Exhibt 10.1
AGREEMENT made as of the 1st day of April 2006 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
XXXXXXXXXX residing at 00 Xxxxxxx Xxxx, Xxx Xxxxxxxxx, 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 two year period
commencing as of April 1, 2006 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 and/or engineering capacity
of Employer (and such of its affiliates, divisions and subsidiaries as Employer
shall designate). Employer shall use its best efforts to cause Employee to be
elected and continue to be elected a Senior Vice President of Employer during
the Term of this Agreement. The precise services of Employee may be designated
or assigned from time to time at the direction of the Board of Directors, the
Chairman of the Board, or President, and all of the services to be rendered
hereunder by Employee shall at all times be subject to the control, direction
and supervision of the Board of Directors of Employer, to which Employee does
hereby agree to be bound. Employee shall devote his entire time, attention and
energies during usual business hours (subject to Employer's policy with respect
to holidays and illnesses for comparable executives of Employer) to the business
and affairs of Employer, its affiliates, divisions and subsidiaries as Employer
shall from time to time direct. Employee further agrees during the Term of this
Agreement to serve as an officer or director of Employer or of any affiliate or
subsidiary of Employer as Employer may request, and if Employee serves as such
officer or a director he will do so without additional compensation, other than
director's fees or honoraria, if any.
During the Term of this Agreement and during any subsequent employment of
Employee by Employer, Employee shall use his best efforts, skills and abilities
in the performance of his services hereunder and to promote the interests of
Employer, its affiliates, divisions and subsidiaries. Employee shall not,
during the Term and during any subsequent employment of Employee by Employer, be
engaged in any other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage. The foregoing shall not
be construed as preventing Employee from investing his assets in such form or
manner as will not require any services on the part of Employee in the operation
of the affairs of the companies in which such investments are made, provided,
however, that Employee shall not, either directly or indirectly, be a director
of or make any investments in any company or companies which are engaged in
businesses competitive with those conducted by Employer or by any of its
subsidiaries or affiliates except where such investments are in stock of a
company listed on a national securities exchange, and such stock of Employee
does not exceed one percent (1%) of the outstanding shares of stock of such
listed company. Employee shall not at any time during or after the Term of this
Agreement use (except on behalf of Employer) divulge, furnish or make accessible
to any third person or organization any confidential information concerning
Employer or any of its subsidiaries or affiliates or the businesses of any of
the foregoing including, without limitation, inventions, confidential methods of
operations and organization, confidential sources of supply, identity of
employees, customer 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 SIXTY
THOUSAND DOLLARS ($160,000) per annum during the period April l, 2006, to June
30, 2006; at the rate of ONE HUNDRED SIXTY-FOUR THOUSAND DOLLARS ($164,000) per
annum during the period July 1, 2006 to March 31, 2007; at the rate of ONE
HUNDRED SIXTY-EIGHT THOUSAND DOLLARS ($l68,000) per annum during the period
April 1, 2007 to March 31, 2008. Such salary shall be payable weekly, or
monthly, or in accordance with the payroll practices of Employer for its
executives. The Employee shall also be entitled to all rights and benefits for
which he shall be eligible under any stock option plan, bonus, participation or
extra compensation plans, pensions, group insurance or other benefits which
Employer presently provides, or may provide for him and for its employees
generally. This Agreement shall not be deemed abrogated or terminated if
Employer, in its discretion, shall determine to increase the compensation of
Employee for any period of time, or if the Employee shall accept such increase.
All payments under this Agreement are in United States dollars unless otherwise
specified.
(b) Employer may make appropriate deductions from the said payments
required to be made in this Section 4 to Employee to comply with all
governmental withholding requirements.
(c) If, during the Term of this Agreement and if the Employee is still
in the employ of Employer, Employee shall be prevented from performing or be
unable to perform, or fail to perform, his duties by reason of illness or any
other incapacity for (4) consecutive months (excluding normal vacation time)
during the Term hereof, Employer agrees to pay Employee thereafter during the
Term for the duration of such incapacity 35% of the base salary which Employee
would otherwise have been entitled to receive if not for the illness or other
incapacity.
(d) The Board upon the recommendation of the Compensation Committee of
the Board shall consider no later than May 31, 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 three-eighths of one percent
(.375%). for the fiscal years ending December 31, 2006, 2007, and 2008 only
(provided however, the Bonus, if any, for 2008 shall be 25% of the amount for
such year.) The Bonuses shall not exceed $20,000 for any year ($5,000 for
January 1 - March 31, 2008).
No Bonus shall be payable for any Fiscal Year in which the annual pre-tax
consolidated earnings determined in accordance with Section 4(d) 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.
Provided Employee is not in default of the Agreement, the Board may, in any
event, even if any of the aforesaid pre-tax consolidated earnings levels are not
exceeded, grant the Employee the aforesaid Bonus or any portion thereof for such
year based on his performance.
Notwithstanding anything to the contrary contained herein, if Employee is
not in the employ of Employer at the end of any aforesaid 2006 or 2007 fiscal
year or March 31, 2008, no Bonus shall be paid for such fiscal year or 2008, as
the case may be. In the event of Employee's death on or after January 1 of 2007
or 2008 or March 31, 2008, any Bonus to which he is otherwise entitled for the
prior fiscal year or 2008, as the case may be, shall be paid to his widow if she
shall survive him or if she shall predecease him to his surviving issue per
stirpes and not per capita.
Such pre-tax consolidated earnings shall be fixed and determined by the
independent certified public accountants regularly employed by Employer. Such
independent certified public accountants, in ascertaining such pre-tax
consolidated earnings, shall apply all accounting practices and procedures
heretofore applied by Employer's independent certified public accountants in
arriving at such annual pre-tax consolidated earnings as disclosed in Employer's
annual statement for that year of profit and loss released to its stockholders.
The determination by such independent certified public accountants shall be
final, absolute and controlling upon the parties. 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 Senor 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 2006, 2007 and 2008. Employer undertakes to use reasonable efforts to
cause said accountants to prepare and furnish such statements within one hundred
thirty (130) days from the close of each such fiscal year and to cause said
independent certified public accountants, concomitantly with delivery of such
statement by accountants to it, to deliver a copy of such statement to Employee.
The Employer shall not have any liability to Employee arising out of any delays
with respect to the foregoing.
(e) In the event Employee dies during the Term of this Agreement while
the Employee is still in the Employ of Employer, Employer shall pay to
Employee's widow or his surviving issue, as the case may be, for the balance of
the Term of the Agreement, or eighteen (18) months, whichever is less, annual
death benefits payable weekly or in accordance with Employer's payroll practices
in an amount equal to 35% of Employee's then annual base salary rate.
5. During the Term of this Agreement, Employer will reimburse Employee for
traveling or other out-of-pocket expenses and disbursements incurred by Employee
with Employer's approval in furtherance of the businesses of Employer, its
affiliates, divisions or subsidiaries, upon presentation of such supporting
information as Employer may from time to time request.
6. During the Term of this Agreement, Employee shall be entitled to a
vacation during the usual vacation period of Employer in accordance with such
vacation schedules as Employer may prescribe.
7. Both parties recognize that the services to be rendered by Employee
pursuant to this Agreement are extraordinary and unique. During the Term of
this Agreement, and during any subsequent employment of Employee by Employer,
Employee shall not, directly or indirectly, enter into the employ of or render
any services to any person, partnership, association or corporation engaged in a
business or businesses in anyway, directly or indirectly, competitive to those
now or hereafter engaged in by Employer or by any of its subsidiaries during the
Term of this Agreement and during any subsequent employment of Employee by
Employer and Employee shall not engage in any such business, directly or
indirectly on his own account and, except as permitted by 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 Exhibits A and B 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, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx
00000-0000, in the case of Employer, or such other address as designated in
writing by the parties.
11. This Agreement shall be construed in accordance with the laws of the
State of New York.
12. This instrument contains the entire agreement between the parties and
supersedes as of April 1, 2006 the Employment Agreement between the parties
dated April 2, 2003, effective January 1, 2003. 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 Xxxxxxxxxx
___________________________
Xxxx Xxxxxxxxxx
EXHIBIT A TO
EMPLOYMENT AGREEMENT
EFFECTIVE AS OF APRIL 1, 2006
ADDITIONAL OBLIGATIONS OF EMPLOYEE
1. All inventions, developments and improvements conceived or made by
Employee, solely or jointly with others, during the period of Employee's
employment by the Employer, whether or not conceived during business hours,
which pertain to any product, goods, apparatus, equipment, systems, methods or
processes made, used or sold by the Employer, or with regard to which the
Employer is conducting research or development work, either alone or in
cooperation with others, shall be a work made for hire, under the supervision of
the Employer, and shall be the property of the Employer, whether patentable or
not.
2. Employee agrees to promptly and voluntarily disclose to the Employer all
such inventions, developments, and improvements conceived or made by Employee
during the period of Employee's employment, and one year thereafter, and to
sign, when requested by Employer any United States and foreign patent
applications or any divisional, continuing, renewal or reissue applications
pertaining thereto, and to provide the Employer or its agents or attorneys with
all reasonable assistance in the preparation and presentation of patent or
copyright applications, drawings, specifications and the like, provided that all
fees pertaining to such applications are to be paid by the Employer. Employee
also agree to assign to the Employer all such inventions, developments and
improvements and any United States and foreign patent applications or
divisional, continuing, renewal or reissue applications pertaining thereto, and
any patent issuing thereon, and Employee agrees to sign any assignments or other
instruments that might, in the opinion of the Employer, be required to carry out
this provision. Employee will perform Employee's obligations under this
paragraph without requesting or receiving any payment therefore other than
Employee's usual salary from the Employer.
3. In any action, claim, or proceeding in which this Agreement or any
provision thereof is in issue, the parties agree that the Employer shall have
the benefit of a prima facie presumption that any invention, development or
improvement as referred to in paragraph 1 which is disclosed or offered to
others, or published or reduced to practice by Employee within a period of one
year after the termination of Employee's employment with Employer, or any such
inventions, developments or improvements disclosed in a patent application filed
by Employee within one year of the termination of Employee's employment by
Employer, was conceived or made during the period of Employee's employment.
4. All work done by Employee for the Employer relating in any way to the
conception, design, development, support, maintenance, sales or leasing of
products for the Employer is the property of the Employer and Employee hereby
assigns to the Employer all of Employee's rights therein. This paragraph
applies to work performed by Employee before and after the signing of this
Agreement.
Trans-Lux Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
________________________
President
/s/ Xxxx Xxxxxxxxxx
_________________________
Xxxx Xxxxxxxxxx
