Exhibit 10.1
AGREEMENT made as of the lst day of April, 2005 by and between TRANS-LUX
CORPORATION, a Delaware corporation having an office at 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000-0000 (hereinafter called "Employer"), and XX XXXXXX
residing at 00 Xxxx Xxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 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 period commencing on
April l, 2005 and terminating March 3l, 2008.
(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 capacity of Employer (and
such of its affiliates, divisions and subsidiaries as Employer shall designate).
Employer shall use its reasonable efforts to cause Employee to be elected and
continue to be elected an Executive Vice President 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, the Vice-Chairman of the Board or President and Co-Chief
Executive Officer, 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
President and Co-Chief Executive Officer and 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, except for current real
estate ventures disclosed to Employer concurrently with the signing of this
Agreement. 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 which 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, 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
FORTY-FIVE THOUSAND DOLLARS ($145,000) per annum during the period April l, 2005
to March 31, 2006; at the rate of ONE HUNDRED FIFTY-ONE THOUSAND DOLLARS
($151,000) per annum during the period April 1, 2006 to March 31, 2007 and at
the rate of ONE HUNDRED FIFTY-SEVEN THOUSAND DOLLARS ($157,000) per annum during
the period April 1, 2007 to March 31, 2008. 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 his and for its employees
generally. Such rights and benefits currently include a performance bonus and
sales override plan, the terms of which are subject to revision by the Employer
each year during the Term of this Agreement. The performance bonus and sales
override target amount of earnings shall be $35,000 for 2005, $37,500 for 2006,
and $40,000 for 2007 and $10,000 for the period January 1-March 31, 2008. The
maximum earnings under this plan shall not exceed two times the target amount
for any of the full calendar years 2005, 2006 and 2007 or $10,000 for January
1-March 31, 2008. 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 four (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 or eighteen (18) months, whichever
is less, but in no event less than ninety (90) days, 40% 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, 2006, 2007, 2008 and 2009,
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, based on
Employer's annual pre-tax consolidated earnings for the applicable fiscal year,
Employer shall pay Employee a Bonus at the rate of one-half of one percent (1/2
of 1%) of the annual pre-tax consolidated earnings for the fiscal years ending
December 31, 2005, 2006, 2007 and 2008 (including the period January 1-March 31,
2005 as herewith provided in Section 12) only, in the event Employer's pre-tax
consolidated earnings for such year determined in accordance with Section 4(d)
exceeds $500,000, provided that this Bonus shall not exceed $40,000 for any
year, and the Bonus, if any, for January 1-March 31, 2008 shall be 25% of the
amount for the year 2008, not to exceed $10,000.
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 2005, 2006 or 2007
fiscal year or March 31, 2008, no Bonus shall be paid for such fiscal year or
part thereof as to 2008. In the event of Employee's death on or after January 1
of 2006, 2007, or 2008 or March 31, 2008 as to 2008, any Bonus to which he is
otherwise entitled for the prior fiscal year shall be paid to his surviving
spouse 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. Notwithstanding the
foregoing, any interest expense savings resulting from conversion of the
Employer's 7 1/2% Convertible Subordinated Notes due 2006 and 8 1/4% Limited
Convertible Subordinated Notes due 2012 may be included or excluded in such
calculation by the Board in its discretion. 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 2005,
2006, 2007 and 2008. 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 surviving spouse 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 40% 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 any way, 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 or, (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 shall at
no time during or after employment 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. In addition to the
obligations of the Employee contained in this Agreement, Employee agrees to be
bound by the provisions contained in Exhibit A to this Agreement.
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 President and Co-Chief Executive Officer, 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 April 1, 2005 the Agreement between Employer and Employee dated
as of April 1, 2002, as amended except any amounts which accrued as of such date
and are unpaid, but excluding the Bonus for the period January 1-March 31, 2005
which is covered by Section 4(d) hereof. 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
_____________________________
President
/s/ Xx Xxxxxx
_____________________________
Xx Xxxxxx
