SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12.
TRANS-LUX CORPORATION
________________________________________________________________________
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TRANS-LUX CORPORATION
110 Richards Avenue
Norwalk, Connecticut 06856-5090
-----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 2004
-----------------------------------------
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 Thursday, May 27, 2004 at 3:00 P.M. local time for the
following purposes:
1. To elect four 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 recommend to the Board of
Directors the retention of Deloitte & Touche LLP as the Corporation's
independent auditors for the ensuing year; and
3. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The close of business on March 31, 2004 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
March 31, 2004
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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.
--------------------------------------------------------------------------------
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 Thursday, May 27, 2004, 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 23, 2004. 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: Corporate 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 March 31, 2004 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 March 31,
2004 and entitled to notice of and to vote at the Meeting 973,243 shares of
Common Stock and 287,505 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of March 31, 2004 (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.
Amount
Beneficially Percent Percent of
Name, Status and Mailing Address Title of Class Owned of Class All Classes
-------------------------------- -------------- ------------ -------- -----------
Gene Jankowski............................... Common Stock 3,500 (1) * *
Chairman of the Board of Directors
110 Richards Avenue
Norwalk, CT 06856-5090
Richard Brandt............................... Class B Stock 125,208 (2) 43.55% 9.93%
Chairman Emeritus of the Board of Common Stock 19,636 (2) 1.98% 1.53%
Directors, Consultant and beneficial owner
of more than 5% of the Corporation's Class B
Stock
110 Richards Avenue
Norwalk, CT 06856-5090
Gabelli Funds, LLC........................... Common Stock 755,670 (3) 46.68% 39.64%
Beneficial owner of more than 5% of the
Corporation's Common Stock
One Corporate Center
Rye, NY 10580-1434
Matthew Brandt............................... Class B Stock 41,700 14.50% 3.31%
Director, Executive Vice President and Common Stock 11,980 (4) 1.22% *
beneficial owner of more than 5% of the
Corporation's Class B Stock
110 Richards Avenue
Norwalk, CT 06856-5090
Thomas Brandt................................ Class B Stock 41,700 14.50% 3.31%
Director, Executive Vice President, Common Stock 11,354 (5) 1.15% *
Co-Chief Executive Officer and beneficial
owner of more than 5% of the Corporation's
Class B Stock
110 Richards Avenue
Norwalk, CT 06856-5090
Steven Baruch................................ Common Stock 1,600 (1) * *
Director
110 Richards Avenue
Norwalk, CT 06856-5090
Howard M. Brenner............................ Common Stock 2,000 (1) * *
Director
465 Park Avenue
New York, NY 10022
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Amount
Beneficially Percent Percent of
Name, Status and Mailing Address Title of Class Owned of Class All Classes
-------------------------------- -------------- ------------ -------- -----------
Jean Firstenberg............................. Common Stock 1,920 (6) * *
Director
110 Richards Avenue
Norwalk, CT 06856-5090
Robert B. Greenes............................ Common Stock 5,000 (7) * *
Director
110 Richards Avenue
Norwalk, CT 06856-5090
Victor Liss.................................. Class B Stock 9,728 3.38% *
Vice Chairman of the Board Common Stock 11,620 (8) 1.19% *
110 Richards Avenue
Norwalk, CT 06856-5090
Howard S. Modlin............................. Class B Stock 8,751 (9) 3.04% *
Director Common Stock 2,500 (9) * *
445 Park Avenue
New York, NY 10022-2606
Michael R. Mulcahy........................... Common Stock 24,303 (10) 2.44% 1.90%
Director, President and Co-Chief
Executive Officer
110 Richards Avenue
Norwalk, CT 06856-5090
Thomas F. Mahoney ........................... Common Stock 3,500 (11) * *
Senior Vice President
110 Richards Avenue
Norwalk, CT 06856-5090
Angela D. Toppi.............................. Common Stock 3,000 (12) * *
Executive Vice President, Treasurer,
Secretary and Chief Financial Officer
110 Richards Avenue
Norwalk, CT 06856-5090
All directors and executive officers......... Class B Stock 227,087 (13) 78.99% 18.01%
as a group (16 persons) Common Stock 106,592 (13) 10.10% 7.94%
_____________________
(1) The amount includes 1,000 shares of Common Stock acquirable upon exercise of stock options.
(2) The amount includes 4,232 shares of Class B Stock owned by Mrs. Brandt, 12,500 shares of Common Stock
acquirable upon exercise of stock options 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").
(3) Based on Schedule 13D, Amendment No. 44 dated March 31, 2004 by Gabelli Funds, LLC, parent holding
company and registered investment adviser, the amount includes 645,470 shares of Common Stock acquirable
upon conversion of $9,045,000 principal amount of the Notes. All securities are held as agent for the
account of various investment company fund accounts managed by such reporting person. Except under
certain conditions, Gabelli Funds, LLC has sole voting power and sole dispositive power over such shares.
-3-
(4) The amount includes 11,500 shares of Common Stock acquirable upon exercise of stock options. Mr. M.
Brandt is Mr. R. Brandt's son.
(5) The amount includes 10,000 shares of Common Stock acquirable upon exercise of stock options. Mr. T.
Brandt is Mr. R. Brandt's son.
(6) The amount includes 1,500 shares of Common Stock acquirable upon exercise of stock options.
(7) The amount includes 2,500 shares of Common Stock acquirable upon exercise of stock options.
(8) The amount includes 1,500 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.
(9) The amount includes 5,939 shares of Class B Stock owned by Mr. Modlin's immediate family or held in trust
for Mr. Modlin's immediate family, and 2,500 shares of Common Stock acquirable upon exercise of stock
options.
(10) The amount includes 21,000 shares of Common Stock acquirable upon exercise of stock options.
(11) The amount includes 3,400 shares of Common Stock acquirable upon exercise of stock options.
(12) The amount includes 2,000 shares of Common Stock acquirable upon exercise of stock options.
(13) The amount includes 10,171 shares of Class B Stock set forth in footnotes 2 and 9 above, 7,850 shares of
Common Stock acquirable upon conversion of the Notes set forth in footnotes 2 and 8 above and 73,839
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%
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. Four directors are to
be elected at the May 27, 2004 Annual Meeting for a three-year term, and until
their successors have been elected and qualified. Messrs. Richard Brandt, Gene
Jankowski and Victor Liss and Ms. Jean Firstenberg, nominated for election as
directors for a three-year term, were each elected a director of the Corporation
at the 2001 Annual Meeting of Stockholders.
Set forth after the name of the nominees and each director is their age, the
year first elected as a director, their principal occupation for the past five
years, the name and principal business of any corporation or other organization
in which such employment is carried on and certain other directorships held.
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.
NOMINEES - Three-Year Term Expiring 2007
Gene Jankowski, 69, has been one of our directors since 1994. Chairman of
the Board of Trans-Lux Corporation; Chairman of Jankowski Communications System,
Inc.; Advisor Managing Director of Veronis Suhler & Associates Inc.; Director of
TV Azteca; Co-Chairman of St. Vincent's College; Trustee of St. Vincent's
Medical Center; formerly President and Chairman of the CBS Broadcast Group;
Chairman Emeritus of the American Film Institute.
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Richard Brandt, 76, has been our Chairman from 1974 to 2003 and a director
since 1954. Consultant to Trans-Lux Corporation; Director of Presidential
Realty Corporation; Chairman Emeritus and Trustee of the American Film
Institute; Trustee of The College of Santa Fe.
Jean Firstenberg, 68, has been one of our directors since 1989. Director
and Chief Executive Officer of the American Film Institute; formerly Trustee of
Boston University.
Victor Liss, 67, has been one of our directors since 1988. Vice Chairman of
the Board of Trans-Lux Corporation; Director of Anthem, Inc.; Trustee of Norwalk
Hospital; formerly Consultant, President and Chief Executive Officer of
Trans-Lux Corporation.
DIRECTORS - Term Expiring 2006
Steven Baruch, 65, has been one of our directors since 1994. Executive Vice
President of Presidential Realty Corporation; Producer of plays and musicals
including Driving Miss Daisy, Angels in America, Love Letters, Smokey Joe's
Cafe, The Producers, Hairspray and the most recent Broadway revivals of Damn
Yankees, A Funny Thing Happened on the Way to the Forum, The Sound of Music and
Little Shop of Horrors.
Thomas Brandt, 40, has been one of our directors since 2000. Executive Vice
President and Co-Chief Executive Officer of Trans-Lux Corporation and its
Entertainment Subsidiaries; formerly Senior Vice President of Trans-Lux
Corporation and its Entertainment Subsidiaries.
Howard M. Brenner, 70, has been one of our directors since 1997. Senior
Advisor of MLGA Holding, Inc.; Director of Interep National Radio Sales, Inc.;
formerly Chairman and Chief Executive Officer of HCFP Brenner Securities LLC;
formerly President of Brenner Securities; formerly Senior Vice President of
Loewenbaum & Company Incorporated, Vice Chairman of Southcoast Capital
Corporation which changed its name to Loewenbaum & Company Incorporated;
formerly President of Drexel Burnham Lambert Incorporated; formerly member of
Board of Governors of the American Stock Exchange and District 10 Committee (NY)
National Association of Securities Dealers Inc.
DIRECTORS - Term Expiring 2005
Matthew Brandt, 40, has been one of our directors since 2000. Executive
Vice President of Trans-Lux Corporation, President of Trans-Lux Corporation's
Entertainment Subsidiaries, except Chairman of Trans-Lux Cinema Consulting
Corporation, and Vice Chairman of the Executive Committee of Trans-Lux
Corporation; Director of the National Association of Theatre Owners; formerly
Senior Vice President of Trans-Lux Corporation and its Entertainment
Subsidiaries.
Robert B. Greenes, 83, has been one of our directors since 1971. Chairman
of the Executive Committee of Trans-Lux Corporation; Chairman of National
Oilheat Research Alliance; 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.
Howard S. Modlin, 72, has been one of our directors since 1975. Attorney
and President of the firm Weisman Celler Spett & Modlin, P.C.; Director of
Fedders Corporation; Chairman and Chief Executive Officer of General DataComm
Industries, Inc.
Michael R. Mulcahy, 55, has been one of our directors since 2002.
President and Co-Chief Executive Officer of Trans-Lux Corporation and its
Communication Subsidiaries; formerly Executive Vice President of Trans-Lux
Corporation.
-5-
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, 2003 to the
Chief Executive Officer and the Corporation's four other most highly compensated
executive officers.
Summary Compensation Table
Long Term
Annual Compensation Compensation
----------------------------------------- ------------- All Other
Other Annual Options Compensation
Name and Principal Position Year Salary($) Bonus ($) Compensation ($) Granted (#) ($) (1)
--------------------------- ---- --------- --------- ---------------- ------------- ------------
Michael R. Mulcahy ................. 2003 276,314 78,992 4,000 - 17,630
President and Co-Chief Executive 2002 270,228 17,854 1,350 - 14,668
Officer, former Executive Vice 2001 248,887 21,541 - - 14,409
President (2)
Thomas Brandt ...................... 2003 173,898 46,362 4,500 - -
Executive Vice President and Co- 2002 158,159 7,141 4,000 - -
Chief Executive Officer, former 2001 135,756 2,949 4,000 - -
Senior Vice President (2)
Matthew Brandt ..................... 2003 169,295 24,925 8,750 - -
Executive Vice President, President 2002 155,364 21,157 7,750 - -
of Entertainment Subsidiaries, 2001 135,756 2,949 4,000 - -
former Senior Vice President (2)
Thomas F. Mahoney .................. 2003 155,684 10,625 - - -
Senior Vice President of Sales 2002 157,924 3,125 - - -
2001 144,339 2,813 - - -
Angela D. Toppi .................... 2003 143,241 42,818 500 - -
Executive Vice President, Treasurer, 2002 138,236 1,563 850 - -
Secretary and Chief Financial 2001 127,096 2,813 - - -
Officer, former Senior Vice
President (2)
____________________
(1) There are no restricted stock awards, stock appreciation rights or
deferred long-term incentive payouts. The amounts reflected for Mr.
Mulcahy represent split dollar life insurance premiums.
(2) Other annual compensation includes directors and/or trustee fees.
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Corporate Governance Policies and Procedures
The Board of Directors has adopted: (1) a Code of Business Conduct and
Ethics that applies specifically to Board Members and Executive Officers; and
(2) a Code of Conduct that applies to all other employees. These Codes are
designed to promote compliance with applicable laws and regulations, to promote
honest and ethical conduct, including full, fair, accurate and timely disclosure
in reports and communications with the public. Both of these Codes are
available for viewing on the Corporation's website at www.trans-lux.com. Any
amendments to, or waivers from, the Code of Business Conduct and Ethics will be
posted on the website. In addition, the Board of Directors adopted a Whistle
Blowing policy, which provides procedures for the receipt, retention and
treatment of complaints received by the Corporation regarding accounting,
internal accounting controls and auditing matters, as well as the confidential,
anonymous submission of concerns regarding questionable accounting or auditing
practices.
In accordance with the American Stock Exchange Listing Standards
("Standards"), the Corporation's Board of Directors must consist of a majority
of independent directors as defined in Section 121A of such Standards, unless
the company is considered a controlled company. Section 801 of the Standards,
defines a controlled company as a company in which over 50% of the voting power
is held by an individual or group. In accordance with the Standards, the
Corporation is considered a controlled company, and therefore, exempt from the
requirements of Section 121A.
Compensation Committee Report
All matters concerning executive compensation for Messrs. Mulcahy and T.
Brandt, Co-Chief Executive Officers, 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 Officers
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 Officers'
compensation is based upon the above factors and included bonuses as described
in the section on Employment Agreements.
This Compensation Committee Report has been respectively submitted by
Compensation Committee members Howard S. Modlin, Jean Firstenberg, Robert B.
Greenes and Gene Jankowski.
Audit Committee Report
The Audit Committee (the "Committee") is comprised of three directors who
are not officers or employees of the Corporation (Ms. Firstenberg and Messrs.
Greenes and Jankowski) and who are independent as defined in Section 121 of the
Standards, plus Mr. Modlin, ex officio. Mr. Jankowski is qualified as an
"audit committee financial expert" as defined by Item 401(h)(2) of Regulation
S-K under the Securities Act of 1933.
In accordance with its written charter adopted by the Committee of the Board
of Directors, (included as Exhibit A in this Proxy Statement) the Committee
assists the Board of Directors in fulfilling its responsibility for oversight of
the quality and integrity of the accounting, auditing and financial reporting
practices of the Company. All of the members of the Committee qualify as
"independent" under the provisions of Section 10A of the Securities Exchange Act
of 1934 and the rules of the Securities and Exchange Commission thereunder.
In discharging its oversight responsibility as to the audit process, the
Committee obtained from the independent auditors a formal written statement
confirming the absence of any relationships between the auditors and the
Corporation that might bear on the auditors' independence consistent with
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees." The Committee discussed with the auditors any activities that
may impact their objectivity and independence and satisfied itself as to the
auditors' independence. The Committee received a report on the quality control
procedures of the independent auditors as well as the most recent peer review
conducted under guidelines of the American Institute of Certified Public
Accountants.
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The Committee discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, both with and without members of
management present, discussed and reviewed the independent auditors' audit of
the financial statements.
The Committee reviewed the audited financial statements of the Corporation
as of and for the year ended December 31, 2003, with management and the
independent auditors. Management is responsible for the preparation,
presentation and integrity of the Corporation's financial statements, the
Corporation's internal controls and financial reporting process and the
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The Corporation's independent auditors' are
responsible for performing an independent audit of the Corporation's financial
statements and expressing an opinion as to their conformity with generally
accepted accounting principles.
Based on the above-mentioned review and discussions with the independent
auditors, the Committee recommended to the Board of Directors that the
Corporation's audited financial statements be included in its Annual Report on
Form 10-K for the year ended December 31, 2003, for filing with the Securities
and Exchange Commission. This Audit Committee Report is provided by the
following independent directors, who constitute the committee: Jean
Firstenberg, Robert B. Greenes and Gene Jankowski.
Retirement Plan and Supplemental Retirement Benefits
The Corporation already made all required 2003 contributions during the 2003
calendar year for the individuals listed in the Summary Compensation Table and
all other eligible employees to the Corporation's retirement plan. Under the
supplemental retirement arrangement, with the retired former Chief Executive
Officer, Mr. Liss, the Corporation made payments totaling $174,000 and $332,000
in 2003 and 2002, respectively. In 2002, the Company accrued $50,000 for such
benefits and in 2001, the Company recognized a benefit of $126,930 due to
amendments to the pension plan.
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.
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
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$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)
______________
As of January 1, 2004, Messrs. Mulcahy, Mahoney, T. Brandt, M. Brandt and
Ms. Toppi had 35, 35, 17, 17 and 16 years of credited service, respectively.
(1) $205,000 is the legislated annual cap on compensation.
(2) $165,000 is the maximum legislated annual benefits payable from a
qualified pension plan.
Certain Transactions
During the year 2003, $602,430 in fees for legal services rendered was paid
by the Corporation to the law firm of which Mr. Modlin, a director of the
Corporation, is the president.
Employment Agreements
The Corporation has employment agreements with Messrs. Mulcahy, T. Brandt
and M. Brandt expiring on March 31, 2005, Mr. Mahoney expiring on May 31, 2005
and Ms. Toppi expiring on March 31, 2006. The agreements provide for annual
compensation of $260,000 through June 30, 2004 and $270,000 through March
-8-
31, 2005 for Mr. Mulcahy; $175,000 through June 30, 2004 and $190,000 through
March 31, 2005 for Mr. T. Brandt; $170,000 through June 30, 2004 and $185,000
through March 31, 2005 for Mr. M. Brandt; $130,000 through August 31, 2004 and
$150,000 through May 31, 2005 for Mr. Mahoney; and $150,000 through June 30,
2004, $160,000 and $170,000 through March 31, 2005 and 2006, respectively, for
Ms. Toppi.
Each agreement, except Ms. Toppi's, contains graduated bonus provisions
based on the Corporation's defined pre-tax consolidated earnings, not to exceed
$150,000 and $20,000 for Messrs. Mulcahy and Mahoney, respectively. Mr. T.
Brandt's agreement provides for profit participation of 1 1/2% of the
Corporation's defined pre-tax consolidated earnings for 2004 and 2005. Mr. M.
Brandt's agreement provides for profit participation of 1% of the Corporation's
defined pre-tax consolidated earnings for 2004 and 2005, plus a percentage of
the Corporation's theatrical cash flow. Each agreement, except Mr. Mahoney's,
provides for severance benefits. Mr. Mulcahy and Mr. Mahoney's agreements
provide for sales override commissions. Each agreement also contains varying
disability and death benefits, and there are insurance benefits for Mr. Mulcahy
and Ms. Toppi. Messrs. Mulcahy, T. Brandt, M. Brandt and Ms. Toppi have
the right to cancel their agreements and receive lump sum payments of
$1,200,000, $600,000, $600,000 and $450,000, respectively, if there is a "change
in control" as defined therein. 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.
The Corporation has a consulting agreement with Mr. R. Brandt, Chairman
Emeritus of the Board, who no longer is an executive officer, expiring on
December 31, 2011. The agreement provides for annual payments of $393,437,
subject to cost of living adjustments. The agreement contains graduated bonus
provisions based on the Corporation's defined pre-tax consolidated earnings, not
to exceed $130,429, subject to cost of living adjustments. The agreement
provides for profit participation of 1 1/2% of the Corporation's defined
pre-tax consolidated earnings and also contains disability, death and insurance
benefits. If there is a "change in control" as defined therein, and the
Corporation fails to elect Mr. R. Brandt to his present position, he has the
right to receive the payments for the balance of the term of his agreement,
including certain lump sum payments thereof.
During 2003 and 2004, the named executives and other executives plus Mr. R.
Brandt deferred their increases for three months.
Stock Option Plans and Stock Options
The Corporation has two incentive stock option plans, which provide for the
grant of incentive stock options at fair market value (or 110% of fair market
value if the optionee owns more than 10% of the Corporation's outstanding voting
securities) on date of grant. Options outstanding are exercisable during the
period one to ten years (or one to six years if the optionee owns more than 10%
of the Corporation's outstanding voting securities) after date of grant and
while the holder is in the employ of the Corporation. No stock options were
granted in fiscal 2003 to the named executive officers. The following table
sets forth information as to the named executive officers with respect to (i)
the value realized on exercise of stock options, and (ii) fiscal year end option
values.
-9-
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Number of
Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Option Exercises Year End Fiscal Year End ($) (1)
-------------------------------------- ------------- -----------------------
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized ($) Unexercisable Unexercisable
---- --------------- ------------------ ------------- --------------
Michael R. Mulcahy None - 21,000/ - 2,950/ -
Thomas Brandt None - 10,000/ - 5,900/ -
Matthew Brandt None - 11,500/ - 5,900/ -
Thomas F. Mahoney None - 3,400/ - - / -
Angela D. Toppi None - 2,000/ - - / -
______________
(1) Market value of underlying securities at fiscal year end, minus the
exercise price.
FIVE-YEAR CORPORATE PERFORMANCE GRAPH
The following graph compares the Corporation's total stockholder return over
the five fiscal years ended December 31, 2003 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**
1998 1999 2000 2001 2002 2003
------ ------ ------ ------ ----- ------
AMEX US 100.00 131.94 122.38 113.91 93.10 126.03
RUSSELL 2000 100.00 119.62 114.59 115.77 90.79 131.98
TLX 100.00 77.67 39.27 63.54 58.14 66.13
______________
* 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.
-10-
INDEPENDENT AUDITORS
Appointment 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.
Principal Accounting Firm Fees
During the years ended December 31, 2003 and 2002, audit fees of $194,780
and $168,050 were paid to the Corporation's principal accounting firm, Deloitte
& Touche LLP. Audit fees for 2003 and 2002 consisted of (i) audit of the
Company's annual financial statements, and (ii) reviews of the Company's
quarterly financial statements. There were no non-audit related fees, tax fees
or fees for any other services paid to Deloitte & Touche LLP during 2003 and
2002.
The Audit Committee of the Board of Directors has considered the absence of
non-audit services by the auditors for financial information systems design and
implementation and absence of all other non-audit services as compatible with
maintaining the auditor's independence.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
During 2003, 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 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. Mr. Jankowski
receives an annual fee of $9,000 as Chairman of the Board and Mr. Liss receives
an annual fee of $2,000 as Vice Chairman of the Board.
The members of the Executive Committee of the Board of Directors are Messrs.
R. Brandt, Greenes, M. Brandt, Liss and Modlin. 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 did not hold any formal meetings in 2003. 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). Mr. Greenes receives an
annual fee of $2,000 as Chairman of the Executive Committee and for other
consulting services, including his participation in telephonic conferences. Mr.
M. Brandt receives an annual fee of $1,000 as Vice Chairman of the Executive
Committee.
The members of the Compensation Committee of the Board of Directors are
Messrs. Modlin, Greenes and Jankowski and Ms. Firstenberg. The Compensation
Committee reviews compensation and other benefits. The Compensation Committee
held two meetings in 2003. 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.
-11-
The members of the Audit Committee of the Board of Directors are Ms.
Firstenberg and Messrs. Greenes and Jankowski, and Mr. Modlin, ex officio.
The Audit Committee reviews the audit function and material aspects thereof with
the Corporation's independent auditors. The Audit Committee held four meetings
in 2003. Members of said Committee receive a fee of $500 for each meeting of
the Committee they attend ($1,000 if on a separate day than a Board Meeting) and
the Chairperson, Ms. Firstenberg, receives an annual fee of $3,000. In
addition, the Chairperson receives $100 for quarterly telephonic meetings with
the Independent Auditors.
The Board of Directors has not established a nominating or similar
committee. In accordance with the Standards, as previously discussed in the
section entitled "Corporate Governance Policies and Procedures," the Corporation
is considered a controlled company, and therefore, not required by such
Standards to have a nominating committee recommend or cast votes for the
nomination or election of directors. Currently, all directors participate in
the consideration of director nominees.
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 10 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 for the year ended Decemebr 31, 2003, the Corporation's executive
officers and directors have complied with the Section 16(a) filing requirements.
STOCKHOLDER PROPOSALS - 2005 ANNUAL MEETING
If any stockholder desires to submit a proposal for action at the 2005
annual meeting, such proposal must be received by the Secretary of the
Corporation on or before December 1, 2004. Nominations for directors at the
2005 annual meeting by stockholders must be in accordance with Article 4(c) of
the Corporation's By-Laws and received on or before January 28, 2005.
-12-
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
March 31, 2004
-13-
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
MAY 27, 2004
NORWALK, CONNECTICUT
PROXY
TRANS-LUX CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - MAY 27, 2004
(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 THOMAS BRANDT, MICHAEL R.
MULCAHY 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 27, 2004, at 3:00 P.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 and 2
Item 1 FOR WITHHELD Election of Richard Brandt,
___ ___ Jean Firstenberg, Gene Jankowski and
\___\ \ ___\ Victor Liss 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).
-------------------------------------------
-------------------------------------------
Item 2 FOR AGAINST ABSTAIN Recommended retention of
___ ___ ___ Deloitte & Touche LLP as
\___\ \___\ \___ \ the independent auditors for
the Corporation for the
ensuing year.
(Continued and to be signed on other side.)
(Continued from other side.)
UNLESS YOU SPECIFY OTHERWISE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE
NOMINEES FOR DIRECTORS AND "FOR" ITEM 2.
A majority of said attorneys and proxies, or their substitutes at said
meeting, or any adjournment 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 March 31, 2004.
Dated:________________, 2004
______________________ (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.