Exhibit 10.2
AGREEMENT made as of the 1st day of April, 2005 by and between TRANS-LUX
CORPORATION, a Delaware corporation having an office at 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000-0000 (hereinafter called "Employer"), and XXXX XXXX,
residing at 0000 Xxxx Xxxxx, Xxxx Xxx Xxxxxx, XX 00000 (hereinafter called,
"Employee").
W I T N E S S E T H:
1. Employer hereby employs Employee, and Employee hereby accepts
employment, upon the terms and conditions hereinafter set forth.
2. (a) The term ("Term") of the Agreement shall be the period commencing on
April l, 2005 and terminating March 31, 2008.
(b) In the event that Employee remains or continues in the employ of
Employer after the Term, such employment, in the absence of a further written
agreement, shall be on an at-will basis, terminable by either party hereto on
thirty (30) days' notice to the other and, upon the 30th day following such
notice the employment of Employee shall terminate.
(c) Upon expiration of the Term of this Agreement, neither party shall
have any further obligations or liabilities to the other except as otherwise
specifically provided in this Agreement.
3. Employee shall be employed in an executive capacity of Employer (and
such of its affiliates, divisions and subsidiaries) as Employer shall designate
including Trans-Lux Midwest Corporation ("Midwest") and Trans-Lux West
Corporation ("West"). Employer shall use its best efforts to cause Employee to
be elected and continue to be elected a Senior Vice President of Employer during
the Term of this Agreement. The precise services of Employee may be designated
or assigned from time to time at the direction of the Board of Directors, the
Chairman of the Board, the Vice-Chairman of the Board, President and Co-Chief
Executive Officer, or Executive Vice President and all of the services to be
rendered hereunder by Employee shall at all times be subject to the control,
direction and supervision of the President and Co-Chief Executive Officer,
Executive Vice President and the Board of Directors of Employer, to which
Employee does hereby agree to be bound. Employee shall devote his entire time,
attention and energies during usual business hours (subject to Employer's policy
with respect to holidays and illnesses for comparable executives of Employer) to
the business and affairs of Employer, its affiliates, divisions and subsidiaries
as Employer shall from time to time direct. Employee further agrees during the
Term of this Agreement to serve as an officer or director of Employer or of any
affiliate or subsidiary of Employer as Employer may request, and if Employee
serves as such officer or a director he will do so without additional
compensation, other than director's fees or honoraria, if any.
During the Term of this Agreement and during any subsequent employment of
Employee by Employer, Employee shall use his best efforts, skills and abilities
in the performance of his services hereunder and to promote the interests of
Employer, its affiliates, divisions and subsidiaries. Employee shall not,
during the Term and during any subsequent employment of Employee by Employer, be
engaged in any other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage.
Additionally, the foregoing shall not be construed as preventing Employee
from investing his assets in such form or manner as will not require any
services on the part of Employee in the operation of the affairs of the
companies in which such investments are made, provided, however, that Employee
shall not, either directly or indirectly, be a director of or make any
investments in any company or companies which are engaged in businesses
competitive with those conducted by Employer or by any of its subsidiaries or
affiliates except where such investments are in stock of a company listed on a
national securities exchange, and such stock of Employee does not exceed one
percent (1%) of the outstanding shares of stock of such listed company.
Employee shall not at any time during or after the Term of this Agreement use
(except on behalf of Employer), divulge, furnish or make accessible to any third
person or organization any confidential information concerning Employer or any
of its subsidiaries or affiliates or the businesses of any of the foregoing
including, without limitation, inventions, confidential methods of operations
and organization, confidential sources of supply, identity of employees,
customer 1ists and confidential financial information.
4. (a) For all services rendered by Employee during the Term of this
Agreement, Employer shall pay Employee a salary at the rate of ONE HUNDRED
FIFTEEN THOUSAND DOLLARS ($115,000) per annum during the period April l, 2005 to
March 31, 2006; at the rate of ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000)
per annum during the period April 1, 2006 to March 31, 2007 and at the rate of
ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000) per annum during the period
April 1, 2007 to March 31, 2008. Such salary shall be payable weekly, or
monthly, or in accordance with the payroll practices of Employer for its
executives. The Employee shall also be entitled to all rights and benefits for
which he shall be eligible under any stock option plan, pension, group insurance
or other benefits which Employer presently provides, or may provide for him and
for its employees generally. Such rights and benefits include a performance
bonus and sales override plan, the terms of which are subject to revision by the
Employer each year. The performance bonus and sales override target amount of
earnings shall be $40,000 for the period January 1, 2005-December 31, 2005,
$42,000 for January 1, 2006-December 31, 2006, and $44,000 for January 1,
2007-December 31, 2007 and $11,000 for the period January 1-March 31, 2008).
The maximum earnings under this plan shall not exceed two times the target
amount for any of the full calendar years 2005, 2006 and 2007 or $11,000 for the
period January 1-March 31, 2008. This Agreement shall not be deemed abrogated
or terminated if Employer, in its discretion, shall determine to increase the
compensation of Employee for any period of time, or if the Employee shall accept
such increase.
All payments under this Agreement are in United States dollars unless
otherwise specified.
(b) Employer may make appropriate deductions from the said payments
required to be made in this Section 4 to Employee to comply with all
governmental withholding requirements.
(c) The Board upon the recommendation of the Compensation Committee of
the Board shall consider no later than May 31, 2006, 2007, 2008 and 2009,
respectively (provided there is no delay in obtaining the financial statements
as provided below, but in no event later than 45 days following receipt thereof)
the grant of a bonus ("Bonus") to Employee based on Employee's performance for
the immediately preceding fiscal year. Notwithstanding the foregoing, based on
Employer's annual pre-tax consolidated earnings in the applicable fiscal year,
Employer shall pay Employee a Bonus at the rate of one-quarter of one percent
(.25%) for the fiscal years ending December 31, 2005, 2006 and 2007, and pro
rata for 2008. This Bonus shall not exceed $20,000 for any year and the Bonus,
if any, for January 1-March 31, 2008 shall be 25% of the amount for the year
2008, not to exceed $5,000.
No Bonus shall be payable for any fiscal year in which the annual pre-tax
consolidated earnings determined in accordance with Section 4(c) are less than
$500,000.
There shall be excluded from the calculation of pre-tax consolidated
earnings during the Term of this Agreement (1) the amount by which (x) any item
or items of unusual or extraordinary gain in the aggregate exceeds 20% of the
Employer's net book value as at the end of the immediate preceding fiscal year
or (y) any item of unusual or extraordinary loss in the aggregate exceeds 20% of
the Employer's net book value as at the end of the immediate preceding fiscal
year, in each case in (x) and (y) above as determined in accordance with
generally accepted accounting principles and items of gain and loss shall not be
netted against each other for purpose of the above 20% calculation, or (2) any
contractual Bonuses and/or contractual profit participations accrued or paid to
Employee or other employees.
Notwithstanding anything to the contrary contained herein, if Employee is
not in the employ of Employer at the end of any aforesaid 2005, 2006 or 2007
fiscal year, or March 31, 2008, no Bonus shall be paid for such fiscal year or
part thereof as to 2008. In the event of Employee's death on or after January 1
of 2006, 2007 or 2008 or March 31, 2008 as to 2008, any Bonus to which he is
otherwise entitled for the prior fiscal year shall be paid to his widow if she
shall survive him or if she shall predecease him to his surviving issue per
stirpes and not per capita.
Provided Employee is not in default of the Agreement, the Board may, in any
event, even if any of the aforesaid pre-tax consolidated earnings levels are not
exceeded, grant the Employee the aforesaid Bonus or any portion thereof for such
year based on his performance.
Such pre-tax consolidated earnings shall be fixed and determined by the
independent certified public accountants regularly employed by Employer. Such
independent certified public accountants, in ascertaining such pre-tax
consolidated earnings, shall apply all accounting practices and procedures
heretofore applied by Employer's independent certified public accountants in
arriving at such annual pre-tax consolidated earnings as disclosed in Employer's
annual statement for that year of profit and loss released to its stockholders.
The determination by such independent certified public accountants shall be
final, absolute and controlling upon the parties. Notwithstanding the
foregoing, any interest expense savings resulting from conversion of the
Employer's 7 1/2% Convertible Subordinated Notes due 2006 and 8 1/4% Limited
Convertible Subordinated Notes due 2012 may be included or excluded in such
calculation by the Board in its sole discretion. Payment of such amount, if any
is due, shall be made for each year by Employer to Employee within sixty (60)
days after which such accountant shall have furnished such statement to Employer
disclosing Employer's pre-tax consolidated earnings for each of the years 2005,
2006, 2007 and 2008. Employer undertakes to use reasonable efforts to cause
said accountants to prepare and furnish such statements within one hundred
thirty (130) days from the close of each such fiscal year and to cause said
independent certified public accountants, concomitantly with delivery of such
statement by accountants to it, to deliver a copy of such statement to Employee.
The Employer shall not have any liability to Employee arising out of any delays
with respect to the foregoing.
(d) If, during the Term of this Agreement and if the Employee is still
in the employ of Employer, Employee shall be prevented from performing or be
unable to perform, or fail to perform, his duties by reason of illness or any
other incapacity for four (4) consecutive months (excluding normal vacation
time) during the Term hereof, Employer agrees to pay Employee thereafter during
the Term for the duration of such incapacity or twelve (12) months, whichever is
less, 35% of the base salary which Employee would otherwise have been entitled
to receive if not for the illness or other incapacity.
(e) In the event Employee dies during the Term of this Agreement while
the Employee is still in the Employ of Employer, Employer shall pay to
Employee's surviving spouse or his surviving issue, as the case may be, for the
balance of the Term of the Agreement, or twelve (12) months, whichever is less,
annual death benefits payable weekly or in accordance with Employer's payroll
practices in an amount equal to 35% of Employee's then annual base salary rate.
5. During the Term of this Agreement, Employer will reimburse Employee for
traveling or other out-of-pocket expenses and disbursements incurred by Employee
with Employer's approval in furtherance of the businesses of Employer, its
affiliates, divisions or subsidiaries, upon presentation of such supporting
information as Employer may from time to time request.
6. During the Term of this Agreement, Employee shall be entitled to a
vacation equal to three (3) weeks per annum or the amount provided by the
Employer's policy, whichever is greater, during the usual vacation period of
Employer in accordance with such vacation schedules as Employer may prescribe.
7. Both parties recognize that the services to be rendered by Employee
pursuant to this Agreement are extraordinary and unique. During the Term of
this Agreement, and during any subsequent employment of Employee by Employer,
Employee shall not, directly or indirectly, enter into the employ of or render
any services to any person, partnership, association or corporation engaged in a
business or businesses in anyway, directly or indirectly, competitive to those
now or hereafter engaged in by Employer or by any of its subsidiaries during the
Term of this Agreement and during any subsequent employment of Employee by
Employer and Employee shall not engage in any such business, directly or
indirectly on his own account and, except as permitted by Section 3 of this
Agreement, Employee shall not become interested in any such business, directly
or indirectly, as an individual, partner, shareholder, director, officer,
principal, agent, employee, trustee, consultant, or in any other relationship or
capacity. For a period of two (2) years following termination of employment for
any reason, Employee shall not directly or indirectly (i) engage or otherwise be
involved in the recruitment or employment of any Employer employee or (ii)
solicit or render any service directly or indirectly to any other person or
entity with regard to soliciting any customer of the Employer during the two (2)
year period prior to termination of employment with respect to products or
services competitive with products or services of Employer. Employee shall at
no time during or after employment disclose to any person, other than Employer,
or otherwise use any information of or regarding Employer except on behalf of
Employer, nor communicate, publish, or otherwise transmit, in any manner
whatsoever, untrue information or negative, competitive, personal or other
information or comments regarding Employer. In addition, Employee agrees that
all lists, materials, books, files, reports, correspondence, records and other
documents and information ("Employer Materials") used, prepared or made
available to Employee, shall be and shall remain the property of Employer. Upon
the termination of employment of Employee or the expiration of this Agreement,
whichever is earlier, all Employer Materials shall be immediately returned to
Trans-Lux Corporation, and Employee shall not make or retain any copies thereof,
nor disclose or otherwise use any information relating to said Employer
Materials to any other party. As used herein the term Employer shall include
Employer, Employer's subsidiaries and affiliates, and any individuals employed
or formerly employed by any of them. Employer shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to obtain damages for any breach of
this Agreement, or to enjoin Employee from any breach of this Agreement, but
nothing herein contained shall be construed to prevent Employer from pursuing
such other remedies as Employer may elect to invoke. In addition to the
obligations of the Employee contained in this Agreement, Employee agrees to be
bound by the provisions contained in Exhibit A to this Agreement.
8. In the event any provision of Section 7 of this Agreement shall be held
invalid or unenforceable by reason of the geographic or business scope or the
duration thereof, such invalidity or unenforceability shall attach only to such
provision and shall not affect or render invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be construed as if the
geographic or business scope or the duration of such provision had been more
narrowly drawn so as not to be invalid or unenforceable.
9. The waiver by Employer of a breach of any provision of this Agreement by
Employee shall not operate or be construed as a waiver of any subsequent breach
by Employee.
10. Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and served personally or sent by United States
certified or registered mail, return receipt requested, or overnight courier
such as Federal Express or Airborne to his address as stated on Employer's
records, in the case of Employee, or to the office of Trans-Lux Corporation,
attention of the President and Co-Chief Executive Officer, 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000-0000, in the case of Employer, or such other address
as designated in writing by the parties.
11. This Agreement shall be construed in accordance with the laws of the
State of New York.
12. This instrument contains the entire agreement between the parties. It
may not be changed, modified, extended or renewed orally except by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification, discharge or extension is sought. IN WITNESS WHEREOF, this
Agreement has been duly executed on the day and year above written.
TRANS-LUX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
__________________________
President
/s/ Xxxx Xxxx
___________________________
Xxxx Xxxx
