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EXHIBIT 10.15
EMPLOYMENT AGREEMENT
Employment Agreement dated and effective as of November 9, 1999 (this
"Agreement"), between NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation
(with its successors and assigns, referred to as the "Company"), and JOSEPH
CROSS (referred to as "Cross").
PRELIMINARY STATEMENT
The Company desires to continue employing Cross, and Cross wishes to
continue being employed by the Company, upon the terms and subject to the
conditions set forth in this Agreement all of which are related to Cross's
employment with the Company. Cross and the Company therefore agree as follows:
AGREEMENT
1. EMPLOYMENT FOR TERM. The Company employs Cross, and Cross accepts
employment with the Company, beginning on the date of this Agreement and
continuing until terminated pursuant to Section 6 below (the "Term").
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 (i) hold such additional positions and titles as the Board of
Directors of the Company (the "Board") may determine from time to time, and (ii)
serve as a member of the Board until such time as he may resign or be removed,
or until his successor may be duly qualified and elected. During the Term, Cross
shall devote substantially all of his business time and best efforts to his
duties as an employee, officer and director 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 $220,000 per annum, payable on the Company's regular pay cycle for
professional employees. Cross may be entitled to additional compensation for his
service as a member of the Board, as determined by the Board in its sole
discretion.
(b) BONUS PAYMENT. The Company shall pay Cross a bonus of $50,000 by
January 15, 2000, in recognition of his service to the Company prior to the date
of this Agreement and in consideration for his accepting his obligations under
the covenants in Section 8 of this Agreement. Cross may be eligible for
additional bonuses for services to be performed as an officer and employee of
the Company for calendar year 2000 and subsequent years, as determined by the
Board in its sole discretion.
(c) STOCK OPTIONS. Subject to the provisions of the Company's Amended
and Restated 1992 Stock Option Plan ("Plan"), and as determined by the Board in
its sole discretion,
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Cross shall be eligible for such stock grants or stock option grants as the
Board deems appropriate.
(d) RELOCATION REIMBURSEMENTS. The Company agrees to pay to or on
behalf of Cross the following costs and expenses, as and when incurred by Cross
or otherwise as specifically set forth below, subject to receipt by the Company
of appropriate documentation or other evidence of such expenses: (i) reasonable
out-of-pocket expenses incurred by Cross in the physical move of his family and
household from his current residence to the Chicago Metropolitan area (including
transport of automobiles and packing and unpacking expenses); (ii) out-of-
pocket costs for reasonable living expenses, including housing, utilities and a
rental or leased automobile, for the period commencing with the first day of the
Term through July 1, 2000, or for such time as may be necessary for Cross to
sell his current residence and relocate to the Chicago Metropolitan area, but in
any event no later than July 1, 2000; (iii) out-of-pocket economy class
commuting costs (including air travel and parking expenses) to and from his
current residence and Chicago, Illinois each weekend for such reasonable time as
may be necessary to relocate his family to the Chicago Metropolitan area, but in
any event no later than a reasonable time; (iv) reimbursement for out-of-pocket
economy-class travel expenses to Chicago for Cross' wife for up to three (3)
trips in connection with the relocation; (v) the services of a relocation
advisor in the Chicago Metropolitan area; (vi) realtor fees, attorneys' fees and
closing costs actually paid by Cross and related to the sale by Cross of his
current residence, in an aggregate amount not to exceed 7% of the gross sales
price of such residence; (vii) $27,000 as reimbursement for incidental costs and
expenses incurred by Cross in the relocation of his family to the Chicago
Metropolitan area; (viii) realtor fees, attorneys' fees, loan origination and
application fees and closing costs actually paid by Cross and related to the
purchase by Cross of a residence in the Chicago Metropolitan area, payable on or
before July 1, 2000, unless a later date is agreed upon by Cross and the
Company; (ix) except for moving expenses reimbursed by the Company pursuant to
this Agreement and which do not constitute taxable income to Cross for federal
income tax purposes, cash in the amount of 38% of the total actual out-of-pocket
relocation expenses incurred by Cross and paid or reimbursed by the Company
under these Sections 3(d)(i) through 3(d)(ix) (and further including the amount
paid to Cross pursuant to subsection 3(d)(vii) above) which are required to be
included in Cross' gross income for federal and state income tax purposes in
calendar years 1999 and 2000, and such reasonable percentage (as agreed upon by
the Chairman of the Board or his designee and Cross in order to facilitate
Cross' not incurring any increased taxable income due to his receipt of the
Company's relocation reimbursements under this Section 3(d)) of the amount of
such expenses incurred by Cross and paid or reimbursed by the Company under this
Section 3(d) in calendar years 1999 and 2000; and (x) an amount of $1,500 per
month commencing with the first month for which Cross is obligated to make a
mortgage payment on a principal residence in the Chicago Metropolitan area, and
for each of the next succeeding twenty-three (23) months thereafter.
(e) OTHER AND ADDITIONAL COMPENSATION. Sections 3(a), 3(b), 3(c) and
3(d) establish minimum salary, reimbursement, bonus, option grant and stock
grant levels for Cross during the Term, and shall not preclude the Board from
awarding Cross a higher salary, stock grants or 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.
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4. EMPLOYEE BENEFITS. During the Term, Cross 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 four (4) weeks vacation in the twelve
month period ending November 15, 2000, subject to adjustment based on subsequent
changes in the Company's vacation policy from time to time applicable to the
Company's officers generally.
5. EXPENSES. Without limitation of Section 3(d) above, the Company
shall reimburse Cross for actual out-of-pocket expenses reasonably incurred by
him in the performance of his 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 (i) immediately upon Cross' death, or
(ii) upon Cross becoming disabled (within the meaning of the Americans With
Disabilities Act of 1991, as amended) and unable to perform fully all essential
functions of his job, with or without reasonable accommodation, for a period of
150 calendar days. Either Cross 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
Cross or the Board (but subject to each party's obligations under this
Agreement), provided that Cross will provide the Company with at least thirty
(30) days' prior written notice of his resignation from his positions as an
officer and employee with, and director of, the Company. Upon receipt of such
written notice, the Company, in its sole discretion, may accelerate the
effective date of such resignation to such date as the Company deems
appropriate, provided that Cross shall receive the compensation required under
Section 3 of this Agreement for the full thirty (30) day period.
(b) NOTICE OF TERMINATION. If the Company ends the Term, it shall give
Cross at least thirty (30) days prior written notice of the termination,
including a statement of whether the termination was for "Cause" (as defined in
Section 7(a) below). Upon delivery of such written notice, the Company, in its
sole discretion, may accelerate the effective date of such termination to such
date as the Company deems appropriate, provided that Cross shall receive the
compensation required under Section 3 of this Agreement for the full thirty (30)
day period. The Company's failure to give notice under this Section 6(b) shall
not affect the validity of the Company's termination of the Term or Cross'
employment, nor shall the lack of such notice entitle Cross to any rights or
claims against the Company other than those arising from Cross' right to receive
the compensation required under Section 3 of this Agreement for the full thirty
(30) day period.
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7. SEVERANCE BENEFITS.
(a) "CAUSE" DEFINED. "Cause" means (i) willful and gross malfeasance or
misconduct by Cross in connection with his employment; (ii) Cross' gross
negligence in performing any of his duties under this Agreement; (iii) Cross'
conviction of, or entry of a plea of guilty or nolo contendere with respect to,
any felony or a misdemeanor reflecting upon Cross' honesty; (iv) Cross' breach
of any material 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) breach by
Cross of any of the material terms and conditions of this Agreement.
(b) TERMINATION WITHOUT CAUSE. If the Company ends the Term other than
for Cause, or if the Term ends due to Cross' death or disability under Section
6(a) of this Agreement, (i) 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 fifty- two (52) 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) any stock options granted to Cross prior to
termination shall become fully vested, and shall immediately become exercisable
(by Cross, or upon his death or disability, by his heirs, beneficiaries and
personal representatives) in accordance with the applicable option grant
agreements and the Plan.
(c) TERMINATION FOR ANY OTHER REASON. If the Company ends the Term for
Cause, or if Cross resigns as an employee, officer or director of the Company,
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 grant agreements), be forfeited immediately upon
the end of the Term. In addition, upon the end of the Term for any reason other
than the death of Cross, Cross shall tender his resignation as a member of the
Board as of such date in form acceptable to the Company.
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 two years thereafter.
(c) COVENANTS OF NON-COMPETITION AND NON-SOLICITATION. Cross
acknowledges that his services pursuant to this Agreement are unique and
extraordinary, that the Company relies upon Cross for the development and growth
of its business and related functions, and that he will develop personal
relationships with significant customers and suppliers of the Company
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and have control of confidential information concerning, and lists of customers
of, the Company. Cross further acknowledges that the business of the Company is
international in scope and cannot be confined to any particular geographic area.
For the foregoing reasons, and in consideration of the benefits available to
Cross under Sections 3(b), 3(d) and 7(c) of this Agreement, Cross covenants and
agrees that during both the Term of this Agreement and the subsequent
Non-Competition Period, Cross shall not, in any manner, directly or indirectly,
engage in, be financially interested in, represent, render any advice or
services to, or be employed by, or otherwise affiliated with, any other business
(conducted for profit or not for profit) which is principally or materially
engaged in or is competitive with the Company's business of developing,
producing, coating, refining, forming, marketing, supplying or selling
nanocrystalline and ultrafine powders. For the reasons acknowledged by Cross at
the beginning of this Section 8(c), Cross additionally 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) contact, accept or solicit the business of any person or entity that
was a customer, supplier or contractor of or to the Company for the purpose of
obtaining business of the type performed by the Company, or (B) contact, accept
or solicit or attempt to solicit for employment or engagement any persons who
were officers or employees of the Company upon the date of termination of his
employment or at any time during a 180 day period preceding the date of
termination, or aid any person or entity in any attempt to hire or engage any
such officers or employees of the Company. 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.
(d) REMEDIES.
(i) INJUNCTION. In view of Cross' access to the Company's
confidential information, and in consideration of the value of such property to
the Company, Cross acknowledges that the covenants contained in this Section 8
are necessary to protect the Company's interests in its proprietary information
and trade secrets and to protect and maintain customer and supplier
relationships, both actual and potential, which Cross would not have had access
to or involvement in but for his employment with the Company. Cross confirms
that enforcement of the covenants in Section 8 will not prevent him from earning
a livelihood. Cross further agrees that in the event of his actual or threatened
breach of any covenant in this Section 8, the Company would be irreparably
harmed and the full extent of resulting injury would be impossible to calculate,
and the Company therefore will not have an adequate remedy at law. Accordingly,
Cross agrees that temporary and permanent injunctive relief are appropriate
remedies for any such breach, without bond or security; provided that nothing
herein shall be construed as limiting any other legal or equitable remedies
available to the Company.
(ii) ENFORCEMENT. Cross shall pay all costs and expenses (including,
without limitation, court costs, investigation costs, expert witness and
attorneys' fees) incurred by the Company in connection with the Company's
successfully enforcing its rights under this Agreement. The Company shall be
entitled to disclose the contents of this Agreement or to deliver a copy of it
to any person or entity whom the Company believes Cross has solicited.
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(iii) ARBITRATION. No dispute arising from Cross' actual or
threatened breach of any covenant in this Section 8 shall be subject to
arbitration. However, any other dispute or claim arising from any other
provision of this Agreement, or relating to Cross' employment or service as an
officer (whether based on statute, regulation, contract, tort or otherwise),
shall be submitted to arbitration before a single arbitrator pursuant to the
Employment Arbitration Rules of the American Arbitration Association. Any such
arbitration shall be conducted in Chicago, Illinois. An arbitration award
rendered under this Section 8(c)(iii) shall be final and binding on the parties
and may be submitted to any court of competent jurisdiction for entry of a
judgment thereon in accord with the Illinois Arbitration Act or the Federal
Arbitration Act.
9. SUCCESSORS AND ASSIGNS.
(a) CROSS. This Agreement is a personal contract, and the rights and
interests that this Agreement accords to Cross may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. Except to the extent
contemplated in Section 7(c) above, 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, tide or interest
under this Agreement by reason of any sale, assignment, transfer, claim or
judgment or bankruptcy proceedings against Cross. Except as 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 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; provided that upon the closing of any such sale, merger, consolidation,
combination or affiliation, any stock options granted to Cross prior to such
closing shall become fully vested and shall immediately become exercisable in
accordance with the applicable option grant and the Plan. The Company's
obligations under this Agreement shall cease, however, if the successor to the
Company, the purchaser or acquirer 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; provided, however, that such
successor or purchaser shall include in its written assumption of the Company's
obligations under this Agreement the provisions that (a) the successor or
purchaser shall not materially alter Cross' responsibilities, compensation,
assigned work location or title under this Agreement without Cross' prior
written consent, and (b) at Cross' option, any such material alteration made
without Cross' prior written consent shall constitute Termination Without Cause
under Section 7(b) of 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
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. The
parties specifically agree that upon the Company's execution of this Agreement,
the Company shall have no further obligations of any kind to Cross under any
prior employment agreement between the parties including that certain employment
agreement dated November 9, 1998.
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 than
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 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
453 Commerce Street
Burr Ridge, IL 60521
Attn: Chief Executive Officer
Facsimile: (630) 323-1221
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To Executive:
Joseph Cross
1200 Willow Oaks Trail
Matthews, NC 28105
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 shall be
determined by any court of competent jurisdiction to be unenforceable to any
extent, the remainder of this Agreement shall not be affected, but shall remain
in full force and effect. If 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 of no effect;
instead, it is the intention of both the Company and Cross that any court of
competent jurisdiction shall interpret or reform this Agreement to provide for a
restriction having the maximum enforceable area, time period and such other
constraints or conditions as shall be 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 Cross 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 of the terms of this Agreement, without
reference to rules relating to conflicts of law.
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18. LIMITATION ON CLAIMS. CROSS AGREES THAT HE WILL NOT COMMENCE ANY
ACTION, CLAIM OR SUIT RELATING TO MATTERS ARISING FROM HIS EMPLOYMENT WITH THE
COMPANY (IRRESPECTIVE OF WHETHER SUCH ACTION, CLAIM OR SUIT ARISES FROM THE
TERMS OF THIS AGREEMENT) LATER THAN SIX MONTHS AFTER THE FIRST TO OCCUR OF (a)
THE DATE SUCH CLAIM INITIALLY ARISES OR (b) THE DATE OF TERMINATION OF
EMPLOYMENT FOR ANY REASON WHATSOEVER. CROSS EXPRESSLY WAIVES ANY APPLICABLE
STATUTE OF LIMITATION TO THE CONTRARY.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
/s/ Joseph Cross
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JOSEPH CROSS
NANOPHASE TECHNOLOGIES
CORPORATION
By: /s/ David L. Weinstein
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David L. Weinstein
One of Its Attorneys
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