<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 26, 1999
ADVANCED LIGHTING TECHNOLOGIES, INC.
- ---------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
OHIO 0-27202 34-1803229
- ---------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
32000 AURORA ROAD, SOLON, OHIO 44139
- ---------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code 440 / 519-0500
-------------------------
NOT APPLICABLE
- ---------------------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE> 2
ITEM 5. OTHER EVENTS.
This filing presents the following with respect to Advanced Lighting
Technologies, Inc. (the "Company"):
1. Background of the Company; and
2. Management.
This information supplements information included in a preliminary prospectus
contained in Amendment No. 3 to the Registration Statement on Form S-4, filed
December 23, 1998, relating to the registration of an offer to exchange 8%
Senior Notes due 2008 of the Company for outstanding 8% Senior Notes due 2008 of
the Company and the Company's proxy materials.
2
<PAGE> 3
BACKGROUND OF THE COMPANY
HISTORY
The Company's business was established in 1983 by Wayne R. Hellman, the
Company's current Chief Executive Officer, and other members of the Company's
senior management to focus on the design and manufacture of metal halide lamps.
Management initially acquired an entity engaged in the production of metal
halide salts necessary to make metal halide lamps and founded Venture Lighting
International, Inc. ("Venture"), a lamp manufacturer, soon thereafter. By 1995,
management had either formed or acquired 17 operating companies, each of which
was engaged in some aspect of the metal halide lighting business and all of
which were under common ownership (the "Predecessors"). In 1985, certain of the
Predecessors produced their first metal halide lamps and, over the next several
years, designed, introduced and manufactured a wide range of specialty metal
halide lamps, as well as certain commodity lamps. In order to support the growth
of their metal halide operations, the Predecessors manufactured and sold
non-metal halide products such as high pressure sodium lamps. To gain entrance
into the European lamp market, management acquired a German quartz halogen lamp
manufacturer in 1984, which was sold in 1990, as described below.
The Predecessors financed early operations through a combination of venture
capital financing and significant bank borrowing. The Predecessors experienced
significant growth between fiscal 1983 and fiscal 1989, with metal halide
products representing slightly less than half of the Predecessors' net aggregate
revenue in fiscal 1989. In January 1989, the senior lender to Venture, one of
the 17 Predecessor companies, requested that it obtain alternative financing
sources for the approximately $32.0 million of bank debt which Venture then had
outstanding. However, Venture was unable to consummate alternative financing
arrangements that would have retired the outstanding debt because of its venture
capital investor's refusal to accept the terms and values offered for its
investment in Venture in two potential transactions with major lamp
manufacturers. In June 1990, Venture and the venture capital investor negotiated
an exchange of the investor's preferred equity for subordinated notes of
Venture. Following this exchange, Venture was able to reduce the $32.0 million
of indebtedness owed to its senior lender to $6.7 million by December 1990
through dispositions of certain subsidiaries, including its German quartz
halogen lamp manufacturer. As a result of these dispositions, non-metal halide
product sales declined to approximately 17% of net sales in fiscal 1991.
During fiscal 1992, Venture was unsuccessful in refinancing the remaining
outstanding senior debt, which had risen to $8.0 million at June 30, 1992 and
was limited to that amount by its senior lender. As a result, Venture
experienced working capital constraints, and its management made a strategic
decision to refocus its manufacturing operations on the core business of
specialty metal halide lamps. Venture contracted its operations by significantly
reducing the number of product lines it manufactured, reducing its work force
and eliminating its second manufacturing shift.
At the end of fiscal 1992, the senior lender expressed its intention not to
further extend the term of the remaining bank debt of Venture. Although Venture
was in default of certain covenants, it had never missed a scheduled interest or
principal payment to the senior lender. Unable to obtain acceptable refinancing,
Venture voluntarily filed for protection under Chapter 11 of the United States
Bankruptcy Code on July 29, 1992. None of the other Predecessors filed for
Chapter 11 protection. Venture successfully emerged from Chapter 11 protection
in July 1993. The Predecessors' aggregate net sales declined to $25.5 million in
fiscal 1993 from $26.4 million in fiscal 1992. During fiscal 1993, the
Predecessors maintained substantially all of their relationships with existing
customers and suppliers. As part of the plan of reorganization, Venture's
management received complete ownership of Venture for an additional equity
investment of $250,000. Venture's reorganization was facilitated by financing
arrangements totalling $8.0 million provided by GE (the "GE Loan"), which were
personally guaranteed by Mr. Hellman. In addition, at that time, GE was issued a
warrant to purchase common stock of Venture (the "GE Warrant"). In connection
with the Company's initial public offering in December 1995, GE received $3.0
million in cash plus 5.0% of the Company's then outstanding Common Stock in
exchange for the cancellation of the GE Warrant and for other consideration. In
addition, with approximately $400,000 of the proceeds of the initial public
offering, the Company paid all amounts remaining to be paid pursuant to the plan
of reorganization.
3
<PAGE> 4
The Company was formed as an Ohio corporation on May 19, 1995 for the
purpose of acquiring ownership, primarily by merger, of the 17 affiliated
Predecessors, including Venture, that were previously under common ownership and
management and were each engaged in some aspect of the metal halide lighting
business. The Combination was effected in October 1995 through a series of
mergers or stock exchanges in which the Predecessors' shareholders received
Common Stock of the Company, except that certain investors and former employees
of the Predecessors received, in the aggregate, an insignificant amount of cash
for their shares.
RECENT ACQUISITIONS AND STRATEGIC INVESTMENTS
To expand the Company's ability to develop and market new metal halide
products and systems, the Company has made a number of acquisitions and
strategic investments, the most notable of which completed since January 1997
are described below.
On January 28, 1998, the Company completed the acquisition of Deposition
Sciences, Inc. ("DSI"), of Santa Rosa, California. DSI is a leader in the
development of sophisticated thin film deposition systems and coatings for
lighting applications, with particular emphasis on coatings for metal halide
lighting systems, and other applications, including aerospace, defense and
automotive applications. The stock of DSI was acquired in a privately-negotiated
transaction. The purchase price consisted of 599,717 shares of the Company's
Common Stock and approximately $14.5 million in cash.
On January 2, 1998, the Company acquired all of the capital stock
outstanding of Ruud Lighting (the "Ruud Stock"), located in Racine, Wisconsin.
Ruud Lighting manufactures and directly markets HID lighting systems,
principally focusing on metal halide installations for commercial, industrial
and outdoor lighting applications. The Ruud Stock was acquired from the five
shareholders of Ruud Lighting in a privately negotiated purchase transaction.
The purchase price for the Ruud Stock consisted of three million shares of the
Company's Common Stock and approximately $35.5 million in cash.
On December 31, 1997, the Company and Rohm and Haas Company ("Rohm and
Haas") completed a series of agreements that resulted in the formation of Unison
Fiber Optics Lighting Systems LLC ("Unison"), a joint venture that focuses on
the manufacture and sale of fiber optic lighting systems. In consideration for a
50% interest in Unison, the Company contributed its subsidiary, Advanced Cable
Lite Corporation, $2.0 million in cash, other optic lighting system assets and
is obligated to contribute an additional $3.0 million in cash on January 1,
2000.
In July 1997, the Company purchased an equity interest in Fiberstars, Inc.
("Fiberstars"), a marketer and distributor of fiber optic lighting products. On
February 11, 1998, the Company increased its equity ownership to approximately
29% of Fiberstars' total shares outstanding. Pursuant to its agreements with
Rohm and Haas, Rohm and Haas has the right to request that the Company divest
its interest in Fiberstars. Upon such request, the Company agrees to complete
such divestiture within two years subject to reasonable extension upon consent
of Rohm and Haas.
On June 2, 1997, the Company purchased the system component manufacturing
and operating assets of W. J. Parry & Co. (Nottingham) Ltd. ("Parry"), a
manufacturer and marketer of magnetic power supplies for high intensity
discharge lighting systems, based in the United Kingdom. The purchase price for
this acquisition was approximately $8.5 million in cash.
On April 2, 1997, the Company invested approximately $3.8 million of cash
in exchange for a 30% interest in Koto Luminous Co., Ltd. ("Koto"), a maker and
distributor of lamps in Japan. After the Company's investment, Koto began doing
business under the name Venture Lighting Japan. Using the proceeds of the
investment and an additional investment by a Koto affiliate, Venture Lighting
Japan has equipped a metal halide lamp manufacturing facility in Japan that
began operations in December 1997.
On February 11, 1997, the Company expanded its system components offerings
by acquiring Ballastronix, Inc. ("Ballastronix"), a Canadian company focused on
designing, manufacturing and marketing magnetic power supplies for high
intensity discharge and fluorescent lighting systems. The consideration for the
acquisition was approximately $5.5 million in cash and 38,024 shares of the
Company's Common Stock.
4
<PAGE> 5
MANAGEMENT
DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following table sets forth certain information, as of December 15,
1998, with respect to each person who is currently a director, an executive
officer or key employee of the Company.
<TABLE>
<CAPTION>
DIRECTORS
TERM
NAME AGE POSITION EXPIRES
---- --- -------- ---------
<S> <C> <C> <C>
Wayne R. Hellman 52 President, Chief Executive Officer and Chairman 2001
Alan J. Ruud 51 Vice Chairman and Director 2000
Louis S. Fisi 63 Executive Vice President, Secretary and Director 2000
Francis H. Beam 62 Director 2000
John R. Buerkle 50 Director 1999
Theodore A. Filson 63 Director 2001
Susumu Harada 47 Director 1999
A Gordon Tunstall 54 Director 1999
Nicholas R. Sucic 51 Chief Financial Officer, Vice President and
Treasurer
Key Employees
Robert S. Roller 51 Coordinator of Market Development
Juris Sulcs 52 Coordinator of Technology Development
</TABLE>
Wayne R. Hellman has served as the chief executive and a director of the
Company since 1995 and as chief executive or other senior officer of each of the
Company's predecessor companies since 1983. From 1968 to 1983 he was employed by
the lighting division of General Electric Company. While at General Electric,
Mr. Hellman served as Manager of Strategy Analysis for the Lighting Business
Group; Manager of Engineering for the Photo Lamp Department; Halarc Project
Venture Manager; Manager of Quartz Halogen Engineering and Manager of Metal
Halide Engineering. As the Halarc Project Venture Capital Manager, he was given
the responsibility of developing metal halide technology. Mr. Hellman is also
currently a director of Fiberstars, Inc., a manufacturer and marketer of fiber
optic lighting systems. The Company owns approximately 29% of the issued and
outstanding shares of Fiberstars, Inc. In 1998, Mr. Hellman married Diane
Mazzola who is Mr. Fisi's step-daughter. Mr. Hellman has been an executive
officer of Venture since its formation and was a director of Venture from 1990
to 1995. See "Background of the Company."
Alan J. Ruud founded Ruud Lighting, Inc. in December of 1982 and has served
as its chairman of the board and chief executive officer since that time. The
Company acquired Ruud Lighting on January 2, 1998. At that time, Mr. Ruud was
appointed to the Company's board. He currently serves as vice-chairman and a
member of the Executive Committee. Mr. Ruud founded SPI Lighting, an HID
lighting manufacturer, in 1973, which was sold to McGraw Edison in 1978. Mr.
Ruud managed SPI Lighting until 1982. From 1969 through 1979, Mr. Ruud also ran
a consulting and lighting engineering group in Milwaukee, Wisconsin.
Louis S. Fisi has served as the executive vice president and a director of
the Company since 1995. He has also served as chief financial officer of the
Company from 1995 to November 1996 and chief financial officer of one or more of
the Company's predecessors from 1985 to November 1996, and assisted Mr. Hellman
in the founding of the predecessors. From 1976 to 1985, Mr. Fisi was employed in
executive and financial capacities by the Smithers Company, an international
industrial company. From 1967 to 1976, he was employed as a certified public
accountant by an international accounting and consulting firm currently known as
Ernst & Young LLP, the Company's independent auditors. Mr. Fisi has been an
executive officer of Venture from its formation and was a director of Venture
from 1991 to 1993. See "Background of the Company."
Francis H. Beam has served as a director of the Company since 1995. Since
1988, Mr. Beam has served as President of Pepper Capital Corp., a venture
capital firm which he formed. Mr. Beam is also a director of The Lamson &
Sessions Co., a manufacturer of thermoplastic conduit and pipe, enclosures,
wiring devices and accessories. From 1959 to 1988 he was employed by Ernst &
Young LLP (and its predecessors), the Company's independent auditors. Beginning
in 1967 he held various partnership positions with that firm until his
retirement in 1988 as Vice Chairman and Regional Managing Partner.
5
<PAGE> 6
John R. Buerkle was appointed as a director of the Company in January 1998.
Mr. Buerkle has served as Executive Vice President -- Regional Director,
Consumer Products, Asia-Pacific, of S.C. Johnson & Son, Inc., a company engaged
in the production of consumer household products, commercial products and
services and specialty polymers, since April 1995. From 1982 to 1995, Mr.
Buerkle was employed in executive and managerial capacities, engaged primarily
in regional business and product development and has held other managerial
positions with S.C. Johnson since 1972.
Theodore A. Filson has been a director of the Company since 1995. Mr.
Filson has served as an independent consultant to the lighting industry since
1994. From 1986 to 1994 he was employed as president and chief executive officer
of Advance Transformer, Inc., the largest manufacturer of lighting system power
supplies in the world.
Susumu Harada has served as a director of the Company since January 1996.
Mr. Harada is the chief executive officer of the following Japanese companies:
Koto Electric, Koto Bunkogen, Iwaki Cristal and Wakoh Corporation. Mr. Harada is
also the chief executive of Venture Lighting, Japan ("Venture Japan"), formerly,
Koto Luminous, which is a Japanese distribution and manufacturing joint venture
in which the Company owns a 30% interest. The product lines of these companies
include specialty lamps, hermetic seals for quartz crystal and optical
semiconductors, and digital display lamps. In 1981, Mr. Harada joined Koto as
the Overseas and Domestic Sales and Planning Manager. He held a number of
positions with Koto before he assumed his current position as chief executive
officer in 1992.
A Gordon Tunstall has served as a director of the Company since June 1996.
He is the founder of, and for more than 18 years has served as President of,
Tunstall Consulting, Inc., a provider of strategic consulting and financial
planning services. Mr. Tunstall is also currently a director of Romac
International, Inc., a professional and technical placement firm; Orthodontic
Centers of America, Inc., a manager of orthodontic practices; Discount Auto
Parts, Inc., a retail chain of automotive aftermarket parts stores; and Horizon
Medical Products, a medical device manufacturer and distributor.
Nicholas R. Sucic joined the Company in 1996 as Special Assistant to the
Chairman. He was appointed chief financial officer and treasurer in November
1996 and became Vice President in April 1997. He is a certified public
accountant. From 1989 to 1996, he was employed by The Prudential Investment
Corporation ("The Prudential") having served as chief financial officer and
comptroller for various institutional investment units. Prior to joining The
Prudential, Mr. Sucic was a partner with Ernst & Young LLP, the Company's
current independent auditors, having been associated with that firm since 1970.
Robert S. Roller has served as the senior officer responsible for product
marketing for one or more of the Predecessors since 1983, and assisted Mr.
Hellman in the founding of the Predecessors. From 1966 to 1983, he was employed
by the lighting division of General Electric in a managerial capacity, engaged
primarily in the marketing and engineering of metal halide and other lighting
products.
Juris Sulcs has served as the senior officer responsible for technology
development for one or more of the Predecessors since 1983, and assisted Mr.
Hellman in the founding of the Predecessors. From 1966 to 1983, he was employed
by the lighting division of General Electric in a managerial capacity, engaged
primarily in the technological development and quality control of metal halide
and other lighting products.
6
<PAGE> 7
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description of Exhibits
- ----------- -----------------------
99.1 Employment Agreement dated as of February 12, 1998 between
Advanced Lighting Technologies, Inc. and Nicholas R. Sucic
7
<PAGE> 8
SIGNATURES
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.
ADVANCED LIGHTING TECHNOLOGIES, INC.
(Registrant)
Date: January 26, 1999 By: /s/ Wayne R. Hellman
-------------------------------
Wayne R. Hellman
Chief Executive Officer
8
<PAGE> 9
EXHIBIT INDEX
-------------
Exhibit No. Description of Exhibits
- ----------- -----------------------
99.1 Employment Agreement dated as of February 12, 1998 between
Advanced Lighting Technologies, Inc. and Nicholas R. Sucic
9
<PAGE> 1
CONFIDENTIAL EXHIBIT 99.1
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT entered into and effective as of February 12,
1998, between ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio corporation ("ADLT"
or "Employer"), and NICHOLAS R. SUCIC ("EMPLOYEE");
WITNESSETH:
-----------
WHEREAS, ADLT and Employee desire to terminate any and all prior
agreements, whether oral or written, between the Employee and ADLT relating to
Employee's employment; and
WHEREAS, ADLT and Employee desire to enter into an Employment Agreement
as set forth herein below to ensure ADLT of the services of Employee as Chief
Financial Officer of ADLT and to set forth the rights and duties of the parties
hereto,
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. TERMINATION OF PRIOR AGREEMENTS. ADLT and Employee hereby terminate any
and all prior agreements, whether oral or written, between the parties
or ADLT relating to Employee's employment.
2. EMPLOYMENT.
(a) ADLT hereby employs Employee, and Employee hereby accepts
employment, upon the terms and conditions hereinafter set
forth.
(b) During the term of this Employment Agreement, (for purposes
hereof, all references to the term of this Employment
Agreement shall be deemed to include all renewals or
extensions hereof, if any), Employee shall devote his full
business time to his employment and shall perform diligently
such duties as are, or may be, required by the Board of
Directors of ADLT or their designee, which duties shall be
within the bounds of reasonableness and acceptable business
standards and ethics.
(c) During the term of this Employment Agreement, Employee shall
not, without the prior written consent of ADLT, which shall
not be unreasonably withheld, directly or indirectly, render
services of a business, professional or commercial nature to
any other person or firm, whether for compensation or
otherwise, other than in the performance of duties naturally
inherent in the businesses of ADLT or any subsidiary or
affiliate of ADLT; provided, however, that Employee may
continue to render
<PAGE> 2
services to and participate in philanthropic and charitable
causes, in each case, in a manner and to the extent consistent
with his past practice.
3. TERM AND POSITION.
(a) Subject to the termination provisions contained herein, the
term of this Employment Agreement shall commence as of the
date hereof and shall continue for a term of three years from
such date, subject, however, to the provisions of Section 6.
(b) Employee shall serve as Chief Financial Officer of ADLT and in
such offices or positions with ADLT as shall be agreed upon by
Employee and the Board of Directors of ADLT, as the case may
be, without, however, any change in Employee's compensation
(but such offices or positions shall be consistent with the
office and position stated herein).
(c) The principal business office of Employee shall be in
Northeast Ohio; however, Employee maintains a residence and a
business office in Hudson, Ohio, from which the Employee may
perform his duties under this Agreement. Employee shall not be
required to relocate without Employee's consent.
4. COMPENSATION.
(a) Subject to the provisions of this Employment Agreement, for
all services which Employee may render to ADLT during the term
of this Employment Agreement, Employee shall receive a salary
at the rate of One Hundred Seventy-Five Thousand Dollars
($175,000) per annum for the first year of this Agreement,
which shall be payable in equal, consecutive biweekly
installments.
(b) Provided that Employee satisfactorily performs his services
under this Employment Agreement, Employee shall be entitled to
salary increases from time to time as determined by the
Compensation Committee of ADLT.
(c) Provided that Employee has satisfactorily performed his
services under this Employment Agreement, Employee shall be
eligible for bonuses from time to time as determined by the
Compensation Committee of ADLT.
5. OTHER BENEFITS.
During the term of this Employment Agreement, Employee shall be
entitled to such vacation privileges, life insurance, medical and
hospitalization benefits, and such other benefits as are typically provided to
other executive officers of ADLT and its subsidiaries in comparable positions.
2
<PAGE> 3
6. TERMINATION AND FURTHER COMPENSATION.
(a) The employment of Employee under this Employment Agreement,
for the term thereof, may be terminated by the Board of
Directors of ADLT for cause at any time.
For purposes hereof, the term "cause" shall mean:
(i) Employee's fraud, dishonesty, willful misconduct or
gross negligence in the performance of his duties
hereunder; or
(ii) Employee's material breach of this Agreement, in
whole or in part.
Any termination by reason of the foregoing shall not be in
limitation of any other right or remedy ADLT may have under
this Employment Agreement or otherwise.
(b) In the event of (i) termination of the Employment Agreement
for any of the reasons set forth in Subparagraph (a) of this
Section 6, or (ii) if Employee shall voluntarily terminate his
employment hereunder prior to the end of the term of this
Employment Agreement, then in either event Employee shall be
entitled to no further salary, bonus or other benefits under
this Employment Agreement, except as to that portion of any
unpaid salary and other benefits accrued and earned by him
hereunder up to and including the effective date of such
termination. In the event the Employee voluntarily terminates
this Agreement, Employee shall provide 30 days' prior written
notice to ADLT of such voluntary termination.
(c) In the event that ADLT terminates Employee's employment
without "cause" (as defined herein above) or Employee
terminates employment with "good reason" (as defined below)
prior to the end of the term of this Employment Agreement,
then Employee shall be entitled to all salary and medical
benefits for the remainder of the term of this Employment
Agreement all upon the terms and as set forth herein. At the
conclusion of the term of this Employment Agreement, all
salary, medical and other benefits as set forth herein shall
cease. Employee shall have no other rights and remedies except
as set forth in this Section 6. For purposes hereof, the term
"good reason" shall mean (i) without the express written
consent of Employee, a material reduction of Employee's
duties, authority, compensation, benefits or responsibilities
or (ii) a material breach of this Agreement by ADLT.
(d) In the event of Employee's death or permanent disability (as
defined herein below) occurring during the term of this
Employment Agreement, this Employment Agreement shall be
deemed terminated for cause and Employee or his estate, as the
case may be, shall be entitled to no further salary or other
compensation provided for herein except as to that portion of
any unpaid salary accrued or earned by Employee hereunder up
to and including the date of death or permanent disability,
and any benefits under any insurance policies or other plans.
3
<PAGE> 4
(e) "Permanent disability" means the inability of Employee to
perform satisfactorily his usual or customary occupation for a
period of 120 days in the aggregate out of 150 consecutive
days as a result of a physical or mental illness or other
disability which in the written opinion of a physician of
recognized ability and reputation, is likely to continue for a
significant period of time.
(f) In the event this Employment Agreement is terminated with
cause, before the end of the term, ADLT may, in its sole
discretion, notify Employee that ADLT intends to continue to
pay all compensation, benefits and monies due under the terms
of the Employment Agreement for the remainder of the term. In
such event, and provided ADLT continues to make such payments,
Employee shall continue to be bound by the terms of the
non-competition provisions in Section 7 hereof.
7. COVENANTS REGARDING NON-COMPETITION AND CONFIDENTIAL INFORMATION.
(a) Non-Competition.
(i) Recognizing that Employee will have been involved as
an executive officer of ADLT and its affiliates,
including ADLT, are engaged in the supply of products
and/or services in every state of the United States
and internationally, therefore, upon termination of
his employment, for any reason, he agrees that he
will not, for a period of three years immediately
following such termination, engage, in the United
States or in any country where ADLT or any of their
affiliates conducts business, either directly or
indirectly on behalf of himself or on behalf of any
employee, consultant, principal, substantial
shareholder or investor, partner or officer of any
corporation, in any business of the type and
character or in competition with the business carried
on by ADLT or its affiliates (as conducted on the
date Employee ceases to be employed by ADLT in any
capacity).
(ii) Employee will not, for a period of three years
immediately following the termination of his
employment, either directly or indirectly or on
behalf of another as an employee, agent, principal,
partnership or other entity, recruit, hire or
otherwise entice any employees of ADLT or its
affiliates to leave the Employer.
(iii) Employee will not disclose, divulge, discuss, copy or
otherwise use or suffer to be used in any manner, in
competition with, or contrary to the interests of
ADLT or its affiliates, the customer lists,
manufacturing methods, product research or
engineering data or other trade secrets of ADLT or
any of its affiliates, it being acknowledged by
Employee that all such information regarding the
business of ADLT or its affiliates developed,
compiled or
4
<PAGE> 5
obtained by or furnished to Employee while Employee
shall have been employed by or associated with ADLT
or its affiliates is confidential information and
ADLT's or its affiliates' exclusive property.
Employee's obligations under this Section 7(a)(iii)
will not apply to any information which (A) is known
to the public other than as a result of Employee's
acts or omissions, (B) is approved for release, in
writing, by the Company, (C) is disclosed to Employee
by a third party without restriction, or (D) Employee
is legally required to disclose.
(b) Employee expressly agrees and understands that the remedy at
law for any breach by him of this Section 7 will be inadequate
and that the damages flowing from such breach are not readily
susceptible to being measured in monetary terms. Accordingly,
it is acknowledged that upon adequate proof of Employee's
violation of any legally enforceable provision of this Section
7, ADLT shall be entitled to immediate injunctive relief and
may obtain a temporary order restraining any threatened or
further breach. Nothing in this Section 7 shall be deemed to
limit ADLT's remedies at law or in equity for any breach by
Employee of any of the provisions of this Section 7 which may
be pursued or availed of by ADLT or any of its affiliates
including but not limited to ADLT.
(c) In the event Employee shall violate any legally enforceable
provision of this Section 7 as to which there is a specific
time period during which he is prohibited from taking certain
actions or from engaging in certain activities as set forth in
such provision then, in such event, such violation shall toll
the running of such time period from the date of such
violation until such violation shall cease.
8. RENEWAL.
Not later than six (6) months prior to the termination of this
Agreement, Employer shall be entitled to notify Employee whether it desires to
renew this Employment Agreement with Employee for an additional period of three
(3) years, which notice, if given, shall contain the compensation and other
benefits proposed to be paid and provided to Employee by Employer. For a period
of thirty (30) days after receipt of such notice, Employee shall have the option
to accept such offer of renewal or, in the alternative, shall be entitled to
consult with Employer with respect to different compensation and/or benefits to
be paid and provided to Employee by Employer during said renewal period of
employment. If at the end of said thirty (30) day period Employee and Employer
are unable to agree, then this Employment Agreement shall not be renewed at the
end of the term thereof, unless otherwise agreed to by the parties. In the
event, however, that Employer does not, timely notify Employee of its desire to
renew this Employment Agreement, then this Employment Agreement shall not be
renewed at the end of the term thereof, unless otherwise agreed upon by the
parties.
5
<PAGE> 6
9. SEVERABLE PROVISIONS.
The provisions of this Employment Agreement are severable and if any
one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision to the extent enforceable in any jurisdiction shall,
nevertheless, be binding and enforceable.
10. ARBITRATION.
Any controversy or claim arising out of or relating to this Employment
Agreement, or the breach thereof, shall be settled by arbitration by a single
arbitrator in the City of Cleveland, State of Ohio, in accordance with the Rules
of the American Arbitration Association, and judgment upon the award rendered by
the Arbitrator may be entered in any court having jurisdiction thereof. The
Arbitrator shall be deemed to possess the powers to issue mandatory orders and
restraining orders in connection with such arbitration; PROVIDED, HOWEVER, that
nothing in this Section 10 shall be construed so as to deny ADLT the right and
power to seek and obtain injunctive relief in a court of equity for any breach
or threatened breach of Employee of any of his covenants contained in Section 7
hereof.
11. NOTICES.
(a) Each notice, request, demand or other communication ("NOTICE")
by either party to the other party pursuant to this Agreement
shall be in writing and shall be personally delivered or sent
by U.S. certified mail, return receipt requested, postage
prepaid, or by nationally recognized overnight commercial
courier, charges prepaid, or by facsimile transmission (but
each such Notice sent by facsimile transmission shall be
confirmed by sending a copy thereof to the other party by U.S.
mail or commercial courier as provided herein no later than
the following business day), addressed to the address of the
receiving party or to such other address as such party shall
have communicated to the other party in accordance with this
Section. Any Notice hereunder shall be deemed to have been
given and received on the date when personally delivered, on
the date of sending when sent by facsimile, on the third
business day following the date of sending when sent by mail
or on the first business day following the date of sending
when sent by commercial courier.
(b) If a Notice is to ADLT, then such Notice shall be addressed to
Advanced Lighting Technologies, Inc., attention of the Board
of Directors.
(c) If a Notice is to Employee, then such Notice shall be
addressed to Employee at his home address last known on the
payroll records of ADLT.
6
<PAGE> 7
12. WAIVER.
The failure of either party to enforce any provision or provisions of
this Employment Agreement shall not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, nor prevent
that party thereafter from enforcing each and every other provision of this
Employment Agreement. The rights granted the parties herein are cumulative and
the waiver of any single remedy shall not constitute a waiver of such party's
right to assert all other legal remedies available to it under the
circumstances.
13. MISCELLANEOUS.
This Employment Agreement supersedes all prior agreements and
understandings between the parties and may not be modified or terminated orally.
No modification, termination or attempted waiver shall be valid unless in
writing and signed by the party against whom the same it is sought to be
enforced.
14. GOVERNING LAW.
This Employment Agreement shall be governed by and construed according
to the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement on the day and year first set forth above.
WITNESS: ADVANCED LIGHTING TECHNOLOGIES, INC.
By: /s/ Jacqueline Massaro By: /s/ Wayne R. Hellman
------------------------- ---------------------
Name: Jacqueline Massaro Name: Wayne R. Hellman
------------------------- Its: Chief Executive Officer and President
WITNESS:
By: /s/ Jacqueline Massaro /s/ Nicholas R. Sucic
------------------------- ---------------------
Name: Jacqueline Massaro NICHOLAS R. SUCIC
-------------------------
7
