EXHIBIT 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT entered into and effective as of July 27, 2005,
among, ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio corporation ("ADLT"), and
XXXXX X. XXXXXXX ("EMPLOYEE");
WITNESSETH:
WHEREAS, ADLT and Employee desire to terminate any and all prior
agreements, whether oral or written, between the parties and between 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 ADLT of the services of Employee as Chief Executive
Officer of ADLT and to set forth the rights and duties of the parties hereto;
and
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
relating to Employee's employment, provided, however that any existing
agreement between Employee and ADLT or any subsidiary of ADLT regarding
non-competition, non-solicitation or confidentiality or ownership of
intellectual property rights shall continue in full force and effect as
supplemented by this Employment Agreement.
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 approval of the Board of Directors of
ADLT, directly or indirectly,
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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, Employee may continue to render services to and participate
in philanthropic and charitable causes, in each case, in a manner
and to the extent consistent with his past practice.
(d) During the term of this Employment Agreement, Employee shall comply
with all policies and procedures of ADLT, including but not limited
to, all terms and conditions set forth in any employee handbook and
any other memoranda pertaining to ADLT's policies, procedures, rules
and regulations. Failure to comply in all material respects with all
such policies and procedures shall be grounds for disciplinary
action, including termination for "cause" pursuant to Section 6(a)
of this Employment Agreement.
3. TERM AND POSITION.
(a) Subject to the termination provisions contained herein, the term of
this Employment Agreement shall commence as of DECEMBER 10, 2003 and
shall continue through JUNE 30, 2007, subject, however, to the
provisions of Section 6.
(b) Employee shall serve as Chief Executive Officer of ADLT, or in such
other offices or positions with ADLT as shall be determined by the
Board of Directors of ADLT, without, however, any change in
Employee's compensation or benefits listed on EXHIBIT B.
(c) The principal business office of Employee shall be in Solon, Ohio.
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 base salary at the
rate of THREE HUNDRED TWELVE THOUSAND DOLLARS ($312,000) per annum
for the first year of this Employment Agreement, which shall be
payable in equal, consecutive biweekly installments. For the period
from January 1, 2005 - June 30, 2007. Employee will receive, in
addition to such base salary, a salary supplement of One Hundred
Thirty-Eight Thousand Dollars ($138,000) per annum, which shall be
payable in equal, consecutive biweekly installments.
(b) Employee will receive options at the commencement of the term of
this Employment Agreement as set forth on EXHIBIT A.
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(c) Provided that Employee satisfactorily performs his services under
this Employment Agreement, the Compensation Committee of ADLT shall
consider base salary increases annually.
(d) Provided that Employee has satisfactorily performed his services
under this Employment Agreement, Employee shall be eligible for
bonuses from time to time as described on EXHIBIT A.
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;
provided, however, that such benefits shall be comparable to those
benefits provided by ADLT in ADLT's fiscal year ended June 30, 2003.
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 committing an act constituting a misdemeanor
involving fraud, dishonesty, or theft or a felony;
(ii) Employee's engaging in habitual or repeated alcohol or drug
abuse;
(iii) Employee's disregarding the instructions of the Board of
Directors of ADLT;
(iv) Employee's neglecting duties (other than by reason of
disability or death), with five (5) business days notice to
cure;
(v) Employee's willful misconduct or gross negligence;
(vi) Employee's material breach of this Employment Agreement, in
whole or in part, with five (5) days notice to cure; or
(vii) ADLT shall enter into a transaction (including, without
limitation, the purchase, sale, lease or exchange of property
or assets, or the rendering of any service) with any Xxxxxxx
Person (as defined the Indenture between ADLT and The Bank of
New York, relating to ADLT's 11% Senior Notes due 2009) if
such transaction is proposed by Employee, unless such
transaction has been unanimously approved by members of the
Board of Directors who are not Executive Managers (as defined
in the Indenture).
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.
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(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 Employment 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 any salary and bonus amounts
due to Employee for the remainder of the term or renewal term of this
Employment Agreement, as the case may be, and medical benefits from the
date of termination to the last day of the calendar month in which
Employee's sixty-sixth birthday occurs, such medical benefits to be no
less than other key executives. Such salary, bonus and benefits shall be
paid in accordance with ADLT's normal payment practices; provided,
however, that amounts payable to Employee may be offset against any
outstanding amount of principal and interest of loans from ADLT to
Employee. At the conclusion of the term of this Employment Agreement,
Employee shall be entitled to all bonuses based on periods prior to
termination, to the extent earned and whether payable during or after the
term of this Employment Agreement, however, 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 compensation or
benefits or (ii) a material breach of this Employment Agreement by ADLT;
or (iii) resignation within three (3) months following a "Change in
Control" of 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; provided however, if Employee dies on
or before July 30, 2007 and, at the time of Employee's death, the Loan
Amount (as defined in Exhibit A) has not been reduced to $0, and a valid
insurance policy on the life of Employee is in force, which names ADLT as
beneficiary and results in a payment of proceeds to ADLT of not less than
$7,500,000, Employee's estate will receive a one-time bonus, in lieu of
any other bonus payable pursuant to this agreement, equal to (a) the Loan
Amount (as defined in Exhibit A) divided by (b) (I) 1 minus (II)
Employee's combined effective federal, state and local income tax
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rate for the year of Employee's death. ADLT acknowledges that such a
policy is currently in effect and such policy will remain in effect until
earlier of (x) July 30, 2007 or (y) the date on which the Loan Amount has
been paid in full.
(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; provided, however, that amounts payable to Employee may be offset
against any outstanding amount of principal and interest of loans from
ADLT to Employee. In such event, and provided ADLT continues to make such
payments or offset such amounts, Employee shall continue to be bound by
the terms of the non-competition provisions in Section 7 hereof, during
the remainder of the term and for a period of two (2) years immediately
following the stated term of the Agreement.
(g) "Change of Control" as used in this Agreement means such time as (i) (a) a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended [the "Exchange Act"])
becomes the ultimate "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) of more than 35% of the total voting power of ADLT on a
fully diluted basis and (b) such ownership represents a greater percentage
of the total voting power of the voting stock of ADLT, on a fully diluted
basis, than may then be voted by (I) Saratoga Lighting Holdings LLC or any
person, directly or indirectly, controlling, controlled by or under common
control with Saratoga Lighting Holdings LLC (the "Saratoga Group"), (II)
any "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) that includes a member of the Saratoga Group, if members of
the Saratoga Group "beneficially own" (within the meaning of Rule 13d-3
under the Exchange Act) voting stock of ADLT representing a majority of
the voting power of the voting stock owned by such group (the "Existing
Stockholders") and (III) the five individuals who were the most highly
compensated officers or employees of ADLT and its subsidiaries, taken as a
whole, for the most recently ended fiscal year of ADLT (the "Executive
Managers") on such date; provided however, that a Change of Control shall
not be deemed to have occurred by reason of the fact that one or more of
the Executive Managers become the beneficial owners of more than 35% of
the total voting power of ADLT on a fully diluted basis; or (ii)
individuals who on the date of this Agreement (or within 120 days
thereafter as contemplated by ADLT's plan of reorganization) constitute
the Board of Directors (together with any new or successor directors whose
election by the Board of Directors or whose nomination by the Board of
Directors for election by ADLT's stockholders was approved by a vote
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of at least two-thirds of the members of the Board of Directors on
the date of their election or nomination) cease for any reason to
constitute a majority of the members of the Board of Directors then
in office.
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 that ADLT and its affiliates,
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 by ADLT or its
subsidiaries, whether such termination is initiated by ADLT or
Employee and whether at the expiration of the term of this
Employment Agreement or otherwise, for any reason, he agrees
that he will not, for a period of TWO (2) YEARS immediately
following such termination, engage, in the United States or in
any country where ADLT or any of its subsidiaries or
affiliates conduct business, either directly or indirectly on
behalf of himself or on behalf of an another, as an employee,
consultant, director, partner or shareholder (other than with
respect to holding up to one percent (1%) of a publicly traded
corporation) of any corporation, limited liability company,
partnership or other business entity, in any business of the
type and character or in competition with the business carried
on by ADLT or any of its subsidiaries or affiliates (as
conducted on the date Employee ceases to be employed by ADLT
in any capacity).
(ii) Employee will not, for a period of TWO (2) YEARS immediately
following the termination of his employment by ADLT or its
subsidiaries, whether such termination is initiated by ADLT or
Employee and whether at the expiration of the term of this
Employment Agreement or otherwise, either directly or
indirectly or on behalf of another, as an employee,
consultant, director, partner or shareholder (other than with
respect to holding up to one percent (1%) of a publicly traded
corporation) of any corporation, limited liability company,
partnership or other business entity, recruit, hire or
otherwise entice any employee(s) of ADLT or its subsidiaries
or affiliates, to terminate his or her employment with ADLT or
to accept employment with anyone or any entity other than
ADLT.
(iii) Employee will not, for a period of TWO (2) YEARS immediately
following the termination of his employment by ADLT or its
subsidiaries, whether such termination is initiated by ADLT or
Employee and whether at the expiration of the term of this
Employment Agreement or otherwise, either directly or
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indirectly or on behalf of another, as an employee, consultant,
director, partner or shareholder (other than with respect to holding
up to one percent (1%) of a publicly traded corporation) of any
corporation, limited liability company, partnership or other
business entity, solicit, do business with or employ any current or
former employee of ADLT, or any of its subsidiaries or affiliates,
or any customer or client of ADLT in connection with any business of
the type and character or in competition with the business carried
on by ADLT or any of its subsidiaries or affiliates (as conducted on
the date Employee ceases to be employed by ADLT in any capacity)
(iv) Employee will not, directly or indirectly, disclose, divulge,
discuss or copy to or for any person or entity, or otherwise use or
suffer to be used in any manner or for any purpose, except for the
benefit of ADLT or any of its subsidiaries or affiliates, any ideas,
methods, customer lists or other customer information, business
plans, product research or engineering data or other trade secrets,
intellectual property, or any other confidential or proprietary
information of ADLT or any of its subsidiaries or affiliates, it
being acknowledged by Employee that all such information regarding
the business of ADLT or its subsidiaries or affiliates conceived,
suggested, developed, compiled or obtained by or furnished to
Employee while Employee shall have been employed by or associated
with ADLT or its subsidiaries or affiliates is confidential
information and ADLT's or its subsidiaries' or affiliates' exclusive
property. Employee's obligations under this Section 7(a)(iv) 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 ADLT, (C) was available, or becomes
available, to Employee on a non-confidential basis independent of
its disclosure to Employee by ADLT, but only if the source of such
information is not bound by the provisions of this Agreement or
otherwise prohibited by a contractual, legal or fiduciary obligation
from disclosing Confidential Information to Employee or Employee's
Representatives or (D) Employee is required, in the opinion of legal
counsel, to disclose by law, regulation, or governmental or court
order, provided that ADLT is given, to the extent that it is
practicable, reasonable advance notice of any court proceeding and
an opportunity to contest disclosure or obtain an appropriate
protective order, at no cost to Employee but with Employee's
reasonable cooperation. The Employee shall have the burden of proof
as to whether any of the foregoing exceptions apply to any
disclosure or proposed disclosure of Confidential Information.
(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
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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. Employee and Company have carefully read and
considered the provisions of this Section 7 and, having done so,
agree that the restrictions set forth are fair and reasonable and
are reasonably required for the protection of the interests of
Company. In the event that any provision of this Section 7 shall be
held to be unenforceable because of the duration of such provision
or area covered thereby, Employee and Company expressly agree that
any court making such determination shall have the power to reduce
the duration and/or area of such provision and, in its reduced form,
said provision shall then be enforceable.
(b) 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.
This Employment Agreement shall be automatically renewed for successive
one (1) year periods, notwithstanding whether the initial terms of this
Agreement was for a term other than one (1) year, unless and until ADLT or
Employee delivers written notice to the other party of its intent to
terminate this Employment Agreement upon completion of the current term.
In the event Employee or ADLT desires to terminate this Employment
Agreement upon completion of the current term, such terminating party must
deliver written notice to the other party not later than three (3) months
prior to the end of the term (or any successive term) of this Employment
Agreement.
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.
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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 Solon, 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 Employment
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., 00000 Xxxxxx Xxxx, Xxxxx,
Xxxx, 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.
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.
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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, and unanimously approved by the non-executive
members of the board of directors of ADLT.
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: _________________________________ By: /s/ Xxxx Xxxxxxxx
--------------------------------
Name: _______________________________ Name: Xxxx Xxxxxxxx
Its: Chief Operating Officer
By: _________________________________ /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: _________________________ XXXXX X. XXXXXXX
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EXHIBIT A
(BONUS AND OPTIONS)
EMPLOYEE: Xxxxx X. Xxxxxxx
BASE SALARY: $300,000.00
I. BONUS SCALE:
Employee shall be eligible for a bonus, as a percentage of Employee's base
salary, contingent upon ADLT's achieving certain financial targets (Base, Goal
and Superior) measured in terms of ADLT's Adjusted EBITDA (after accruing the
applicable bonus) for each fiscal year pursuant to the following scale:
FY 2004 (7/1/03-6/30/04) EBITDA (ADJUSTED) * BONUS (% OF BASE SALARY)
No Bonus Below $23,500,000.00 --
Base $23,500,000.00 50%
Goal $25,000,000.00 100%
Superior $27,000,000.00 150%
FY 2005 (7/1/04-6/30/05) EBITDA (ADJUSTED)** BONUS (% OF BASE SALARY)
No Bonus Below $26,000,000 --
Base $ 26,000,000 50%
Goal $ 27,300,000 100%
Superior $ 29,000,000 150%
FY 2006 (7/1/05-6/30/06) (To be determined by the
Compensation Committee of ADLT)
FY 2007 (7/1/06-6/30-07) (Bonus, payable on or before July
30, 2007, to be determined by the
Compensation Committee of ADLT)
* Bonus increase in FY 2004 will be on a sliding scale whereby the percentage of
base salary bonus will increase proportionally based on the amount by which ADLT
exceeds one financial target but falls short of a higher financial target. For
example: If ADLT has an adjusted EBITDA in FY 2004 of $26,000,000.00 (which
amount is the midpoint between the Goal and Superior targets) then Employee
would be entitled to a bonus of 125% (100% + an additional 25%).
**Bonus in FY 2005 will be on a sliding scale whereby the percentage of base
salary bonus will increase proportionally based on the amount by which ADLT
exceeds one financial target but falls short of a higher financial target. For
example: If ADLT has an adjusted EBITDA in FY2005 of $26,650,000.00 (which
amount is the midpoint between the Base and Goal targets) then Employee would be
entitled to a bonus of 75% (50% + an additional 25%). If ADLT has an adjusted
EBITDA
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in FY 2050 of $28,150,000.00 (which amount is the midpoint between the Goal and
Superior targets) then Employee would be entitled to a bonus of 125% (100% + an
additional 25%).
II. ADDITIONAL BONUS
Subject to Section 6, Employee will receive additional bonuses of : (1) on July
1, 2004, $2,027,000 (of which an amount equal to the after-tax proceeds of such
additional bonus shall be applied to the outstanding loan by the Company to
Employee, with the remaining amount being, first, applied to required
withholding obligations of the Company and, second, any remaining amount,
withheld by the Company and paid to the respective tax authorities for
application to Employee's tax liability); and (2) on July 1, 2005, $2,027,000
(of which an amount equal to the after-tax proceeds of such additional bonus
shall be applied to the outstanding loan by the Company to Employee, with the
remaining amount being, first, applied to required withholding obligations of
the Company and, second, any remaining amount, withheld by the Company and paid
to the respective tax authorities for application to Employee's tax liability).
Subject to Section 6, if ADLT has EBITDA (Adjusted) of $31,000,000 for any four
consecutive fiscal quarters ending on or before June 30, 2007, then, on or
before September 30, 2006 (or such later date which is not more than 90 days
following the last day of the fourth fiscal quarter of such period), Employee
will receive an additional bonus equal to: (a) (i) one half of the Loan Amount1
(after application of the after-tax proceeds of Employee's FY2006 bonus pursuant
to I of this Exhibit A) or (ii) if the "Goal" bonus level is not achieved for
FY2006, one half of (x) the Loan Amount less (y) the amount by which (1) the
amount of after tax proceeds which would have been applied from the FY2006
"Goal" level bonus exceeds (2) the amount of any FY2006 bonus pursuant to I of
this Exhibit A which was actually applied to the Loan, divided by (b) (I) 1
minus (II) Employee's combined effective federal, state and local income tax
rates for 2006 (of which bonus, an amount equal to the after-tax proceeds of
such additional bonus shall be applied to the outstanding loan by the Company to
Employee, with the remaining amount being, first, applied to required
withholding obligations of the Company and, second, any remaining amount,
withheld by the Company and paid to the respective tax authorities for
application to Employee's tax liability).
Subject to Section 6, if ADLT has EBITDA (Adjusted) of $35,000,000 for any four
consecutive fiscal quarters ending on or before June 30, 2007, then, on or
before July 30, 2007, Employee will receive an additional bonus equal to: (a)
(i) the Loan Amount (after application of the after-tax proceeds of Employee's
FY2007 bonus pursuant to I of this Exhibit A) or (ii) if the "Goal" bonus level
is not achieved for both FY2006 and FY2007, the Loan Amount less the amount by
which (1) the amount of after tax proceeds which would have been applied upon
achievement of both the FY2006 and FY2007 "Goal" level bonuses exceeds (2) the
amount of any FY2006 and FY2007 bonuses pursuant to I of this Exhibit A which
was actually applied to the Loan divided by (b) (I) 1 minus (II) Employee's
combined effective federal, state and local income tax rates for 2007 (of which
bonus an amount equal to the after-tax proceeds of such additional bonus shall
be applied to the outstanding loan by the Company to Employee, with the
remaining amount being, first, applied
------------------
* "Loan Amount" at any date means the total of the unpaid principal and interest
on the Loan from ADLT to Employee pursuant to the Loan Agreement dated as of
October 8, 1998, as amended.
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to required withholding obligations of the Company and, second, any remaining
amount, withheld by the Company and paid to the respective tax authorities for
application to Employee's tax liability).
If there is a substantial capital transaction which has a substantial positive
effect on the value of ADLT, the Board of Directors of ADLT will consider
whether any unpaid additional bonus should be accelerated.
III. OPTIONS:
Employee shall participate in the ADLT equity compensation plan to the extent of
3.5% of the equity stock of ADLT on the date of this Agreement, which shall vest
in four (4) equal increments on the anniversary dates of the grant date.
Employee shall Participate in the ADLT 2005 Equity Incentive Plan to the extent
of 1.8% of the diluted Common Shares at the time of adoption of such Plan (22
shares). The shares will vest in accordance with the terms of the Award under
such Plan.
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EXHIBIT B
XXXXX XXXXXXX EMPLOYEE BENEFITS
- Medical and Benefits offered to ADLT and Venture Solon employees
- Accidental Death & Dismemberment......2 x Annual Salary
- Mutual of Omaha Life Insurance - 2x Annual Salary
- Vision Plan
- Medical Insurance: United Health Care
- Dental Insurance: Cigna
- Short Term Disability
- Long Term Disability
- 10 Paid Holidays
- Paid Vacation in accordance with company policy; 20 days at Xxxxx
Xxxxxxx'x level of service
- Quarterly dues paid at Barrington Country Club; current dues approximately
$1500
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