<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <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 Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
TRANS-LUX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than 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)(4) and 0-12.
(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:
------------------------------------------------------------------------
<PAGE> 2
TRANS-LUX CORPORATION
110 RICHARDS AVENUE
NORWALK, CONNECTICUT 06856-5090
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 31, 2000
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of TRANS-LUX
CORPORATION will be held at the Office of the Corporation, 110 Richards Avenue,
Norwalk, Connecticut, on Wednesday, May 31, 2000 at 10:00 A.M. local time for
the following purposes:
1. To elect three directors to serve for a term of three years, in
each case until their successors shall be elected and shall have qualified;
2. To consider and act upon a proposal to amend the 1995 Stock Option
Plan by which an additional 25,000 shares of the Corporation's capital
stock will be reserved for issuance thereunder;
3. To consider and act upon a proposal to recommend to the Board of
Directors the retention of Deloitte & Touche LLP as the Corporation's
independent auditors for the ensuing year; and
4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The close of business on April 7, 2000 has been fixed as the record date
for the determination of the stockholders entitled to notice of and to vote at
the Meeting.
By Order of the Board of Directors,
ANGELA D. TOPPI
Corporate Secretary
Dated: Norwalk, Connecticut
April 7, 2000
- --------------------------------------------------------------------------------
Please mark, date, sign and return promptly the enclosed proxy so that your
shares may be represented at the Meeting. A return envelope, which requires no
postage if mailed in the United States, is enclosed for your convenience.
- --------------------------------------------------------------------------------
<PAGE> 3
TRANS-LUX CORPORATION
110 RICHARDS AVENUE
NORWALK, CONNECTICUT 06856-5090
------------------------
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
Board of Directors of TRANS-LUX CORPORATION (hereinafter called the
"Corporation"), of proxies in the accompanying form to be used at the Annual
Meeting of the Stockholders of the Corporation to be held on Wednesday, May 31,
2000, and at any adjournment thereof, for the purposes set forth in the
accompanying notice of the Meeting. It is intended that this Statement and the
proxies solicited hereby be mailed to stockholders no later than April 17, 2000.
A stockholder who shall sign and return a proxy in the form enclosed with this
statement has the power to revoke it at any time before it is exercised by
giving written notice of revocation or a proxy of later date and returning it to
the Corporation, Attention: Secretary, or by voting in person at the Meeting.
Proxies properly executed and received in time for the Meeting will be voted.
The close of business on April 7, 2000 has been fixed as the record date
for the determination of the stockholders entitled to notice of and to vote at
the Meeting. There were outstanding as of the close of business on April 7, 2000
and entitled to notice of and to vote at the Meeting 964,759 shares of Common
Stock and 296,005 shares of Class B Stock. Each outstanding share of Common
Stock is entitled to one vote on all matters voted on at the Meeting and each
outstanding share of Class B Stock is entitled to ten votes on all matters voted
on at the Meeting. The holders of Common Stock and Class B Stock vote together
on all the proposals.
Unless otherwise specified, the proxies in the accompanying form will be
voted in favor of all of the proposals set forth in the Notice of Annual
Meeting. In the discretion of the proxyholders, the proxies will also be voted
for or against such other matters as may properly come before the Meeting. The
Board of Directors is not aware that any other matters are to be presented for
action at the Meeting.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of April 7, 2000 (or such
other date specified) with respect to the beneficial ownership of the
Corporation's Class B Stock and Common Stock or shares acquirable within 60 days
of such date by (i) each person known by the Corporation to own more than 5% of
the Corporation's outstanding Class B Stock and/or Common Stock and who is
deemed to be such beneficial owner of the Corporation's Class B Stock and Common
Stock under Rule 13d-3(a)(ii); (ii) each person who is a director of the
Corporation; (iii) each named executive in the Summary Compensation Table; and
(iv) all persons as a group who are executive officers and directors of the
Corporation, and as to the percentage of outstanding shares held by them on that
date.
<TABLE>
<CAPTION>
AMOUNT PERCENT
BENEFICIALLY PERCENT OF ALL
NAME, STATUS AND MAILING ADDRESS TITLE OF CLASS OWNED OF CLASS CLASSES
-------------------------------- -------------- ------------ -------- -------
<S> <C> <C> <C> <C>
Richard Brandt............................... Class B Stock 129,192(1) 43.65% 10.25%
Chairman of the Board of Directors and Common Stock 7,136(1) * *
beneficial owner of more than 5% of the
Corporation's Class B Stock
110 Richards Avenue
Norwalk, CT 06856-5090
Franklin Resources, Inc. .................... Common Stock 1,141,797(2) 54.20% 47.52%
Beneficial owner of more than 5% of the
Corporation's Common Stock
777 Mariners Island Blvd
San Mateo, CA 94404
Gabelli Funds, Inc. ......................... Common Stock 222,588(3) 20.23% 15.94%
Beneficial owner of more than 5% of the
Corporation's Common Stock
One Corporate Center
Rye, NY 10580-1434
The Killen Group, Inc. ...................... Common Stock 267,702(4) 23.33% 18.54%
Beneficial owner of more than 5%
of the Corporation's Common Stock
1199 Lancaster Avenue
Berwyn, PA 19312
Matthew Brandt............................... Class B Stock 38,700 13.07% 3.07%
Senior Vice President and beneficial owner Common Stock 2,300(5) * *
of more than 5% of the
Corporation's Class B Stock
110 Richards Avenue
Norwalk, CT 06856-5090
Thomas Brandt................................ Class B Stock 38,700(6) 13.07% 3.07%
Senior Vice President and beneficial owner Common Stock 1,354 * *
of more than 5% of the
Corporation's Class B Stock
110 Richards Avenue
Norwalk, CT 06856-5090
Steven Baruch................................ Common Stock 1,600(7) * *
Director
110 Richards Avenue
Norwalk, CT 06856-5090
Howard M. Brenner............................ Common Stock 1,500(8) * *
Director
465 Park Avenue
New York, NY 10022
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT PERCENT
BENEFICIALLY PERCENT OF ALL
NAME, STATUS AND MAILING ADDRESS TITLE OF CLASS OWNED OF CLASS CLASSES
-------------------------------- -------------- ------------ -------- -------
<S> <C> <C> <C> <C>
Jean Firstenberg............................. Common Stock 1,920(9) * *
Director
110 Richards Avenue
Norwalk, CT 06856-5090
Allan Fromme, PhD............................ Class B Stock 2,013 * *
Director Common Stock 2,900(10) * *
110 Richards Avenue
Norwalk, CT 06856-5090
Robert B. Greenes............................ Common Stock 5,000(11) * *
Director
110 Richards Avenue
Norwalk, CT 06856-5090
Gene Jankowski............................... Common Stock 3,500(7) * *
Director
110 Richards Avenue
Norwalk, CT 06856-5090
Victor Liss.................................. Class B Stock 9,728 3.29% *
Director, Vice Chairman, President Common Stock 54,020(12) 5.35% 4.14%
and Chief Executive Officer
110 Richards Avenue
Norwalk, CT 06856-5090
Howard S. Modlin............................. Class B Stock 8,751(13) 2.96% *
Director Common Stock 2,500(13) * *
445 Park Avenue
New York, NY 10022
Michael R. Mulcahy........................... Common Stock 19,803(14) 2.02% 1.55%
Executive Vice President
110 Richards Avenue
Norwalk, CT 06856-5090
Karl P. Hirschauer........................... Common Stock 3,629(15) * *
Senior Vice President
110 Richards Avenue
Norwalk, CT 06856-5090
Thomas F. Mahoney............................ Common Stock 1,000(16) * *
Senior Vice President
110 Richards Avenue
Norwalk, CT 06856-5090
All directors and executive officers......... Class B Stock 227,084(17) 76.72% 18.01%
as a group (16 persons) Common Stock 113,412(17) 10.76% 8.40%
</TABLE>
- ---------------
(1) The amount includes 4,232 shares of Class B Stock owned by Mrs. Brandt and
7,136 shares of Common Stock acquirable upon conversion of $100,000
principal amount of the Corporation's 7 1/2% Convertible Subordinated Notes
due 2006 (the "Notes").
(2) Based on Schedule 13G, Amendment No. 1, dated February 6, 1998 and other
telephonic advice by Franklin Resources, Inc., a parent holding company,
Charles B. Johnson and Rupert H. Johnson, Jr., principal shareholders of
said company and Franklin Advisers, Inc., an investment adviser. The amount
includes 1,141,797 shares of Common Stock acquirable upon conversion of
$16,000,000 principal amount of the Notes beneficially owned by one or more
open or closed-end investment companies or other managed accounts which are
advised by direct and indirect investment advisory subsidiaries of Franklin
Resources, Inc., each of which is a registered investment advisor and which
have all voting and investment power over the Notes.
(3) Based on Schedule 13D, Amendment No. 34 dated October 1, 1999 by Gabelli
Funds, Inc., parent holding company and registered investment adviser, the
amount includes 135,588 shares of Common Stock acquirable upon conversion
of $1,900,000 principal amount of the Notes. All securities are held as
3
<PAGE> 6
agent for the account of various investment company fund accounts managed
by such reporting person. Except under certain conditions, Gabelli Funds,
Inc. has sole voting power and sole dispositive power over such shares.
(4) Based on Schedule 13G, Amendment No. 4, dated February 9, 2000 and other
telephonic advice by Killen Group, Inc., a registered investment adviser,
has sole dispositive power of 84,800 shares of Common Stock and sole power
to vote 58,200 of such shares, and its clients for whom the shares were
purchased, have the right to the proceeds of a sale. The amount also
includes 182,902 shares of Common Stock acquirable upon conversion of
$2,563,000 principal amount of the Notes held for such client accounts.
(5) The amount includes 1,820 shares of Common Stock acquirable upon exercise
of stock options. Mr. Matthew Brandt is Mr. R. Brandt's son.
(6) Mr. Thomas Brandt is Mr. R. Brandt's son.
(7) The amount includes 1,000 shares of Common Stock acquirable upon exercise
of stock options.
(8) The amount includes 500 shares of Common Stock acquirable upon exercise of
stock options.
(9) The amount includes 1,500 shares of Common Stock acquirable upon exercise
of stock options.
(10) The amount includes 2,500 shares of Common Stock acquirable upon exercise
of stock options. Dr. Fromme is Mr. R. Brandt's brother-in-law.
(11) The amount includes 2,500 shares of Common Stock acquirable upon exercise
of stock options.
(12) The amount includes 43,900 shares of Common Stock acquirable upon exercise
of stock options, and 714 shares of Common Stock acquirable upon conversion
of $10,000 principal amount of the Notes.
(13) The amount includes 3,460 shares of Class B Stock owned by Mr. Modlin's
immediate family, 2,479 shares of Class B Stock held in trust for Mr.
Modlin's immediate family, and 2,500 shares of Common Stock acquirable upon
exercise of stock options.
(14) The amount includes 16,500 shares of Common Stock acquirable upon exercise
of stock options.
(15) The amount includes 3,000 shares of Common Stock acquirable upon exercise
of stock options.
(16) The amount includes 900 shares of Common Stock acquirable upon exercise of
stock options.
(17) The amount includes 10,171 shares of Class B Stock set forth in footnotes 1
and 13 above, 7,850 shares of Common Stock acquirable upon conversion of
the Notes set forth in footnotes 1 and 12 above, and 81,259 shares of
Common Stock which members of the group have the right to acquire by
exercise of stock options (including director stock options).
* Less than 1%
4
<PAGE> 7
ELECTION OF DIRECTORS
The Board of Directors of the Corporation is divided into three classes
with the term of office of one of the three classes of directors expiring each
year and with each class being elected for a three-year term. Three directors
are to be elected at the May 31, 2000 Annual Meeting for a three-year term, and
until their successors have been elected and qualified. Messrs. Steven Baruch,
Howard M. Brenner and Allan Fromme nominated for election as directors for a
three-year term were each elected a director of the Corporation at the 1997
Annual Meeting of Stockholders.
Set forth opposite the name of the nominees and each director is their
principal occupation for the past five years, age, the name and principal
business of any corporation or other organization in which such employment is
carried on, certain other directorships held, the year first elected as a
director and the year in which the term of office for which they are a nominee
or the term of office of such person will expire.
Management has no reason to believe that the nominees are not available or
will not serve if elected, but if a nominee should not become available to serve
as a director, full discretion is reserved to the persons named as proxies to
vote for such other persons as may be nominated. Proxies will be voted "FOR" the
nominees unless the stockholder specifies otherwise.
<TABLE>
<CAPTION>
FIRST
BECAME TERM
NAME PRINCIPAL OCCUPATION, OTHER DIRECTORSHIPS AND AGE DIRECTOR EXPIRES
---- ------------------------------------------------- -------- -------
<S> <C> <C> <C>
NOMINEES -- THREE-YEAR TERM
Steven Baruch........................ Executive Vice President of Presidential Realty 1994 2003
Corporation; Producer of plays and musicals,
among them Driving Miss Daisy, Angels in America,
Love Letters, Smokey Joe's Cafe, Swing! and the
Broadway most recent revivals of Damn Yankees, A
Funny Thing Happened on the Way To The Forum and
the Sound of Music; 61
Howard M. Brenner.................... Chairman and Chief Executive Officer of HCFP 1997 2003
Brenner Securities LLC, formerly Vice President
of Loewenbaum & Company Incorporated, Vice
Chairman of Southcoast Capital Corporation and
President of Brenner Securities Corporation which
was merged into Southcoast Capital Corporation
which changed its name to Loewenbaum & Company
Incorporated; Director of Interep National Radio
Sales, Inc.; formerly President of Drexel Burnham
Lambert Incorporated; former member of Board of
Governors of the American Stock Exchange and
District 10 Committee (NY) National Association
of Securities Dealers Inc.; 66
Allan Fromme, PhD. .................. Psychologist, Author, Consultant, Chairman of the 1958 2003
Executive Committee of Trans-Lux Corporation; 84
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
FIRST
BECAME TERM
NAME PRINCIPAL OCCUPATION, OTHER DIRECTORSHIPS AND AGE DIRECTOR EXPIRES
---- ------------------------------------------------- -------- -------
<S> <C> <C> <C>
DIRECTORS -- TWO-YEAR REMAINING TERM
Robert B. Greenes.................... Vice Chairman of the Executive Committee of 1971 2002
Trans-Lux Corporation; President of Petroconsult,
Inc.; President of East Coast Energy Council;
formerly President and Chief Executive Officer of
Public Fuel Service Inc. and all of its
subsidiaries; 79
Howard S. Modlin..................... Attorney and member of the firm Weisman Celler 1975 2002
Spett & Modlin, P.C.; Director of Fedders
Corporation and General DataComm Industries,
Inc.; 68
DIRECTORS -- ONE-YEAR REMAINING TERM
Richard Brandt....................... Chairman of the Board of Trans-Lux Corporation; 1954 2001
Director of Presidential Realty Corporation;
Board member of Taos Talking Picture Festival;
Chairman Emeritus and Trustee of the American
Film Institute; Trustee of The College of Santa
Fe; 72
Jean Firstenberg..................... Chief Executive Officer and Director of the 1989 2001
American Film Institute; Trustee of Boston
University; 64
Gene Jankowski....................... Chairman of Jankowski Communications System, 1994 2001
Inc.; Chief Executive Officer of JCS New England
Television Network, Inc.; formerly President and
Chairman of the CBS Broadcast Group; Chairman
Emeritus of the American Film Institute; Director
of The Advertising Educational Foundation and
Advisor to the World Press Freedom Foundation; 65
Victor Liss.......................... Vice Chairman of the Board, President and Chief 1988 2001
Executive Officer of Trans-Lux Corporation;
Director of Anthem, Inc.; Trustee of Norwalk
Hospital; 63
</TABLE>
6
<PAGE> 9
EXECUTIVE COMPENSATION AND TRANSACTIONS WITH MANAGEMENT
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table sets forth the compensation paid
or awarded for each of the three years in the period ended December 31, 1999 to
the Chief Executive Officer and the Corporation's four other most highly
compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------ ALL OTHER
OTHER ANNUAL OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) GRANTED(#) ($)(1)
- --------------------------- ---- --------- -------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Richard Brandt................. 1999 328,881 52,431 72,442 30,000 40,328
Chairman of the Board(2) 1998 342,471 133,735 70,634 -- 32,435
1997 318,421 123,037 69,830 -- 8,424
Victor Liss.................... 1999 259,615 65,543 5,150 -- 7,573
Chief Executive Officer, 1998 253,654 199,951 4,850 -- 16,548
President and Vice Chairman(2) 1997 238,847 185,124 5,150 25,000 8,763
Michael R. Mulcahy............. 1999 232,285 26,772 -- -- 14,099
Executive Vice President 1998 236,198 84,975 -- 12,500 14,193
1997 255,164 30,000 -- -- --
Thomas F. Mahoney.............. 1999 147,803 3,438 -- -- --
Senior Vice President of Sales, 1998 143,511 8,438 -- -- --
former Vice President of Sales 1997 138,976 7,813 -- -- --
Karl P. Hirschauer............. 1999 124,615 3,438 -- -- --
Senior Vice President of 1998 120,461 13,438 -- -- --
Engineering 1997 112,153 7,813 -- -- --
</TABLE>
- ---------------
(1) There are no restricted stock awards, stock appreciation rights or deferred
long-term incentive payouts. The amounts reflected for Mr. Brandt include
$1,089, $2,652 and $7,874 for tax equalization payments in 1999, 1998 and
1997, respectively, resulting from FICA taxes and split dollar life
insurance premiums. The amounts reflected for Mr. Liss represent split
dollar life insurance, additional life insurance and disability insurance
premiums. The amount reflected for Mr. Mulcahy represents split dollar life
insurance premiums.
(2) Other annual compensation for Messrs. Brandt and Liss includes directors
fees.
COMPENSATION COMMITTEE REPORT
All matters concerning executive compensation for Mr. Liss, the Chief
Executive Officer, and other executive officers are considered by the
Corporation's Compensation Committee. The salary levels are intended to be
consistent with competitive practice and level of performance. In determining
the total compensation to be paid to the Chief Executive Officer and all other
executive officers, the Compensation Committee considers management's
recommendations based upon past salary levels, contractual obligations where
applicable, experience, capability, duties, normal salary increase levels in
past years, and the Corporation's and respective individual's performance during
the last fiscal year. The Chief Executive Officer's compensation is based upon
the above factors and includes bonuses as described in the section on Employment
Agreements.
RETIREMENT PLAN AND SUPPLEMENTAL RETIREMENT BENEFITS
A cash contribution of $457,131 for the individuals listed in the Summary
Compensation Table, (except Mr. Brandt who is not eligible), and all other
eligible employees to the Corporation's retirement plan for 1999
7
<PAGE> 10
has been made. Under the supplemental retirement arrangement with Mr. Liss,
$97,109, $97,109 and $62,482 was accrued, but not paid in 1999, 1998 and 1997,
respectively.
The Corporation's retirement plan covers all salaried employees over age 21
with at least one year of service who are not covered by a collective bargaining
agreement to which the Corporation is a party. The following table presents
estimated retirement benefits payable at normal retirement date, which normally
is age 65. The amounts shown include estimated Social Security benefits which
would be deducted in calculating benefits payable under such Plan.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
BASED ON CREDITED SERVICE YEARS
FINAL AVERAGE SALARY FOR HIGHEST FIVE OF -----------------------------------------------------
THE TEN YEARS PRECEDING RETIREMENT 10 20 30 35 40
- ---------------------------------------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000............................... $15,000 $30,000 $45,000 $ 52,500 $ 60,000
125,000............................... 18,750 37,500 56,250 65,625 75,000
150,000............................... 22,500 45,000 67,500 78,750 90,000
200,000(1)............................ 30,000 60,000 90,000 105,000 120,000(2)
</TABLE>
As of January 1, 2000, Messrs. Liss, Mulcahy, Mahoney and Hirschauer had
31, 32, 32 and 20 years of credited service, respectively.
- ---------------
(1) $170,000 is the legislated annual cap on compensation.
(2) $135,000 is the maximum legislated annual benefits payable from a qualified
pension plan.
CERTAIN TRANSACTIONS
During the year 1999, $327,917 in fees for legal services rendered were
paid by the Corporation to the law firm of which Mr. Modlin, a director of the
Corporation, is a member.
A subsidiary of the Corporation loaned an aggregate of $320,385 during the
years 1989 through 1996 to Dr. Fromme, Chairman of the Executive Committee, to
pay the premiums on a $500,000 life insurance policy on his life. The
Corporation has received an assignment of the policy as collateral for the
repayment to the extent the proceeds of the policy are in excess of $200,000.
The loans plus accrued interest are repayable solely from the proceeds from the
policy.
Messrs. Matthew Brandt and Thomas Brandt are Senior Vice Presidents of the
Corporation and each is employed by the Corporation at an annual compensation
level of $130,000, plus one quarter of one percent of the Corporation's defined
pre-tax consolidated earnings.
EMPLOYMENT AGREEMENTS
The Corporation has employment agreements with Messrs. Brandt, Liss,
Mulcahy, Mahoney and Hirschauer expiring on December 31, 2002, April 1, 2002,
May 31, 2001, May 31, 2001 and December 31, 2002, respectively. Mr. Brandt's
agreement further provides for a consulting term expiring on December 31, 2007.
The agreements provide for annual compensation of $391,079 (subject to cost of
living adjustments) for Mr. Brandt; $260,000 in 2000, plus an additional $10,000
each year thereafter for Mr. Liss; $195,000 and $215,000 through May 31, 2000
and 2001, respectively, for Mr. Mulcahy; $105,000 and $110,000 through May 31,
2000 and 2001, respectively, for Mr. Mahoney; and $128,000, $135,000 and
$140,000 through December 31, 2000, 2001 and 2002, respectively, for Mr.
Hirschauer. Each agreement contains graduated bonus provisions based on the
Corporation's defined pre-tax consolidated earnings, not to exceed $125,000,
$300,000, $125,000, $20,000 and $20,000 in the case of Messrs. Brandt, Liss,
Mulcahy, Mahoney and Hirschauer, respectively. Each agreement also contains
varying disability, death, and, other than Messrs. Mahoney and Hirschauer,
insurance benefits. Mr. Brandt's agreement provides for profit participations of
1 1/2% and 3/4%, respectively of the Corporation's defined pre-tax consolidated
earnings during the employment term and consulting term, respectively. Mr.
Mulcahy's agreement provides for sales override commissions and severance
benefits. Mr. Mahoney's agreement provides for sales override commissions.
Messrs. Brandt and Liss have the right to cancel their agreements if, among
other things, in the case of
8
<PAGE> 11
Mr. Liss, Mr. Liss gives six months early termination notice (after January 1,
2000) or there is a "change in control" as defined therein or the Corporation
fails to elect him to his present positions and, in the case of Mr. Brandt, the
Corporation fails to elect him to his present position in which case he has the
right to receive the payments for the balance of the term of his agreement,
including certain lump sum payments thereof. The foregoing is a summary of the
agreements and reference is made to the agreements, each of which has been filed
with the Securities and Exchange Commission, for the full terms thereof.
STOCK OPTION PLANS AND STOCK OPTIONS
The Corporation has two incentive stock option plans which provide for the
grant of incentive stock options at fair market value (or 110% of fair market
value if the optionee owns more than 10% of the Corporation's outstanding voting
securities) on date of grant. Options outstanding are exercisable during the
period one to ten years (or one to six years if the optionee owns more than 10%
of the Corporation's outstanding voting securities) after date of grant and
while the holder is in the employ of the Corporation. The following tables set
forth information as to the named executive officers with respect to (i) stock
options granted in fiscal 1999 and the potential gain that could be realized if
the fair market value of the Corporation's Common Stock were to appreciate at a
5% or 10% annual rate over the option term, (ii) the value realized on exercise
of stock options and (iii) fiscal year end option values.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES
-------------------------------------------------------- OF STOCK PRICE
% OF TOTAL APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR ($)PER SHARE DATE 5%($) 10%($)
---- ------- ------------------ ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard Brandt........... 30,000 100% 8.80 9/22/2004 73,000 161,000
</TABLE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR FISCAL YEAR
OPTION EXERCISES END END($)
----------------------------- ------------- ----------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ----------- ------------- ----------------
<S> <C> <C> <C> <C>
Richard Brandt....................... None -- --/30,000 --/--
Victor Liss.......................... None -- 43,900/-- --/--
Michael R. Mulcahy................... None -- 16,500/-- --/--
Thomas F. Mahoney.................... None -- 900/-- --/--
Karl P. Hirschauer................... None -- 3,000/-- 375/--
</TABLE>
- ---------------
(1) Market value of underlying securities at fiscal year end, minus the exercise
price.
9
<PAGE> 12
FIVE YEAR CORPORATE PERFORMANCE GRAPH
The following graph compares the Corporation's total stockholder return
over the five fiscal years ended December 31, 1999 with the Total Return Index
for American Stock Exchange US ("AMEX US") and the Russell 2000 Index ("RUSSELL
2000"). The stockholder return shown on the graph as "TLX" is not intended to be
indicative of future performance of the Corporation's Common Stock.
COMPARATIVE FIVE YEAR TOTAL RETURNS*
Trans-Lux Corporation, AMEX US Total Return Index, Russell 2000 Index**
LINE GRAPH
<TABLE>
<S> <C> <C> <C>
TLX AMEX US RUSSELL 2000
1994 100 100 100
1995 89.06 128.68 126.21
1996 121.88 130.73 144.84
1997 162.91 163.5 174.56
1998 101.37 175.49 168.54
1999 78.8 224.19 201.61
</TABLE>
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* Cumulative total return assumes reinvestment of dividends.
** Peer group consists of the RUSSELL 2000. Assumes $100 investment at the close
of trading on the last trading day preceding the first day of the fifth
preceding fiscal year in TLX Common Stock, AMEX US and RUSSELL 2000.
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<PAGE> 13
PROPOSED AMENDMENT TO
1995 STOCK OPTION PLAN
The 1995 Stock Option Plan ("1995 Plan") was adopted by the stockholders at
the 1995 Annual Meeting of Stockholders and amended at the 1996 annual meeting.
It is intended to provide an incentive to key employees, including officers and
directors who are employees of the Corporation and its subsidiaries, and to
offer an inducement in obtaining the services of key personnel. The 1995 Plan is
in addition to the Corporation's existing 1992 Stock Option Plan. At the 2000
Annual Meeting it is intended that an additional 25,000 shares be authorized for
grant under the 1995 Plan.
Options granted under the 1995 Plan may be either "incentive stock options"
within the meaning of Section 422A of the Internal Revenue Code of 1986 ("Code")
as amended or non-statutory options. The 1995 Plan is not qualified under
Section 40l(a) of the Code and is not subject to the Employee Retirement Income
Security Act of 1974.
SUMMARY OF THE PLAN
The basic provisions of the 1995 Plan are as follows:
l. One hundred thousand (100,000) shares of the Common Stock, $1.00
par value, and/or Class A Stock, $1.00 par value, if a certificate of
amendment to the Certificate of Incorporation is filed creating Class A
Stock of the Corporation authorized at the 1995 Annual Meeting of
Stockholders, are authorized for issuance under the 1995 Plan, which number
of shares is subject to adjustment by reason of certain specified changes
in the capitalization of the Corporation. An additional 25,000 shares will
be available if the stockholders approve this proposal. Of such 125,000
total shares, as of April 7, 2000, 90,739 options have been granted and are
outstanding and 28,500 options remain available for grant, including the
additional 25,000 shares subject to stockholder approval.
2. The 1995 Plan is administered by the Compensation Committee of the
Board of Directors which reports to the Board of Directors with respect to
the names of employees to be granted stock options, the number of shares
covered by each option, the applicable option prices, the type of option
and class of stock subject to the option. Options granted to persons who
are not subject to Section 16 of the Securities Exchange Act of 1934 shall
be adopted by resolution of the Board of Directors and options granted to
persons subject to Section 16 shall be adopted by resolution of the
Compensation Committee.
3. The granting of an option under the 1995 Plan takes place whenever
the Board of Directors or the Compensation Committee, as the case may be,
by resolution makes such grant, designates the person for the receipt of
the option and such option is evidenced by an appropriate Stock Option
Contract executed by the Corporation and the employee.
4. The 1995 Plan terminates on March 9, 2005, and no option shall be
granted under the 1995 Plan after that date.
5. The option price at which non-statutory stock options may be
granted shall be the fair market value of the Common Stock and/or Class A
Stock on the date the option is granted or such greater or lesser price as
determined by the Compensation Committee, as the case may be. The option
price at which incentive stock options may be granted shall not be less
than the fair market value of the Common Stock or Class A Stock on the date
the option is granted, except that if the optionee owns more than 10% of
the total combined voting power of the Corporation on the date of grant,
the exercise price of such option shall be not less than 110% of the market
price for said shares on the date of grant.
6. The maximum term of each non-statutory stock option shall be for a
period not exceeding ten (10) years from the date of grant thereof and the
term of each incentive stock option shall likewise be for a period not
exceeding ten (10) years from the date of grant thereof (but only five (5)
years if the optionee owns more than 10% of the voting power).
7. Except in limited situations as expressly provided in the 1995
Plan, no option granted under the 1995 Plan may be exercised during the
life of the optionee, unless the optionee remains in the continuous
11
<PAGE> 14
employ of the Corporation or one of its subsidiaries from the date of grant
to the date of exercise. The option shall be exercisable in whole or in
part, from time to time, during the term thereof, as may be determined by
the Compensation Committee and stated in the option, provided, however,
that unless otherwise permitted by the Compensation Committee, no option
may be exercised prior to the first anniversary of the date of grant of
such option.
8. Payment for shares purchased will be made in full in cash or by the
surrender of shares of Common Stock or Class A Stock, as the case may be,
of the Corporation valued at the market price for such shares at the time
of exercise of the option under the 1995 Plan.
9. If an optionee holds more than one (1) incentive or non-statutory
stock option under the 1995 Plan or 1992 Plan the options may be exercised
by the optionee in any order.
FEDERAL INCOME TAX CONSEQUENCES
Tax Aspects -- Non-Statutory Stock Options
Messrs. Weisman Celler Spett & Modlin, P.C., the Corporation's legal
counsel, have advised that under existing Treasury regulations, with respect to
non-statutory stock options, (i) an optionee will not realize taxable income
upon the grant of an option; (ii) the difference between the option price and
the fair market value of the shares on the date of exercise is taxable as
ordinary income to the optionee at the time of exercise and is allowable to the
Corporation, as an income tax deduction; (iii) the ordinary income to the
optionee will be treated as compensation to the optionee which is subject to
income tax withholding by the Corporation; (iv) the optionee will take a basis
in the shares for tax purposes equal to the sum of the option price plus the
amount taxed to him or her as compensation income; and (v) any gain or loss on a
subsequent sale of the shares, which will equal the difference between the sales
proceeds and the optionee's tax basis in the shares, will be capital gain or
loss at the time of sale. If the optionee holds the shares for more than one
year, such gain or loss will be treated as a long-term capital gain or loss,
with any such long-term capital gain taxed at a maximum rate of 20%.
Tax Aspects -- Incentive Stock Options
The Corporation has also been advised by such legal counsel that the
Federal income tax consequences of incentive stock options under present law are
generally as follows: if an option is an incentive stock option, the optionee
will recognize no income upon grant or exercise (except for purposes of
computing alternative minimum tax described below) of the incentive stock option
and as such, the Corporation will not be allowed a deduction for Federal tax
purposes as it would in the case of the exercise of a non-statutory stock
option. Upon the sale of the shares by the optionee (assuming that the sale
occurs no sooner than two (2) years after grant of the option and one (1) year
after exercise of the option), any gain will be long-term capital gain to the
optionee taxed at a maximum rate of 20%.
In order for an option to qualify as an incentive stock option, (i) the
option must be granted pursuant to a plan which includes the aggregate number of
shares which may be issued under options and the employees (or class of
employees) eligible to receive options; (ii) such option is granted within ten
(10) years from the date such plan is adopted, or the date such plan is approved
by the stockholders, whichever is earlier; (iii) the option must be exercised
while the optionee is an employee of the Corporation or a subsidiary of the
Corporation, or no more than three months after the optionee's employment ceases
(twelve (12) months in the case of termination following the optionee's total
disability); (iv) the option may not by its terms be exercisable after the
expiration of ten (10) years from the date it is granted; (v) the option price
must not be less than the fair market value of the stock at the time such option
is granted; (vi) the option plan must be approved by the stockholders within
twelve (12) months after the date such plan is adopted; (vii) the option by its
terms is non-transferable other than upon death of the optionee and is
exercisable only by the optionee during his or her lifetime; (viii) if the
optionee owns more than 10% of the voting power of all classes of the
Corporation's stock at the time the option is granted, the option price must be
at least 110% of the fair market value on the date of grant and the option may
not be exercised after five (5) years from the date of grant; and (ix) under the
terms of the plan, the aggregate fair market value, determined at time of grant,
of stock for
12
<PAGE> 15
which an employee may exercise incentive stock options for the first time in any
calendar year under all plans cannot exceed $100,000.
For purposes of computing alternative minimum tax the spread between the
fair market value of the stock on the exercise date and the option price is
added to taxable income as an adjustment in computing alternative minimum tax,
and the basis of the acquired stock is fair market value on the date of
exercise.
The selection of officers, executives and employees who will be granted
options, and the number of shares to be offered shall be made by the
Compensation Committee. However, it is presently expected that approximately 50
such persons of whom 9 are executive officers, and/or employee directors, will
be eligible for consideration by the Compensation Committee. The shares will be
held by the optionee for investment unless the Corporation registers the shares
covered by the 1995 Plan under the Securities Act of 1933.
The preceding summary of certain provisions of the 1995 Stock Option Plan
as proposed to be amended is qualified in its entirety by reference to the
complete text of the 1995 Plan which is set forth as Exhibit A of this Proxy
Statement.
The affirmative vote of a majority of all of the Common and Class B shares
entitled to vote as a single class is required to approve the amendment to the
1995 Plan authorizing an additional 25,000 shares for issuance thereunder. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
AMENDMENT TO THE 1995 PLAN. IT IS INTENDED THAT PROXIES SOLICITED HEREBY WILL BE
VOTED FOR SUCH AMENDMENT UNLESS THE STOCKHOLDER SPECIFIES OTHERWISE.
SELECTION OF INDEPENDENT AUDITORS
The auditors recommended to be retained by the Board of Directors, Deloitte
& Touche LLP, have advised the Corporation that they have no direct financial
interest or any material indirect financial interest in the Corporation, nor did
they have any connection during the past three years with the Corporation in the
capacity of promoter, underwriter, voting trustee, director, officer or
employee. Such auditors were first retained in 1987 as auditors for the
Corporation's 1987 fiscal year.
Representatives of such auditors are expected to be at the Meeting of the
stockholders and will be permitted to make a statement to stockholders if they
desire and to respond to any appropriate questions addressed by stockholders to
such representatives. The affirmative vote of a majority of the total votes cast
at the Meeting by the holders of Common Stock and Class B Stock combined is
required to approve the proposal to recommend the independent auditors.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
During 1999, the Board of Directors had four meetings. All directors
attended 75% or more of such meetings and of committees of which they were
members. Non-employee directors and the Chairman receive an annual fee of $4,000
and $1,200 for each meeting of the Board attended, while employee directors
receive an annual fee of $2,200 and $450 for each meeting of the Board attended.
The members of the Executive Committee of the Board of Directors are
Messrs. Brandt, Greenes, Liss and Modlin and Dr. Fromme. The Executive Committee
is authorized to exercise the powers of the Board of Directors during the
intervals between the meetings of the Board and is from time to time delegated
certain authorizations by the Board in matters pertaining to the Corporation.
The Executive Committee held one formal meeting in 1999. Members of said
Committee receive a fee of $400 for each meeting of the Committee they attend,
($700 if on a separate day than a Board Meeting). Dr. Fromme receives an annual
fee of $12,000 as Chairman of the Executive Committee and for other consulting
services, including his participation in telephonic conferences. Mr. Greenes
receives an annual fee of $6,000 as Vice Chairman of the Executive Committee and
for other consulting services, including his participation in telephonic
conferences.
13
<PAGE> 16
The members of the Compensation Committee of the Board of Directors are
Messrs. Greenes, Jankowski and Modlin and Ms. Firstenberg. The Compensation
Committee reviews compensation and other benefits. The Compensation Committee
held three meetings in 1999. Members of said Committee receive a fee of $400 for
each meeting of the Committee they attend ($700 if on a separate day than a
Board Meeting) and the Chairman, Mr. Modlin, receives an annual fee of $2,500.
The members of the Audit Committee of the Board of Directors are Messrs.
Baruch, Brenner, Greenes and Modlin and Ms. Firstenberg. The Audit Committee
reviews the audit function and material aspects thereof with the Corporation's
independent auditors. The Audit Committee held two meetings in 1999. Members of
said Committee receive a fee of $400 for each meeting of the Committee they
attend ($700 if on a separate day than a Board Meeting) and the Chairperson, Ms.
Firstenberg, receives an annual fee of $2,500.
The Board of Directors has not established a nominating or similar
committee.
The Board of Directors has previously established a Non-Employee Director
Stock Option Plan which as amended, covers a maximum of 30,000 shares for grant.
Options are for a period of six years from date of grant, are granted at fair
market value on date of grant, may be exercised at any time after one year from
date of grant while a director and are based on years of service, with a minimum
of 500 stock options for each director, an additional 500 stock options based on
five or more years of service, another 500 stock options based on ten or more
years of service and an additional 1,000 stock options based on twenty or more
years of service. Additional stock options are granted upon the expiration or
exercise of any such option which is no earlier than four years after date of
grant, in an amount equal to such exercised or expired options.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The Corporation's executive officers and directors are required under
Section 16(a) of the Securities Exchange Act of 1934 to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and American Stock Exchange. Copies of those reports must also be furnished to
the Corporation.
Based solely on a review of the copies of reports furnished to the
Corporation and the Corporation's monthly reporting compliance program, the
Corporation believes that during the preceding year, all filing requirements
applicable to executive officers and directors were met except one Form 4 for
Mr. Greenes was approximately two (2) weeks late because the Corporation
inadvertently failed to timely file it on his behalf.
STOCKHOLDER PROPOSALS -- 2001 ANNUAL MEETING
If any stockholder desires to submit a proposal for action at the 2001
annual meeting, such proposal must be received by the Secretary of the
Corporation on or before December 8, 2000. Nominations for directors at the 2001
annual meeting by stockholders must be in accordance with Article 4(c) of the
Corporation's By-Laws and received on or before January 31, 2001.
COST OF SOLICITATION
The cost of preparing and mailing material in connection with the
solicitation of proxies is to be borne by the Corporation. Solicitation will be
made by the Corporation's regular employees in the total approximate number of
ten. Solicitation will be made by mail, telegram, telephone and in person.
By Order of the Board of Directors
ANGELA D. TOPPI
Corporate Secretary
Dated: Norwalk, Connecticut
April 7, 2000
14
<PAGE> 17
EXHIBIT A
1995 STOCK OPTION PLAN
OF
TRANS-LUX CORPORATION
1. Purpose. The purpose of this Plan is to enable the Corporation to
attract and keep able and qualified officers, key executives and employees of
the Corporation and its subsidiaries, as defined in Section 425(f) of the
Internal Revenue Code of 1986, as amended, by offering them an opportunity to
participate in the growth and development of the Corporation through stock
ownership, and to thereby provide additional incentive for them to promote the
success of the business.
2. Stock Subject to the Plan. The shares of stock to be offered pursuant
to this Plan shall be shares of the Corporation's authorized Common Stock and/or
Class A Stock (if a certificate of amendment to the Certificate of Incorporation
is filed creating Class A Stock of the Corporation authorized at the May 18,
1995 annual meeting of stockholders), and may be unissued shares or reacquired
shares. The aggregate amount of stock which may be delivered upon exercise of
all options granted under the Plan shall not be more than 100,000(1) shares.
Shares subject to but not delivered under any option terminating or expiring for
any reason prior to the exercise thereof by the optionee in full shall be deemed
available for options thereafter granted during the continuance of the Plan.
Options granted may be "Incentive Stock Options" or "Non-Statutory Stock
Options".
3. Administration of the Plan. The Board of Directors shall appoint a
Compensation Committee (hereinafter called "Committee"), which shall consist of
not less than three members who are not employees of the Corporation. Each
member of the Committee, while serving as such, shall also be a member of the
Board of Directors of the Corporation. Subject to the provisions of the Plan,
the Committee shall have plenary authority in its sole discretion to determine
the employees of the Corporation and its subsidiaries to whom options may be
granted, the number and class of shares to be embraced in each of the options
and the time or times at which options shall be granted; to interpret the Plan;
and to prescribe, amend, and rescind rules and regulations relating to it;
provided, however, that options shall be granted in accordance with the
provisions of paragraphs 4 and 5 hereof. The Board of Directors may from time to
time appoint members of the Committee in substitution for or in addition to
members previously appointed and may fill vacancies, however caused, in the
Committee. The Committee shall select one of its members as its chairman and
shall hold its meetings at such times and places as it shall deem advisable. A
majority of its members shall constitute a quorum. All actions of the Committee
shall be taken by a majority of its members. Any action may be taken by a
written instrument signed by a majority of the members and actions so taken
shall be fully as effective as if it had been taken by a vote of a majority of
the members at a meeting duly called and held. The Committee may appoint a
secretary, shall keep minutes of its meetings, and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
4. Employees to Whom Options May be Granted. Options may be granted to
such qualified officers, key executives and employees of the Corporation and of
its subsidiaries who, in the opinion of the Committee, perform services of
special importance to the management, operation and development of the business
of the Corporation or any of its subsidiaries. The Committee shall determine
those employees to be granted options and the number and class of shares to be
subject to each option so granted, provided, however, that the option shall be
granted only by resolution adopted by the Board of Directors of this Corporation
if it is to an employee who is not subject to Section 16 of the Securities
Exchange Act of 1934. Options granted to employees who are subject to said
Section 16 shall be granted by resolution of the Committee. Employees may
receive more than one (1) option under the Plan, but the aggregate fair market
value (determined as of the time the option is granted) of the stock for which
any employee may exercise Incentive Stock Options for the first time in any
calendar year (under all such plans of the Corporation and its subsidiaries)
shall not exceed $100,000.
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1 125,000 if the proposal is adopted at the 2000 Annual Meeting of Stockholders.
<PAGE> 18
5. Option Price. The purchase price of the Common Stock and/or Class A
Stock under each option shall be determined by the Committee, but shall not be
less than the fair market value of the stock at the time of granting of the
option except that in the case of Non-Statutory Stock Options, the price may be
such lesser price as determined by the Committee. Such fair market value shall
be taken by the Committee as the average between the high and low sale price of
the Common Stock and/or Class A Stock of the Corporation as quoted on a national
securities exchange or other market on the date the option is granted, or, if
there is no such sale on that date, then on the last previous day on which such
a sale was reported. If the option holder owns more than 10% of the total
combined voting power of the Corporation, the purchase price of Incentive Stock
Options shall not be less than 110% of the fair market value on the date of
grant.
6. Term of Option. The term of each option granted pursuant to the Plan
shall be for a period not exceeding ten (10) years from the date of granting
thereof, except that if the option holder owns more than 10% of the total
combined voting power of the Corporation and the option is an Incentive Stock
Option, such period shall not exceed five (5) years from the date of grant.
Options shall be subject to earlier termination as hereinafter provided.
7. Exercise of Options. An option when and after it becomes exercisable
may be exercised at any time, or from time to time during its term as to any
part of or all of the shares which shall be optioned, provided, however, that:
(a) an option may not be exercised as to less than 100 shares at any
one time (or the remaining shares then purchasable under the option if the
same is less than 100 shares);
(b) the purchase price of the shares as to which an option shall be
exercised shall be paid in full in cash and/or by delivery of shares of the
same class of the Corporation valued at the closing price of such Common
Stock and/or Class A Stock, as the case may be, on the American Stock
Exchange or other market on the date of exercise;
(c) each option shall be subject to the following additional
conditions precedent and restrictions thereon with respect to its exercise:
(i) Each employee to whom an option is granted under the Plan must
remain in the continuous employ of the Corporation or one of its
subsidiaries for one year from the date the option is granted or such
shorter period as permitted by the Committee before he or she shall have
the right to exercise any part thereof. Thereafter all or any part of
the shares covered by each option may be purchased at any time or from
time to time during the option period, provided, however, that no option
may be exercised unless the optionee is at the time of such exercise in
the employ of the Corporation or one of its subsidiaries, and shall have
been continuously so employed since the grant of his or her option,
except as otherwise permitted in paragraph 8. Absence on leave, approved
by the Committee, shall not be considered an interruption of employment
for any purpose of the Plan.
(ii) No option shall be transferable by a participant otherwise
than by will or by the laws of descent and distribution and is
exercisable during his or her lifetime only by the optionee.
(iii) Neither this Plan nor the granting of any option hereunder
shall be deemed to confer upon any optionee any right with respect to
continuation of employment by the Corporation or any subsidiary, nor in
any way interfere with or affect the right of the optionee or the
Corporation's right to terminate his or her employment at any time.
(iv) Each optionee shall agree that unless and until the shares are
registered under the Securities Act of 1933, he or she will purchase the
optioned shares for investment and not with any present intention to
resell the shares.
8. Limitations on Participation.
(a) If an optionee shall cease to be employed by the Corporation or one of
its subsidiaries for any reason (other than death or disability), he or she may,
but only within the 90 days next succeeding such cessation of employment,
exercise the option to the extent that he or she was entitled to exercise it at
the date of such
A-2
<PAGE> 19
cessation, unless he or she was discharged for cause. If an optionee shall be
discharged for cause, the option shall terminate on the date of such discharge
and the optionee shall forfeit any and all rights which may have accrued prior
thereto. The Committee's determination that an optionee was discharged for cause
shall be final and absolute, and shall not be subject to question by the
optionee or the Corporation. All options to the extent not exercisable on the
date of cessation of employment shall be forfeited.
(b) Retirement shall be deemed a cessation of employment within the meaning
of this Plan.
(c) In the event of death of an optionee while in the employ of the
Corporation or any of its subsidiaries, the option theretofore granted to the
optionee shall be exercisable only within nine (9) months next following the
date of his or her death by the person or persons to whom the optionee's rights
under the option shall pass by the optionee's will or the laws of descent and
distribution, or within six (6) months after the date of the appointment of an
administrator or executor of the estate of such optionee, whichever date shall
sooner occur, and then only if and to the extent that he or she was entitled to
exercise it at the date of death, provided, however, that the optionee shall be
deemed to be so entitled even if such death shall have taken place prior to the
expiration of one (1) year from the date of the granting of the option, anything
in this Plan to the contrary notwithstanding, if the Committee so determines.
(d) In the event that an optionee becomes permanently and totally disabled
while in the employ of the Corporation or any of its subsidiaries, the optionee
may, but only within one (1) year next succeeding the day of the commencement of
such disability, exercise the option to the extent that he or she was entitled
to exercise, but in no event after the expiration of the option. For this
purpose, an optionee shall be considered permanently and totally disabled if he
or she is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months. An optionee shall not be considered
to be permanently and totally disabled unless the optionee furnishes proof of
the existence thereof in such form and manner, and at such times, as the
Committee may require. The Committee's determination of whether the optionee is
permanently and totally disabled shall be final and absolute, and shall not be
subject to question by the optionee, a representative of the optionee, or the
Corporation.
9. Adjustments Upon Changes in Capitalization. In the event of changes in
the outstanding Common Stock and Class A Stock of the Corporation by reason of
stock dividends, split-ups, recapitalizations, mergers, consolidations,
combinations, or exchanges of shares, separations, reorganizations, or
liquidations, the number and class of shares available under the Plan and the
aggregate and the maximum number of shares as to which options may be granted to
any employee shall be correspondingly adjusted by the Committee. No adjustment
shall be made in the minimum number of shares which may be purchased at any time
or the total purchase price of the shares then so covered.
10. Effectiveness of the Plan. The Plan shall become effective on such
date as the Board of Directors shall determine, but only after:
(a) The stockholders shall have approved the Plan by an affirmative
vote of the majority of the outstanding shares of capital stock entitled to
vote as a single class within twelve (12) months following the adoption of
the Plan by the Board of Directors;
(b) if not previously listed, the shares of the Common Stock and/or
Class A Stock reserved for the Plan shall have been duly listed, upon
official notice of issuance, upon the national exchange whereon they are
traded and registered under the Securities Exchange Act of 1934, as
amended; and
(c) the Board of Directors shall have been advised by counsel that all
applicable legal requirements have been complied with.
11. Time of Granting Options. Whenever the Board of Directors or Committee
shall designate a person for the receipt of an option, the Corporation shall
forthwith send notice thereto to the designee. The date of such notice shall be
the date of granting the option to such participant for all purposes of this
Plan. The notice shall be in the form of a Grant approved by the Board of
Directors of this Corporation.
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<PAGE> 20
12. Amendments and Termination of the Plan. The Plan shall terminate on
March 9, 2005, and an option shall not be granted under the Plan after that
date. The Board of Directors without further approval of the stockholders, may
at any time suspend or terminate the Plan or amend it from time to time in such
respects as it may deem advisable in order that options granted hereunder as
Incentive Stock Options shall be "Incentive Stock Options" as defined in Section
422A of the Internal Revenue Code of 1986, or to conform to any change in
applicable law or to regulations or rulings of administrative agencies, or may
so amend it in any other respect not involving a substantial departure from the
principles herein set forth; provided, however, that no amendment shall be
effective without prior approval of a majority of the holders of the issued and
outstanding shares of capital stock of the Corporation entitled to vote, which
would: (a) except as specified in paragraph 9, increase the number of shares for
which options may be granted under the Plan; (b) change the eligibility
requirements for individuals entitled to receive options hereunder; (c) the
manner of determining option prices; (d) the period during which options may be
granted or exercised or (e) the provisions relating to adjustments to be made in
changes in capitalization. No termination, suspension or amendment of the Plan
shall, without the consent of the holder of an existing option, adversely affect
the holder's rights under such option.
13. Restriction on Issuance of Shares. The Corporation shall not be
obligated to sell or issue any shares pursuant to any stock option agreement
unless:
(a) the shares with respect to which the option is being exercised
have been registered under the Securities Act of 1933, as amended, or are
exempt from such registration; and
(b) the prior approval of such sale or issuance has been obtained from
any State regulatory body having jurisdiction.
14. Class A Stock. All references to Class A Stock herein are subject to
filing of a certificate of amendment to the Certificate of Incorporation
authorized at the Corporation's May 18, 1995 annual meeting of stockholders. If
such certificate of amendment is not filed then the only shares of stock offered
pursuant to this Plan shall be Common Stock.
A-4
<PAGE> 21
(INCENTIVE) (NON-STATUTORY) STOCK OPTION
GRANT made this day of , 20 , by TRANS-LUX
CORPORATION, a Delaware corporation having its office at 110 Richards Avenue,
Norwalk, Connecticut (hereinafter called the "Corporation") to
residing at (hereinafter called the "Employee").
WHEREAS, Corporation has heretofore adopted the TRANS-LUX CORPORATION 1995
STOCK OPTION PLAN for the benefit of its employees and the employees of its
subsidiaries, which Plan has been approved by Corporation's stockholders; and
WHEREAS, the said 1995 Stock Option Plan makes the granting of an option to
Employee effective on the date hereof,
FIRST: Subject to all of the provisions hereinafter set forth and the terms
and provisions of the 1995 Stock Option Plan, Corporation grants to Employee the
right and option (hereinafter called the "Option") to purchase all or any part
of an aggregate of ( ) shares of the Stock* of
Corporation (such number being subject to adjustment as provided in paragraph
SEVENTH hereof).
SECOND: The purchase price of the shares of Corporation's Stock*
covered by the Option shall be ($ ) per share.
THIRD: The term of the Option shall be for a period of ten (10)** years
from the date hereof subject to earlier termination as provided in paragraphs
FIFTH and SIXTH hereof. The Option may be exercised at any time, or from time to
time, during its term, as to any part or all of the shares covered by the Option
provided, however, that an Option may not be exercised as to less than one
hundred (100) shares at any time (or the remaining shares then purchasable under
the Option if the same is less than one hundred (100) shares), and further
provided that except as otherwise provided in paragraph SIXTH hereof, Employee,
at the time of exercise of the Option, shall have been continuously employed by
Corporation, or one of its subsidiaries, for a period of one (1) year from the
date hereof. (Absence on leave approved by or on behalf of the employing
corporation, shall not be considered an interruption of employment for the
purpose hereof.)
The holder of the Option shall not have any of the rights of a stockholder
with respect to the shares covered by the Option except to the extent that any
such shares shall be actually delivered upon the due exercise of the Option. The
Option may not be exercised unless at the date of exercise a registration
statement under the Securities Exchange Act of 1934, as amended, relating to the
shares covered by the Option, shall be in effect, and such shares shall have
been duly listed, upon official notice of issuance, upon the national exchange
wherein they are traded.
FOURTH: The Option herein granted may not be assigned, transferred, pledged
or hypothecated in any way, shall not be subject to execution, attachment or
similar process and shall not be transferable or assignable by operation of law
except that the Option shall be assignable or transferable under and pursuant to
the last will and testament of Employee or the laws of descent and distribution.
The Option may be exercised during the lifetime of the Employee only by
Employee. The granting of the Option herein granted to Employee shall not in any
way be deemed to confer upon Employee any right to continuation of employment by
the Corporation, or any subsidiary of Corporation nor shall it in any way
interfere or affect the right of Corporation or any subsidiary of Corporation
who shall be the employer of Employee, to terminate Employee's employment.
FIFTH: If Employee shall cease to be employed by Corporation or one of its
subsidiaries for any reason other than death, disability or discharge for cause,
Employee may, but only within 90 days next succeeding
- ---------------
* Insert whether options are granted for Common or Class A Stock. Options will
only be for Common Stock if a certificate of amendment to the Corporation's
Certificate of Incorporation creating such Class A Stock is not filed.
** Five (5) years if the Employee owns more than ten percent (10%) of the total
combined voting power of the Corporation and the Option is an Incentive Stock
Option.
A-5
<PAGE> 22
such cessation of employment, but in no event after the expiration of the
option, exercise the Option herein granted to the extent that Employee shall be
entitled to exercise it at the date of such cessation of employment. If Employee
shall be discharged for cause, the Option herein granted shall terminate on the
date of such discharge and Employee shall forthwith forfeit any and all rights
which may have accrued prior thereto. Any determination by or on behalf of the
employing corporation of Employee that Employee was discharged for cause shall
be final and absolute and shall not be subject to any question by Employee.
SIXTH: (a) In the event of the death of Employee while in the employ of
Corporation or any of its subsidiaries, the Option herein granted shall be
exercisable only within nine (9) months next following the date of Employee's
death by the person or persons to whom the rights under the Option shall pass by
the Employee's will or by the laws of descent and distribution, or within six
(6) months after the date of the appointment of an administrator or executor of
the estate of the Employee, whichever date shall sooner occur, and then only if
and to the extent that Employee was entitled to exercise the Option at the date
of death, but in no event after the expiration of the option; provided, however,
that anything hereinbefore contained to the contrary notwithstanding, the
Employee shall be deemed, in the sole and absolute discretion of the
Compensation Committee of the Board of Directors of the Corporation, to be so
entitled to exercise the Option herein granted in such number of shares, if any,
as the Compensation Committee of the Board of Directors of the Corporation
determines in its sole and absolute discretion, even if death shall take place
prior to the expiration of one (1) year from the date hereof.
(b) In the event that Employee becomes permanently and totally disabled
while in the employ of the Corporation or one of its subsidiaries the Employee
may, but only within one (1) year next succeeding the day of the commencement of
such disability, exercise the Option to the extent Employee is entitled to
exercise, but in no event after the expiration of the Option. For this purpose,
Employee shall be considered permanently and totally disabled if Employee is
unable to engage in any substantial gainful activity by reason of any medically
determinable mental or physical impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. Employee shall not be considered to be
permanently and totally disabled unless Employee furnishes proof of the
existence thereof in such form and manner and at such times as the Compensation
Committee of the Board of Directors may require. The Compensation Committee's
determination of whether Employee is permanently and totally disabled shall be
final and absolute and shall not be questioned by the Employee, a representative
of the Employee or the Corporation.
SEVENTH: If all or any portion of the Option shall be exercised subsequent
to any stock dividend, split-up, recapitalization, merger, consolidation,
combination or exchange of shares, separation, reorganization or liquidation
occurring after the date hereof, as a result of which shares of any class shall
be issued in respect of outstanding shares of Stock*, or shares of
Stock* shall be changed into the same or a different number of shares of
the same or another class or classes, the person or persons so exercising the
Option shall receive, for the aggregate price paid upon such exercise, the
aggregate number and class of shares which, if shares of Stock* (as
authorized at the date hereof) had been purchased at the date hereof for the
same aggregate price (on the basis of the price per share set forth in paragraph
SECOND hereof) and had not been disposed of, such person or persons would be
holding, at the time of such exercise, as a result of such purchase and all
stock dividends, split-ups, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations, or
liquidations; provided, however, that no fractional share will be issued upon
any such exercise, and the aggregate price paid shall be appropriately reduced
on account of any fractional share not issued. No adjustment shall be made in
the minimum number of shares which may be purchased at any one time or the total
purchase price of the shares then so covered.
EIGHTH: The granting of this Option is subject to Employee's agreement that
unless the shares are registered under the Securities Act of 1933, as amended,
Employee or any successor to Employee will purchase the shares which are the
subject hereof for investment and not with any present intention to resell the
same, and to Employee's further agreement that Employee or such successor will
confirm such intention by an appropriate certificate at the time of exercising
the Option, the form of such certificate to be in the form determined by counsel
for the Corporation at the time of any purchase of shares pursuant to the Option
herein
A-6
<PAGE> 23
granted, and no shares will be issued pursuant to the Option unless and until
such appropriate certificate shall be executed, signed and delivered by the
Employee or any successor.
NINTH: The Option may be exercised by giving written notice of such
exercise to the Corporation, at 110 Richards Avenue, Norwalk, Connecticut
06856-5090 or such other address as designated by the Corporation. Such notice
shall state an intention to exercise the Option and the number of shares in
respect of which it is being exercised, and shall be signed by the person or
persons exercising the Option. Such notice shall either:
(a) be accompanied by the full purchase price of such shares, which
payment shall be the cash and/or delivery of Stock* of
Corporation valued at the closing price of such Stock* on the
American Stock Exchange or other market on the date of exercise, in which
event the Corporation shall deliver a certificate or certificates
representing such shares as soon as practicable after the notice is
received; or
(b) fix a date (not less than 10 nor more than 15 business days from
the date such notice shall be received by the Corporation) for the payment
of the full purchase price of such shares, at the office of the
Corporation, or designate in writing, against delivery of a certificate or
certificates representing such shares.
The certificate or certificates for the shares as to which the Option shall
have been exercised, shall be registered in the name of the person or persons
exercising the Option and shall be delivered as provided above to or upon the
written order of the person or persons exercising the Option. In the event that
the Option shall be exercised by any person or persons other than the Employee,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise the Option, which proof shall be to the
satisfaction of counsel to the Corporation.
TENTH: As used herein, the terms "subsidiary" or "subsidiaries" shall mean
any present or future corporation which would be a "subsidiary corporation" of
the Corporation as that term is defined in Section 425(f) of the Internal
Revenue Code of 1986 as now or hereafter amended.
ELEVENTH: This agreement contains the sole and entire Option Grant and may
not be changed, varied, amended or modified except by an instrument in writing
duly executed by the Corporation.
TWELFTH: The appropriate Federal or State Courts of, or located, in the
State in which the Corporation has its principal executive offices shall have
exclusive jurisdiction of all disputes arising under this Agreement.
IN WITNESS WHEREOF, the Corporation has caused this Option Grant to be duly
executed by its officer thereunto duly authorized on the day and year first
above written.
TRANS-LUX CORPORATION
By
--------------------------------------
Accepted and Agreed to
- ------------------------------------
Employee
- ---------------
* Insert whether options are granted for Common or Class A Stock. Options will
only be for Common Stock if a certificate of amendment to the Corporation's
Certificate of Incorporation creating such Class A Stock is not filed.
A-7
<PAGE> 24
TRANSLUX LOGO
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
MAY 31, 2000
NORWALK, CONNECTICUT
<PAGE> 25
PROXY
TRANS-LUX CORPORATION
ANNUAL MEETING OF STOCKHOLDERS -- MAY 31, 2000
(SOLICITED ON BEHALF OF BOARD OF DIRECTORS)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of TRANS-LUX
CORPORATION hereby constitutes and appoints RICHARD BRANDT, VICTOR LISS and
HOWARD S. MODLIN, and each of them, the attorneys and proxies of the
undersigned, with full power of substitution, to vote for and in the name, place
and stead of the undersigned, at the Annual Meeting of the Stockholders of said
Corporation, to be held at the office of the Corporation, 110 Richards Avenue,
Norwalk, Connecticut, on May 31, 2000, at 10:00 A.M., and at any adjournment
thereof, the number of votes the undersigned would be entitled to cast if
present for the following matters and, in their discretion, upon such other
matters as may properly come before the meeting or any adjournment thereof:
DIRECTORS RECOMMEND VOTE FOR ITEMS 1, 2 AND 3.
<TABLE>
<C> <S> <C> <C>
Item 1 [ ] FOR [ ] NOT FOR Election of Steven Baruch, Howard M. Brenner and Allan
Fromme to serve as directors for a three-year term, and
until their successors are elected and shall have
qualified.
Authority is withheld with respect to the following
nominee(s).
----------------------------------------------------------
</TABLE>
<TABLE>
<C> <S> <C> <C> <C>
Item 2 [ ] FOR [ ] AGAINST [ ] ABSTAIN The proposal to add 25,000 shares of capital stock for
issuance under the 1995 Stock Option Plan.
Item 3 [ ] FOR [ ] AGAINST [ ] ABSTAIN Recommended retention of Deloitte & Touche LLP as the
independent auditors for the Corporation for the for the
ensuing year.
</TABLE>
(Continued and to be signed on other side.)
<PAGE> 26
(Continued from other side.)
UNLESS YOU SPECIFY OTHERWISE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
THE NOMINEES FOR DIRECTORS AND "FOR" ITEMS 2 AND 3.
A majority of said attorneys and proxies, or their substitutes at said
meeting, or any adjournments thereof, may exercise all of the powers hereby
given. Any proxy to vote any of the shares with respect to which the undersigned
is or would be entitled to vote, heretofore given to any person or persons other
than the persons named above, is hereby revoked.
IN WITNESS WHEREOF, the undersigned has signed and sealed this proxy and
hereby acknowledges receipt of a copy of the notice of said meeting and proxy
statement in reference thereto, both dated April 7, 2000.
Dated: , 2000
----------------------------
----------------------------(L.S.)
Stockholder(s)
Signature
----------------------------(L.S.)
NOTE: This proxy properly filled
in, dated and signed, should be
returned immediately in the
enclosed postpaid envelope to
TRANS-LUX CORPORATION, 110 Richards
Avenue, Norwalk, Connecticut
06856-5090. If the signer is a
corporation, sign in full the
corporate name by a duly authorized
officer. If signing as attorney,
executor, administrator, trustee or
guardian, please give your full
title as such.
