Exhibit 10.3
EMPLOYMENT
AGREEMENT
Employment Agreement dated and
effective as of August 12, 2009 (this “ Agreement
”), between NANOPHASE TECHNOLOGIES CORPORATION, a Delaware
corporation (with its successors and assigns, referred to as the
“ Company ”), and Jess Jankowski, (referred to
as “ Executive Officer ”).
Preliminary
Statement
The Company desires to continue
employing Executive Officer, and Executive Officer wishes to
continue being employed by the Company, upon the terms and subject
to the conditions set forth in this Agreement. The Company and
Executive Officer also wish to enter into the other covenants set
forth in this Agreement, all of which are related to Executive
Officer’s continued employment with the Company. In
consideration of the mutual promises and covenants stated below,
Executive Officer and the Company therefore agree as
follows:
Agreement
1. Employment for Term . The
Company employs Executive Officer, and Executive Officer hereby
accepts employment as an Executive Officer of the Company,
beginning on August 12, 2009, and renewing automatically on an
annual basis until terminated pursuant to Section 7 below (the
“ Term ”).
2. Position and Duties .
During the Term, Executive Officer shall serve as President and
Chief Executive Officer, and shall report to the Board of Directors
(the “ Board ”) of the Company. During the Term,
Executive Officer shall also hold such additional positions and
titles as the Board may determine from time to time. During the
Term, Executive Officer shall devote substantially all of his
business time and best efforts to his duties as an Executive
Officer of the Company.
3. Signing Benefits . In
consideration of and in reliance upon Executive Officer’s
execution of this Agreement, and based entirely upon Executive
Officer’s acceptance of the duties and obligations to the
Company under this Agreement (specifically including, without
limitation, Executive Officer’s obligations under the
covenants in Section 9, and the restrictions in
Section 10 of the Agreement), the Company shall provide
Executive Officer with signing benefits including:
(a) the following Severance Benefits
if the Company ends the Term for reasons other than
“Cause” (as defined in Section 8(a)) and Executive
Officer signs, without subsequent revocation, a Separation
Agreement and Release in a form acceptable to the Company:
(i) the Company shall pay Executive Officer a sum equal in
annual amount to Executive Officer’s base salary in effect at
the time of termination during the period (the “ Severance
Period ”) of 52 full weeks after the effective date of
termination, payable in proportionate amounts on the
Company’s regular pay cycle for executive 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) all
stock options granted to Executive Officer prior to termination
shall become fully vested, and shall become exercisable (by
Executive Officer, or upon his death or disability, by
his
heirs, beneficiaries and personal
representatives) in accordance with the applicable option grant
agreement and the Company’s 2004 Equity Compensation Plan
(the “ Plan ”) or such predecessor or successor
stock option plan as may govern any particular option grant
agreement.
(b) the benefits arising from a
Change In Control (as defined in Section 11(b) ).
4. Compensation .
(a) Base Salary . The Company
shall pay Executive Officer a base salary, beginning on the first
day of the Term and ending on the last day of the Term, of not less
than $275,000 per annum, payable on the Company’s regular pay
cycle for professional employees. Executive Officer may be entitled
to additional compensation for his services as a member of the
Board, as determined by the Board in its sole
discretion.
(b) Bonus Payment . Executive
Officer will be eligible for discretionary bonuses for services to
be performed as an Executive Officer of the Company based on
performance milestones agreed upon by the Board.
(c) Stock Options. Subject to
the provisions of the Company’s Plan, and as determined by
the Board in its sole discretion, Executive Officer shall be
eligible for such stock options and other equity compensation as
the Board deems appropriate.
(d) Other and Additional
Compensation . Section 4(a) establishes the minimum salary
level for Executive Officer during the Term, and shall not preclude
the Board from awarding Executive Officer a higher salary at any
time, nor shall it preclude the Board from awarding Executive
Officer bonuses or other compensation in the discretion of the
Board.
5. Employee Benefits . During
the Term, Executive Officer shall be entitled to the employee
benefits made available by the Company generally to all other
Executive Officers of the Company, subject to all the terms and
conditions of the Company’s employee benefit plans in effect
from time to time. Executive Officer shall be entitled to five
(5) weeks of paid vacation during each year of the Term,
subject to the Company’s vacation policy in effect from time
to time.
6. Expenses . The Company
shall reimburse Executive Officer for actual out-of-pocket expenses
reasonably incurred by Executive Officer in performing services as
an Executive Officer of the Company in accord with the
Company’s policy for such reimbursements in effect from time
to time.
7. Termination .
(a) General . The Term shall
end (i) immediately upon Executive Officer’s death, or
(ii) upon Executive Officer 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 Executive Officer 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
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Officer or the Board (but subject to each
party’s obligations under this Agreement), provided that
Executive Officer will provide the Company with at least two
(2) weeks prior written notice of Executive Officer’s
resignation from his position as an employee with the Company. Upon
receipt of such written notice, the Company, in its sole
discretion, may accelerate the effective date of the resignation to
such date as the Company deems appropriate, provided that Executive
Officer shall receive the compensation required under
Section 4(a) of this Agreement for a full two (2) week
period.
(b) Notice of Termination .
If the Company ends the Term, it shall give Executive Officer at
least two (2) weeks prior written notice of the termination,
including a statement of whether the termination was for
“Cause” (as defined in Section 8(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
Executive Officer shall receive the compensation required under
Section 4(a) of this Agreement for a full two (2) week
period. The Company’s failure to give notice under this
Section 7(b) shall not, however, affect the validity of the
Company’s termination of the Term or Executive
Officer’s employment, nor shall the lack of such notice
entitle Executive Officer to any rights or claims against the
Company other than those arising from Executive Officer’s
right to receive the compensation required under Section 4(a)
of this Agreement for a full two (2 week period.
8. Severance Benefits
.
(a) “Cause”
Defined . “Cause” means (i) willful or gross
malfeasance or misconduct by Executive Officer in connection with
Executive Officer’s employment; (ii) Executive
Officer’s negligence in performing any of Executive
Officer’s duties under this Agreement; (iii) Executive
Officer’s conviction of, or entry of a plea of guilty or nolo
contendere with respect to, any felony or misdemeanor reflecting
upon Executive Officer’s honesty; (iv) Executive
Officer’s 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) breach by Executive Officer 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, Executive
Officer shall receive the Severance Benefits provided under
Section 3(a ) of this Agreement, provided that Executive
Officer signs, without subsequent revocation, a Separation
Agreement and Release in a form acceptable to the
Company.
(c) Termination for Any Other
Reason . If the Company ends the Term for Cause, or if
Executive Officer resigns as an employee of the Company, then the
Company shall have no obligation to pay Executive Officer 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.
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9. Additional Covenants
.
(a) Confidentiality .
Executive Officer confirms his acceptance of all his obligations
under that certain Confidential Information and Proprietary Rights
Agreement between Executive Officer and the Company dated as of
November 28, 1995.
(b) “Non-Competition
Period” Defined. “Non-Competition Period”
means the period beginning at the end of the Term and ending twelve
(12) months thereafter.
(c) Covenants of Non-Competition
and Non-Solicitation .
(i) Executive Officer acknowledges
that: [a] the Company will rely upon Executive Officer to help
maintain and grow the Company’s business and related
functions; [b] Executive Officer will have business relationships
on the Company’s behalf with the
