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<SEC-DOCUMENT>0000950137-07-000309.txt : 20070112
<SEC-HEADER>0000950137-07-000309.hdr.sgml : 20070112
<ACCEPTANCE-DATETIME>20070112163701
ACCESSION NUMBER:		0000950137-07-000309
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20070108
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20070112
DATE AS OF CHANGE:		20070112

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NANOPHASE TECHNOLOGIES CORPORATION
		CENTRAL INDEX KEY:			0000883107
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS PRIMARY METAL PRODUCTS [3390]
		IRS NUMBER:				363687863
		STATE OF INCORPORATION:			IL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-22333
		FILM NUMBER:		07529105

	BUSINESS ADDRESS:	
		STREET 1:		453 COMMERCE ST
		CITY:			BURR RIDGE
		STATE:			IL
		ZIP:			60521
		BUSINESS PHONE:		6303231200

	MAIL ADDRESS:	
		STREET 1:		453 COMMERCE STREET
		CITY:			BURR RIDGE
		STATE:			IL
		ZIP:			60521
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>c11335e8vk.htm
<DESCRIPTION>CURRENT REPORT
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington D.C., 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>Form&nbsp;8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Current Report<BR>
Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date
Of Report (Date Of Earliest Event Reported): January&nbsp;8, 2007</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>NANOPHASE TECHNOLOGIES CORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact Name of Registrant as Specified in its Charter)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission File Number: 0-22333</B></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>36-3687863</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or Other Jurisdiction of<BR>
Incorporation or Organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>1319 Marquette Drive, Romeoville, Illinois 60446</B></DIV>

<DIV align="center" style="font-size: 10pt">(Address of Principal Executive Offices, Including Zip Code)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(630)&nbsp;771-6700</B></DIV>

<DIV align="center" style="font-size: 10pt">(Registrant&#146;s Telephone Number, Including Area Code)</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(Former name or former address, if changed since last report)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>
Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange
Act (17 CFR 240.14a-12)
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>








<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
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	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">Item&nbsp;1.01. Entry into a Material Definitive Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">Item&nbsp;2.02. Results of Operations and Financial Condition</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">Item&nbsp;5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">Item&nbsp;9.01. Financial Statements and Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">Signature(s)</A></TD></TR>
<TR><TD colspan="9"><A HREF="c11335exv99w1.htm">Exhibit 99.1 Employment Agreement dated January 8, 2007 between the Company and Kevin J. Wenta</A></TD></TR>
<TR><TD colspan="9"><A HREF="c11335exv99w2.htm">Exhibit 99.2 Press Release dated January 9, 2007</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>







<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Items
to be Included in this Report
</DIV>

<!-- link1 "Item&nbsp;1.01. Entry into a Material Definitive Agreement" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1.01. Entry into a Material Definitive Agreement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
January&nbsp;8, 2007, Nanophase Technologies Corporation (the
&#147;Company&#148;) entered into an Employment Agreement with Kevin
J.&nbsp;Wenta pursuant to which joined the Company as Executive
Vice President, Sales and Marketing. A copy of the Employment
Agreement is being filed as Exhibit&nbsp;99.1 to this report and is
incorporated herein by reference.
</DIV>

<!-- link1 "Item&nbsp;2.02. Results of Operations and Financial Condition" -->
<DIV align="left"><A NAME="001"></A></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2.02. Results of Operations and Financial Condition</B></div>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
January&nbsp;9, 2007, the Company issued a press release containing
information relating to preliminary financial results for the quarterly
fiscal period ended December&nbsp;31, 2006. A copy of the press release is being furnished as Exhibit 99.2 to this report.
<div>

<!-- link1 "Item&nbsp;5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;8, 2007, Kevin J. Wenta was appointed Executive Vice President, Sales and
Marketing of the Company. Mr.&nbsp;Wenta brings more than 20&nbsp;years of experience in business
development, sales, marketing, finance and operations, primarily in the industrial chemicals field,
to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the terms of the Employment Agreement, dated and effective as of January&nbsp;8, 2007,
a copy of which is attached hereto as Exhibit&nbsp;99.1, Mr.&nbsp;Wenta will receive an annual base salary of
not less than $270,000. In addition, Mr.&nbsp;Wenta will be eligible for discretionary bonuses for
services to be performed as an employee of the Company based on performance milestones agreed upon
by Mr.&nbsp;Wenta and the CEO of the Company and approved by the Board of Directors of the Company (the
&#147;Board&#148;). During calendar year 2007, Mr.&nbsp;Wenta&#146;s bonus will be a maximum of $121,500, subject to
completion of his performance milestones, as determined by the Board in its sole discretion.
However, for calendar year 2007 only, the Company guarantees Mr.&nbsp;Wenta a bonus payment of $24,300
payable in two installments of $12,150 on each of July&nbsp;8, 2007 and January&nbsp;8, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, Mr.&nbsp;Wenta received non-qualified options to purchase up to 75,000 shares of the
Company&#146;s common stock under the terms of the Company&#146;s 2004 Equity Compensation Plan (the &#147;Plan&#148;),
with a grant date of January&nbsp;8, 2007 and vesting at the rate of 20% on January&nbsp;8, 2008, 20% on
January&nbsp;8, 2009, 20% on January&nbsp;8, 2010, 20% on January&nbsp;8, 2011, and 20% on January&nbsp;8, 2012. Mr.
Wenta will also be eligible for other benefits as are offered or available to all other employees
in accordance with the Company&#146;s employee benefit plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event Mr.&nbsp;Wenta&#146;s employment is terminated other than for Cause, as defined in the
Employment Agreement, Mr.&nbsp;Wenta will receive a sum equal to his annual base salary in effect at the
time of termination payable over the 52&nbsp;week period following the effective date of termination.
In addition, all stock options granted to Mr.&nbsp;Wenta prior to termination will become fully vested,
and will become exercisable in accordance with the applicable option grant agreement and the Plan.
If he is terminated with Cause, Mr.&nbsp;Wenta will not be entitled to any severance or other benefits
and his options will not become fully vested. The Employment Agreement also contains customary
non-competition and non-solicitation provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing summary of the material provision of the Employment Agreement does not purport
to be complete and is subject to and qualified in its entirety by reference to all provisions of
the described agreement.
</DIV>

<!-- link1 "Item&nbsp;9.01. Financial Statements and Exhibits" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9.01. Financial Statements and Exhibits</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated
January&nbsp;8, 2007 between the Company and Kevin J.&nbsp;Wenta</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Press Release dated January&nbsp;9, 2007</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>





<!-- link1 "Signature(s)" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Signature(s)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto duly
authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left">Nanophase Technologies Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
January&nbsp;12, 2007
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">/s/ JESS JANKOWSKI</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">JESS JANKOWSKI</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Chief Financial Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>
</DIV>
</DIV>
</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>c11335exv99w1.htm
<DESCRIPTION>EXHIBIT 99.1 EMPLOYMENT AGREEMENT DATED JANUARY 8, 2007 BETWEEN THE COMPANY AND KEVIN J. WENTA
<TEXT>
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<TITLE>exv99w1</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;99.1
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EMPLOYMENT AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employment Agreement dated and effective as of January&nbsp;8, 2007 (this &#147;<B>Agreement</B>&#148;), between
NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation (with its successors and assigns,
referred to as the &#147;<B>Company</B>&#148;), and Kevin J. Wenta (referred to as Executive Vice President, Sales
and Marketing, or EVP).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Preliminary Statement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company desires to employ EVP, and EVP wishes to be employed by the Company, upon the
terms and subject to the conditions set forth in this Agreement. The Company and EVP also wish to
enter into the other covenants set forth in this Agreement, all of which are related to EVP&#146;s
employment with the Company. In consideration of the mutual promises and covenants stated below,
EVP and the Company therefore agree as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Agreement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Employment for Term</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company employs EVP, and EVP hereby accepts employment with the
Company, beginning on January&nbsp;8, 2007, and renewing automatically on an annual basis until
terminated pursuant to Section&nbsp;7 below (the &#147;<B>Term</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Position and Duties</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the Term, EVP shall serve as Executive Vice President, Sales
and Marketing, and shall report to the President &#038; CEO of the Company. During the Term, EVP shall
also hold such additional positions and titles as the President or the Board of Directors of the
Company (the &#147;<B>Board</B>&#148;) may determine from time to time. During the Term, EVP shall devote
substantially all of his business time and best efforts to his duties as an EVP of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Signing Benefits</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In consideration of and in reliance upon EVP&#146;s execution of this
Agreement, and based entirely upon EVP&#146;s acceptance of the duties and obligations to the Company
under this Agreement (specifically including, without limitation, EVP&#146;s obligations under the
covenants in Section&nbsp;9, and the restrictions in Section&nbsp;10 of the Agreement), the Company shall
provide EVP with the following signing benefits:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A guarantee of part of EVP&#146;s 2007 bonus payment, as provided under Section 4(b) below;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A grant of stock options, as provided under Section 4(c) below; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Severance Benefits if the Company ends the Term for reasons other than Cause (as defined
in Section&nbsp;8): (i)&nbsp;the Company shall pay EVP a sum equal in annual amount to EVP&#146;s base salary in
effect at the time of termination during the period (the &#147;<B>Severance Period</B>&#148;) of 52 full weeks after
the effective date of termination, payable in proportionate amounts on the Company&#146;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)&nbsp;all stock options granted to EVP
prior to termination shall become fully vested, and shall become exercisable (by EVP, or upon his
death or disability, by his heirs, beneficiaries and personal representatives) in accordance with
the applicable option grant agreement and the Company&#146;s 2004 Equity Compensation Plan (the &#147;<B>Plan</B>&#148;)
or such predecessor stock option plan as may govern any particular option grant agreement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Compensation</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Base Salary</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company shall pay EVP a base salary, beginning on the first day of the
Term and ending on the last day of the Term, of not less than $270,000 per annum, payable on the
Company&#146;s regular pay cycle for professional employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Bonus Payment</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EVP will be eligible for
discretionary bonuses for services to be performed as an employee of the Company based on
performance milestones agreed upon by EVP and the CEO of the Company and approved by the Board.
During calendar year 2007, EVP&#146;s bonus will be a maximum of $121,500 (or 45% of his initial base
salary), subject to completion of his performance milestones, as determined by the Board in its
sole discretion. However, for calendar year 2007 only, the Company guarantees EVP a bonus payment
of $24,300 (or 20% of EVP&#146;s 2007 bonus target). The guaranteed portion of EVP&#146;s 2007 bonus will be
paid in installments of $12,150 on or about July&nbsp;8, 2007 and $12,150 on or about January&nbsp;8, 2008,
provided that EVP&#146;s employment and the Term of this Agreement have not been terminated for Cause
(as defined under Section 8(a) below) on or before the date that an installment of the guaranteed
bonus has been paid. Any discretionary bonus awarded to EVP for his performance in 2007 will be
paid at such time as performance bonuses awarded to other officers of the Company are paid.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Stock Options.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In connection with the execution of this Agreement, the Company has
granted to EVP non-qualified options to purchase up to 75,000 shares of the Company&#146;s common stock
under the terms of the Company&#146;s Plan, with a grant date of
January&nbsp;8, 2007 and vesting at the rate
of 20% on January&nbsp;8, 2008, 20% on January&nbsp;8, 2009, 20% on
January&nbsp;8, 2010, 20% on January&nbsp;8,
2011 and 20% on January&nbsp;8, 2012. The stock price of the options shall be determined as of the closing market price of the
Company&#146;s stock on January&nbsp;8, 2007. Subject to the provisions of the Company&#146;s Plan, and as
determined by the Board in its sole discretion, EVP shall be eligible for such additional stock
options and other equity compensation as the Board deems appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Other and Additional Compensation</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sections 4(a) and 4(b) establish minimum salary and
bonus levels for EVP during the Term, and shall not preclude the Board from awarding EVP a higher
salary at any time, nor shall they preclude the Board from awarding EVP additional bonuses or other
compensation in the discretion of the Board.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Employee Benefits</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the Term, EVP shall be entitled to the employee benefits made
available by the Company generally to all other employees of the Company, subject to all the terms
and conditions of the Company&#146;s employee benefit plans in effect from time to time. EVP shall be
entitled to four (4)&nbsp;weeks of paid vacation during each year of the Term, subject to the Company&#146;s
vacation policy in effect from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Expenses</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company shall reimburse EVP for actual out-of-pocket expenses reasonably
incurred by EVP in performing services as an employee of the Company in accord with the Company&#146;s
policy for such reimbursements applicable to employees generally, and upon receipt by the Company
of appropriate documentation and receipts for such expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Termination</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>General</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Term shall end (i)&nbsp;immediately upon EVP&#146;s death, or (ii)&nbsp;upon EVP 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 EVP 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 EVP or the Board (but
subject to each party&#146;s obligations under this Agreement), provided that EVP will provide the
Company with at least forty-five (45)&nbsp;days&#146; prior written notice of EVP&#146;s resignation from his
position as an employee with the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 EVP shall receive the compensation required under Section 4(a) of this Agreement for
a full forty-five (45)&nbsp;day period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Notice of Termination</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company ends the Term, it shall give EVP at least
forty-five (45)&nbsp;days prior written notice of the termination, including a statement of whether the
termination was for &#147;Cause&#148; (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 EVP shall receive the compensation
required under Section 4(a) of this Agreement for a full forty-five (45)&nbsp;day period. The Company&#146;s
failure to give notice under this Section 7(b) shall not, however, affect the validity of the
Company&#146;s termination of the Term or EVP&#146;s employment, nor shall the lack of such notice entitle
EVP to any rights or claims against the Company other than those arising from EVP&#146;s right to
receive the compensation required under Section 4(a) of this Agreement for a full forty-five (45)
day period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Severance Benefits</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Cause&#148; Defined</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Cause&#148; means (i)&nbsp;willful or gross malfeasance or misconduct by EVP in
connection with EVP&#146;s employment; (ii)&nbsp;EVP&#146; gross negligence in performing any of EVP&#146;s duties
under this Agreement; (iii)&nbsp;EVP&#146;s conviction of, or entry of a plea of guilty or nolo contendere
with respect to, any felony or misdemeanor reflecting upon EVP&#146;s honesty; (iv)&nbsp;EVP&#146;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)&nbsp;breach by EVP of any of the material
terms and conditions of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Termination without Cause</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company ends the Term other than for Cause, EVP shall
receive the Severance Benefits provided under Section 3(c) of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Termination for Any Other Reason</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company ends the Term for Cause, or if EVP
resigns as an employee of the Company, then the Company shall have no obligation to pay EVP 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Additional Covenants</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Confidentiality</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EVP confirms his acceptance of all his obligations under that certain
Confidential Information and Proprietary Rights Agreement between EVP and the Company dated as of
January&nbsp;8, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>&#147;Non-Competition Period&#148; Defined.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Non-Competition Period&#148; means the period beginning at
the end of the Term and ending twelve (12)&nbsp;months thereafter.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Covenants of Non-Competition and Non-Solicitation</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EVP acknowledges that: &#091;a&#093; the Company will rely upon EVP to help maintain and grow the
Company&#146;s business and related functions; &#091;b&#093; EVP will have business relationships on the Company&#146;s
behalf with the Company&#146;s significant customers, suppliers and vendors with whom the Company has
exclusive, long-term or near-permanent relationships; and &#091;c&#093; EVP will have access to, use or
control of highly valuable non-public tangible confidential information about the Company&#146;s
developed and developing technology, inventions, equipment, methods and know-how concerning
nanomaterials production, coating and marketing, as well as highly valuable non-public tangible and
non-tangible proprietary information about the Company&#146;s finances, pending transactions, customer
identity and Customer dealings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the foregoing reasons, and in consideration of the benefits available to EVP under
Sections&nbsp;3(a), 3(b), 3(c), 7(a), 7(b), and 8(b) of this Agreement, EVP covenants that both during
the term of this Agreement and the subsequent Non-Competition Period, EVP shall not in any manner,
directly or indirectly:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;A&#093;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Engage in, be financially interested in, represent, render advice or service of any kind
to, or be employed by or in any way affiliated with, any other business (conducted for profit or
not for profit) which is materially engaged in developing, producing, coating, refining, marketing,
supplying or selling nanocrystalline materials (including powders, dispersions and coatings) (a
&#147;Prohibited Business&#148;), (a)&nbsp;where such Prohibited Business is located or conducted within a radius
of fifty (50)&nbsp;miles from any of the Company&#146;s facilities where EVP has worked or over which EVP has
exercised any form of supervisory authority during a period of twelve (12)&nbsp;months before the date
of EVP&#146;s termination; or (b)&nbsp;where EVP provides a Prohibited Business with services the same as or
similar to those he provided to the Company and such Prohibited Business, regardless of its
location, is either Cabot Corporation; Cabot Microelectronics Corporation; DeGussa Corporation;
NanoDynamics, Inc; NanoProducts Corporation; or Nanotechnologies, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;B&#093;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Whether on EVP&#146;s own behalf or on behalf of any other person or entity, (a)&nbsp;contact,
solicit, accept business from, disrupt or in any way interfere with the Company&#146;s business
relationship with any person or entity that was a customer, supplier or vendor of the Company
during EVP&#146;s employment, with respect to the type of business done by the Company, or (b)&nbsp;contact,
solicit or attempt to solicit for employment or engagement any persons who were officers, employees
or contractors of the Company at any time within a 180-day period before the date of EVP&#146;s
termination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The restrictions in this Section&nbsp;9(c)(ii) shall not preclude EVP from owning up to
three percent (3%) of the voting securities of any Prohibited Business whose voting securities are
registered under Section 12(g) of the Securities Exchange Act of 1934.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Remedies.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Injunctions</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In view of EVP&#146;s access to the Company&#146;s confidential information, and in
consideration of the value of such property to the Company, EVP agrees that the covenants in this
Section&nbsp;9 are necessary to protect the Company&#146;s interests in its proprietary information and trade
secrets, and to protect and maintain customer and supplier relationships, both actual and
potential, which EVP would not have had access to or involvement in but for his employment with the
Company. EVP confirms that enforcement of the covenants in this Section&nbsp;9 will not prevent him
from earning a livelihood. EVP further agrees that in the event of his actual or threatened breach
of any covenant in this Section&nbsp;9, the Company would be irreparably harmed and the full extent of
injury resulting therefrom would be impossible to
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">calculate, and the Company therefore will not have an adequate remedy at law. Accordingly,
EVP agrees that temporary and permanent injunctive relief are 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Enforcement</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EVP shall pay all costs and expenses (including, without limitation, court
costs, investigation costs, expert witness and attorneys&#146; fees) incurred by the Company in
connection with its successfully enforcing its rights under this Agreement. The Company shall have
the right to disclose the contents of this Agreement or to deliver a copy of it to any person or
entity whom the Company believes the EVP has solicited in violation of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Arbitration</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No dispute arising from EVP&#146;s actual or threatened breach of any covenant
in this Section&nbsp;9 shall be subject to arbitration. However, any other dispute or claim arising
from any other provision of this Agreement, or relating to EVP&#146;s employment (whether based on
statute, ordinance, 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&nbsp;9(d)(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
Federal Arbitration Act or the Illinois Arbitration Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Limitation On Claims</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EVP AGREES THAT HE WILL NOT COMMENCE ANY ACTION OR SUIT RELATING TO
MATTERS ARISING OUT OF HIS EMPLOYMENT WITH THE COMPANY (IRRESPECTIVE OF WHETHER SUCH ACTION OR SUIT
ARISES OUT OF THE PROVISIONS OF THIS AGREEMENT) LATER THAN SIX MONTHS AFTER THE FIRST TO OCCUR OF
(A)&nbsp;THE DATE SUCH CLAIM INITIALLY ARISES, OR (B)&nbsp;THE DATE EVP&#146;S EMPLOYMENT TERMINATES FOR ANY
REASON WHATSOEVER. EVP EXPRESSLY WAIVES ANY APPLICABLE STATUTE OF LIMITATION TO THE CONTRARY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Successors and Assigns</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>EVP</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Agreement is a personal contract, and the rights and interests that this
Agreement accords to EVP may not be sold, transferred, assigned, pledged, encumbered, or
hypothecated by EVP. Except to the extent contemplated in Section&nbsp;3(c)(ii) above, EVP shall not
have any power of anticipation, alienation or assignment of the payments contemplated by this
Agreement, all rights and benefits of EVP shall be for the sole personal benefit of EVP, 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 EVP. Except as so
provided, this Agreement shall inure to the benefit of and be binding upon EVP and EVP&#146;s personal
representatives, distributees and legatees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>The Company</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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&#146;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&#146;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&#146;s obligations under this Agreement (and deliver an executed
copy of such assumption to EVP), in which case such successor or purchaser, but not the Company,
shall thereafter be the only party obligated to perform the obligations that
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">remain to be performed on the part of the Company under this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Entire Agreement</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Agreement and the other agreements referenced herein represent the
entire agreement between the parties concerning EVP&#146;s employment with the Company and supersede all
prior negotiations, discussions, understandings and agreements, whether written or oral, between
EVP and the Company relating to the subject matter of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Amendment or Modification, Waiver</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No provision of this Agreement may be amended or
waived unless such amendment or waiver is agreed to in writing signed by EVP and by a duly
authorized officer of the Company other than EVP. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Notices</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="84%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To the Company:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Nanophase Technologies Corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1319 Marquette Drive</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Romeoville, IL 60446</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: Chief Executive Officer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Facsimile: (630)&nbsp;771-0825</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To EVP:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Kevin J. Wenta</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">780 Lenox Road</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Glen Ellyn, IL 60137</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Severability</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 invalid, such provision shall not be determined to be
entirely of no effect; instead, it is the intention and desire of both the Company and EVP 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Survivorship</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Headings</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Withholding Taxes</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All salary, benefits, reimbursements and any other payments to EVP
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>Applicable Law: Jurisdiction</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date
first written above.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">NANOPHASE TECHNOLOGIES CORPORATION<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="center">/s/ Joseph Cross
&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD valign="top">Its:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 0px solid #000000" align="center"> Chief Executive Officer&nbsp;</TD>
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    <TD colspan="2" style="border-bottom: 1px solid #000000" align="center">/s/ Kevin J. Wenta
&nbsp;</TD>
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    <TD colspan="2" style="border-bottom: 0px solid #000000" align="center"> Kevin J. Wenta&nbsp;</TD>
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<TYPE>EX-99.2
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<FILENAME>c11335exv99w2.htm
<DESCRIPTION>EXHIBIT 99.2 PRESS RELEASE DATED JANUARY 9, 2007
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;99.2
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NANOPHASE EXPANDS SALES AND BUSINESS DEVELOPMENT TEAM, NAMING<BR>
KEVIN WENTA EXECUTIVE VICE PRESIDENT, SALES &#038; MARKETING</B>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Romeoville, IL, January&nbsp;9, 2007 </B>&#151; <B>Nanophase Technologies (Nasdaq: NANX)</B>, a technology
leader in nanomaterials and advanced nanoengineered products, announced that Kevin J. Wenta has
joined Nanophase as executive vice president, sales and marketing. Wenta brings to Nanophase more
than 20&nbsp;years of experience in business development, sales, marketing, finance and operations,
primarily in the industrial chemicals field.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;In light of the company&#146;s increasing manufacturing capabilities and sales opportunities, this is
the ideal time to expand our sales team and to bring to the company Kevin&#146;s wealth of experience,&#148;
said Joseph Cross, president and chief executive officer. &#147;This important addition complements our
seasoned and successful sales management team which has doubled the Company&#146;s product revenue since
2004. Kevin assuming leadership of our sales and business development function, which I have
directly led since 2004, also will now allow me to focus further on managing the company&#146;s
financial and business operations as Nanophase continues to grow.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;We achieved record quarterly year-over-year revenues during 2006 and anticipate continued growth
in 2007 with new emerging market opportunities, accelerating customer activity, and new product
introductions. This is the time to look into the future and position ourselves to manage and
propel long-term growth. Kevin&#146;s diverse business and sales experience will be a key asset for
Nanophase to drive increasing market expansion and revenues.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Wenta served as a general manager at Eastman Chemical Company, successfully leading a turnaround of
its $520&nbsp;million resins, monomers and textiles businesses. He also held the position of director of
corporate strategy. Before joining Nanophase he was a partner of Accenture, a global consultancy.
In his 20&nbsp;year career, he has also held positions with ChemConnect (formerly CheMatch), a global
electronic chemical exchange, financial positions at ARCO and sales positions with Elemica and
Shell Chemical. He holds a degree in chemical engineering from the University of Texas at Austin
and an M.B.A. from the University of Chicago.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Nanophase Technologies Corporation (NANX), </I></B><U><B><I>www.nanophase.com</I></B></U><B><I>, is a leader in nanomaterials
technologies and provides nanoengineered solutions for multiple industrial product applications.
Using a platform of patented and proprietary integrated nanomaterial technologies, the Company
creates products with unique performance attributes from two ISO 9001:2000 and ISO 14001
facilities. Nanophase delivers commercial quantity and quality nanoparticles, coated nanoparticles,
and nanoparticle dispersions in a variety of media. The Company owns or licenses 19 United States
and 54 foreign patents and patent applications. Information about Nanophase may be found in the
Company&#146;s public filings or on its website.</I></B>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 6pt"><B><I>This press release contains words such as &#147;expects&#148;, &#148;shall&#148;, &#147;will&#148; , &#147;believes&#148; and similar
expressions that are intended to identify forward-looking statements within the meaning of the Safe
Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements in this
announcement are made based on the Company&#146;s current beliefs, known events and circumstances at the
time of publication, and as such, are subject in the future to unforeseen risks and uncertainties
that could cause the Company&#146;s results of operations, performance and achievements to differ
materially from current expectations expressed in, or implied by, these forward-looking statements.
These risk and uncertainties include the following: a decision by a customer to cancel a purchase
order or supply agreement in light of the Company&#146;s dependence on a limited number of key
customers; uncertain demand for, and acceptance of, the Company&#146;s nanocrystalline materials; the
Company&#146;s manufacturing capacity and product mix flexibility in light of customer demand; the
Company&#146;s limited marketing experience; changes in development and distribution relationships; the
impact of competitive products and technologies; the Company&#146;s dependence on patents and protection
of proprietary information; the resolution of litigation in which the Company may become involved;
and other risks described in the Company&#146;s Form&nbsp;10Q filed November&nbsp;7, 2006 and other filings with
the Securities and Exchange Commission. In addition, the Company&#146;s forward-looking statements
could be affected by general industry and market conditions and growth rates. Except as required
by federal securities laws, the Company undertakes no obligation to update or revise these
forward-looking statements to reflect new events, uncertainties or other contingencies.</I></B>
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