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CONFIDENTIAL EXHIBIT 10.5
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT entered into and effective as of February 12,
1998, between ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio corporation ("ADLT"
or "Employer"), and XXXXXXXX X. XXXXX ("EMPLOYEE");
WITNESSETH:
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WHEREAS, ADLT and Employee desire to terminate any and all prior
agreements, whether oral or written, between the Employee and ADLT relating to
Employee's employment; and
WHEREAS, ADLT and Employee desire to enter into an Employment Agreement
as set forth herein below to ensure ADLT of the services of Employee as Chief
Financial Officer of ADLT and to set forth the rights and duties of the parties
hereto,
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. TERMINATION OF PRIOR AGREEMENTS. ADLT and Employee hereby terminate any
and all prior agreements, whether oral or written, between the parties
or ADLT relating to Employee's employment.
2. EMPLOYMENT.
(a) ADLT hereby employs Employee, and Employee hereby accepts
employment, upon the terms and conditions hereinafter set
forth.
(b) During the term of this Employment Agreement, (for purposes
hereof, all references to the term of this Employment
Agreement shall be deemed to include all renewals or
extensions hereof, if any), Employee shall devote his full
business time to his employment and shall perform diligently
such duties as are, or may be, required by the Board of
Directors of ADLT or their designee, which duties shall be
within the bounds of reasonableness and acceptable business
standards and ethics.
(c) During the term of this Employment Agreement, Employee shall
not, without the prior written consent of ADLT, which shall
not be unreasonably withheld, directly or indirectly, render
services of a business, professional or commercial nature to
any other person or firm, whether for compensation or
otherwise, other than in the performance of duties naturally
inherent in the businesses of ADLT or any subsidiary or
affiliate of ADLT; provided, however, that Employee may
continue to render
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services to and participate in philanthropic and charitable
causes, in each case, in a manner and to the extent consistent
with his past practice.
3. TERM AND POSITION.
(a) Subject to the termination provisions contained herein, the
term of this Employment Agreement shall commence as of the
date hereof and shall continue for a term of three years from
such date, subject, however, to the provisions of Section 6.
(b) Employee shall serve as Chief Financial Officer of ADLT and in
such offices or positions with ADLT as shall be agreed upon by
Employee and the Board of Directors of ADLT, as the case may
be, without, however, any change in Employee's compensation
(but such offices or positions shall be consistent with the
office and position stated herein).
(c) The principal business office of Employee shall be in
Northeast Ohio; however, Employee maintains a residence and a
business office in Hudson, Ohio, from which the Employee may
perform his duties under this Agreement. Employee shall not be
required to relocate without Employee's consent.
4. COMPENSATION.
(a) Subject to the provisions of this Employment Agreement, for
all services which Employee may render to ADLT during the term
of this Employment Agreement, Employee shall receive a salary
at the rate of One Hundred Seventy-Five Thousand Dollars
($175,000) per annum for the first year of this Agreement,
which shall be payable in equal, consecutive biweekly
installments.
(b) Provided that Employee satisfactorily performs his services
under this Employment Agreement, Employee shall be entitled to
salary increases from time to time as determined by the
Compensation Committee of ADLT.
(c) Provided that Employee has satisfactorily performed his
services under this Employment Agreement, Employee shall be
eligible for bonuses from time to time as determined by the
Compensation Committee of ADLT.
5. OTHER BENEFITS.
During the term of this Employment Agreement, Employee shall be
entitled to such vacation privileges, life insurance, medical and
hospitalization benefits, and such other benefits as are typically provided to
other executive officers of ADLT and its subsidiaries in comparable positions.
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6. TERMINATION AND FURTHER COMPENSATION.
(a) The employment of Employee under this Employment Agreement,
for the term thereof, may be terminated by the Board of
Directors of ADLT for cause at any time.
For purposes hereof, the term "cause" shall mean:
(i) Employee's fraud, dishonesty, willful misconduct or
gross negligence in the performance of his duties
hereunder; or
(ii) Employee's material breach of this Agreement, in
whole or in part.
Any termination by reason of the foregoing shall not be in
limitation of any other right or remedy ADLT may have under
this Employment Agreement or otherwise.
(b) In the event of (i) termination of the Employment Agreement
for any of the reasons set forth in Subparagraph (a) of this
Section 6, or (ii) if Employee shall voluntarily terminate his
employment hereunder prior to the end of the term of this
Employment Agreement, then in either event Employee shall be
entitled to no further salary, bonus or other benefits under
this Employment Agreement, except as to that portion of any
unpaid salary and other benefits accrued and earned by him
hereunder up to and including the effective date of such
termination. In the event the Employee voluntarily terminates
this Agreement, Employee shall provide 30 days' prior written
notice to ADLT of such voluntary termination.
(c) In the event that ADLT terminates Employee's employment
without "cause" (as defined herein above) or Employee
terminates employment with "good reason" (as defined below)
prior to the end of the term of this Employment Agreement,
then Employee shall be entitled to all salary and medical
benefits for the remainder of the term of this Employment
Agreement all upon the terms and as set forth herein. At the
conclusion of the term of this Employment Agreement, all
salary, medical and other benefits as set forth herein shall
cease. Employee shall have no other rights and remedies except
as set forth in this Section 6. For purposes hereof, the term
"good reason" shall mean (i) without the express written
consent of Employee, a material reduction of Employee's
duties, authority, compensation, benefits or responsibilities
or (ii) a material breach of this Agreement by ADLT.
(d) In the event of Employee's death or permanent disability (as
defined herein below) occurring during the term of this
Employment Agreement, this Employment Agreement shall be
deemed terminated for cause and Employee or his estate, as the
case may be, shall be entitled to no further salary or other
compensation provided for herein except as to that portion of
any unpaid salary accrued or earned by Employee hereunder up
to and including the date of death or permanent disability,
and any benefits under any insurance policies or other plans.
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(e) "Permanent disability" means the inability of Employee to
perform satisfactorily his usual or customary occupation for a
period of 120 days in the aggregate out of 150 consecutive
days as a result of a physical or mental illness or other
disability which in the written opinion of a physician of
recognized ability and reputation, is likely to continue for a
significant period of time.
(f) In the event this Employment Agreement is terminated with
cause, before the end of the term, ADLT may, in its sole
discretion, notify Employee that ADLT intends to continue to
pay all compensation, benefits and monies due under the terms
of the Employment Agreement for the remainder of the term. In
such event, and provided ADLT continues to make such payments,
Employee shall continue to be bound by the terms of the
non-competition provisions in Section 7 hereof.
7. COVENANTS REGARDING NON-COMPETITION AND CONFIDENTIAL INFORMATION.
(a) Non-Competition.
(i) Recognizing that Employee will have been involved as
an executive officer of ADLT and its affiliates,
including ADLT, are engaged in the supply of products
and/or services in every state of the United States
and internationally, therefore, upon termination of
his employment, for any reason, he agrees that he
will not, for a period of three years immediately
following such termination, engage, in the United
States or in any country where ADLT or any of their
affiliates conducts business, either directly or
indirectly on behalf of himself or on behalf of any
employee, consultant, principal, substantial
shareholder or investor, partner or officer of any
corporation, in any business of the type and
character or in competition with the business carried
on by ADLT or its affiliates (as conducted on the
date Employee ceases to be employed by ADLT in any
capacity).
(ii) Employee will not, for a period of three years
immediately following the termination of his
employment, either directly or indirectly or on
behalf of another as an employee, agent, principal,
partnership or other entity, recruit, hire or
otherwise entice any employees of ADLT or its
affiliates to leave the Employer.
(iii) Employee will not disclose, divulge, discuss, copy or
otherwise use or suffer to be used in any manner, in
competition with, or contrary to the interests of
ADLT or its affiliates, the customer lists,
manufacturing methods, product research or
engineering data or other trade secrets of ADLT or
any of its affiliates, it being acknowledged by
Employee that all such information regarding the
business of ADLT or its affiliates developed,
compiled or
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obtained by or furnished to Employee while Employee
shall have been employed by or associated with ADLT
or its affiliates is confidential information and
ADLT's or its affiliates' exclusive property.
Employee's obligations under this Section 7(a)(iii)
will not apply to any information which (A) is known
to the public other than as a result of Employee's
acts or omissions, (B) is approved for release, in
writing, by the Company, (C) is disclosed to Employee
by a third party without restriction, or (D) Employee
is legally required to disclose.
(b) Employee expressly agrees and understands that the remedy at
law for any breach by him of this Section 7 will be inadequate
and that the damages flowing from such breach are not readily
susceptible to being measured in monetary terms. Accordingly,
it is acknowledged that upon adequate proof of Employee's
violation of any legally enforceable provision of this Section
7, ADLT shall be entitled to immediate injunctive relief and
may obtain a temporary order restraining any threatened or
further breach. Nothing in this Section 7 shall be deemed to
limit ADLT's remedies at law or in equity for any breach by
Employee of any of the provisions of this Section 7 which may
be pursued or availed of by ADLT or any of its affiliates
including but not limited to ADLT.
(c) In the event Employee shall violate any legally enforceable
provision of this Section 7 as to which there is a specific
time period during which he is prohibited from taking certain
actions or from engaging in certain activities as set forth in
such provision then, in such event, such violation shall toll
the running of such time period from the date of such
violation until such violation shall cease.
8. RENEWAL.
Not later than six (6) months prior to the termination of this
Agreement, Employer shall be entitled to notify Employee whether it desires to
renew this Employment Agreement with Employee for an additional period of three
(3) years, which notice, if given, shall contain the compensation and other
benefits proposed to be paid and provided to Employee by Employer. For a period
of thirty (30) days after receipt of such notice, Employee shall have the option
to accept such offer of renewal or, in the alternative, shall be entitled to
consult with Employer with respect to different compensation and/or benefits to
be paid and provided to Employee by Employer during said renewal period of
employment. If at the end of said thirty (30) day period Employee and Employer
are unable to agree, then this Employment Agreement shall not be renewed at the
end of the term thereof, unless otherwise agreed to by the parties. In the
event, however, that Employer does not, timely notify Employee of its desire to
renew this Employment Agreement, then this Employment Agreement shall not be
renewed at the end of the term thereof, unless otherwise agreed upon by the
parties.
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9. SEVERABLE PROVISIONS.
The provisions of this Employment Agreement are severable and if any
one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision to the extent enforceable in any jurisdiction shall,
nevertheless, be binding and enforceable.
10. ARBITRATION.
Any controversy or claim arising out of or relating to this Employment
Agreement, or the breach thereof, shall be settled by arbitration by a single
arbitrator in the City of Cleveland, State of Ohio, in accordance with the Rules
of the American Arbitration Association, and judgment upon the award rendered by
the Arbitrator may be entered in any court having jurisdiction thereof. The
Arbitrator shall be deemed to possess the powers to issue mandatory orders and
restraining orders in connection with such arbitration; PROVIDED, HOWEVER, that
nothing in this Section 10 shall be construed so as to deny ADLT the right and
power to seek and obtain injunctive relief in a court of equity for any breach
or threatened breach of Employee of any of his covenants contained in Section 7
hereof.
11. NOTICES.
(a) Each notice, request, demand or other communication ("NOTICE")
by either party to the other party pursuant to this Agreement
shall be in writing and shall be personally delivered or sent
by U.S. certified mail, return receipt requested, postage
prepaid, or by nationally recognized overnight commercial
courier, charges prepaid, or by facsimile transmission (but
each such Notice sent by facsimile transmission shall be
confirmed by sending a copy thereof to the other party by U.S.
mail or commercial courier as provided herein no later than
the following business day), addressed to the address of the
receiving party or to such other address as such party shall
have communicated to the other party in accordance with this
Section. Any Notice hereunder shall be deemed to have been
given and received on the date when personally delivered, on
the date of sending when sent by facsimile, on the third
business day following the date of sending when sent by mail
or on the first business day following the date of sending
when sent by commercial courier.
(b) If a Notice is to ADLT, then such Notice shall be addressed to
Advanced Lighting Technologies, Inc., attention of the Board
of Directors.
(c) If a Notice is to Employee, then such Notice shall be
addressed to Employee at his home address last known on the
payroll records of ADLT.
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12. WAIVER.
The failure of either party to enforce any provision or provisions of
this Employment Agreement shall not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, nor prevent
that party thereafter from enforcing each and every other provision of this
Employment Agreement. The rights granted the parties herein are cumulative and
the waiver of any single remedy shall not constitute a waiver of such party's
right to assert all other legal remedies available to it under the
circumstances.
13. MISCELLANEOUS.
This Employment Agreement supersedes all prior agreements and
understandings between the parties and may not be modified or terminated orally.
No modification, termination or attempted waiver shall be valid unless in
writing and signed by the party against whom the same it is sought to be
enforced.
14. GOVERNING LAW.
This Employment Agreement shall be governed by and construed according
to the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement on the day and year first set forth above.
WITNESS: ADVANCED LIGHTING TECHNOLOGIES, INC.
By: /s/ Xxxxxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxxxxxxx Xxxxxxx Name: Xxxxx X. Xxxxxxx
------------------------- Its: Chief Executive Officer and President
WITNESS:
By: /s/ Xxxxxxxxxx Xxxxxxx /s/ Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxxxx Xxxxxxx XXXXXXXX X. XXXXX
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