<PAGE> 1
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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
ADVANCED LIGHTING TECHNOLOGIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
Advanced Lighting Logo
32000 Aurora Road
Solon, Ohio 44139
October 27, 2000
To Our Shareholders:
On behalf of the Board of Directors and management, I cordially invite you
to attend the Annual Shareholders Meeting to be held on Thursday, December 7,
2000, at 10:00 a.m. (E.S.T.), at KSK Color Lab (Conference Room), 32300 Aurora
Road, Solon, Ohio 44139.
The notice of meeting and proxy statement accompanying this letter describe
the specific business to be acted upon.
In addition to the specific matters to be acted upon, there will be a
report on progress of the Company and an opportunity for questions of general
interest to the shareholders.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, you are requested to vote, sign, date and
promptly return the enclosed proxy in the envelope provided.
Sincerely yours,
/s/ Wayne R. Hellman
Chairman of the Board
<PAGE> 3
ADVANCED LIGHTING TECHNOLOGIES, INC.
32000 Aurora Road
Solon, Ohio 44139
NOTICE OF ANNUAL SHAREHOLDERS MEETING TO BE HELD
DECEMBER 7, 2000
To the Shareholders of ADVANCED LIGHTING TECHNOLOGIES, INC.:
Notice is hereby given that the Annual Shareholders Meeting of ADVANCED
LIGHTING TECHNOLOGIES, INC. (the "Company") will be held on Thursday, December
7, 2000, at 10:00 a.m., Eastern Standard Time at KSK Color Lab (Conference
Room), 32300 Aurora Road, Solon, Ohio 44139, for the following purposes:
1. To elect directors, the names of whom are set forth in the accompanying
proxy statement, to serve until the 2003 Annual Meeting and until their
successors have been elected and qualified.
2. To ratify the appointment of Grant Thornton LLP as independent auditors
of the Company.
3. To transact such other business as may properly be brought before the
meeting.
The Board of Directors has fixed the close of business on October 13, 2000
as the record date for the determination of the shareholders entitled to notice
of and to vote at the Annual Meeting, and only shareholders of record at the
close of business on that date will be entitled to vote at the Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person. WHETHER OR NOT YOU EXPECT TO BE PRESENT, YOU ARE REQUESTED TO VOTE,
SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE PREPAID ENVELOPE
PROVIDED. If you are present at the Annual Meeting and desire to vote in person,
your proxy will not be used if you revoke your appointment of proxy so that you
may vote your shares personally.
By Order of the Board of Directors,
/s/ Alan J. Ruud
Secretary
October 27, 2000
NOTICE
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED SO THAT THE PRESENCE OF A QUORUM
MAY BE ASSURED. EACH SHAREHOLDER IS REQUESTED TO EXECUTE AND PROMPTLY RETURN THE
ENCLOSED PROXY.
<PAGE> 4
ADVANCED LIGHTING TECHNOLOGIES, INC.
32000 Aurora Road
Solon, Ohio 44139
PROXY STATEMENT
ANNUAL SHAREHOLDERS MEETING
TO BE HELD DECEMBER 7, 2000
The enclosed Proxy is solicited on behalf of the Board of Directors of
ADVANCED LIGHTING TECHNOLOGIES, INC. (the "Company") for use at the Annual
Shareholders Meeting ("Annual Meeting") to be held Thursday, December 7, 2000,
at 10:00 a.m. Eastern Standard Time or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Shareholders Meeting. The Annual Meeting will be held at KSK Color Lab
(Conference Room), 32300 Aurora Road, Solon, Ohio 44139.
The definitive proxy solicitation materials are expected to be mailed on or
about November 2, 2000 to all shareholders entitled to vote at the Annual
Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARES OUTSTANDING
There were 281 shareholders of record at the close of business on October
13, 2000 entitled to notice of, and to vote at, the Annual Meeting. 22,196,675
shares of the Company's Common Stock, par value $.001 per share ("Common Stock")
and 761,250 shares of the Company's Series A Preferred Stock, par value $.001
per share ("Series A Stock") are issued and outstanding and entitled to vote at
the Annual Meeting. At the Annual Meeting, the Common Stock and the Series A
Stock will vote on all matters as a single class, with each share of Common
Stock having one vote and each share of Series A Stock having four votes (the
number of votes equal to the number of shares of Common Stock into which each
share of Series A Stock may be initially converted). The maximum aggregate votes
eligible to be cast at the annual meeting, is 25,241,675.
REVOCABILITY OF PROXIES
Ohio General Corporation Law provides that any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before its use
by delivering to the Secretary of the Company or any of the Persons named as
Proxies, a written notice of revocation or a duly-executed proxy bearing a later
date than the date of the proxy being revoked or by attending the Annual Meeting
and revoking their proxy and voting in person.
VOTING AND SOLICITATION
Every shareholder voting for the election of directors is entitled to one
vote for each share of Common Stock held and four votes for each share of Series
A Stock held. Shareholders do not have the right to cumulate their votes in the
election of directors. On all other matters each share of Common Stock is
likewise entitled to one vote, and each share of Series A Stock is likewise
entitled to four votes, on each proposal or item that comes before the Annual
Meeting.
The Company intends to include abstentions and broker non-votes as present
or represented for purposes of establishing a quorum for the transaction of
business, but to exclude abstentions and broker non-votes from
1
<PAGE> 5
the determination of votes cast with respect to any proposal. The number of
votes required for approval is determined by the votes cast. The presence of the
holders of a majority of the total issued and outstanding shares of Common Stock
and Series A Stock in person or represented by duly executed proxies at the
Annual Meeting shall constitute a quorum for the transaction of business. The
vote required for passage of each proposal is set forth in the discussion of the
separate proposals.
The cost of this solicitation will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. Proxies also may be solicited by certain
Company directors, officers, and employees, without additional compensation.
The Board does not know of any other business to be presented for
consideration at the annual meeting. If any other business properly comes before
the annual meeting or any adjournments thereof, the proxies will be voted on
such matters in the discretion of the proxy holders.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has fixed the number of directors at ten. Messrs.
Alan J. Ruud, Francis H. Beam and Louis S. Fisi are currently directors whose
terms expire at the Annual Meeting. Each has been nominated for election at the
Annual Meeting as a director for a term expiring at the 2003 annual meeting, or
until their successors are duly elected and qualified. The persons named in the
accompanying proxy will vote for Messrs. Ruud, Beam and Fisi to serve as
directors for such term. Although it is not presently contemplated that any
nominee will decline or be unable to serve as a director, in either such event,
the proxies will be voted by the proxy holders for such other persons as may be
designated by the present Board of Directors.
NOMINEES
The following table sets forth certain information regarding each of the
three nominees of the Board of Directors for election as a director for the term
expiring in 2003.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR'S TERM EXPIRES
---- --- -------- -----------------------
<S> <C> <C> <C>
Alan J. Ruud 53 Director, Vice Chairman, President 2000
and Chief Operating Officer
Francis H. Beam 64 Director 2000
Louis S. Fisi 65 Director 2000
</TABLE>
The three persons receiving the greatest number of votes shall be elected
directors. The Board of Directors recommends a vote "FOR" the three nominees as
directors of the Company.
2
<PAGE> 6
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding each of the
seven directors whose terms expire in 2001 and 2002, as well as the Company's
other executive officers:
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR'S TERM EXPIRES
---- --- -------- -----------------------
<S> <C> <C> <C>
Wayne R. Hellman 54 Chief Executive Officer and 2001
Chairman of the Board of Directors
Theodore A. 61 Director 2001
Filson
Thomas K. Lime 62 Director 2001
John E. Breen 55 Director 2002
John R. Buerkle 52 Director 2002
Susumu Harada 49 Director 2002
A Gordon 56 Director 2002
Tunstall
Nicholas R. 53 Executive Vice President*
Sucic
Steven C. Potts 47 Chief Financial Officer and
Treasurer*
</TABLE>
---------------
* Executive officer only; not a director.
Wayne R. Hellman has served as the Chief Executive Officer 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 ("GE Lighting") 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 24% of the issued and outstanding shares of Fiberstars, Inc. In
1998, Mr. Hellman married Diane Mazzola who is Mr. Fisi's step-daughter.
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. In June 1999, Mr. Ruud was appointed to the
additional positions of President and Chief Operating Officer of the Company.
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. Mr. Ruud is also currently a director of Fiberstars,
Inc.
Francis H. Beam has served as a director of the Company since 1995. From
1988 to 1999, Mr. Beam served as president of Pepper Capital Corp., a venture
capital firm which he formed. Mr. Beam retired from Pepper Capital effective at
the end of 1999. 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). Beginning in 1967 he held various partnership positions with that
firm until his retirement in 1988 as vice chairman and regional managing
partner.
John E. Breen was appointed to the Company's board in December 1999. Dr.
Breen served as vice president of technology for GE Lighting from 1990 until his
retirement in 1998. Dr. Breen spent 26 years at GE Lighting focused on
technology for all lighting applications and on new product introductions.
3
<PAGE> 7
John R. Buerkle was appointed as a director of the Company in January 1998.
In June 2000, Mr. Buerkle was appointed the president of UNext International.
UNext International is a global internet education company. Previously, Mr.
Buerkle spent 28 years with S.C. Johnson & Son, Inc., a leading worldwide
manufacturer and marketer of consumer household products where among other
responsibilities, he was president Asia-Pacific and the Americas, each for five
years. Mr. Buerkle is also currently a director of Alloyd Company, Inc., a
privately-held leading manufacturer of plastic packaging and packaging
equipment.
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.
Louis S. Fisi served as the Executive Vice President of the Company from
1995 until his retirement in 1999, and has served as 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 the predecessor of Ernst & Young LLP, an international accounting
firm.
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 officer of Venture Lighting, Japan ("Venture Japan"),
formerly, Koto Luminous, which is a Japanese distribution and manufacturing
joint venture in which the Company owns an equity interest consisting of
preferred stock. 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 Venture Japan as the Overseas and
Domestic Sales and Planning Manager. He held a number of positions with Venture
Japan before he assumed his current position as chief executive officer in 1992.
Thomas K. Lime was appointed to the Company's board in December 1999. Mr.
Lime retired from GE Lighting in 1998 after 37 years in sales and marketing
positions at GE Lighting. From 1995 to 1998, Mr. Lime served as General
Manager-World Wide Strategic Accounts Sales and from 1984 to 1994 as General
Manager-Consumer Sales US/Canada.
A Gordon Tunstall has served as a director of the Company since June 1996.
He is the founder of, and for more than 20 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 kforce.com,
Inc., a professional and technical placement firm; Orthodontic Centers of
America, Inc., a manager of orthodontic practices 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 Executive Vice President in October 2000. Previously,
he served as Chief Financial Officer and Treasurer from November 1996 to October
2000 and Vice President from April 1997 to October 2000. 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, having
been associated with that firm since 1970.
Steven C. Potts joined the Company as Chief Financial Officer and Treasurer
in October 2000. Before joining the Company, Mr. Potts served in several
financial positions for General Dynamics, Inc. from 1975 until 1999. From
October 1995 to December 1999, Mr. Potts served as Vice President of Finance and
Controller of General Dynamics, Land Systems Division. In this position, Mr.
Potts was responsible for directing financial operations and information
resource management for Land Systems and played a key role in domestic and
international acquisitions for General Dynamics.
4
<PAGE> 8
COMPOSITION OF THE BOARD OF DIRECTORS
Pursuant to the terms of the Company's Articles of Incorporation and Code
of Regulations (By-Laws), the Board of Directors has the power to change the
number of directors by resolution. The number of directors is currently set at
ten members. The directors are divided into three classes. Each director in a
particular class is elected to serve a three-year term or until his or her
successor is duly elected and qualified. The classes are staggered so that their
terms expire in successive years, resulting in the election of only one class of
directors each year.
BOARD MEETINGS AND COMMITTEES
Mr. Hellman serves as Chairman of the Board of Directors of the Company.
The Board of Directors held a total of four regular and two special meetings
during the fiscal year ended June 30, 2000. Other than Mr. Harada, all of the
current directors attended 75% or more of the regular and special meetings of
the Board of Directors and committees of the Board, if any, upon which such
directors served. Mr. Harada did not attend any of the special meetings of the
Board of Directors.
During fiscal 2000, the Executive Committee, consisting of Mr. Hellman, Mr.
Fisi, and Mr. Ruud, held one meeting. The Executive Committee is authorized to
exercise all of the powers of the Board of Directors except the powers to
declare dividends and issue shares of Common Stock in excess of 50,000 shares or
rights to acquire such Common Stock. The Executive Committee is empowered to act
during the interim periods between meetings of the Board of Directors.
During fiscal 2000, the Audit Committee, consisting of Mr. Beam, Mr.
Tunstall and Dr. Breen, held five meetings. Dr. Breen replaced Mr. Filson on the
Audit Committee on April 27, 2000. The Audit Committee makes recommendations
concerning the engagement of independent public accountants, reviews with the
independent public accountants the plans and results of the audit engagement,
approves professional services provided by the independent public accountants,
reviews the independence of the independent public accountants, considers the
range of audit and nonaudit fees, and reviews the adequacy of the Company's
internal accounting controls.
During fiscal 2000, the Compensation Committee, consisting of Mr. Buerkle,
Mr. Filson and Mr. Lime, held three meetings. Mr. Lime replaced Mr. Harada on
the Compensation Committee on April 27, 2000. The Compensation Committee
determines the compensation of the Company's executive officers. Its report is
included below at "COMPENSATION OF EXECUTIVE OFFICERS -- Report on Executive
Compensation by the Compensation Committee."
During fiscal 2000, the Incentive Award Plan Committee held no meetings,
other than at meetings of the entire Board. On October 6, 1999, the Board of
Directors determined that, instead of two committees, the Compensation Committee
would also serve as the Incentive Award Plan Committee, which then consisted of
Messrs. Hellman, Fisi and Tunstall. The Incentive Award Plan Committee
administers the 1995 Incentive Award Plan, the 1997 Billion Dollar Market
Capitalization Incentive Award Plan and the 1998 Incentive Award Plan. This
committee will make all determinations as to future grants of stock and stock
options under these plans. Awards under the 1995 Incentive Award Plan, 1997
Billion Dollar Market Capitalization Incentive Award Plan and the 1998 Incentive
Award Plan to members of the Incentive Award Plan Committee are subject to
approval by the entire Board of Directors.
During fiscal 2000, the Company had no Nominating Committee, and the entire
Board considers candidates for directors.
5
<PAGE> 9
CERTAIN HOLDERS OF VOTING SECURITIES
The following table sets forth information regarding the ownership of the
Company's Common Stock as of October 13, 2000, by each of the directors and
executive officers of the Company, by each person or group known by the Company
to be the beneficial owner of more than five percent of the Company's
outstanding Common Stock, and by all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(2)
------------------------------------
PERCENT
PERCENT OF VOTING
NAME AND ADDRESS(1) NUMBER OF CLASS POWER
------------------- ------ -------- ---------
<S> <C> <C> <C>
Wayne R. Hellman(3)................................. 3,944,385(7) 17.8% 15.6%
Alan J. Ruud(4)..................................... 3,657,504(7) 16.5% 14.5%
Louis S. Fisi(5).................................... 297,169(7) 1.3% 1.2%
Nicholas R. Sucic................................... 19,158(7) * *
Steven C. Potts..................................... 0 * *
Francis H. Beam..................................... 42,554 * *
John E. Breen....................................... 0 * *
John R. Buerkle..................................... 25,000 * *
Theodore A. Filson.................................. 45,000 * *
Susumu Harada(6).................................... 152,868 * *
Thomas K. Lime...................................... 0 * *
A Gordon Tunstall................................... 15,000 * *
All Directors and Executive Officers as a
Group(3)(4)(12 Persons)........................... 7,901,721(7) 35.4% 31.1%
General Electric Company(8)......................... 4,475,887 17.1% 17.1%
Brown Investment Advisory & Trust Company/ Brown
Advisory Incorporated(9).......................... 1,367,579 6.2% 5.4%
Wellington Management Company(10)................... 1,170,300 5.3% 4.6%
</TABLE>
---------------
* Less than one percent
(1) The business address of each of Messrs. Hellman, Fisi, Sucic, Potts, Beam,
Buerkle, Filson and Lime and Dr. Breen is 32000 Aurora Road, Solon, Ohio
44139; Mr. Ruud -- Ruud Lighting, Inc., 9201 Washington Avenue, Racine,
Wisconsin 53406; Mr. Harada -- Koto Electric Co., Ltd., Bunmeido Bldg., 7th
Floor, 3-16-5, Taito, Taito-Ku, Tokyo 110, Japan; and Mr.
Tunstall -- Tunstall Consulting, Inc., 13153 North Dale Mabry, Suite 200,
Tampa, Florida, 33618. The business address of General Electric Company is
3135 Easton Turnpike, Fairfield, CT 06431. The business address of Brown
Investment Advisory & Trust Company/Brown Advisory Incorporated is 19 South
Street, Baltimore, MD 21202. The business address of Wellington Management
Company is 75 State Street, Boston, MA 02109.
(2) Shares beneficially owned include the following shares which may be
acquired within 60 days of the date of this proxy by exercise of options
granted pursuant to the incentive award plans; Mr. Hellman -- 20,000; Mr.
Ruud -- 10,000; Mr. Sucic -- 14,250 shares; Mr. Beam -- 15,000 shares; Mr.
Buerkle -- 9,000 shares; Mr. Filson -- 45,000 shares; Mr. Harada -- 9,600
and Mr. Tunstall -- 15,000 shares. Shares beneficially owned by General
Electric Company include 3,045,000 shares of Common Stock which may be
acquired by General Electric Company at any time upon conversion of the
Series A Stock and 1,000,000 shares of Common Stock subject to a warrant
which is exercisable at any time. Percentage ownership is calculated on the
basis of shares outstanding, plus shares which may be acquired within 60
days of the date of the proxy upon exercise or conversion by the named
holder of options, warrants and Series A Stock. Percentage voting power is
calculated on the same basis as
6
<PAGE> 10
percentage ownership, except the calculation includes for all holders the
voting power of the Series A Stock and the shares issuable upon exercise by
GE of the warrant.
(3) Includes 1,928,070 shares owned by Mr. Hellman individually; 125,000 shares
owned by a limited liability company ("Hellman Ltd.") of which Mr. Hellman
is the manager and as to which Mr. Hellman has sole voting and investment
power; 50,000 shares owned by a private charitable foundation established
by Mr. Hellman and as to which Mr. Hellman has sole voting and investment
power; 70,414 shares beneficially owned by certain shareholders of the
Company held under a voting trust which expires in 2009 (the "Trust") and
1,714,067 shares formerly subject to the Trust as to which Mr. Hellman
holds an irrevocable proxy under similar terms. These shares, totaling
1,784,481, are referred to herein as the "Trust Shares." The Trust Shares
include all shares individually owned by Mr. Louis S. Fisi, Mr. Robert S.
Roller, and Mr. Juris Sulcs, Ms. Christine Hellman and Ms. Lisa Hellman,
Ms. Mary Sarver, and trusts for the benefit of Mr. Roller's children. The
Trust Shares also include shares owned by Mr. Brian Hellman. Pursuant to
the terms of the Trust and the irrevocable proxies, Mr. Wayne Hellman is
empowered to vote the Trust Shares for all purposes at his sole discretion,
but is not provided with investment power with respect to the Trust Shares.
Beneficial owners of the Trust Shares may remove the shares from the Trust
or release the shares from the irrevocable proxy, as the case may be, to
effect a bona fide sale free of the restrictions of the Trust. All share
distributions on account of the Trust Shares become subject to the Trust,
and all cash and other nonshare distributions on account of the Trust
Shares are to be paid over to the grantors of the Trust. The expiration of
the Trust may be accelerated under certain circumstances. Mr. Hellman does
not receive any compensation for serving as voting trustee of the Trust.
Mr. Hellman has granted to the General Electric Company ("GE") irrevocable
proxies with respect to shares owned by him individually and by Hellman,
Ltd. and with respect to the Trust Shares. However, these proxies will be
effective only if the Company fails to maintain a ratio of earnings before
interest, taxes, depreciation and amortization to interest charges of 2:1
for any two-quarter measurement period and if certain other conditions are
met. Also includes shares beneficially owned by Mr. Hellman's wife as to
which Mr. Hellman disclaims beneficial ownership, consisting of 26,297
shares owned and 10,000 shares subject to options exercisable within 60
days of the date of this proxy.
(4) Mr. Ruud has the sole power to vote 3,657,504 shares of Common Stock of
which 1,497,143 shares of Common Stock are subject to the terms of a voting
trust agreement dated January 2, 1998 (the "Voting Trust") or an
irrevocable proxy similar to the irrevocable proxies held by Mr. Hellman,
discussed above (collectively, the "Voting Trust Shares"), and the sole
power to dispose of 2,160,361 shares of Common Stock. The purpose of the
Voting Trust agreement and proxies is to provide Mr. Ruud with the power to
vote all of the 1,497,143 shares of Common Stock held by the signatories to
the Voting Trust agreement. The Voting Trust Shares include all shares
individually owned by Mr. Donald Wandler, Mr. Theodore O. Sokoly, Mr.
Christopher A. Ruud, and Ms. Cynthia A. Johnson. Mr. Ruud has granted to GE
proxies with respect to shares owned by him individually and with respect
to the Voting Trust Shares. However, these proxies will be effective only
if the Company fails to maintain a ratio of earnings before interest,
taxes, depreciation and amortization to interest charges of 2:1 for any
two-quarter measurement period and if certain other conditions are met.
(5) All individually owned shares are Trust Shares subject to voting control by
Mr. Hellman.
(6) Includes 142,268 shares owned by Venture Lighting, Japan, of which Mr.
Harada is chief executive officer. Mr. Harada disclaims beneficial
ownership of these shares.
(7) Includes 3,065 shares purchased via the Employee Stock Purchase Plan by Mr.
Sucic and 537, 252, 504 and 342 shares purchased via the Company 401(k)
plan for Messrs. Hellman, Fisi, Ruud and Sucic, respectively.
(8) Includes 430,887 shares of Common Stock held by General Electric Company,
3,045,000 shares issuable upon conversion of the Series A Stock held by
General Electric and 1,000,000 shares issuable upon exercise of a currently
exercisable warrant held by General Electric. General Electric owns 100% of
the issued and outstanding shares of Series A Stock.
7
<PAGE> 11
(9) Information obtained from Schedule 13G filed by the shareholder. Includes
560,340 shares as to which BIATC has sole voting power and 772,039 shares
as to which BIATC has sole voting power and 595,540 shares as to which
BIATC has sole dispositive power and 772,039 shares as to which BIATC has
sole dispositive power.
(10) Information obtained from Schedule 13G filed by the shareholder. Includes
703,900 shares as to which Wellington has shared voting power and 1,170,300
shares as to which Wellington has shared dispositive power.
COMPENSATION OF EXECUTIVE OFFICERS
The following tables set forth certain information with respect to all
compensation paid or earned for services rendered to the Company in all
capacities for the fiscal years ending June 30, 2000, June 30, 1999 and June 30,
1998 by the Company's executive officers. The Company has not granted any stock
appreciation rights. The Company has no defined benefit employee pension plan.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------
OTHER ANNUAL
SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)
--------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Wayne R. Hellman 2000 $218,514(1) $-0- $ -0-
Chairman and 1999 $200,000(1) $-0- $ -0-(2)
Chief Executive Officer 1998 $200,000(1) $-0- $33,882(3)
Alan J. Ruud(4) 2000 $200,260(1) $-0- $ -0-
Vice Chairman, President and 1999 $192,500(1) $-0- $ -0-(2)
Chief Operating Officer 1998 $ 92,500(1) $-0- $ -0-(2)
Nicholas R. Sucic 2000 $190,641(1) $-0- $ -0-
Executive Vice President(5) 1999 $175,000(1) $-0- $ -0-(2)
1998 $175,000(1) $-0- $ -0-(2)
Louis S. Fisi 2000 $100,625 $-0- $99,073(6)
Retired Executive Vice 1999 $175,000 $-0- $19,729(3)
President 1998 $165,000 $-0- $ -0-(2)
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
AWARD(S) PAYOUTS
------------------------- -------
RESTRICTED SECURITIES
STOCK UNDERLYING LTIP ALL OTHER
AWARD(S) OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) (#) ($) ($)
--------------------------- ---- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C>
Wayne R. Hellman 2000 $-- 200,000 $-- $ 2,986(7)
Chairman and 1999 -- -- -- $233,764(7)
Chief Executive Officer 1998 -- -- -- $114,897(7)
Alan J. Ruud(3) 2000 -- 100,000 -- $ 2,503(7)
Vice Chairman, President and 1999 -- -- -- $ 5,065(7)
Chief Operating Officer 1998 -- -- -- $ -0-
Nicholas R. Sucic 2000 -- -- -- $ 3,672(7)
Executive Vice President(5) 1999 -- -- -- $ 26,894(7)
1998 -- -- -- $ 12,700(7)
Louis S. Fisi 2000 -- 5,000 -- $ 1,042(7)
Retired Executive Vice 1999 -- -- -- $235,048(7)
President 1998 -- -- -- $181,545(7)
</TABLE>
---------------
(1) Mr. Hellman, Mr. Ruud and Mr. Sucic are each parties to Employment
Agreements with the Company. The Employment Agreement of Mr. Hellman had an
initial term expiring December 31, 1998. In fiscal
8
<PAGE> 12
1998, Mr. Hellman's Employment Agreement was extended through December 31,
2003. Mr. Ruud and Mr. Sucic are parties to similar Employment Agreements
with the Company: Mr. Ruud's having an initial term expiring January 1,
2001; Mr. Sucic's having an initial term expiring on February 11, 2001.
Through these Employment Agreements, Mr. Hellman, Mr. Ruud and Mr. Sucic are
entitled to receive annual base compensation of $195,000, $185,000, and
$175,000, respectively. In addition, Mr. Hellman, Mr. Ruud and Mr. Sucic
will each be entitled to receive a bonus in amounts determined by the
Compensation Committee. These Employment Agreements provide for annual
increases in annual base compensation in amounts determined by the
Compensation Committee during the term of these Employment Agreements. For
fiscal 2000, Messrs. Hellman, Ruud and Sucic received annual base
compensation of $210,421, $200,000 and $183,580, respectively. For fiscal
2001, effective November 1, 2000, the Compensation Committee has determined
that Messrs. Hellman, Ruud, and Sucic will receive annual base compensation
of $250,000, $250,000 and $183,580, respectively. Also includes compensation
deferred pursuant to the Company's 401(k) deferred compensation plan. Under
the Employment Agreements, Mr. Hellman, Mr. Ruud and Mr. Sucic participate
in Company sponsored life, health, and disability insurance coverage.
(2) Perquisites provided to these executive officers consisted primarily of
automobile use, automobile insurance, club dues, the total of which did not
exceed 10% of the person's salary and bonus.
(3) Perquisites provided to Mr. Hellman in fiscal 1998 included $21,600 in club
dues and $9,771 for automobile use and insurance. Perquisites provided to
Mr. Fisi in fiscal 1999 included $7,854 in club dues and $11,875 for
automobile use and insurance.
(4) Mr. Ruud was elected to the office of Vice Chairman effective on January 2,
1998. All compensation amounts for fiscal 1998 exclude compensation received
from Ruud Lighting, Inc. prior to its acquisition by the Company on January
2, 1998.
(5) Until October 2000, Mr. Sucic served as Chief Financial Officer, Vice
President and Treasurer. In October 2000, Mr. Potts joined the Company as
Chief Financial Officer and Treasurer.
(6) Mr. Fisi retired as an officer and employee of the Company effective
December 31, 1999. The principal terms of Mr. Fisi's retirement arrangement
are as follows: Mr. Fisi was retained as a consultant until June 30, 2000
for a fixed consulting fee of $93,000 (the consulting arrangement during
this period involved the direction and completion of Mr. Fisi's current
projects at the time of his retirement); after June 30, 2000, Mr. Fisi will
be available to consult with Company management for an additional period of
three years on special projects, where Mr. Fisi's extensive industry
experience, special knowledge regarding the Company and availability to
supervise substantial projects would assist the Company's completion of
these projects, with compensation for the three-year period set at $93,000
per year. In addition, Mr. Fisi has continued serving his existing term as a
director of the Company and was given a 5,000 share option grant under the
Company's 1995 Incentive Award Plan or 1998 Incentive Award Plan. Also
includes reimbursement of taxes Mr. Fisi incurred in the consulting
arrangement.
(7) Since 1993, the Company and its predecessors have maintained split dollar
life insurance policies with respect to certain key employees. In order to
reduce expenses, the split dollar life insurance program was terminated
effective June 30, 1999. This program applied to approximately 25 employees,
including Messrs. Hellman, Fisi and Sucic. This program provided life
insurance benefits and a cash value benefit which vested over a ten year
period and was to be received upon termination of employment or retirement
from the Company. In connection with the termination of this program the
Company accelerated the vesting of the cash value benefits, providing full
vesting as to the cash value in each policy. For fiscal year 1999, the
amounts indicated represent the incremental value of the cash value benefits
each Executive Officer received as a result of normal and accelerated
vesting. For fiscal year 1998 the amounts indicated represent the split
dollar life insurance premiums. For fiscal 1999 the amounts include Company
contributions to 401(k) plan in the amounts of $4,271, $2,776, $5,065 and
$1,384 for Messrs. Hellman, Fisi, Ruud and Sucic, respectively. For fiscal
2000, the amounts include Company contributions to 401(k) plan in the
amounts of $2,986, $1,042, $2,503 and $3,672 for Messrs. Hellman, Fisi, Ruud
and Sucic, respectively.
9
<PAGE> 13
COMPANY OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTION EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE PRESENT VALUE
---- ----------- ------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Wayne R. Hellman(1)....... 200,000 19.3% $7.625 10/11/2009 $830,000(2)
Alan J. Ruud(1)........... 100,000 9.6% $7.625 10/11/2009 $415,000(2)
Nicholas R. Sucic......... -- -- -- -- --
Louis S. Fisi(1).......... 5,000 0.5% $ 6.50 2/18/2010 $ 16,400(3)
</TABLE>
---------------
(1) The options granted to Messrs. Hellman and Ruud vest on their sixth
anniversary. Vesting of these options may be accelerated upon the following
events: 10% of the grant became exercisable when the market price of the
Company's Common Stock reached $15.25 per share on the last trading day of
any month ("Market Price"); 20% will become exercisable when the Market
Price exceeds $22.875 per share; 30% will become exercisable when the Market
Price exceeds $30.50 per share and 40% will become exercisable when the
Market Price exceeds $38.125 per share. Mr. Fisi's option will become
exercisable as follows: 25% on the first anniversary of date of grant; 35%
on the second anniversary of date of grant and 40% on the third anniversary
of the date of grant.
(2) The grant date value of the stock options was estimated using the
Black-Scholes option pricing model with the following assumptions: expected
volatility -- 55.4%; risk-free interest rate -- 6.2%; time of exercise - 5
years; and no dividend yield.
(3) The grant date value of the stock options was estimated using the
Black-Scholes option pricing model with the following assumptions: expected
volatility -- 56.8%; risk-free interest rate -- 6.7%; time of exercise -- 4
years; and no dividend yield.
AGGREGATED COMPANY OPTION EXERCISES IN LAST FISCAL YEAR
AND 2000 FISCAL YEAR END COMPANY OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES ACQUIRED OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS
ON EXERCISE VALUE END(#) EXERCISABLE/ AT FISCAL YEAR-END ($)
NAME (#) REALIZED ($) UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- ------------ ----------------------- -------------------------
<S> <C> <C> <C> <C>
Wayne R. Hellman....... -- -- 20,000/180,000 $217,500/$1,957,500
Alan J. Ruud........... -- -- 10,000/90,000 $108,750/$978,750
Nicholas R. Sucic...... -- -- 14,250/50,000 --
Louis S. Fisi.......... -- -- 0/5,000 $0/$60,000
</TABLE>
COMPENSATION OF DIRECTORS
All directors of the Company receive reimbursement for reasonable
out-of-pocket expenses incurred in connection with meetings of the Board of
Directors. In addition, in the fiscal year ended June 30, 2000, the nonemployee
directors were compensated $2,500 for each meeting of the full-board attended.
Such directors will be entitled to a minimum of $10,000 if they attend 75% or
more meetings of the board and committees to which they belong. No director who
is an employee of the Company will receive separate compensation for services
rendered as a director.
10
<PAGE> 14
In December 1995, the Company granted options to purchase 9,600 shares of
Common Stock at $10.00 per share to each of its nonemployee directors all of
which are currently exercisable. In January, 1996, the Company granted options
to purchase 9,600 shares of Common Stock at $10.25 per share under the incentive
award plans to Mr. Harada upon appointment to the Board of Directors, all of
which are currently exercisable. In June 1996, the Company granted options to
purchase 15,000 shares of Common Stock at $17.00 per share to Mr. Tunstall upon
appointment to the Board of Directors, all of which are currently exercisable.
Also, in June 1996, each nonemployee director other than Mr. Harada and Mr.
Tunstall (Messrs. Beam and Filson) was granted options to purchase an additional
5,400 shares at an exercise price of $17.00 per share. All of these options are
currently exercisable. In September 1997, Mr. Filson was granted an option to
purchase 30,000 shares of Common Stock at $23.75 per share, all of which are
currently exercisable. In January, 1998, the Company granted options to purchase
15,000 shares of Common Stock at $22.63 per share to Mr. Buerkle upon
appointment to the Board of Directors, of which 9,000 shares are currently
exercisable. In February, 2000, Dr. Breen and Mr. Lime each were granted options
to purchase 15,000 shares of Common Stock at $6.50 per share, none of which are
currently exercisable; Mr. Fisi was granted an option to purchase 5,000 shares
at $6.50 per share, none of which are currently exercisable; Mr. Beam was
granted an option to purchase 5,000 shares of Common Stock at $6.50 per share,
none of which are currently exercisable and Messrs. Buerkle, Harada and Tunstall
each were granted options to purchase 15,000 shares of Common Stock at $6.50 per
share, none of which are currently exercisable. None of these options are
exercisable within 60 days of this proxy statement. Each grant was made pursuant
to the Company's incentive award plans at the market price of the Company's
Common Stock on the date of grant. Each option will vest 25% in the first year,
35% in the second year, and 40% in the third year from the date of grant.
Each of the nonemployee directors of the Company was granted options to
purchase 15,000 shares of Company Common Stock in 1995 and 1996 (other than Mr.
Harada, who received options to purchase 9,600 shares). Also, upon appointment
or reelection, each of the nonemployee directors of the Company will receive
option grants equal to 5,000 shares for each year in a director's term under the
1998 Incentive Award Plan.
In fiscal 2000, Mr. Filson provided consulting services to the Company and
received fees in the amount of $104,541. In calendar 2000, Mr. Filson has agreed
to provide consulting services to the Company. In fiscal 2000, Mr. Fisi provided
consulting services to the Company and received fees in the amount of $93,000.
In fiscal 2001, Mr. Fisi has agreed to provide consulting services to the
Company for a fee of $93,000.
EMPLOYMENT AGREEMENTS
Mr. Hellman, Mr. Ruud and Mr. Sucic are each parties to Employment
Agreements with the Company. The Employment Agreement of Mr. Hellman had an
initial term expiring December 31, 1998 but was extended through December 31,
2003 in fiscal 1999. Mr. Ruud and Mr. Sucic are parties to similar Employment
Agreements with the Company: Mr. Ruud's expires on January 1, 2001; and Mr.
Sucic's expires on February 11, 2001. Through these Employment Agreements, Mr.
Hellman, Mr. Ruud, and Mr. Sucic are entitled to receive annual base
compensation of $195,000, $185,000, and $175,000, respectively. In addition, Mr.
Hellman, Mr. Ruud and Mr. Sucic will each be entitled to receive a bonus in
amounts determined by the Compensation Committee. These Employment Agreements
provide for annual increases in the annual base compensation as determined by
the Compensation Committee during the term of these Employment Agreements. For
fiscal 2000, Messrs. Hellman, Ruud and Sucic received annual base compensation
of $210,421, $200,000 and $183,580, respectively. For fiscal 2001, the
Compensation Committee has determined that Messrs. Hellman, Ruud and Sucic will
receive annual base compensation of $250,000, $250,000 and $183,580,
respectively, effective November 1, 2000. Under these Employment Agreements, Mr.
Hellman, Mr. Ruud and Mr. Sucic participate in Company sponsored life, health
and disability insurance coverage. It is anticipated that Messrs. Ruud and Sucic
will continue the same compensation terms and continue to participate in these
plans following termination of their respective employment agreements. Pursuant
to their Employment Agreements, Mr. Hellman has agreed not to compete with the
Company for a period of two years after termination of employment, and Messrs.
Ruud and Sucic have agreed not to compete with the Company for a period of three
years after termination of employment.
11
<PAGE> 15
In the event the Company terminates the Employment Agreements without cause
(as defined in the Employment Agreement) Messrs. Ruud and Sucic each would be
entitled to receive all payments and benefits through the remainder of the term
of the Employment Agreement. "Without cause" is defined in the Employment
Agreements as (i) the employee's not committing fraud, dishonesty, willful
misconduct, or gross negligence in performing his duties or (ii) his not
materially breaching his Employment Agreement. In the event the Employment
Agreements are terminated by Messrs. Ruud or Sucic for good reason (as defined
in the Employment Agreement), Messrs. Ruud and Sucic each would be entitled to
receive all payments and benefits through the remainder of the term of the
Employment Agreement. "Good reason" is defined in the Employment Agreements as
(i) a material reduction in the employee's duties, authority, compensation,
benefits or responsibilities without the employee's prior written consent or
(ii) the Company's material breach of the Employment Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee requires a majority to be independent directors.
During fiscal 2000, this Committee consisted of Messrs. Buerkle, Filson and
Lime. Mr. Lime replaced Mr. Harada on April 27, 2000. Mr. Filson is a consultant
to the Company and during fiscal 2000 received consultant's fees of $104,541.
Mr. Harada is chief executive officer of Venture Japan, a company in which the
Company has a nonvoting preferred stock interest and which purchased goods from
the Company in fiscal 2000 for an aggregate price of $1,094,000.
The Company also established an Incentive Award Plan Committee which was
composed of Wayne R. Hellman, the Chief Executive Officer, Louis S. Fisi,
retired Executive Vice President, and A Gordon Tunstall. On October 6, 1999, the
Board of Directors determined that, instead of two committees, the Compensation
Committee would also serve as the Incentive Award Plan Committee, which then
consisted of Messrs. Hellman, Fisi and Tunstall. The Incentive Award Plan
Committee administers the 1995 Incentive Award Plan, the 1997 Billion Dollar
Market Capitalization Incentive Award Plan and the 1998 Incentive Award Plan.
This committee will make all determinations as to future grants of stock and
stock options under these plans. Awards under the 1995 Incentive Award Plan, the
1997 Billion Dollar Market Capitalization Incentive Award Plan and the 1998
Incentive Award Plan to members of the Incentive Award Plan Committee are
subject to approval by the entire Board of Directors. Awards to any executive
officer or director under the 1995 Incentive Award Plan, the 1997 Billion Dollar
Market Capitalization Incentive Award Plan and the 1998 Incentive Award Plan
will be approved by the entire Board of Directors.
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION COMMITTEE
The Compensation Committee's duty is to (i) establish a philosophy and
basic structure governing all executive compensation plans, including the
compensation of the Executive Officers of the Company and its subsidiaries, and
to make recommendations to the Board of Directors regarding such compensation;
(ii) consider and make recommendations to the Board regarding directors'
compensation and benefits; (iii) consider and make recommendations to the Board
regarding salary structure, officer gradings and salaries for other officers;
(iv) propose and review bonus and stock option guidelines for officers and key
employees; (v) make recommendations to the Board regarding grants of options and
other awards to the Chief Executive Officer under the Company's incentive
compensation plans; (vi) consider and approve perquisites and other remuneration
for officers; (vii) review major changes to the Company's retirement plans and
incentive plans to officers and hourly employees; (viii) submit an annual report
to the Board regarding the effectiveness and appropriateness of the Company's
compensation program and (ix) ensure that the Executive Officers have in place
plans to develop talent and provide succession for key positions to enable
achievement of key business goals.
Effective August 4, 1997, the Compensation Committee adopted a charter to
compensate each Executive Officer (implemented in fiscal year 1998) based on the
stated objectives (sales, profits, return on net assets) achieved by him within
the last year. Each officer has certain stated objectives, which combines
personal, managerial and corporate aspects. At the end of the year, each
officer's stated objectives (approved by the
12
<PAGE> 16
Board of Directors), are weighed against his achievements, and compared to the
overall financial condition of the division the officer is responsible for and
compared to the overall financial condition of the Company. Accordingly, the
achievements and the profit growth of the division and of the Company are
directly related to the executive officer's earnings. This, the Compensation
Committee concludes, is the best method for the Company to attract and reward
proficient executives.
The Compensation Committee reviews the compensation of the executive
officers: Wayne R. Hellman, Chairman and Chief Executive Officer, Alan J. Ruud,
Vice Chairman, President and Chief Operating Officer and Nicholas R. Sucic,
Executive Vice President. Mr. Hellman, Mr. Ruud and Mr. Sucic are each parties
to an Employment Agreement with the Company, which in Mr. Hellman's case expires
in December 2003, in Mr. Ruud's case expires in January 2001, and in Mr. Sucic's
case expires in February 2001. The Compensation Committee has determined that
for fiscal 2001, the annual base compensation of Messrs. Hellman, Ruud and Sucic
will be $250,000, $250,000 and $183,580, respectively, effective November 1,
2000. The Compensation Committee may determine that the executive officers will
be entitled to a bonus in an appropriate amount for any fiscal year. For the
fiscal year ended June 30, 2000, the Compensation Committee has determined that
no bonus will be paid to Mr. Hellman, Mr. Ruud or Mr. Sucic. Performance
criteria for Mr. Hellman during fiscal 2000 included: (a) performance related to
sales, operating income, cash flow and the Company's debt-to-equity ratio; (b)
recruitment and development of senior management personnel; (c) completion of
acquisitions and investments; (d) increase in shareholder value; and (e) further
development of ADLT's metal halide lighting technology and market position. The
Committee did not assign these performance criteria relative weights or rankings
but rather made a subjective determination after considering all factors
collectively. Accordingly, because certain important performance criteria were
not met, the Committee decided that no bonus will be paid to Mr. Hellman for the
fiscal year ended June 30, 2000. Messrs. Hellman, Ruud and Sucic participate in
Company sponsored life, health and disability insurance coverage. Pursuant to
their Employment Agreements, Mr. Hellman has agreed not to compete with the
Company for a period of two years after termination of employment, and Mr. Ruud
and Mr. Sucic have agreed not to compete with the Company for a period of three
years after termination of employment.
COMPENSATION COMMITTEE
John R. Buerkle
Theodore A. Filson
Thomas K. Lime
Dated: October 2000
13
<PAGE> 17
REPORT BY AUDIT COMMITTEE
The Audit Committee has adopted a written charter to set forth its
responsibilities. A copy of the charter is attached as Exhibit "A" to this proxy
statement. As required by the charter, the Audit Committee reviewed the
Company's audited financial statements and met with management, as well as with
Grant Thornton LLP, the Company's auditors, to discuss the financial statements.
The Audit Committee received the report of Grant Thornton regarding the results
of their audit. In connection with its review of the financial statements and
the auditors' report, the members of the Audit Committee discussed with a
representative of Grant Thornton their independence, as well as the following:
the auditors' responsibilities in accordance with generally accepted
auditing standards;
the initial selection of, and whether there were any changes in,
significant accounting policies or their application;
management's judgments and accounting estimates;
whether there were any significant audit adjustments;
whether there were any disagreements with management;
whether there was any consultation with other auditors;
whether the auditors encountered any difficulties in performing the
audit; and
the auditor's judgments about the quality of the Company's accounting
principles.
Based on its discussions with management and the Company's auditors, the
Audit Committee did not become aware of any material misstatements or omissions
in the financial statements. Accordingly, the Audit Committee recommended to the
Board of Directors that the financial statements be included in the Annual
Report on Form 10-K for the period ended June 30, 2000 for filing with the SEC.
THE AUDIT COMMITTEE
Francis H. Beam (Chairman)
John E. Breen
A Gordon Tunstall
INDEPENDENCE OF AUDIT COMMITTEE
In fiscal 2000, our Audit Committee consisted of Mr. Beam (Chairman), Dr.
Breen and Mr. Tunstall (Dr. Breen replaced Mr. Filson on April 27, 2000). Each
of Mr. Beam, Dr. Breen and Mr. Tunstall is independent, as defined in Rule
4200(a)(15) of the NASD listing standards, as may be modified or supplemented.
14
<PAGE> 18
COMPARISON OF CUMULATIVE TOTAL RETURN*
<TABLE>
<CAPTION>
NASDAQ STOCK MARKET RUSSELL 2000 ADLT
------------------- ------------ ----
<S> <C> <C> <C>
12/12/95 100 100 100
6/28/96 113 111 173
6/30/97 137 127 249
6/30/98 180 147 230
6/30/99 255 147 89
6/30/00 377 166 183
</TABLE>
* Five-year performance is not provided since the Company's Common Stock first
became traded on December 12, 1995.
The Company has selected the Russell 2000 Index for comparison purposes
because it represents the smallest 2,000 companies from the universe of the
3,000 largest U.S. stocks in the U.S. trading on the New York Stock Exchange,
American Stock Exchange and Nasdaq National Market. The Russell 2000 Index is
considered the benchmark of U.S. small-cap market performance. The Company's
stock is now a component of the Russell 2000. The Company does not believe that
it can reasonably identify a group of peer companies for comparison purposes,
and no relevant industry index exists. In prior years, the Company used the
NASDAQ Non-Financial Index instead of the Russell 2000 Index. The NASDAQ
Non-Financial Index includes companies with substantially larger market
capitalization and the Company has chosen to use the Russell 2000 Index for
reasons outlined above. In the year ended June 30, 2000, the cumulative total
return on the Russell 2000 Index was 11.5% and the cumulative total return on
the NASDAQ Non-Financial Index was 32.3%.
CERTAIN TRANSACTIONS WITH DIRECTORS AND OFFICERS
The Company was formed on May 19, 1995, and acquired ownership, primarily
by merger (the "Combination") of 17 affiliated operating corporations that were
previously under common ownership and management (the "Predecessors"). On
September 15, 1995, one of the Predecessors transferred its nonlamp assets to
H&F Five, Inc., a company owned by Messrs. Hellman, Fisi and certain other
employees of the Company, for a demand promissory note from H&F Five, Inc. in
the amount of $200,000 bearing interest at 8.5% per annum. Total principal and
accrued interest at June 30, 2000 was $302,000, which was the largest amount
outstanding at any time during fiscal 2000.
In fiscal 2000, Mr. Filson provided consulting services to the Company and
received fees in the amount of $104,541. Mr. Filson's consulting services
included taking an active role in sales/marketing through the development of key
customer relationships, obtaining commitments from customer companies to
introduce new lighting products that include ADLT components and the
establishment of major sales agreements. Mr. Filson's services during fiscal
2000 also encompassed other activities, including joint venture activities and
recruitment of key personnel. In calendar 2000, Mr. Filson has agreed to provide
consulting services to the Company.
15
<PAGE> 19
Mr. Harada, a director of the Company, is an executive officer, director,
and a shareholder of Venture Lighting, Japan ("Venture Japan"), formerly known
as Koto Luminous Ltd., a Japanese manufacturer and marketer of lighting
products. Venture Japan owns 142,268 shares of the Company, which were acquired
in the Combination as a result of its investment in a Predecessor. In April
1997, the Company purchased a 30% common stock interest in Venture Japan. In
November 1998, this common stock interest was exchanged for nonvoting
convertible preferred stock which Company management determined had fair value
not less than the fair value of the original common stock interest. The exchange
for this preferred stock enhanced the security of the Company's investment by
providing preferential treatment upon liquidation of Venture Japan, while the
convertibility of the preferred stock allows the Company to participate in the
future potential of Venture Japan. Additionally, Mr. Harada and members of his
family control Wakoh Corporation, a Japanese corporation. Wakoh Corporation and
the Company are each 50% joint venture partners in Pacific Lighting, Inc., a
British Virgin Islands holding company. The Company uses Pacific Lighting to own
and hold a number of the Company's joint venture investments. Venture Japan is
the Company's sole trading partner in Japan and, as a result, the Company
supplies Venture Japan with materials, lamps and equipment. In fiscal 2000, the
Company had sales of approximately $1,194,000 to Venture Japan and purchases of
approximately $1,108,000 from Venture Japan.
The Company has utilized a Saab 340 Aircraft (the "Saab Aircraft") on an
hourly rental basis. The Saab Aircraft was originally owned by LightAir Ltd.
("LightAir"), an Ohio limited liability company owned by Mr. Hellman (80%) and
Mr. Fisi (20%), and was subsequently transferred to LightAir II Ltd. ("LightAir
II"), an Ohio limited liability company owned by Mr. Hellman (50%) and Mr. Ruud
(50%). Messrs. Hellman and Fisi guaranteed the repayment of $3.0 million of
indebtedness to purchase the Saab Aircraft. All agreements with LightAir were
effectively terminated by the transfer by LightAir of all of its aircraft in
fiscal 1999. In addition, at June 30, 2000, the Company had a $50,000 receivable
from LightAir. LightAir paid certain rebates and reimbursements of amounts paid
by the Company. Rebates paid in fiscal 1998 totalled $211,000 and no subsequent
rebates have been made or are expected.
On May 20, 1998, LightAir II acquired a 1988 Cessna Citation III aircraft.
The Citation III was chartered to the Company at an average of $2,000 per hour
prior to January 1999 and $2,400 per hour thereafter. Scott Air Charter of
Milwaukee, Wisconsin is the charter broker for the plane. Messrs. Hellman and
Ruud guaranteed the repayment of $6.4 million of indebtedness incurred to
purchase the Citation III. Following transfer to LightAir II of the Saab
Aircraft, LightAir II made the Saab Aircraft available to the Company on the
same terms as were made available by LightAir. Commencing in January 1999 the
arrangements with LightAir II were changed to provide for minimum payments of
$55,000 per month for the Saab Aircraft. The hourly usage rates for the plane
were reduced from $2,000 per hour to $1,100 per hour for the Saab Aircraft.
LightAir II has sold both of its aircraft and the minimum payment was reduced to
$33,500 with respect to the Saab Aircraft until the aircraft was sold. Payments
to LightAir II during fiscal 1998 totalled $90,000; approximately $1,030,000 in
fiscal 1999; and approximately $474,000 in fiscal 2000. The arrangements with
LightAir II have been effectively terminated by the sale of its aircraft in
fiscal 2000 and 2001.
Pursuant to a loan agreement dated October 8, 1998 between the Company and
Mr. Hellman, its Chairman and Chief Executive Officer (the "Hellman Loan
Agreement"), the Company has loaned $9,000,000 to Mr. Hellman for a one-year
term at the rate of 8%. The loan was made following approval by the Company's
Board of Directors (Messrs. Hellman and Fisi did not participate in the
deliberations). The proceeds of the loan were used to reduce the outstanding
principal balance of a margin account loan, which is secured by 2,053,070 shares
of Company Common Stock owned by Mr. Hellman and Hellman Ltd. (the "Hellman
Personal Shares"). In connection with the loan, the Board asked for and received
Mr. Hellman's agreement to extend the term of his employment agreement to
December 31, 2003. The Hellman Loan Agreement prohibits Mr. Hellman from
encumbering the Hellman Personal Shares in any manner except pursuant to
existing agreements governing Mr. Hellman's margin account, without consent of
the Board's representative. Mr. Hellman has paid accrued interest of $720,000 on
the loan through October 6, 1999. The principal on the loan was due on October
6, 1999. On January 25, 2000, the Board of Directors agreed that Mr. Hellman
would not be required to repay the loan until October 6, 2000. The term of the
loan has now
16
<PAGE> 20
been extended by the Board of Directors to October 6, 2001. The Board of
Directors have informed Mr. Hellman that the Company may require immediate
payment of the loan if the Company requires the payment to prevent an
unacceptable strain on cash resources.
Diane Hellman, Mr. Hellman's wife, has served the Company in various
marketing positions since 1985, and currently serves as Vice President of Sales
of Venture Lighting International, Inc. In fiscal 2000, Mrs. Hellman's salary,
benefits and perquisites were $125,574. Brian Hellman, Mr. Hellman's son, has
served the Company in various positions since 1992, and currently serves as
Senior Business Analyst of Venture Lighting International, Inc. In fiscal 2000,
Brian Hellman's salary, benefits and perquisites were $89,118. Deborah Rogers,
Mr. Hellman's sister-in-law, has served the Company in various positions since
1994, and currently serves as Regional Sales Manager of Venture Lighting
International, Inc. In fiscal 2000, Ms. Rogers' salary and sales commissions and
benefits and perquisites were $136,001. Christopher Ruud, Mr. Ruud's son, has
served the Company since 1998, and served Ruud Lighting in various positions
since 1986, and currently serves as Vice President of Human Resources of the
Company. In fiscal 2000, Christopher Ruud's salary, benefits and perquisites
were $90,166.
The Company does not intend to enter into any material transaction with
officers or directors, or their family members, without the approval of a
majority of the disinterested directors in the future. All above-described
transactions since March 1997 were approved by a majority of disinterested
directors except Mr. Filson's consulting service fees and the employment and
compensation of the Hellman and Ruud family members.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership with the Securities and Exchange Commission and the
Nasdaq National Market. Specific due dates for these reports have been
established, and the Company is required to report in this proxy statement any
failure to file by these dates during fiscal 1999. All of these filing
requirements were satisfied by the Company's Executive Officers and directors,
and persons who own more than ten percent of a registered class of the Company's
equity securities, except that Mr. Harada filed a report on Form 4 relating to
two stock purchase transactions in March and December of 1999 after the required
filing date.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
CHANGE OF INDEPENDENT AUDITORS
On May 17, 1999, the Company engaged Grant Thornton LLP as its new
independent accountants to act as the principal accountant to audit the
Company's consolidated financial statements.
The Company's Audit Committee of the Board of Directors participated in and
approved the engagement of Grant Thornton LLP.
During the fiscal years ended June 30, 1998 and June 30, 1997 and through
May 17, 1999, the Company did not consult with Grant Thornton LLP regarding (i)
the application of accounting principles to a specified transaction, either
completed or proposed; or the type of audit opinion that might be rendered on
the Company's consolidated financial statements, and in no case was a written
report provided to the Company nor was oral advice provided that was an
important factor in reaching a decision by the Company as to an accounting,
auditing or financial reporting issue; or (ii) any matter that was either the
subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of
Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a
reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation
S-K.
On March 29, 1999, Ernst & Young LLP ("E&Y") resigned as independent
auditors of the Company.
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<PAGE> 21
The reports of E&Y on the Company's consolidated financial statements for
the past two fiscal years ended June 30, 1998 and June 30, 1997 did not contain
an adverse opinion or a disclaimer of opinion and were not qualified or modified
as to uncertainty, audit scope, or accounting principles.
In connection with the audit of the Company's financial statements for the
fiscal year ended June 30, 1998, there were no disagreements with E&Y on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope and procedures which, if not resolved to the satisfaction of
E&Y, would have caused E&Y to make reference to the matter in their report
("Disagreements") with respect to the fiscal year ended June 30, 1998. In
connection with the audit of the Company's consolidated financial statements for
the fiscal year ended June 30, 1997, there were no Disagreements with E&Y with
respect to the fiscal year ended June 30, 1997, except as follows: E&Y disagreed
with the accounting for deferred advertising costs; the valuation of inventories
acquired in purchase business combinations; and the capitalization of certain
joint venture formation costs. E&Y identified and discussed the above matters
with the Company's management and the audit committee of the Company's board of
directors. Such matters were, however, resolved to the satisfaction of E&Y prior
to the issuance of its report on the Company's consolidated financial statements
for the fiscal year ended June 30, 1997. There were no Disagreements with E&Y
for the interim period subsequent to June 30, 1998.
E&Y has not advised the Company that information has come to its attention
that would materially impact the fairness or reliability of any interim or
audited financial statements issued by the Company.
Subject to shareholder approval, the Board of Directors, acting on the
recommendation of its Audit Committee, has appointed Grant Thornton LLP as its
independent accountants to audit the consolidated financial statements of the
Company and its subsidiaries for fiscal 2001. Representatives of Grant Thornton
LLP will be present at the Annual Meeting and will be given the opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
PROPOSAL 2.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows the Company to "incorporate
by reference" the documents that it files with the Commission. This means that
the Company can disclose certain information to you by referring to those
documents. Any information the Company incorporates in this manner is considered
part of this proxy statement except to the extent updated or superseded by
disclosure in this proxy statement. Any information the Company files with the
Commission after the date of this proxy statement and until the date of the
annual meeting of shareholders will automatically update and supersede the
information contained in this proxy statement.
The Company's 2000 Annual Report to shareholders accompanies this proxy
statement. The Company incorporates by reference only information contained
under the caption "Financial Information" (pages 25-60).
2000 ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JUNE 30, 2000
A copy (excluding exhibits) of the Company's 2000 Annual Report on Form
10-K for the fiscal year ended June 30, 2000 as filed with the Securities and
Exchange Commission may be obtained by shareholders, without charge, by
addressing a request to Corporate Secretary, Advanced Lighting Technologies,
Inc., 32000 Aurora Road, Solon, Ohio 44139. Copies of the exhibits may be
obtained by the same means. A charge equal to the reproduction cost will be made
if the exhibits are requested.
SHAREHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's 2001 Annual Meeting should be received by
the Secretary of the Company no later than July 6,
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<PAGE> 22
2001, in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that meeting.
WHERE YOU CAN FIND MORE INFORMATION
The Company currently files reports, proxy statements, and other
information with the Securities and Exchange Commission. These reports, proxy
statements, and other information can be read and copied at the Commission's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the Public
Reference Room. The Commission maintains an internet site at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission, including the
Company.
19
<PAGE> 23
EXHIBIT A
As Adopted April 27, 2000
ADVANCED LIGHTING TECHNOLOGIES, INC.
AUDIT COMMITTEE CHARTER
FUNCTION OF THE AUDIT COMMITTEE
The Audit Committee (the "Committee") of the Board of Directors (the
"Board") will assist the Board in fulfilling the Board's oversight
responsibilities relating to accounting for the Company's financial position,
results of operations and cash flows, as well as such other matters as may from
time-to-time be specifically delegated to the Committee by the Board.
While the Committee has the powers and responsibilities set forth in this
Charter, the Company's Code of Regulations, and the related resolution of the
Board of Directors providing for the Audit Committee, it is not the
responsibility of the Committee to plan or conduct audits or to determine that
the Company's financial statements are complete and accurate or are in
compliance with generally accepted accounting principles, which is the
responsibility of management and the outside auditor. Likewise, it is not the
responsibility of the Committee to conduct investigations, to resolve disputes,
if any, between management and the outside auditor or to assure compliance with
laws or the Company's Conduct Policy Statements and Authorization Guidelines.
The Audit Committee will be given the resources necessary to discharge its
responsibilities.
COMPOSITION OF THE COMMITTEE
REQUIREMENTS. The Committee will consist of at least three Board members.
Each member of the Committee must be independent of management and free from any
relationship with the Company that would interfere with the exercise of
independent judgment as a Committee member. In determining independence, the
Board will observe the requirements of the National Association of Security
Dealers (NASD).
Each member of the Committee must be financially literate or must become
financially literate within a reasonable period of time after appointment to the
Committee. The Board will determine, in its business judgment and in accordance
with the NASD rules, whether a director meets the financial literacy
requirement.
At least one member of the Committee must have accounting or related
financial management expertise, as determined by the Board in its business
judgment and in accordance with the NASD rules.
APPOINTMENT. The Board will appoint the members of the Committee. The Board
will, or will delegate to the members of the Committee, the responsibility to
appoint a Chairman of the Committee. The Chairman of the Committee will, in
consultation with the other members of the Committee, the Company's outside
auditors and the appropriate officers of the Company, be responsible for calling
meetings of the Committee, establishing agenda therefor and supervising the
conduct thereof.
OUTSIDE AUDITOR
The outside auditor for the Company is ultimately accountable to the Board
and the Committee. The Committee and the Board have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the outside
auditor. Alternatively, the Committee and the Board may nominate the outside
auditor to be proposed for shareholder approval in any proxy statement.
<PAGE> 24
RESPONSIBILITIES OF THE COMMITTEE
The Committee will:
1. Recommend Outside Auditors: Recommend to the Board annually, and at
other appropriate times, the firm to be retained as the Company's
outside auditors.
2. Review Independence of Outside Auditors: In connection with
recommending the firm to be retained as the Company's outside
auditors, review the information provided by management and the
outside auditors relating to the independence of such firm,
including, among other things, information related to the nonaudit
services provided and expected to be provided by the outside
auditors.
The Committee is responsible for (1) ensuring that the outside
auditor submits on a periodic basis to the Committee a formal written
statement delineating all relationships between the auditor and the
Company consistent with independence Standards Board Standard No. 1,
(2) actively engaging in dialogue with the outside auditor with
respect to any disclosed relationship or services that may impact the
objectivity and independence of the outside auditor and (3)
recommending that the Board take appropriate action in response to
the outside auditors' report to satisfy itself of the outside
auditors' independence.
3. Review Audit Plan: Review with the outside auditors their plans for,
and the scope of, their annual audit and other examinations.
4. Conduct of Audit: Discuss with the outside auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
as amended.
5. Review Audit Results: Review with the outside auditors the report of
their annual audit, or proposed report of their annual audit, the
accompanying management letter, if any, the reports of their reviews
of the Company's interim financial statements conducted in accordance
with Statement on Auditing Standards No. 71, and the reports of the
results of such other examinations outside of the course of the
outside auditors' normal audit procedures that the outside auditors
may from time-to-time undertake.
6. Review Financial Statements: Review with appropriate officers of the
Company and the outside auditors the annual and quarterly financial
statements of the Company prior to public release thereof and prior
to filing with the SEC. The review of the annual and quarterly
financial statements will include the communication matters set forth
in Statement on Auditing Standards No. 61, as amended. Following
review of the annual financial statements, the Committee will make a
recommendation to the Board of Directors as to whether such
statements should be included in the Company's Form 10-K.
7. Review Internal Audit Plans: Review with the senior financial
executive for internal audit and other persons responsible for the
internal audit function the plans for, and the scope of, their
ongoing audit activities.
8. Review Internal Audit Reports: Review with the senior financial
executive for internal audit and other persons responsible for the
internal audit function the annual report of the audit activities,
examinations and results thereof for the internal audit function.
9. Review Systems of Internal Accounting Controls: Review with the
outside auditors, the senior financial executive and other persons
responsible for the internal audit function, the outside legal
counsel and, if and to the extent deemed appropriate by the Chairman
of the Committee, members of their respective staffs, the adequacy of
the Company's internal accounting controls and the Company's policies
and compliance procedures with respect to business practices. Review
with the outside auditors and senior financial executives the
Company's financial auditing and accounting organizations and
personnel.
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<PAGE> 25
10. Review Recommendations of Outside Auditors: Review with the persons
responsible for the internal audit function recommendations made by
the outside auditors and the senior financial executive, as well as
such other matters, if any, as such persons or other officers of the
Company may desire to bring to the attention of the Committee.
11. Securities Exchange Act: Obtain assurance from the outside auditors
and management that Section 10A of the Securities Exchange Act has
not been implicated.
12. Review Other Matters: Review such other matters in relation to the
accounting, auditing and financial reporting practices and
procedures of the Company as the Committee may, in its own
discretion, deem desirable in connection with the review functions
described above.
13. Board Reports: Report its activities to the Board in such manner and
at such times, as it deems appropriate.
MEETINGS OF THE COMMITTEE
The Committee shall meet at least four times annually, or more frequently
as it may determine necessary, to comply with its responsibilities as set forth
herein. The Committee may request any officer or employee of the Company or the
Company's outside legal counsel or outside auditor to attend a meeting of the
Committee or to meet with any members of the Committee. The Committee may meet
with management, the outside auditors and others in separate private sessions to
discuss any matter that the Committee, management, the outside auditors or such
other persons believe should be discussed privately.
ANNUAL REPORT
The Committee will prepare, with the assistance of management, the outside
auditors and outside legal counsel, a report for inclusion in the Company's
proxy or information statement relating to the annual meeting of security
holders at which directors are to be elected that complies with the requirements
of the federal securities laws, to the extent any report is so required.
OTHER REPORTING
The Committee will prepare, with the assistance described above written
certification affirming compliance with the NASD listing standards regarding
audit committees, to the extent any certification is so required.
ANNUAL REVIEW OF CHARTER
The Committee will review and reassess, with the assistance of management,
the outside auditors and outside legal counsel, the adequacy of the Committee's
charter at least annually.
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<PAGE> 26
ADVANCED LIGHTING TECHNOLOGIES, INC.
32000 Aurora Road
Solon, Ohio 44139
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Wayne R. Hellman and Alan J. Ruud as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to vote as designated on the reverse, all the shares of Common Stock
Advanced Lighting Technologies, Inc. held of record by the undersigned on
October 13, 2000, at the annual meeting of shareholders to be held on Thursday,
December 7, 2000 at 10:00 am (EST) at KSK Color Lab (Conference Room), 32300
Aurora Road, Solon, Ohio, 44139 or any adjournment thereof.
PLEASE VOTE, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED
ENVELOPE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER AND, IN THE DISCRETION OF THE PROXIES, ON ANY OTHER
BUSINESS WHICH MAY PROPERLY COME BEFORE THE MEETING. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE> 27
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
ADVANCED LIGHTING TECHNOLOGIES, INC.
December 7, 2000
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
A [ X ] Please mark your
votes as in the
example.
<TABLE>
<CAPTION>
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except as marked to to vote for all
the contrary below) nominees listed at right
<S> <C> <C> <C>
1. Election of [ ] [ ] NOMINEES:
Directors: Alan J. Ruud
Francis H. Beam
Louis S. Fisi
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE
LIST AT RIGHT.)
2. TO RATIFY THE APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT
AUDITORS OF THE COMPANY.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE VOTE, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE.
<TABLE>
<S> <C> <C>
Signature___________________________________ Signature, if held jointly__________________________DATE______________________, 2000
NOTE: Please sign exactly as names appear hereon. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign full
corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized
officer.
</TABLE>
