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EXHIBIT 10.5
NANOPHASE TECHNOLOGIES CORPORATION
453 Commerce Street
Burr Ridge, Illinois 60521
Dated as of September 3, 1996
Mr. Dennis Nowak
10113 Wellington Terrace
Munster, Indiana 46321
Dear Dennis:
We are delighted you have agreed to join Nanophase Technologies
Corporation ("NTC"). In this letter, I would like to present the terms of your
employment with NTC.
1. Title and Duties. Subject to (i) confirmation and election by
the Board of Directors of NTC, and (ii) the resignation of the current
Secretary and Treasurer of NTC, you will serve as Vice President, Chief
Financial Officer, Secretary and Treasurer of NTC. In those capacities, you
will have such duties as are assigned to you from time to time by the Board or
by the President and Chief Executive Officer of NTC. You will report to the
President and Chief Executive Officer. During your employment with NTC you
agree that you will devote substantially all of your business time and best
efforts to your duties as an employee and officer of NTC.
2. Compensation. Your base annual salary upon the commencement
of your employment will be $140,000 per year. Thereafter, all increases in
your base salary will be as determined by the Board in their discretion.
Assuming you are still employed by NTC at that time, you will be entitled to
(i) a bonus of $35,000 on the first anniversary of your employment with NTC,
and (ii) a bonus of $35,000 upon the successful consummation of an initial
public offering of the common stock of NTC. You will also be eligible to
receive cash bonuses as determined in the discretion of the Board from time to
time. All base salary will be earned and paid in accordance with NTC's regular
payroll policies for professional employees in effect from time to time.
3. Other Benefits. You will be entitled to the health, life and
other insurance benefits generally made available by NTC to other executive
officers of NTC from time to time, which benefits are subject to change. You
will be entitled to paid annual vacation in accordance with NTC's policy for
executive officers. Further, NTC will reimburse you for actual out-of-pocket
expenses incurred by you in the performance of your services for NTC (in
accordance with NTC's policy for such reimbursements applicable to NTC's
executive officers on the same terms generally offered to such officers), upon
the receipt of appropriate documentation of such expenses.
4. Stock Options. Subject to action by the Board of Directors,
upon the commencement of your employment and your execution of the stock option
agreement we have provided you, you will receive options to purchase 100,000
shares of NTC's common stock at a price of $2.25 per share, subject to the
terms of the stock option agreement and the Nanophase Technologies Corporation
Stock Option Plan effective January 13, 1992, as it may be amended from time to
time. Subsequent grants of options may be
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Mr. Dennis Nowak
September 3, 1996
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made in the discretion of the Board of NTC on such terms and conditions as it
may determine.
5. Severance Payment. If NTC terminates your employment with NTC
other than for Cause (as defined below), NTC shall pay to you an amount equal
in annual amount to your 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 NTC'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. No severance will be due you if termination occurs for any
other reason. For purposes of this letter agreement, "Cause" means (i) willful
and gross malfeasance or willful and gross misconduct by you in connection with
your employment with NTC, (ii) gross negligence in performing any of your
duties with NTC, (iii) your 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) your willful and gross breach of any written policy
applicable to all employees adopted by NTC 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) the material breach by you of any of your
agreements in this letter agreement.
6. Confidentiality. As a NTC employee, you will have access to
information about the properties and operations of NTC and third parties which
are confidential in nature. Consequently, you have agreed to execute the form
of confidentiality and proprietary rights agreement we have provided to you as
of the date of the commencement of your employment.
7. Miscellaneous.
(a) You acknowledge and agree that (i) your employment with NTC is
"at-will", (ii) NTC has not made any agreements concerning the duration of your
employment, (iii) no agreement concerning the duration of your employment can
be made except in a written agreement executed by you and the President of NTC,
and (iii) your employment may be terminated at any time, with or without cause,
by either you or NTC at any time.
(b) The agreements set forth in this letter are a personal contract,
and your rights set forth above may not be sold, transferred, assigned, pledged
or encumbered by you.
(c) Except as contemplated in Sections 4 and 6 above, this letter
agreement represents the entire agreement between you and NTC concerning your
employment with NTC and supersedes all prior negotiations and agreements,
whether written or oral, relating to your employment with NTC.
(d) No provision of this letter agreement may be amended or waived
unless pursuant to a writing signed by you and the President of NTC. No waiver
by any party to this letter agreement of any breach by another party of any
condition or provision to be performed by
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Mr. Dennis Nowak
September 3, 1996
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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.
(e) All salary, bonuses, benefits, reimbursements and any other
payments to you 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.
(f) 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 with respect to any matters related to your employment shall be
brought in any court of competent jurisdiction in the State of Illinois.
To acknowledge your agreement to the terms of your employment set
forth above, please sign a copy of this letter where indicated and return it to
me at your earliest convenience.
Nanophase Technologies Corporation
By:
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Robert W. Cross
President and Chief Executive Officer
Accepted and Agreed the
date first written above
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Dennis Nowak