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EXHIBIT 10.8
ADVANCED LIGHTING TECHNOLOGIES, INC.
Common Stock Purchase Agreement
THIS
AGREEMENT is dated as of July 27, 2005 between ADVANCED
LIGHTING
TECHNOLOGIES, INC. (the "Company"), and
Wayne J. Vespoli ("Purchaser").
WITNESSETH:
WHEREAS,
the Company has given Purchaser an award attached hereto as
Annex
1 (the "Award") pursuant to the Company's
2003 Equity Incentive Plan (the
"Plan") and
WHEREAS,
the Award permits the Purchaser to purchase up to 2.202 shares
within 30 days of the Date of Grant
specified in the Award; and
WHEREAS,
pursuant to the Award, Purchaser desires to purchase shares of
the Company as herein described, on the
terms and conditions set forth in this
Agreement, the Award and the Plan. Certain
capitalized terms used in this
Agreement are defined in the Plan.
NOW,
THEREFORE, it is agreed between the parties as follows:
1. PURCHASE OF
SHARES.
Pursuant
to the terms of the Award, Purchaser hereby agrees to purchase
from the Company and the Company agrees to
sell and issue to Purchaser 2.202
shares [cannot exceed number of Shares
above] of the Company's common stock (the
"Stock") for the Purchase Price Per Share
specified in the Award payable by
personal check, cashier's check or money
order. Payment shall be delivered at
the Closing, as such term is hereinafter
defined. The closing hereunder (the
"Closing") shall occur at the offices of
the Company on August 1, 2005, or such
other time and place as may be designated
by the Company (the "Closing Date").
2. REPURCHASE OR
FORFEITURE OF UNVESTED STOCK.
All
unvested shares of the Stock purchased by the Purchaser pursuant
to
this Agreement (sometimes referred to as
the "Unvested Stock") shall be subject
to the following forfeiture or mandatory
repurchase requirement (the "Unvested
Stock Requirement"):
In the
event the Purchaser ceases to be an Employee of the Company as
defined in the Plan, i.e. terminates
service with the Company ("Service") for
any reason, other than a Permitted Reason,
all Unvested Stock shall immediately
be forfeited and cancelled without
consideration to the Purchaser of any kind.
If
Purchaser ceases to be an Employee of the Company for a
Permitted
Reason, the Company shall purchase the
Unvested Stock as hereinafter provided.
Purchaser understands that the Stock is
being sold in order to induce Purchaser
to become and/or remain associated with the
Company and to work diligently for
the success of the Company and that the
unvested Stock will
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vest in accordance with the schedule set
forth in the Award. Accordingly, the
Company shall be required within 60 days
after the termination of Service for a
Permitted Reason to purchase from the
Purchaser all shares of Stock purchased
hereunder which have not vested on the date
of termination of Service in
accordance with the terms of such vesting
schedule in the Award; provided
further, however, if at the time of the
exercise of such Right of First Refusal
there shall exist any Company Payment
Condition, the Company may defer the
payment for the purchase until such time as
the Company Payment Condition no
longer exists. The purchase price for such
Unvested Stock shall be the Purchase
Price Per Share paid by Purchaser for such
shares pursuant to the Award (the
"Purchase Price"). The purchase price shall
be paid by check and/or by
cancellation of any indebtedness of
Purchaser to the Company. The Company's
rights under this paragraph shall be freely
assignable, in whole or in part,
and, following such assignment, such rights
will not be limited by any Company
Payment Condition.
Nothing in
this Agreement shall be construed as a right by Purchaser to be
employed by Company, or a parent or
subsidiary of Company.
3. ESCROW OF STOCK.
As
security for Purchaser's faithful performance of the terms of
this
Agreement and to ensure the availability
for delivery of Purchaser's shares upon
repurchase by the Company, Purchaser agrees
at the Closing hereunder, to deliver
to and deposit with the Escrow Agent named
in the Joint Escrow Instructions
attached hereto as Exhibit C, the
certificate or certificates evidencing the
Unvested Stock and four Assignments
Separate from Certificate duly executed
(with date and number of shares in blank)
in the form attached hereto as Exhibit
D. Such documents are to be held by the
Escrow Agent and delivered by the Escrow
Agent pursuant to the Joint Escrow
Instructions, which instructions shall also
be delivered to the Escrow Agent at the
Closing hereunder.
Within 30
days after each anniversary of the Grant Date (as defined in
the
Award), if Purchaser so requests, the
Escrow Agent will deliver to Purchaser
certificates (including any voting trust
certificates) representing so many
shares of Stock as are no longer subject to
the Unvested Stock Requirement (less
such shares as have been previously
delivered).
4. ADJUSTMENT OF
SHARES.
Subject to
the provisions of the Articles of Incorporation of the Company,
if, from time to time during the term of
the Unvested Stock Requirement:
(a) there is any
stock dividend or liquidating dividend of cash
and/or property, stock split or other change in the character
or amount of any of the outstanding securities of the Company,
or
(b) there is any
consolidation, merger or sale of all or
substantially all, of the assets of the Company,
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then, in such event, any and all new,
substituted or additional securities or
other property to which Purchaser is
entitled by reason of Purchaser's ownership
of the shares shall be immediately subject
to such Unvested Stock Requirement
with the same force and effect as the
shares from time to time subject to the
Unvested Stock Requirement. While the total
Purchase Price shall remain the same
after each such event, the Purchase Price
Per Share of Unvested Stock shall be
appropriately and equitably adjusted as
determined by the Board of Directors of
the Company.
5.
THIRD
PARTY TRANSFER RESTRICTIONS.
5.1 Prior to a
Major Event. (a) Vested Shares. Prior to the
occurrence of a Major Event, the Purchaser may not transfer
vested Shares, other than by a Permitted Transfer or otherwise
with the prior written consent of the Company.
(b) Unvested Shares. The Purchaser may not transfer unvested
Shares, other than by a Permitted Transfer.
5.2 After a
Major Event. (a) Vested Shares. In the event the
Purchaser proposes to sell, pledge or otherwise transfer to a
party other than a Permitted Transferee, pursuant to a bona
fide purchase offer, any vested Shares acquired under the Plan
or any interest in such Shares at any time after the
occurrence of a Major Event and prior to the Initial Public
Offering, the Company shall have the "Right of First Refusal"
with respect to all (and not less than all) of such Shares.
The Purchaser must give a written "Transfer Notice" to the
Company describing fully the proposed transfer, including the
number of Shares proposed to be transferred, the proposed
transfer price and the name and address of the proposed
transferee and including a copy of the bona fide purchase
offer. The Transfer Notice shall be signed both by the
Purchaser and by the proposed transferee and must constitute a
binding commitment of both parties to the transfer of the
Shares. Such right of First Refusal with respect to vested
Shares shall terminate upon the sale of Common Stock by the
Company pursuant to an Initial Public Offering.
The Company and its assignees shall have the right to purchase
all, and not less than all, of the Shares on the terms
described in the Transfer Notice (subject, however, to any
change in such terms permitted in the next paragraph) by
delivery of a Notice of Exercise of the Right of First Refusal
within 30 days after the date when the Transfer Notice was
received by the Company.
If the Company fails to exercise its Right of First Refusal
within 30 days after the date when it received the Transfer
Notice, the Purchaser may, not later than 60 days following
receipt of the Transfer Notice by the Company, conclude a
transfer of the Shares subject to the Transfer Notice
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on the terms and conditions described in the Transfer Notice.
Any proposed transfer on terms and conditions different from
those described in the Transfer Notice, as well as any
subsequent proposed transfer by the Purchaser, shall again be
subject to the Right of First Refusal and shall require
compliance with the procedure described in the paragraph
above. If the Company exercises its Right of First Refusal,
the Purchaser and the Company (or its assignees) shall
consummate the sale of the Shares on the terms set forth in
the Transfer Notice; provided, however, that the purchase
price for such shares shall be the lesser of the price
described in such Transfer Notice or Fair Market Value and,
provided further, however, if at the time of the exercise of
such Right of First Refusal there shall exist any Company
Payment Condition, the Company may defer the payment for the
purchase until such time as the Company Payment Condition no
longer exists.
The Company's Right of First Refusal shall inure to the
benefit of its successors and assigns and shall be binding
upon any transferee of the Shares. The Company's rights under
this Subsection shall be freely assignable, in whole or in
part.
(b) Unvested Shares. Prior to a termination of Service, the
Purchaser may not transfer Unvested Shares, other than
pursuant to a Permitted Transfer.
5.3 Termination
of Service. (a) Prior to a Major Event. (i)
Termination for Other than a Permitted Reason. Following the
Purchaser's termination of Service for other than a Permitted
Reason, as defined in Section 5.3(b) below, the Company shall
the right, but not the obligation, to purchase all or any
portion of the vested Shares of the Purchaser at any time
within 12 months following such termination of Service. Such
purchase will be at the Fair Market Value of such Shares at
the time of the exercise of such right. To exercise such
right, Company shall give the Purchaser written notice of the
sale in the same manner and with the same effect as a
Compelled Sale, pursuant to Section 5.4; provided, however, if
at the time of the exercise of such right there shall exist
any Company Payment Condition, the Company may defer the
payment for the purchase until such time as the Company
Payment Condition no longer exists. After any such termination
of Service, all unvested Shares of the Purchaser shall be
forfeited by the Purchaser and shall be cancelled without
payment of any kind.
(ii) Termination of Service for A Permitted Reason. (A)
Following a termination of Service (I) by the Company for any
reason other than "cause," (II) by the Purchaser by
resignation with "good reason," (III) death or (IV)
"disability," each as defined in the Purchaser's employment
contract, or, if the Purchaser does not have such a contract,
as defined on Annex 2 to this Agreement (a "Permitted
Reason"), the Company shall
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have
the right to purchase all or any portion of the vested
Shares of the Purchaser at any time within 12 months following
such termination of Service. Such purchase will be at the Fair
Market Value of such Shares at the time of the exercise of
such right. To exercise such right, Company shall give the
Purchaser written notice of the sale in the same manner and
with the same effect as a Compelled Sale, pursuant to Section
5.4; provided, however, if at the time of the exercise of such
right there shall exist any Company Payment Condition, the
Company may defer the payment for the purchase until such time
as the Company Payment Condition no longer exists. The Company
will purchase all unvested Shares of such Purchaser within 60
days of the Purchaser's such termination of Service; provided,
however, if at the time of the exercise of such right there
shall exist any Company Payment Condition, the Company may
defer the payment for the purchase until such time as the
Company Payment Condition no longer exists.
(B) Following any such termination of Service for a Permitted
Reason, such Purchaser shall have the right to compel the
purchase (a "Vested Put") of that number of vested Shares of
Purchaser, at the Fair Market Value at the time of exercise of
such right, necessary to make the aggregate consideration, for
all unvested Shares purchased pursuant to Subsection
5.3(a)(ii)(A) and the vested Shares to be purchased pursuant
the Vested Put, would be equal to the total consideration
initially paid by such Purchaser for such vested and unvested
Shares; provided however, that if the purchase of all such
vested and unvested Shares at the prices specified results in
aggregate consideration which is less than such total
consideration, all vested Shares shall be purchased pursuant
to the Vested Put at Fair Market Value. Such right shall be
exercised within twelve (12) months following such termination
of Service and the purchase by the Company shall take place
within 60 days of such exercise; provided, however, if at the
time of the exercise of such right there shall exist any
Company Payment Condition, the Company may defer the payment
for the purchase until such time as the Company Payment
Condition no longer exists.
(iii) Company's Rights Assignable. The Company's rights under
this Section shall be freely assignable, in whole or in part,
and, following such assignment, such rights will not be
limited by any Company Payment Condition.
(b) After a Major Event. The Company shall not have any
obligation to purchase vested Shares following the Purchaser's
termination of Service for any reason after the occurrence of
a Major Event.
5.4 Right to
Compel Sale. (a) Compelled Sale. If members of the
Saratoga Group propose a Change of Control Transaction, then
Saratoga shall have
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the right (whether the Change of Control results from the sale
of all, or some lesser portion, of the Saratoga Group's
Shares) to require the Purchaser (or his Permitted Transferee)
to sell all, or a Pro Rata Portion, of his Shares to the
prospective purchaser of the Saratoga Shares (if such right is
exercised, a "Compelled Sale"). If the prospective purchaser
in the Change of Control Transaction proposed by the Saratoga
Group is to acquire Shares of the Saratoga Group, but Saratoga
does not elect to cause a Compelled Sale pursuant to the
foregoing sentence, the Purchaser (or such Permitted
Transferee) shall have the right to elect to sell to the
prospective purchaser, as part of the Change of Control
Transaction, the Pro Rata Portion of the Purchaser's (or such
Permitted Transferee's) Shares (if such right is exercised, a
"Co-Sale"). The consideration to be received by the Purchaser
(or such Permitted Transferee) for each Share in the Compelled
Sale or Co-Sale shall be the same consideration per Share to
be received by the Saratoga Group, and the terms and
conditions of such sale by the Purchaser (or such Permitted
Transferee) shall be the same as those upon which the Saratoga
Group sell their Shares, except that the Purchaser (or such
other party)
shall not be bound by the terms of any indemnity,
hold-back or escrow given to the purchaser in connection with
such sale to the extent that such indemnity is not limited in
value with respect to the Purchaser (or such Permitted
Transferee) to at most the aggregate consideration to be
received for his Shares in such sale.
(b) Notice and Sale Procedures. (i) The Company shall provide
written notice to the Purchaser (or his Permitted Transferee)
of any proposed Change of Control Transaction, which notice (a
"Control Transaction Notice") shall (A) set forth the
consideration per Share to be paid by the prospective
purchaser and (B) state whether Saratoga is electing pursuant
to Section 5.4(a) to cause a Compelled Sale. If Saratoga does
not elect to cause a Compelled Sale and the Purchaser (or such
Permitted Transferee) desires to cause a Co-Sale pursuant to
Section 5.4(a), the Purchaser (or such Permitted Transferee)
must give written notice of his election to cause such Co-Sale
(a "Co-Sale Notice") to Saratoga (or the representative of
Saratoga as may be designated in the Control Transaction
Notice) within ten (10) days following the date of the Control
Transaction Notice. Within ten (10) days following the date of
the Control Transaction Notice in which Saratoga has elected
to cause a Compelled Sale, the Purchaser (or Permitted
Transferee) shall deliver to Saratoga (or such designated
representative), or in the case of a Co-Sale, the Co-Sale
Notice shall be accompanied by, the certificates representing
the Shares held by the Purchaser (or Permitted Transferee) to
be sold in such Compelled Sale or Co-Sale, together with a
suitably executed blank stock power and all other documents
required to be executed in connection with such Change of
Control Transaction. In the event that the Purchaser (or
Permitted Transferee) should fail to deliver such certificates
and other documents as aforesaid, the Company shall cause the
books and records of the Company
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to show that such Shares are bound by the provisions of this
Section 5.4 and that such Shares shall be transferred only to
the purchaser
identified in the Change of Control Notice upon
surrender for transfer by the Purchaser (or any other party)
thereof.
(ii) If, within one hundred twenty (120) days after the
Saratoga Group gives the notice they have not completed the
sale of Shares described in the notice, the Saratoga Group
shall return to the Purchaser (or such Permitted Transferee)
all certificates representing Shares that the Purchaser (or
such Permitted Transferee) delivered for sale pursuant hereto,
together with any such other documents delivered by the
Purchaser.
(iii) Promptly after the consummation of the sale of the
Shares of the Saratoga Group and Purchaser (or Permitted
Transferee) pursuant to this Section, the Saratoga Group shall
remit to the Purchaser (or Permitted Transferee) the total
sales price of the Shares of the Purchaser (or Permitted
Transferee) sold pursuant thereto, and shall furnish such
other evidence of the completion and time of completion of
such sale or other disposition and the terms thereof as may be
reasonably requested by the Purchaser (or Permitted
Transferee).
6. PURCHASER'S RIGHTS
UPON REPURCHASE.
At such
time as the Company makes available, the consideration for the
Stock to b
