AGREEMENT made as of the 1st day of June 1998 by and between TRANS-LUX
CORPORATION, a Delaware corporation having an office at 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000-0000 (hereinafter called "Employer"), and XXXXXX X.
XXXXXXX residing at 00 Xxxx Xxxx Xxxx, Xxxxxxx, XX 00000 (hereinafter called,
"Employee").
W I T N E S S E T H:
1. Employer hereby employs Employee, and Employee hereby accepts
employment, upon the terms and conditions hereinafter set forth.
2. (a) The term ("Term") of the Agreement shall be the three (3) year
period commencing on the date hereof and terminating May 3l, 2001.
(b) In the event that Employee remains or continues in the employ of
Employer after the Term, such employment, in the absence of a further written
agreement, shall be on an at-will basis, terminable by either party
hereto on thirty (30) days' notice to the other and, upon the 30th day following
such notice the employment of Employee shall terminate.
(c) Upon expiration of the Term of this Agreement, neither party shall
have any further obligations or liabilities to the other except as otherwise
specifically provided in this Agreement.
3. Employee shall be employed in an executive sales capacity of Employer
(and such of its affiliates, divisions and subsidiaries as Employer shall
designate). Employer shall use its best efforts to cause Employee to be
elected and continue to be elected a Senior Vice President Sales of Employer
during the Term of this Agreement. The precise services of Employee may be
designated or assigned from time to time at the direction of the Board of
Directors, the Chairman of the Board, or the Vice-Chairman of the Board,
President, Executive Vice President or other person designated by the President
or Executive Vice President, and all of the services to be rendered hereunder by
Employee shall at all times be subject to the control, direction and supervision
of the Board of Directors of Employer, to which Employee does hereby agree to be
bound. Employee shall devote his entire time, attention and energies during
usual business hours (subject to Employer's policy with respect to holidays and
illnesses for comparable executives of Employer) to the business and affairs of
Employer, its affiliates, divisions and subsidiaries as Employer shall from time
to time direct. Employee further agrees during the Term of this Agreement to
serve as an officer or director of Employer or of any affiliate or subsidiary of
Employer as Employer may request, and if Employee serves as such officer or a
director he will do so without additional compensation, other than director's
fees or honoraria, if any.
During the Term of this Agreement and during any subsequent employment of
Employee by Employer, Employee shall use his best efforts, skills and abilities
in the performance of his services hereunder and to promote the interests of
Employer, its affiliates, divisions and subsidiaries. Employee shall not,
during the Term and during any subsequent employment of Employee by Employer, be
engaged in any other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage. The foregoing shall not
be construed as preventing Employee from investing his assets in such form or
manner as will not require any services on the part of Employee in the operation
of the affairs of the companies in which such investments are made, provided,
however, that Employee shall not, either directly or indirectly, be a director
of or make any investments in any company or companies which are engaged in
businesses competitive with those conducted by Employer or by any of its
subsidiaries or affiliates except where such investments are in stock of a
company listed on a national securities exchange, and such stock of Employee
does not exceed one percent (1%) of the outstanding shares of stock of such
listed company. Employee shall not at any time during or after the Term of this
Agreement use (except on behalf of Employer) divulge, furnish or make accessible
to any third person or organization any confidential information concerning
Employer or any of its subsidiaries or affiliates or the businesses of any of
the foregoing including, without limitation, inventions, confidential methods of
operations and organization, confidential sources of supply, identity of
employees, customer lists and confidential financial information.
4. (a) For all services rendered by Employee during the Term of this
Agreement, Employer shall pay Employee a salary at the rate of ONE HUNDRED
THOUSAND DOLLARS ($100,000) per annum during the period June l, 1998 to May 31,
1999; at the rate of ONE HUNDRED FIVE THOUSAND DOLLARS ($105,000) per annum
during the period June 1, 1999 to May 31, 2000; and at the rate of ONE HUNDRED
TEN THOUSAND DOLLARS ($110,000) during the period June 1, 2000 to May 31, 2001.
Such salary shall be payable weekly, or monthly, or in accordance with the
payroll practices of Employer for its executives. The Employee shall also be
entitled to all rights and benefits for which he shall be eligible under any
stock option plan, bonus, participation or extra compensation plans, pensions,
group insurance or other benefits which Employer presently provides, or may
provide for him and for its employees generally. Such rights and benefits
include the sales override commission plan (as currently in place and currently
compensated monthly) based on all sales and rentals of Employer's world-wide
sales staff. The sales override commission shall not exceed (x) $24,500 for the
period June 1-December 31, 1998, $49,000 for January 1-December 31, 1999,
$53,000 for January 1-December 31, 2000, or $22,083.33 for the period January 1-
May 31, 2001 plus (y) for any such period in which the bonus sales goal is
exceeded, an additional bonus of 110% (100% plus 7/12 of 10% for June 1-
December 31, 1998 period) times the override factor times the excess. For
example, if the sales override amount for a given period (year) is $42,000 and
if the mutually agreed upon goal for that period is $49,358,826, the factor is
.0008509 (override amount divided by goal) and sales reached is $50,358,826 then
there is an additional override commission of $935.99 ($1,000,000 x .0008509 x
110%). Notwithstanding the foregoing, in no event shall an additional override
be paid for any amount which exceeds twice the mutually agreed goal (e.g. up to
$98,717,652 if the goal is $49,358,826). This Agreement shall not be deemed
abrogated or terminated if Employer, in its discretion, shall determine to
increase the compensation of Employee for any period of time, or if the Employee
shall accept such increase.
All payments under this Agreement are in United States dollars unless
otherwise specified.
(b) Employer may make appropriate deductions from the said payments
required to be made in this Section 4 to Employee to comply with all
governmental withholding requirements.
(c) If, during the Term of this Agreement and if the Employee is
still in the employ of Employer, Employee shall be prevented from performing or
be unable to perform, or fail to perform, his duties by reason of illness or any
other incapacity for (4) consecutive months (excluding normal vacation time)
during the Term hereof, Employer agrees to pay Employee thereafter during the
Term for the duration of such incapacity 35% of the base salary which Employee
would otherwise have been entitled to receive if not for the illness or other
incapacity.
(d) The Board upon the recommendation of the Compensation Committee of
the Board shall consider no later than May 31, l999, 2000, 2001 and 2002,
respectively (provided there is no delay in obtaining the financial statements
as provided below, but in no event later than 45 days following receipt thereof)
the grant of a bonus ("Bonus") to Employee based on Employee's performance for
the immediately preceding fiscal year. Notwithstanding the foregoing, Employer
shall pay Employee the highest Bonus applicable for any of the fiscal years
ending December 31, l998, l999, 2000 and 2001 only, in the event Employer's
pre-tax consolidated earnings for such year determined in accordance with
Section 4(d) exceed the respective amounts hereinafter set forth. The Bonuses
shall not exceed $20,000 for 1998, 1999 and 2000, and $8,334 for 2001.
If Pre-Tax Consolidated
Earnings Exceed for
1998-1999- Annual Non-Cumulative Level of Bonus Payable
2000-2001
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1998, 1999 and 2000 2001(41.67%)
------------------- ------------
$ 250,000 $ 625.00 $ 260.44
375,000 937.50 390.66
500,000 1,250.00 520.88
625,000 1,562.50 651.09
750,000 1,875.50 781.52
875,000 2,187.50 911.53
1,000,000 2,500.00 1,041.75
1,125,000 2,812.50 1,171.97
1,250,000 3,125.00 1,302.19
1,375,000 3,437.50 1,432.41
1,500,000 3,750.00 1,562.63
1,625,000 4,062.50 1,692.84
1,750,000 4,375.00 1,823.06
1,875,000 4,687.50 1,953.28
2,000,000 5,000,00 2,083.50
2,125,000 5,312.50 2,213.72
2,250,000 5,625.00 2,343.94
2,375,000 5,937.50 2,474.16
2,500,000 6,250.00 2,604.38
2,625,000 6,562.50 2,734.59
2,750,000 6,875.00 2,864.81
2,875,000 7,187.50 2,995.03
3,000,000* 7,500.00 3,125.25
4,000,000* 10,000.00 4,167.00
5,000,000* 12,500.00 5,208.75
6,000,000* 15,000.00 6,250.50
7,000,000* 17,500,00 7,292.25
8,000,000* 20,000.00** 8,334.00**
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* For each incremental level of $l25,000 between $3,000,000 and
$8,000,000 not listed, there is an additional Bonus of $3l2.50
** Maximum
There shall be excluded from the calculation of pre-tax consolidated
earnings during the Term of this Agreement the amount by which (x) any item or
items of unusual or extraordinary gain in the aggregate exceeds 20% of the
Employer's net book value as at the end of the immediate preceding fiscal year
or (y) any item of unusual or extraordinary loss in the aggregate exceeds 20% of
the Employer's net book value as at the end of the immediate preceding fiscal
year, in each case in (x) and (y) above as determined in accordance with
generally accepted accounting principles and items of gain and loss shall not be
netted against each other for purpose of the above 20% calculation.
Provided Employee is not in default of the Agreement, the Board may, in any
event, even if any of the aforesaid pre-tax consolidated earnings levels are not
exceeded, grant the Employee the aforesaid Bonus or any portion thereof for such
year based on his performance.
Notwithstanding anything to the contrary contained herein, if Employee is
not in the employ of Employer at the end of any aforesaid 1998, 1999 or 2000
fiscal year or on May 31, 2001, no Bonus shall be paid for such fiscal year
except 58.33% of the 1998 Bonus has vested in Employee and payable whether or
not he is in Employer's employ on December 31, 1998. In the event of Employee's
death on or after January 1 of 1999, 2000 or 2001, or June 1, 2002 as to 2002,
any Bonus to which he is otherwise entitled for the prior fiscal year shall be
paid to his widow if she shall survive him or if she shall predecease him to his
surviving issue per stirpes and not per capita.
Such pre-tax consolidated earnings shall be fixed and determined by the
independent certified public accountants regularly employed by Employer. Such
independent certified public accountants, in ascertaining such pre-tax
consolidated earnings, shall apply all accounting practices and procedures
heretofore applied by Employer's independent certified public accountants in
arriving at such annual pre-tax consolidated earnings as disclosed in Employer's
annual statement for that year of profit and loss released to its stockholders.
The determination by such independent certified public accountants shall be
final, absolute and controlling upon the parties. Payment of such amount, if
any is due, shall be made for each year by Employer to Employee within sixty
(60) days after which such accountant shall have furnished such statement to
Employer disclosing Employer's pre-tax consolidated earnings for each of the
years 1998, l999, 2000 and 2001. Employer undertakes to use reasonable efforts
to cause said accountants to prepare and furnish such statements within one
hundred thirty (130) days from the close of each such fiscal year and to cause
said independent certified public accountants, concomitantly with delivery of
such statement by accountants to it, to deliver a copy of such statement to
Employee. The Employer shall not have any liability to Employee arising out of
any delays with respect to the foregoing.
(e) In the event Employee dies during the Term of this Agreement while the
Employee is still in the Employ of Employer, Employer shall pay to Employee's
widow or his surviving issue, as the case may be, for the balance of the Term of
the Agreement, or eighteen (18) months, whichever is less, annual death benefits
payable weekly or in accordance with Employer's payroll practices in an amount
equal to 35% of Employee's then annual base salary rate.
5. During the Term of this Agreement, Employer will reimburse Employee for
traveling or other out-of-pocket expenses and disbursements incurred by Employee
with Employer's approval in furtherance of the businesses of Employer, its
affiliates, divisions or subsidiaries, upon presentation of such supporting
information as Employer may from time to time request.
6. During the Term of this Agreement, Employee shall be entitled to a
vacation during the usual vacation period of Employer in accordance with such
vacation schedules as Employer may prescribe.
7. Both parties recognize that the services to be rendered by Employee
pursuant to this Agreement are extraordinary and unique. During the Term of
this Agreement, and during any subsequent employment of Employee by Employer,
Employee shall not, directly or indirectly, enter into the employ of or render
any services to any person, partnership, association or corporation engaged in a
business or businesses in anyway, directly or indirectly, competitive to those
now or hereafter engaged in by Employer or by any of its subsidiaries during the
Term of this Agreement and during any subsequent employment of Employee by
Employer and Employee shall not engage in any such business, directly or
indirectly on his own account and, except as permitted by paragraph 3 of this
Agreement, Employee shall not become interested in any such business, directly
or indirectly, as an individual, partner, shareholder, director, officer,
principal, agent, employee, trustee, consultant, or in any other relationship or
capacity. For a period of two (2) years following termination of employment for
any reason, Employee shall not directly or indirectly (i) engage or otherwise be
involved in the recruitment or employment of any Employer employee nor (ii)
solicit or render any service directly or indirectly to any other person or
entity with regard to soliciting any customer of the Employer during the two (2)
year period prior to termination of employment with respect to products or
services competitive with products or services of Employer. Employee at no time
during or after employment shall disclose to any person, other than Employer, or
otherwise use any information of or regarding Employer except on behalf of
Employer, nor communicate, publish, or otherwise transmit, in any manner
whatsoever, untrue information or negative, competitive, personal or other
information or comments regarding Employer. In addition, Employee agrees that
all lists, materials, books, files, reports, correspondence, records and other
documents and information ("Employer Materials") used, prepared or made
available to Employee, shall be and shall remain the property of Employer. Upon
the termination of employment of Employee or the expiration of this Agreement,
whichever is earlier, all Employer Materials shall be immediately returned to
Trans-Lux Corporation, and Employee shall not make or retain any copies thereof,
nor disclose or otherwise use any information relating to said Employer
Materials to any other party. As used herein the term Employer shall include
Employer, Employer's subsidiaries and affiliates, and any individuals employed
or formerly employed by any of them. Employer shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to obtain damages for any breach of
this Agreement, or to enjoin Employee from any breach of this Agreement, but
nothing herein contained shall be construed to prevent Employer from pursuing
such other remedies as Employer may elect to invoke.
8. In the event any provision of paragraph 7 of this Agreement shall be
held invalid or unenforceable by reason of the geographic or business scope or
the duration thereof, such invalidity or unenforceability shall attach only to
such provision and shall not affect or render invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be construed as if the
geographic or business scope or the duration of such provision had been more
narrowly drawn so as not to be invalid or unenforceable.
9. The waiver by Employer of a breach of any provision of this Agreement
by Employee shall not operate or be construed as a waiver of any subsequent
breach by Employee.
10. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and served personally or sent by United States
certified or registered mail, return receipt requested, or overnight courier
such as Federal Express or Airborne to his address as stated on Employer's
records, in the case of Employee, or to the office of Trans-Lux Corporation,
attention of the Chairman or Vice Chairman of the Board, 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000-0000, in the case of Employer, or such other address
as designated in writing by the parties.
11. This Agreement shall be construed in accordance with the laws of the
State of New York.
12. This instrument contains the entire agreement between the parties and
supersedes as of June 1, 1998 the Employment Agreement dated June 1, 1996
between the parties. It may not be changed, modified, extended or renewed
orally except by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, discharge or extension is
sought.
IN WITNESS WHEREOF, this Agreement has been duly executed on the day and
year above written.
TRANS-LUX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Executive Vice President
/s/ Xxxxxx X. Xxxxxxx
--------------------------
Xxxxxx X. Xxxxxxx
