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EXHIBIT 10.4
SEVERANCE AND NONCOMPETITION AGREEMENT
THIS
SEVERANCE AND NONCOMPETTION AGREEMENT is entered into and
effective
as of July 27, 2005, among, ADVANCED
LIGHTING TECHNOLOGIES, INC., an Ohio
corporation ("ADLT"), and WAYNE J. VESPOLI
("EMPLOYEE");
WITNESSETH:
WHEREAS,
ADLT and Employee desire to reach agreement on compensation, if
any, which will be due Employee at the time
of Employee's termination of service
ADLT or any of its affiliates; and
WHEREAS,
ADLT requires, as a condition of such agreement and Employee's
continued employment by ADLT, an agreement
with respect to certain competitive
activities following Employee's termination
of service,
NOW, THEREFORE, in consideration of the mutual promises herein
contained,
the parties agree as follows:
1. SEVERANCE
PAYMENTS.
Subject to
the provisions of this Agreement, upon Employee's Termination,
other than
a Termination for "cause" or a Termination resulting from
Employee's
resignation without "good reason," each as defined below,
Employee
shall be entitled to receive severance payments equal to
Employee's
then-current base salary for the one-year period commencing on
the
effective date of such Termination, payable in the same amounts and
at
the same
intervals as such base salary would have otherwise been paid if
such
Termination had not occurred.
2. OTHER BENEFITS.
During the
term of any severance payments pursuant to Section 1 of this
Agreement,
Employee shall be entitled to such medical and hospitalization
benefits,
as are provided executive officers of ADLT and its subsidiaries
and at the
same cost, if any, charged to such executive officers.
3. CERTAIN
DEFINITIONS.
(a)
For purposes
hereof, the term "Termination" shall mean the cessation
of employment of Employee by ADLT or any of its affiliates.
(b)
For purposes
hereof, the term "cause" shall mean:
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(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
shall fail to devote his full business time to his
employment and perform diligently such duties as are, or may
be, required by the Board of Directors of ADLT or their
designee consistent with Employee's duties and authority at
the date of this Agreement or such other duties as may be
mutually agreed, with five (5) business days notice to cure;
provided such duties are within the bounds of reasonableness
and acceptable business standards;
(vi) Employee shall,
without the prior written approval of the
Board of Directors of ADLT, 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, with five (5) business days notice to cure;
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;
(vii) Employee shall fail to 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, with five (5) business days notice to cure; or
(viii) Employee's willful misconduct or gross negligence.
(c)
For purposes
hereof, the term "good reason" shall mean, without the
express written consent of Employee, a material reduction of
Employee's duties, authority, compensation, benefits or
responsibilities.
(d)
In the event of
Employee's death or permanent disability (as defined
herein below), Employee's service 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 up to and including the date of death or
permanent disability, and any benefits under any insurance
policies
or other plans.
(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.
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4. 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, whether such Termination is initiated by
ADLT or Employee, for any reason, he agrees that he will not,
for a period of ONE (1) YEAR 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 shareho
