SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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-12.
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) and 0-11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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[ ] 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:
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(4) Date Filed:
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TRANS-LUX CORPORATION
110 Richards Avenue
Norwalk, Connecticut 06856-5090
_______________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 13, 2006
_______________________________
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 Tuesday, June 13, 2006 at 3:00 P.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 ratify the retention of Eisner
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 April 17, 2006 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 17, 2006
_______________________________________________________________________________
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 Tuesday, June 13, 2006, 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 May 19, 2006. 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 April 17, 2006 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 17,
2006 and entitled to notice of and to vote at the Meeting 973,598 shares of
Common Stock and 286,814 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 April 17, 2006 (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 133,208 (2) 46.44% 10.57%
Chairman Emeritus of the Board of Directors, Common Stock 25,833 (2) 2.58% 2.01%
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 915,212 (3) 65.31% 54.21%
Beneficial owner of more than 5% of the
Corporation's Common Stock
One Corporate Center
Rye, NY 10580-1434
Kornitzer Capital Management Inc........ Common Stock 137,222 (4) 12.35% 9.82%
Beneficial owner of more than 5% of the
Corporation's Common Stock
5420 West 61st Place
Shawnee Mission, KS 66205
FMR Corp................................ Common Stock 55,556 (5) 5.40% 4.22%
Beneficial owner of more than 5% of the
Corporation's Common Stock
82 Devonshire Street
Boston, MA 02109
Matthew Brandt.......................... Class B Stock 41,700 14.54% 3.31%
Director, Executive Vice President and Common Stock 10,480 (6) 1.07% *
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 14.54% 3.31%
Director, Executive Vice President, Common Stock 11,354 (6) 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
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Amount
Beneficially Percent Percent of
Name, Status and Mailing Address Title of Class Owned of Class All Classes
-------------------------------- -------------- ----- -------- -----------
Steve 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
Jean Firstenberg........................ Common Stock 1,420 (1) * *
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 3.39% *
Vice Chairman of the Board of Directors Common Stock 14,239 (8) 1.46% 1.13%
110 Richards Avenue
Norwalk, CT 06856-5090
Howard S. Modlin......................... Class B Stock 8,751 (9) 3.05% *
Director Common Stock 2,500 (9) * *
445 Park Avenue
New York, NY 10022-2606
Michael R. Mulcahy....................... Common Stock 20,803 (10) 2.10% 1.63%
Director, President and Co-Chief
Executive Officer
110 Richards Avenue
Norwalk, CT 06856-5090
Thomas F. Mahoney ....................... Common Stock 2,600 (7) * *
Senior Vice President
110 Richards Avenue
Norwalk, CT 06856-5090
Angela D. Toppi.......................... Common Stock 7,000 (11) * *
Executive Vice President, Treasurer,
Secretary and Chief Financial Officer
110 Richards Avenue
Norwalk, CT 06856-5090
All directors and executive officers..... Class B Stock 235,087 (12) 81.96% 18.65%
as a group (16 persons) Common Stock 110,869 (12) 10.46% 8.23%
-----------------------
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(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
13,333 shares of Common Stock acquirable upon conversion of $120,000
principal amount of the Corporation's 8 1/4% Limited Convertible Senior
Subordinated Notes due 2012 (the "8 1/4% Notes").
(3) Based on Schedule 13D, Amendment No. 46 dated December 12, 2005 by Gabelli
Funds, LLC and GAMCO Asset Management Inc., parent holding company and
registered investment adviser, the amount includes 377,434 shares of Common
Stock acquirable upon conversion of $5,295,000 principal amount of the
Corporation's 7 1/2% Convertible Subordinated Notes due 2006 (the "7 1/2%
Notes") and 427,778 shares of Common Stock acquirable upon conversion of
$3,850,000 principal amount of the 8 1/4% 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.
(4) Based on Schedule 13G, Amendment No. 1 dated January 31, 2006 by Kornitzer
Capital Management, Inc., parent holding company and registered investment
adviser, and held by Great Plains Trust Company, the amount includes
137,222 shares of Common Stock acquirable upon conversion of $1,235,000
principal amount of the 8 1/4% Notes. All securities are held as agent for
the account of other persons who have the right to receive, and the power
to direct the receipt of, dividends from, or the proceeds from the sale of,
the Common Stock.
(5) Based on Schedule 13G, Amendment No. 1 dated February 14, 2006 by FMR
Corp. and Edward C. Johnson 3d, parent holding company and registered
investment adviser, the amount includes 55,556 shares of Common Stock
acquirable upon conversion of $500,000 principal amount of the 8 1/4%
Notes. All securities are held as agent for the account of various
investment company fund accounts managed by such reporting persons. All
securities are held as agent for the account of other persons who have the
right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the Common Stock.
(6) The amount includes 10,000 shares of Common Stock acquirable upon exercise
of stock options. Mr. M. Brandt and Mr. T. Brandt are Mr. R. Brandt's
sons.
(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 3,333 shares of Common Stock acquirable upon
conversion of $30,000 principal amount of the 8 1/4% 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 17,500 shares of Common Stock acquirable upon exercise
of stock options.
(11) The amount includes 6,000 shares of Common Stock acquirable upon exercise
of stock options.
(12) The amount includes 10,171 shares of Class B Stock set forth in footnotes 2
and 9 above, 16,666 shares of Common Stock acquirable upon conversion of
the 8 1/4% Notes set forth in footnotes 2 and 8 above and 69,300 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%
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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 June 13, 2006 Annual Meeting for a three-year term, and until
their successors have been elected and qualified. Messrs. Steven Baruch,
Thomas Brandt and Howard M. Brenner, nominated for election as directors for a
three-year term, were each elected a director of the Corporation at the 2003
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 2009
Steven Baruch, 67, 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,
Little Shop of Horrors and Sweeney Todd.
Thomas Brandt, 42, 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, 72, 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; formerly Vice Chairman of Southcoast Capital
Corporation; 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.
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DIRECTORS - Term Expiring 2008
Matthew Brandt, 42, has been one of our directors since 2000. Executive
Vice President of Trans-Lux Corporation, President of Trans-Lux Corporation's
Entertainment Subsidiaries and Vice Chairman of the Executive Committee of
Trans-Lux Corporation; formerly Director of the National Association of Theatre
Owners; formerly Senior Vice President of Trans-Lux Corporation and its
Entertainment Subsidiaries.
Robert B. Greenes, 85, 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, 74, 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, 57, 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.
DIRECTORS - Term Expiring 2007
Gene Jankowski, 71, has been one of our directors since 1994. Chairman of
the Board (a non-executive position) of Trans-Lux Corporation; Chairman of
Jankowski Communications System, Inc.; Advisor Managing Director of Veronis
Suhler & Associates Inc.; formerly Director of TV Azteca; formerly Co-Chairman
of St. Vincent's College; formerly Trustee of St. Vincent's Medical Center;
formerly President and Chairman of the CBS Broadcast Group; Chairman Emeritus of
the American Film Institute.
Richard Brandt, 78, had been our Chairman from 1974 to 2003 and has been a
director since 1954. Consultant to Trans-Lux Corporation; Chairman of the Audit
and Compensation Committees and Director of Presidential Realty Corporation;
Chairman Emeritus and Trustee of the American Film Institute; formerly Trustee
of The College of Santa Fe.
Jean Firstenberg, 70, 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, 69, has been one of our directors since 1988. Vice Chairman of
the Board (a non-executive position) of Trans-Lux Corporation; Director of
Wellpoint, Inc.; Chairman of the Board of Trustees of Norwalk Hospital;
Co-Chairman of the Advisory Board to University College of Sacred Heart
University; formerly Consultant, President and Chief Executive Officer of
Trans-Lux Corporation.
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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, 2005 to the
Chief Executive Officers and the Corporation's four other most highly
compensated executive officers.
Summary Compensation Table
Annual Compensation Long Term
------------------------------------------------ Compensation All Other
Other Annual Options Compensation
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($)(1) Granted (#) ($) (2)
--------------------------- ---- ---------- --------- ------------------- ----------- ------------
Michael R. Mulcahy....................... 2005 279,733 - 4,450 - 18,471
President and Co-Chief Executive 2004 281,094 5,885 4,000 - 18,444
Officer 2003 276,314 78,992 4,000 - 17,630
Thomas Brandt ........................... 2005 194,853 - 4,950 - -
Executive Vice President and Co-Chief 2004 183,028 36,954 4,500 - -
Executive Officer 2003 173,898 46,362 4,500 - -
Matthew Brandt........................... 2005 190,183 - 6,250 - -
Executive Vice President and President 2004 178,293 30,931 6,200 - -
of Entertainment Subsidiaries 2003 169,295 24,925 8,750 - -
Thomas F. Mahoney ....................... 2005 185,271 - - - -
Senior Vice President of Sales 2004 186,638 3,750 - - -
2003 155,684 10,625 - - -
Angela D. Toppi ......................... 2005 164,391 - 500 - -
Executive Vice President, Treasurer, 2004 161,028 5,977 500 5,000 -
Secretary and Chief Financial Officer 2003 143,241 42,818 500 - -
-------------------
(1) Other annual compensation includes director and/or trustee fees.
(2) 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.
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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 (the
"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 principal components of
compensation for the Corporation's executive officers are base salaries, cash
bonus and incentive compensation. All but one of the executive officers' base
salary, cash bonus and incentive compensation is fixed by contract. The base
salary of the executive officers is reviewed at contract expiration or annually
and adjustments made generally on the basis of the Corporation's performance as
measured by certain financial and non-financial criteria, various survey
information respecting compensation of executive officers, compensation levels
for executive officers in a broad range of companies, cost of living information
and individual performance of the particular executive officer. The
Compensation Committee has not assigned relative weights or values to any of
such criteria. In such review, the Compensation Committee takes into
consideration a review of individual performance of the executive officer. With
respect to the financial performance of the Corporation, the Compensation
Committee generally takes into consideration the Corporation's earnings from
continuing operations, earnings per share and divisional revenue and operating
profits. The salary levels are intended to be consistent with competitive
practice and level of performance. The Co-Chief Executive Officers'
compensation is based upon the above factors and includes bonuses as described
in the section on Employment Agreements.
This Compensation Committee Report has been respectively submitted by
Compensation Committee members Howard S. Modlin, Howard M. Brenner, Jean
Firstenberg, Robert B. Greenes and Gene Jankowski.
Audit Committee Report
The Audit Committee of the Board of Directors (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. The
board has made a determination that Mr. Gene Jankowski is an "audit committee
financial expert" as such term is defined by the Securities and Exchange
Commission (the "SEC"). In accordance with the SEC's safe harbor rule for
"audit committee financial experts," no member designated as an audit
committee financial expert shall (i) be deemed an "expert" for any purpose or
(ii) have any duty,
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obligation or liability that is greater than the duties, obligations and
liability imposed beyond those imposed on a member of the board or the audit
committee not so designated. Additionally the designation of a member or
members as an "audit committee financial expert" shall in no way affect the
duties, obligations or liability of any member of the audit committee, or the
board, not so designated.
In accordance with its written charter adopted by the Committee of the Board
of Directors, 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 Corporation. 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 SEC
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.
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 and discussed the audited financial statements of the
Corporation as of and for the year ended December 31, 2005, 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 accounting
principles generally accepted in the United States of America.
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, 2005, for filing with the SEC. 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 has already made all required 2005 contributions during the
2005 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 the final payments totaling $174,000 in
2003, for such benefits under such agreement.
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.
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Estimated Annual Retirement Benefits
Final Average Salary for Based on Credited Service Years
Highest Five of the Ten -------------------------------
Years Preceding
Retirement 10 20 30 35 40
---------- -- -- -- -- --
$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, 2006, Messrs. Mulcahy, Mahoney, T. Brandt, M. Brandt and Ms.
Toppi had 37, 37, 19, 19 and 18 years of credited service, respectively.
(1) $220,000 is the legislated annual cap on compensation.
(2) $175,000 is the maximum legislated annual benefits payable from a qualified
pension plan.
Certain Transactions
During the year 2005, $384,863 in consulting fees for consulting services
rendered by Mr. R. Brandt was paid by the Corporation to Moving Images, LLC,
which is owned by members of his family, which includes Mr. M. Brandt and Mr.
T. Brandt. During the year 2005, $180,917 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 an employment agreement with Mr. Michael R. Mulcahy
for a term expiring March 31, 2010, which provides for compensation at the
annual rate of $280,000 through March 31, 2010, subject to cost-of-living
adjustments subsequent to calendar year 2005. Mr. Mulcahy is entitled to
receive as a profit participation 2 1/2% of the Corporation's pre-tax
consolidated earnings if earnings are $500,000 up to $1,000,000, 3 1/4% of total
if over $1,000,000 and 4% of total if over $2,000,000 with a maximum of $150,000
for any fiscal year. Such pre-tax consolidated earnings shall not include any
defined extraordinary or unusual items of gain or loss as determined by
accounting principles generally accepted in the United States of America to the
extent such item exceeds 20% of net book value. The agreement further provides
that if Mr. Mulcahy is disabled, the Corporation will pay to him 50% of the
salary he is entitled to receive for the duration of the disability during the
term but in no event less than twenty-four (24) months. In the event Mr.
Mulcahy dies during the term of said agreement, the Corporation shall pay to his
widow death benefits in an amount equal to 50% of his then annual salary for the
immediate preceding fiscal year for twenty-four (24) months. The Corporation
has purchased two life insurance policies in the amount of $500,000 and $75,000
in favor of Mr. Mulcahy's beneficiary. The agreement also provides for
supplemental retirement benefits in excess of the limitations on the maximum
annual benefits imposed by Section 415 of the Internal Revenue Code of 1986 and
if the Pension Plan is discontinued following a Change in Control. The
agreement further provides for severance pay equal to 100% of his base salary in
effect at time of termination of employment for a period of three (3) years or
his 65th birthday, whichever first occurs unless he rejects a proposed renewal
contract for a term of at least three years and upon the same terms and
conditions in effect at such time. The agreement also contains a "Change in
Control of Employer" provision, entitling Mr. Mulcahy to terminate the
agreement on 75 days prior written notice and receive a lump sum payment of
$1,200,000, grossed up for taxes if subject to Section 4999 of the Internal
Revenue Code of 1986 if such payment is deemed to be an "excess parachute
-10-
payment" under Section 280G of the Internal Revenue Code of 1986. Mr. Mulcahy
also has the option of extending his agreement for three (3) years through March
31, 2013 at his then current salary subject to the cost-of-living adjustment in
the event such Change in Control is approved by Mr. R. Brandt (or a majority
of his sons if he dies or is disabled).
The Corporation has an employment agreement with Mr. Thomas Brandt for a
term expiring March 31, 2009, which provides for compensation at the annual rate
of $210,000 through March 31, 2007, $225,000 through March 31, 2008 and $240,000
through March 31, 2009. Mr. T. Brandt is entitled to receive as a profit
participation 2% of the Corporation's pre-tax consolidated earnings for 2005 and
2006 and 2 1/2% of the Corporation's pre-tax consolidated earnings for 2007,
2008 and 2009 if earnings meet or exceed $500,000, plus 3/8 of 1% of the
Corporation's theatrical net pre-tax cash flow. Such pre-tax consolidated
earnings shall not include any defined extraordinary or unusual items of gain or
loss as determined by accounting principles generally accepted in the United
States of America to the extent such item exceeds 20% of net book value. The
agreement further provides that if Mr. T. Brandt is disabled, the Corporation
will pay to him 50% of the salary he is entitled to receive for the duration of
the disability during the term but in no event less than twenty-four (24)
months. In the event Mr. T. Brandt dies during the term of said agreement,
the Corporation shall pay to his beneficiary death benefits in an amount equal
to 50% of his then annual salary for the immediate preceding fiscal year for
twenty-four (24) months. The agreement further provides for severance pay equal
to 100% of his base salary in effect at time of termination of employment for a
period of one (1) year if the Corporation wants to continue a non-compete
clause. The agreement also contains a "Change in Control of Employer"
provision, entitling Mr. T. Brandt to terminate the agreement on 75 days prior
written notice and receive a lump sum payment of 2.9 times his salary level then
in effect, grossed up for taxes if subject to Section 4999 of the Internal
Revenue Code of 1986 if such payment is deemed to be an "excess parachute
payment" under Section 280G of the Internal Revenue Code of 1986. Mr. T. Brandt
also has the option of extending his agreement for three (3) years through March
31, 2012 at his then current salary subject to the cost-of-living adjustment if
such Change in Control is approved as provided above. The agreement also
provides for supplemental retirement benefits in the absence of the Pension Plan
in the event of a Change in Control.
The Corporation has an employment agreement with Mr. Matthew Brandt for a
term expiring March 31, 2009, which provides for compensation at the annual rate
of $205,000 through March 31, 2007, $220,000 through March 31, 2008 and $230,000
through March 31, 2009. Mr. M. Brandt is entitled to receive as a profit
participation 1 1/2% of the Corporation's pre-tax consolidated earnings for 2005
and 2006 and 2% of the Corporation's pre-tax consolidated earnings for 2007,
2008 and 2009 if earnings meet or exceed $500,000, plus 7/8 of 1% of the
Corporation's theatrical net pre-tax cash flow. Such pre-tax consolidated
earnings shall not include any defined extraordinary or unusual items of gain or
loss as determined by accounting principles generally accepted in the United
States of America to the extent such item exceeds 20% of net book value. The
agreement further provides that if Mr. M. Brandt is disabled, the Corporation
will pay to him 50% of the salary he is entitled to receive for the duration of
the disability during the term but in no event less than twenty-four (24)
months. In the event Mr. M. Brandt dies during the term of said agreement,
the Corporation shall pay to his beneficiary death benefits in an amount equal
to 50% of his then annual salary for the immediate preceding fiscal year for
twenty-four (24) months. The agreement further provides for severance pay equal
to 100% of his base salary in effect at time of termination of employment for a
period of one (1) year if the Corporation wants to continue a non-compete
clause. The agreement also contains a "Change in Control of Employer"
provision, entitling Mr. M. Brandt to terminate the agreement on 75 days prior
written notice and receive a lump sum payment of 2.9 times his salary level then
in effect, grossed up for taxes if subject to Section 4999 of the Internal
Revenue Code of 1986 if such payment is deemed to be an "excess parachute
payment" under Section 280G of the Internal Revenue Code of 1986. Mr. M. Brandt
also has the option of extending his agreement for three (3) years through March
31, 2012 at his then current salary subject to the cost-of-living adjustment if
such Change in Control is approved as provided above. The agreement also
provides for supplemental retirement benefits in the absence of the Pension Plan
in the event of a Change in Control.
-11-
The Corporation has an employment agreement with Ms. Angela Toppi for a
term expiring March 31, 2009, which provides for compensation at the annual rate
of $180,000 through March 31, 2007, $190,000 through March 31, 2008 and $200,000
through March 31, 2009. The agreement provides that if Ms. Toppi is disabled,
the Corporation will pay to her 50% of the salary she is entitled to receive for
the duration of the disability during the term but in no event less than
eighteen (18) months. In the event Ms. Toppi dies during the term of said
agreement, the Corporation shall pay to her beneficiary death benefits in an
amount equal to 50% of her then annual salary for the immediate preceding fiscal
year for the duration of the term but in no event less than eighteen (18)
months. The Corporation will reimburse Ms. Toppi up to $2,500 per annum for
the cost of long-term disability insurance and life insurance. The agreement
further provides for severance pay equal to 100% of her base salary in effect at
time of termination of employment for a period of one (1) year if the
Corporation continues a non-compete clause. The agreement also contains a
"Change in Control of Employer" provision, entitling Ms. Toppi to terminate the
agreement on 75 days prior written notice and receive a lump sum payment of 2.9
times her salary level then in effect, grossed up for taxes if subject to
Section 4999 of the Internal Revenue Code of 1986 if such payment is deemed to
be an "excess parachute payment" under Section 280G of the Internal Revenue Code
of 1986. Ms. Toppi also has the option of extending her agreement for three
(3) years through March 31, 2012 at her then current salary subject to the
cost-of-living adjustment if such Change in Control is approved as provided
above. The agreement also provides for supplemental retirement benefits in the
absence of the Pension Plan in the event of a Change in Control.
The foregoing is a summary of the agreements and reference is made to the
agreements, each of which has been filed with the SEC, for the full terms
thereof.
The Corporation has a consulting agreement with Moving Images, LLC, a
private company owned by family members of Mr. R. Brandt, Chairman Emeritus of
the Board. The consulting agreement, which replaced a similar agreement with
Mr. R. Brandt, who performs the consulting services on behalf of such company,
expires 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 $130,429, subject to cost-of-living
adjustments. The agreement provides for profit participation of 1 1/2% of the
Corporation's defined pre-tax consolidated earnings and also contains
disability, death and insurance benefits. If there is a "change in control" as
defined therein, or if the Corporation fails to elect Mr. R. Brandt to his
present positions, the consultant has the right to receive the payments for the
balance of the term of its agreement, including certain lump sum payments
thereof.
During 2005, 2004 and 2003, the named executives and other executives plus
Mr. R. Brandt deferred their increases for three months. During 2006, the
named executives and other executives plus Mr. R. Brandt deferred their
increases for six months.
Stock Option Plans and Stock Options
The Corporation had an incentive stock option plan, which provided for the
grant of incentive stock options at fair market value (or 110% of fair market
value if the optionee owns more than 10% of the Corporation's outstanding voting
securities) on date of grant. Options outstanding are exercisable during the
period one to 10 years (or one to six years if the optionee owns more than 10%
of the Corporation's outstanding voting securities) after date of grant and
while the holder is in the employ of the Corporation and survive the termination
of the plan. The following table sets forth information as to the named
executive officers with respect to (i) the value realized on exercise of stock
options and (ii) fiscal year end option values.
-12-
Aggregate Option Exercises in Last Fiscal Year
And Fiscal Year End Option Values
Number of
Unexercised Value of Unexercised In-
Options at Fiscal the-Money Options at
Year End Fiscal Year End ($) (1)
Option Exercises -------- -----------------------
------------------------------- Exercisable/ Exercisable/
Name Shares Acquired Value Unexercisable Unexercisable
---- on Exercise Realized ($) ------------- -------------
----------- ------------
Michael R. Mulcahy..... None - 17,500/- 1,400/ -
Thomas Brandt.......... None - 10,000/- 2,800/ -
Matthew Brandt......... None - 11,500/- 2,800/ -
Thomas F. Mahoney...... None - 2,500/- - / -
Angela D.Toppi......... None - 6,000/- - / -
(1) Market value of underlying securities at fiscal year end, minus the exercise
price.
-13-
FIVE-YEAR CORPORATE PERFORMANCE GRAPH
The following graph compares the Corporation's total stockholder return over
the five fiscal years ended December 31, 2005 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**
2000 2001 2002 2003 2004 2005
-----------------------------------------------------------------------
AMEX US 100.00 93.08 76.08 102.98 119.00 128.79
RUSSELL 2000 100.00 101.03 79.23 115.18 134.75 139.23
TLX 100.00 161.81 148.08 168.41 209.62 159.89
* 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.
-14-
INDEPENDENT AUDITORS
Ratification of Selection of Independent Registered Accounting Firm
Subject to stockholder ratification, the Audit Committee has appointed the
firm of Eisner LLP as independent accountants to audit the financial statements
of the Corporation's 2006 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. Eisner 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. If the
stockholders do not ratify the appointment of Eisner LLP, the selection of
independent accountants will be reconsidered by the Audit Committee.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF EISNER LLP AS INDEPENDENT ACCOUNTANTS TO AUDIT THE FINANCIAL
STATEMENTS OF THE CORPORATION FOR THE 2006 FISCAL YEAR.
Independent Auditors' Fees
During the year ended December 31, 2005, audit fees of $181,000 were paid or
accrued to Eisner LLP, the Corporation's independent registered public
accounting firm. There were no audit, non-audit related fees, tax fees or fees
for any other services paid to Eisner LLP for the year ended December 31, 2004.
Audit fees for 2005 consisted of (i) audit of the Corporation's annual financial
statements, and (ii) reviews of the Corporation's quarterly financial
statements. During the years ended December 31, 2005 and 2004, audit fees of $0
and $231,500 were paid to the Corporation's former independent registered public
accounting firm, Deloitte & Touche LLP. Audit fees for 2004 consisted of (i)
audit of the Corporation's annual financial statements and (ii) reviews of the
Corporation's quarterly financial statements. During the year ended December
31, 2006, audit-related fees of $4,450 were paid to Deloitte & Touche LLP.
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 2005, the Board of Directors had five meetings, one of which was a
telephonic meeting. 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, Jankowski, 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 held one telephonic meeting in 2005.
Members of said Committee receive a fee of
-15-
$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, Brenner, Greenes and Jankowski and Ms. Firstenberg. The
Compensation Committee reviews compensation and other benefits. The
Compensation Committee held two meetings in 2005. 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 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 2005. 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 and receives
$100 for each quarterly telephonic meeting 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. The Board of Directors does not have any
specific, minimum qualifications that the board believes must be met by a
nominee for a position on the board, or any specific qualities or skills that
the board believes are necessary for one or more of the directors to possess.
The board has consistently sought to nominate to the Board of Directors
eminently qualified individuals whom the board believes would provide
substantial benefit and guidance to the Corporation. The board believes that
substantial judgment, diligence and care are required to identify and select
qualified persons as directors and does not believe that it would be appropriate
to place limitations on its own discretion. 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 20 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.
-16-
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 SEC 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 December 31, 2005, the Corporation's executive
officers and directors have complied with the Section 16(a) filing requirements,
except Messrs. R. Brandt and Liss were each inadvertently two days late in
filing Form 4s reporting their respective exchanges of 7 1/2% Notes for 8 1/4%
Notes which intent to exchange was disclosed in the exchange offer material.
STOCKHOLDER PROPOSALS - 2007 ANNUAL MEETING
If any stockholder desires to submit a proposal for action at the 2007
annual meeting, such proposal must be received by the Secretary of the
Corporation on or before December 18, 2006. Nominations for directors at the
2007 annual meeting by stockholders must be in accordance with Article 4(c) of
the Corporation's By-Laws and received on or before February 13, 2007.
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
10. 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 17, 2006
-17-
TRANS-LUX (R) LOGO
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
JUNE 13, 2006
NORWALK, CONNECTICUT
PROXY
TRANS-LUX CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - JUNE 13, 2006
(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 June 13, 2006, 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 Steven Baruch,
_____ _____ Thomas Brandt, and Howard M. Brenner
\____\ \____\ 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 Ratify the retention of Eisner 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 April 17, 2006.
Dated:________________, 2006
______________________ (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.