCCESSORS AND ASSIGNS.
(a) CROSS. This Agreement is a personal contract, and
the rights and interests that the Agreement accords to Cross may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him. Cross
shall not have any power of anticipation, alienation or assignment of the
payments contemplated by this Agreement, all rights and benefits of Cross shall
be for the sole personal benefit of Cross, and no other person shall acquire
any right, title or interest under this Agreement by reason of any sale,
assignment, transfer, claim or judgment or bankruptcy proceedings against
Cross. Except as
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so provided, this Agreement shall inure to the benefit of and be binding upon
Cross and his 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 of its successors and
assigns, including (but not limited to) any corporation that may acquire all or
substantially all of the Company's assets or business or into or with which the
Company may be consolidated or merged. This Agreement shall continue in full
force and effect in the event that 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 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 Cross), 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.
10. ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties concerning Cross's employment with the Company
and supersedes all prior negotiations, discussions, understandings and
agreements, whether written or oral, between Cross 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 Cross and by a duly authorized officer of the Company
other that Cross. 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 to be given under this Agreement shall be
in writing and delivered personally or sent by overnight courier or registered
or certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to Cross: Robert Cross
P.O. Box 200
Solebury, Pennsylvania 18963
If to the Company: Nanophase Technologies Corporation
8205 S. Cass Avenue, Suite 105
Darien, Illinois 60561
Attention: President
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with a copy to: Bruce A. Zivian, Esq.
Fitzpatrick Law Offices
20 North Wacker Drive, Suite 2200
Chicago, Illinois 60606
Any notice delivered personally or by overnight courier shall be deemed given
on the date delivered and any notice sent by registered or certified mail,
postage prepaid, return receipt requested, shall be deemed given on the date
mailed.
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 than 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 Cross 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 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. All salary, benefits, reimbursements and
any other payments to Cross under this Agreement shall be subject to all
applicable payroll and withholding taxes and deductions required by any law,
rule or regulation of and 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 Cross with respect to this Agreement, or
any judgment 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
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elect in its sole discretion, and Cross hereby submits to the nonexclusive
jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NANOPHASE TECHNOLOGIES CORPORATION
By: ________________________________________
Leonard Batterson, Chairman of the Board
__________________________________
ROBERT CROSS
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