(1)
Market value of underlying securities at fiscal year-end, minus the exercise price.
Non-Employee Director Stock Option Plan
The Board of Directors has previously established a Non-Employee Director Stock Option Plan. 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. The stockholders are being asked to consider and act upon Proposal No. 2 to approve the adoption of the 2012 Long-Term Incentive Plan, which approval is conditioned upon the approval of Proposal No. 1(a); if Proposal No. 1(a) is not approved; then Proposal No. 2 to approve the adoption of the 2012 Long-Term Incentive Plan will not pass.
Retirement Plan
The Corporation made a cash contribution of $382,000,$253,000 during 2009 and $48,000 during 2010, which iswas less than the minimum required contribution, to the Corporation'sCorporation’s retirement plan for 2008 by
September 15, 2009 for all eligible employees and the individuals listed in the Summary Compensation Table, exceptTable. The Corporation has filed requests for Mr. Brandt who previously received his
benefitswaivers of the minimum funding standard as permitted under 412(d) of the Internal Revenue Code and no longer participates.
Section 303 of the Employee Retirement Income Security Act of 1974 for both the 2009 and 2010 plan year.
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 presentsRetirement benefits are based on the final average salary for the highest five of the ten years preceding retirement. For example, estimated annual retirement benefits payable at normal retirement date, which normally is age 65. The amounts shown include estimated Social Security benefits that
would be deducted in calculating benefits65, is approximately $15,000 for an individual with ten years of credited service and with a final average salary of
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$100,000; and approximately $120,000 for an individual with 40 years of credited service and with a final average salary of $200,000. Currently, $245,000 is the legislated annual cap on determining the final average salary and $195,000 is the maximum legislated annual benefit payable under such Plan.
As of January 1, 2009, Messrs. Hirschauer, Mahoney, Miller and Mulcahy and2011, Ms. Toppi had 23, 26, 35, 35 and 1617 years of credited service, respectively.service. As of December 31, 2003, the benefit service under the pension plan had been frozen, and, accordingly, no further years of credited service have been allowed, and as of April 30, 2009, the benefit under the pension plan has been frozen, and, accordingly, there is no further increase in benefit being accrued. The normal annual retirement benefit for Ms. Toppi is approximately $36,000.
Supplemental Executive Retirement Agreement
The former President and Chief Executive Officer, Michael Mulcahy, retired on December 31, 2009. In accordance with his agreement, Mr. Mulcahy was due a Supplemental Executive Retirement Payment (“SERP”). The SERP benefit payment was due on July 1, 2010 in the amount of $353,000 plus tax effect of approximately $170,000, but has not yet been paid.
Certain Transactions
During the year 2008, $300,000 in consulting fees for consulting services
rendered by Mr. Brandt was paid by the Corporation to Moving Images, LLC, which
is owned by members of his family, which includes Mr. M. Brandt2009 and Mr. T.
Brandt, former directors2010, $141,000 and executive officers of the Corporation, as more
fully described below in the section entitled "Employment Agreements." During
the year 2008, $146,333$107,000, respectively, 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.
President.
Employment Agreements
Agreement
The Corporation hasexecuted an employment agreement with Mr. Michael R. MulcahyJ.M. Allain on February 16, 2010 for a term expiring March 31, 2010, whichon February 16, 2012. Mr. Allain was appointed as President and Chief Executive Officer of the Corporation at that time. The agreement provides for compensation at the annual rate of $307,151$250,000 through March 31, 2010, subject to annual cost-of-living
adjustments.February 16, 2012. Mr. MulcahyAllain is entitled to receive as a profit participation 2
1/2%one-time bonus of $50,000 in the event that the cash flow of the Corporation's pre-tax consolidated earningsCorporation, before financing activities and sale of real estate, exceeds $2.5 million for 2010 or 2011, during the term of the employment agreement. Payment of such bonus shall be made only once, if earnings are $500,000earned, within 120 days after the end of the period earned. In addition, Mr. Allain is entitled to receive up to $1,000,000, 3 1/4%50,000 shares of restricted Common Stock of the Corporation's pre-tax consolidated earnings if
earnings are over $1,000,000 up to $2,000,000Corporation upon achieving specified levels of Earnings Before Interest, Taxes, Depreciation and 4%Amortization (“EBITDA”), excluding (i) sales of real estate and (ii) the amount by which (x) any item or items of unusual or extraordinary gain in the aggregate exceeds 20% of the Corporation's
pre-tax consolidated earnings if earnings are over $2,000,000, with a maximumCorporation’s net book value as at the end of $150,000 forthe immediate preceding fiscal year or (y) any fiscal year. Such pre-tax consolidated earnings shall not
include any defined extraordinary or unusual items of gainunusual or extraordinary loss in the aggregate exceeds 20% of the Corporation’s net book value as at the end of the immediate preceding calendar year, in each case in (x) and (y) above as determined by accounting principles generally accepted in the United States of America, and items of gain and loss shall not be netted against each other for purpose of the above 20% calculation. Mr. Allain will receive 10,000 shares of restricted stock if EBITDA equals $4.6 million for 2010 or 2011, and for each $200,000 increase in EBITDA over $4.6 million, Mr. Allain will receive an additional 10,000 shares of restricted stock, not to exceed 50,000 shares of restricted stock in the extentaggregate. Delivery of such item exceeds 20%restricted shares shall be made within 120 days after the end of net book value.the period earned. Also, Mr. Allain executed, concurrently with his employment agreement, a restricted stock agreement, awarding him 50,000 shares of restricted stock. The restricted stock vested at the rate of 50% on February 16, 2011 and the remaining 50% vests on February 16, 2012, provided Mr. Allain is employed by the Corporation on that date. His employment agreement further provides that if Mr. Mulcahy is disabled,consistent with duties and obligations under Delaware law, the Corporation will payrecommend his nomination to him 50%
of the salaryBoard as and when a seat becomes available. Mr. Allain was appointed as a Director by the Board on June 22, 2011, thereby filling a vacancy. If Mr. Allain’s employment is terminated for any reason, 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 annualfour month’s salary for the
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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 foras severance pay equaland he has agreed to 100% of his base salary in
effect at time of termination of employment for a period of three (3) years or
until 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
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. Brandt (or a majority of
his sons if he dies or is disabled).
The Corporation has an employment agreement with Ms. Angela D. Toppi that
expired and is now on a 30-day basis, which provides for compensation at the
annual rate of $200,000. 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 Corporation has an employment agreement with Mr. Al L. Miller that expired
and is now on a 30-day basis, which provides for compensation at the annual rate
of $161,500. Mr. Miller is entitled to receive a performance bonus and sales
override target amount of earnings of $45,000 per annum. Mr. Miller is also
entitled to receiveimmediately resign as a profit participation 1/2 of 1% of the Corporation's
pre-tax consolidated earnings if earnings exceed $500,000, with a maximum of
$40,000 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 provides that
if Mr. Miller is disabled, the Corporation will pay to him 40% of the salary he
is entitled to receive for the duration of the disability during the term, but
in no event less than ninety (90) days. In the event Mr. Miller dies during
the term of said agreement, the Corporation shall pay to his beneficiary death
benefits in an amount equal to 40% of his then annual salary for the immediate
preceding fiscal year for the duration of the term.
The Corporation has an employment agreement with Mr. Thomas F. Mahoney that
expired and is now on a 30-day basis, which provides for compensation at the
annual rate of $152,000. Mr. Mahoney is entitled to receive a performance
bonus and sales override target amount of earnings of $50,000 per annum. Mr.
Mahoney is also entitled to receive as a profit participation 1/2 of 1% of the
Corporation's pre-tax consolidated earnings if earnings exceed $500,000, with a
maximum of $20,000 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
provides that if Mr. Mahoney is disabled, the Corporation will pay to him 35%
of the salary he is entitled to receive for the duration of the disability
during the term. In the event Mr. Mahoney dies during the
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term of said agreement, the Corporation shall pay to his beneficiary death
benefits in an amount equal to 35% of his then annual salary for the immediate
preceding fiscal year for the duration of the term, or eighteen (18) months,
whichever is less.
The Corporation has an employment agreement with Mr. Karl P. Hirschauer for a
term expiring March 31, 2010, which provides for compensation at the annual rate
of $171,500 through June 30, 2009 and $175,500 through March 31, 2010. Mr.
Hirschauer is entitled to receive as a profit participation 3/8% of 1% of the
Corporation's pre-tax consolidated earnings if earnings exceed $500,000, with a
maximum of $20,000 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
provides that if Mr. Hirschauer is disabled, the Corporation will pay to him
35% of the salary he is entitled to receive for the duration of the disability
during the term. In the event Mr. Hirschauer dies during the term of said
agreement, the Corporation shall pay to his beneficiary death benefits in an
amount equal to 35% of his 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 has a consulting agreement with Moving Images, LLC, a private
company owned by family members of Mr. Richard Brandt, Chairman Emeritus of the
Board. The consulting agreement, which replaced a similar agreement with Mr.
Brandt, who performs the consulting services on behalf of such company, expires
on December 31, 2014. The agreement provides for annual payments of $300,000
through December 31, 2011 and $195,000 through December 31, 2014. The agreement
contains graduated bonus provisions based on the Corporation's defined pre-tax
consolidated earnings, not to exceed $142,976, subject to cost-of-living
adjustments and provides for profit participation of 1 1/2% of the Corporation's
defined pre-tax consolidated earnings. 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. Brandt is disabled or dies during the term of said
agreement, the Corporation shall pay to Moving Images, LLC, at his then annual
consulting fee in effect, for the remaining term of the agreement. The
agreement further provides for severance pay for the term of said agreement
equal to his then annual consulting fee in effect at time of termination of
employment in a lump sum payment. If there is a "change in control" as defined
therein, or if the Corporation fails to elect Mr. Brandt to his present
positions, Moving Images, LLC has the right to receive the payments for the
balance of the term of its agreement, including certain lump sum payments
thereof. Moving Images, LLC agreed to reduce their 2008 fees by $90,406 plus
the cost-of-living adjustment.
director.
The foregoing is a summary of the agreementsagreement and reference is made to the agreements, each ofagreement which has been filed with the SEC, for the full terms thereof.
During 2009, the named executives agreed to a voluntary reduction in their
salary for ten months; and during 2008, the named executives agreed to defer
their increases for nine months. The named executives and other executives plus
Moving Images, LLC agreed to defer their increases for nine months during 2007,
for six months during 2006 and for three months during 2005, 2004 and 2003.
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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 on date of grant. The plan has
expired and no further options may be granted. Options outstanding are
exercisable during the period one to 10 years after date of grant and while the
holder is in the employ of the Corporation and survive the termination of the
plan. The Corporation has a Non-Employee Director Stock Option Plan, which
provides for the grant of incentive stock options at fair market value on date
of grant, pursuant to which the option set forth below was granted. Options
outstanding are exercisable during the period one to six years after date of
grant and while a director. There were no stock options granted in fiscal 2008
to the named executive officers or the management consultant.
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The following table sets forth information as to the named executive officers and the management consultant with respect to the value realized on exercise of
stockunexercised options and (iii)equity incentive plan awards as of the end of the fiscal year end option values.
Outstanding Equity Awards at Fiscal Year-End | ||||||||
Name | Number of Securities Underlying Unexercised Options # | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options # | Option Exercise Price $ | Option Expiration Date | Number of Shares or Units of Stock that have not Vested # | Market Value of Shares of Units of Stock that have not Vested $ | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested # | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights that have not Vested $ |
J.M. Allain………….... | - | 25,000 | - | 02/16/12 | 25,000 | 4,000 | 25,000 | 4,000 |
Angela D. Toppi…….. | 5,000 | - | 7.00 | 03/24/14 | - | - | - | - |
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FIVE-YEAR CORPORATE PERFORMANCE GRAPH
The following graph compares the Corporation'sCorporation’s total stockholder return over the five fiscal years ended December 31, 20082010 with the NYSE Amex Composite Index ("XAX"),
the Total Return Index for American Stock Exchange US ("AMEX US"(“XAX”) and the Russell 2000 Index ("(“RUSSELL 2000"2000”). The NYSE Amex has ceased to track the AMEX
US, therefore the Corporation selected the XAX as the broad market index. The stockholder return shown on the graph as "TLX"“TNLX” is not intended to be indicative of future performance of Corporation'sthe Corporation’s Common Stock.
COMPARATIVE FIVE YEAR TOTAL RETURNS*
Trans-Lux Corporation, NYSE Amex Composite Index, Russell 2000 Index**
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
XAX | 100.00 | 116.90 | 136.98 | 79.45 | 103.74 | 125.54 |
RUSSELL 2000 | 100.00 | 117.00 | 113.79 | 74.19 | 92.90 | 116.40 |
TNLX | 100.00 | 135.48 | 109.97 | 13.23 | 12.20 | 2.75 |
*
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 TNLX Common Stock, XAX and RUSSELL 2000.
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THE CORPORATION’S RESTRUCTURING TRANSACTION
The Corporation has completed the previously announced financial restructuring and recapitalization (the “Restructuring Plan”) of the Corporation. The Corporation has raised an aggregate $8,330,000 (the “Offering”) via the issuance of 416,500 shares of Series A Convertible Preferred Stock, $1.00 par value (“Preferred Stock”) having a stated value of $20.00 per share and 10,000 one-year warrants (the “A Warrants”). The Preferred Stock is convertible into fifty (50) shares of the Corporation’s Common Stock, par value $1.00 per share. Each holder of Preferred Stock shall be entitled to vote on all matters submitted to shareholders of the Corporation and shall be entitled to fifty (50) votes for each share of Preferred Stock owned at the record date. Upon filing the Corporation’s Amended and Restated Certificate of Incorporation to increase the number of shares of authorized Common Stock so that there is an adequate amount of shares of authorized Common Stock for issuance upon conversion of the Preferred Stock, the shares of Preferred Stock will be automatically converted into Common Stock (and such conversion will require no action on behalf of the Corporation or the holder of the Preferred Stock). Each share of Preferred Stock shall convert into fifty (50) shares of Common Stock of the Corporation. Each A Warrant shall entitle the holder to purchase (a) one share of the Corporation’s Common Stock and (b) a three-year warrant (the “B Warrants”), at an exercise price of $1.00 per share. At such time as the Corporation’s Amended and Restated Certificate of Incorporation is filed reducing the par value of the Common Stock to an amount equal to or less than $0.10, the exercise price of the A Warrants shall be reduced to $0.20 per share, subject to such other or further adjustments as may be provided in the A Warrants. Each B Warrant shall entitle the holder to purchase one share of the Corporation’s Common Stock at an exercise price of $1.00 per share. At such time as the Corporation’s Amended and Restated Certificate of Incorporation is filed reducing the par value of the Common Stock to an amount equal to or less than $0.10, the exercise price of the B Warrants shall be reduced to $0.50 per share, subject to such other or further adjustments as may be provided in the B Warrants.
The gross proceeds to the Corporation from the sale of the Preferred Stock offered was $8,330,000. The net proceeds of the Offering were used to fund the restructuring of the Company’s outstanding debt (the “Restructuring”), which included: (1) a cash settlement to holders of the 8¼% Limited Convertible Senior Subordinated Notes due 2012 in the amount of $2,019,600; (2) a cash settlement to holders of the 9½% Subordinated Debentures due 2012 in the amount of $71,800; (3) payment of the Company’s outstanding term loan with the senior lender in the amount of $320,833 and (4) payment of $1.0 million on the Company’s outstanding revolving loan with the senior lender under the Credit Agreement. Any net proceeds of the Offering remaining after payment to holders of the Notes, the Debentures and the senior lender will be used for working capital and other general corporate purposes.
The Placement Agent received a commission of six percent (6%) of the principal amount of Preferred Stock sold to investors not introduced to the Placement Agent by the Corporation, and two percent (2%) of the principal amount of Preferred Stock sold to investors introduced to the Placement Agent by the Corporation, for a maximum amount of commissions of $320,000. The Placement Agent also received a non-accountable expense allowance of one percent (1%) of such gross proceeds, for a maximum amount of unaccountable expenses of $80,000. The Placement Agent received $200,000 at closing and $200,000 is payable pursuant to a promissory note due 12 months from closing bearing interest at the rate of 4.0% per annum. In addition, the Placement Agent received a three (3) year warrant covering a number of the securities equal to six percent (6%) of (i) the total number of shares of Common Stock issuable upon conversion of the Preferred Stock and (ii) the A Warrants sold to investors in the Offering (the “Placement Agent Warrants”); provided, however, that for purposes of the calculation of the amount of Placement Agent Warrants issued to the Placement Agent, the maximum gross proceeds to the Corporation from the sale of the Preferred Stock offered was $8,000,000. The A Warrants issuable upon exercise of the Placement Agent Warrants (and the B Warrants issuable upon exercise of the A Warrants underlying the Placement Agent’s Warrants) are substantially the same as the A Warrants (and B Warrants) sold to the investors in the Offering, except that they shall have the following exercise periods: (i) A Warrants issuable upon exercise of the Placement Agent Warrants shall be exercisable for a period of one (1) year from the date of exercise of the Placement Agent Warrants; and (ii) the B Warrants issuable upon exercise of the A Warrants underlying the Placement Agent Warrants shall be exercisable for a period equal to the longer of (a) three (3) years from the closing date of the Offering or (b) one (1) year from the
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date or exercise of the A Warrants underlying the Placement Agent Warrants. The Placement Agent Warrants will be exercisable at a price of $0.50, and the A Warrants and B Warrants issuable upon exercise of the Placement Agent Warrants will be exercisable at a price of $1.00 per share (subject to adjustment to $0.20 per share in the case of the A Warrants and $0.50 per share in the case of the B Warrants, as described herein).
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Corporation'sCorporation’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 the NYSE Amex.SEC. 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, 2008,2009 and 2010, the Corporation'sCorporation’s executive officers and directors have complied with the Section 16(a) filing requirements.
requirements, with the exception of three Form 3s filed late due to a delay in obtaining a Securities and Exchange Commission CIK code in order to electronically file the report, although timely requested.
STOCKHOLDER PROPOSALS - 20102012/2013 ANNUAL MEETING
If any stockholder desires to submit a proposal for action at the 20102012/2013 annual meeting, such proposal must be received by the Corporation'sCorporation’s Corporate Secretary on or before December 26, 2009.September 9, 2012. Nominations for directors at the 20102012/2013 annual meeting by stockholders must be in accordance with Article 4(c) of the Corporation'sCorporation’s By-Laws and received on or before February 4, 2010.
November 25, 2012.
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'sCorporation’s regular employees in the total approximate number of 10. Solicitation will be made by mail, telephone and in person.
By Order of the Board of Directors
Angela D. Toppi
CorporateSecretary
Dated:
Norwalk, Connecticut
October 28, 2009
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January 26, 2012
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APPENDIX A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
ARTICLE
OF
TRANS-LUX CORPORATION
It is hereby certified that:
1. (a) The present name of the corporation is TRANS-LUX CORPORATION;
(b) The name under which the Corporation was originally incorporated is AMERICAN LUX PRODUCTS CORPORATION, and the date of filing the original Certificate of Incorporation of the Corporation with the Secretary of State of the State of Delaware, is the 5th day of February, 1920.
2. The provisions of the Certificate of Incorporation of the Corporation, as heretofore amended and/or supplemented, are hereby restated and integrated into the single instrument which is hereinafter set forth, and which is entitled Amended and Restated Certificate of Incorporation of TRANS-LUX CORPORATION, without further amendment and without any discrepancy between the provisions of the Certificate of Incorporation as heretofore amended and supplemented and the provisions of the said single instrument hereinafter set forth.
3. The restatement of the Certificate of Incorporation herein certified has been duly adopted by the Board of Directors pursuant to the provisions of Section 245 of the General Corporation Law of the State of Delaware in the form set forth as follows:
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
TRANS-LUX CORPORATION
FIRST: The name of this Corporation is TRANS-LUX CORPORATION, (the “Corporation”).
SECOND: Its principal office in the State of Delaware is to be located at 1013 Centre Road, in the City of Wilmington, County of New Castle, Delaware, and the name and address of its resident agent is The Prentice-Hall Corporation System, Inc. of 1013 Centre Road, in the City of Wilmington, County of New Castle, Delaware.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
FOURTH: The aggregate number of shares of stock of all classes which the Corporation shall have authority to issue is 63,500,000, consisting of 60,000,000 shares of Common Stock having a par value of $0.001 per share and 500,000 shares of Preferred Stock having a par value of $1.00 per share.
The powers, preferences and the relative, participating, optional and other rights and the qualifications, limitations and restrictions thereof, of each class of stock, and the express grant of authority to the Board of Directors to fix by resolution the designations and the powers, preferences and rights of each share of Preferred Stock and the qualifications, limitations and restrictions thereof, which are not fixed by this Certificate of Incorporation, are as follows:
A-1
A.
Common Stock
I.
Dividends.
Subject to the rights of the holders of Preferred Stock, and subject to any other provisions of this Certificate of Incorporation, as amended from time to time, holders of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor, , and provided that in no event shall dividends and other distributions be paid on any of the Common Stock unless the other such classes of stock also receive dividends and provided, further, that in the case of dividends or other distributions payable in stock of the Corporation other than Preferred Stock, including distributions pursuant to stock splits or divisions of stock of the Corporation other than Preferred Stock, only shares of Common Stock shall be distributed with respect to Common Stock.
II. Voting.
(a) At every meeting of the stockholders every holder of Common Stock shall be entitled to one (1) vote in person or by proxy for each share of Common Stock standing in his name on the transfer books of the Corporation.
(b) The provisions of this Article FOURTH PARAGRAPH A, SECTION IV(a)
CONVERSION RIGHTS
PROPOSED NEW SUBSECTION (e)
(e) Notwithstanding anything containedof the Certificate of Incorporation shall not be modified, revised, altered or amended, repealed or rescinded in this Section IV, subsection (a),
pursuant towhole or in part, without the affirmative vote of a voting majority of the shares of the Common StockStock.
(c) The Corporation may not effect or consummate:
(1) any merger or consolidation of the Corporation with or into any other corporation;
(2) any sale, lease, exchange or other disposition of all or substantially all of the assets of the Corporation to or with any other person, unless and until such transaction is authorized by the vote, if any, required by Article NINTH of this Certificate of Incorporation and by Delaware law; or
(3) any dissolution of the Corporation, unless and until such transaction is authorized by a majority of the voting majoritypower of the shares of Common Stock, but the Class Bforegoing shall not apply to any merger or other transaction described in the preceding subparagraphs (1) and (2) if the other party to the merger or other transaction is a Subsidiary of the Corporation.
For purposes of this paragraph (c) a "Subsidiary" is any corporation more than 50% of the voting securities of which are owned directly or indirectly by the Corporation; and a "person" is any individual, partnership, corporation or entity.
(d) Every reference in this Certificate of Incorporation to a majority or other proportion of shares of stock shall refer to such majority or other proportion of the votes of such shares of stock.
III. Conversion Rights. The shares of Common Stock are not convertible into any other class of stock.
IV. Liquidation Rights.
In the event of any dissolution, liquidation or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of each voting separatelyseries of Preferred Stock shall be entitled to receive, out of the net assets of the Corporation, an amount for each share equal to the amount fixed and determined by the Board of Directors in any resolution or resolutions providing for the issuance of any particular series of Preferred Stock, plus an amount equal to all dividends accrued and unpaid on shares of such series to the date fixed for distribution, and no more,
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before any of the assets of the Corporation shall be distributed or paid over to the holders of Common Stock. After payment in full of said amounts to the holders of Preferred Stock of all series, the remaining assets and funds of the Corporation shall be divided among and paid ratably to the holders of Common Stock. If, upon such dissolution, liquidation or winding up, the assets of the Corporation distributable as
B.
Preferred Stock.
The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article FOURTH, atto provide for the 2009 Annual Meetingissuance of Stockholders, immediately upon the preferred shares in series, and by filing
of a certificate pursuant to the General Corporation Law of amendment containing this subsection (e),Delaware, to establish the number of shares to be included in each sharesuch series, and to fix the designations, relative rights, preferences and limitations of Class B Stockthe shares of each such series. The authority of the Board with respect to each series shall include, but not be limited to, determination of the following:
(a) The number of shares constituting that series and the distinctive designations of that series;
(b) The dividend rate on the shares of that series, whether dividends shall be converted into 1.3cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of Common Stock (e.g. a
certificatethat series;
(c) Whether that series shall have voting rights, in addition to the voting rights provided by law and, if so, the terms of such voting rights;
(d) Whether that series shall have conversion privileges and, if so, the terms and conditions of such conversion, including provision for 100 shares of Class B Stock shall thereupon and thereafter be
deemed to represent 130 shares of Common Stock). Fractional shares shall be
valued based on the averageadjustment of the daily closing price of the Common Stock on
the five trading days immediately preceding the date of the 2009 Annual Meeting
on which sales took place.
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APPENDIX B
TRANS-LUX CORPORATION
1989 Non-Employee Director Stock Option Plan
(As amended atconversion rate in such events as the Board of Directors Meeting held
September 25, 2009shall determine;
(e) Whether or not the shares of that series shall be redeemable and, subjectif so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
(f) Whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and
(h) Any other relative rights, preferences and limitations of that series.
Dividends on outstanding preferred shares shall be declared and paid, or set apart for payment, before any dividends shall be declared and paid, or set apart for payment, on the common shares with respect to approvalthe dividend period.
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Any and all such shares issued, and for which the full consideration has been paid or delivered shall be deemed fully paid stock and the holder of such shares shall not be liable for any further call or assessment or any other payment thereon.
C.
Series A Convertible Preferred Stock Designation.
(a) Designation and Authorized Shares. The Corporation shall be authorized to issue four hundred sixteen thousand five hundred (416,500) shares of Series A Convertible Preferred Stock, par value $1.00 per share (the "Series A Preferred Stock").
(b)
Stated Value. Each share of Series A Preferred Stock shall have a stated value of twenty dollars ($20.00) (the “Stated Value”).
(c) Voting. Except as otherwise expressly required by stockholderslaw, each holder of Series A Preferred Stock shall be entitled to vote on all matters submitted to shareholders of the Corporation and shall be entitled to fifty (50) votes for each share of Series A Preferred Stock owned at the 2009 Annual Meeting.)
1. Purpose: The purposerecord date for the determination of this Planshareholders entitled to vote on such matter or, if no such record date is established, at the date such vote is taken or any written consent of shareholders is solicited. Except as otherwise required by law, the holders of shares of Series A Preferred Stock shall vote together with the holders of Common Stock on all matters and shall not vote as a separate class.
(d) Liquidation. Upon the liquidation, dissolution or winding up of the business of the Corporation, whether voluntary or involuntary, each holder of Series A Preferred Stock shall be entitled to enablereceive, for each share thereof, out of assets of the Corporation legally available therefor, a preferential amount in cash equal to (and not more than) the Stated Value. All preferential amounts to be paid to the holders of Series A Preferred Stock in connection with such liquidation, dissolution or winding up shall be paid before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Corporation to attractthe holders of (i) any other class or series of capital stock whose terms expressly provide that the holders of Series A Preferred Stock should receive preferential payment with respect to such distribution (to the extent of such preference) and keep non-employee persons(ii) the Corporation's Common Stock. If upon any such distribution the assets of requisite business experiencethe Corporation shall be insufficient to servepay the holders of the outstanding shares of Series A Preferred Stock (or the holders of any class or series of capital stock ranking on a parity with the Series A Preferred Stock as to distributions in the event of a liquidation, dissolution or winding up of the Corporation) the full amounts to which they shall be entitled, such holders shall share ratably in any distribution of assets in accordance with the sums which would be payable on such distribution if all sums payable thereon were paid in full. Any distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy or insolvency proceeding, shall be made in cash to the extent possible. Whenever any such distribution shall be paid in property other than cash, the value of such distribution shall be the fair market value of such property as determined in good faith by the Board of Directors of the Corporation by offering themCorporation.
(e) Conversion. Upon filing an opportunityamendment to participate in the growthCorporation’s Certificate of Incorporation to increase the number of shares of authorized Common Stock so that there is an adequate amount of shares of authorized Common Stock for issuance upon conversion of the Series A Preferred Stock (the “Amendment”), the shares of Series A Preferred Stock will be automatically converted into Common Stock and developmentsuch conversion will require no action on behalf of the Corporation through stock
ownership, and to thereby provide additional incentive for them to promoteor the successholder of the business.
2.Series A Preferred Stock. Each share of Series A Preferred Stock shall convert into fifty (50) shares of Common Stock of the Corporation.
The Corporation and its transfer agent, if any, for the Series A Preferred Stock may deem and treat the record holder of any shares of Series A Preferred Stock as reflected on the books and records of the Corporation as the sole true and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.
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(g) Reservation. Subject to filing of the Plan: TheAmendment, the Corporation shall at all times reserve from its authorized Common Stock a sufficient number of shares to provide for conversion of all Series A Preferred Stock from time to time outstanding
(h) Restriction and Limitations. Except as expressly provided herein or as required by law so long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not, without the vote or written consent of the holders of at least a majority of the then outstanding shares of the Series A Preferred Stock, take any action which would adversely and materially affect any of the preferences, limitations or relative rights of the Series A Preferred Stock, including without limitation cancel or modify adversely and materially the voting rights as provided in Section 3 herein.
(i) Amendment. The provisions hereof and the Certificate of Incorporation, as amended, of the Corporation shall not be amended in any manner which would adversely affect the rights, privileges or powers of the Series A Preferred Stock without, in addition to any other vote of stockholders required by law, the affirmative vote of the holders of a majority of the outstanding shares of Series A Preferred Stock, voting together as a single class.
(j) Certain Adjustments.
(i)
Stock Dividends and Stock Splits. If the Corporation, at any time while the Series A Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation pursuant to be offeredthe Series A Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Corporation, each share of Series A Preferred Stock shall receive such consideration as if such number of shares of Series A Preferred Stock had been, immediately prior to such foregoing dividend, distribution, subdivision, combination or reclassification, the holder of one share of Common Stock. Any adjustment made pursuant to this PlanSection shall be sharesbecome effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
(ii)
Fundamental Transaction. If, at any time while the Series A Preferred Stock is outstanding, (A) the Corporation effects any merger or consolidation of the Corporation's authorized common capital stock,
and may be unissued sharesCorporation with or reacquired shares. The aggregate number of shares
which may be delivered upon exerciseinto another Person, (B) the Corporation effects any sale of all options granted underor substantially all of its assets in one transaction or a series of related transactions, (C) any tender offer or exchange offer (whether by the PlanCorporation or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of this Series A Preferred Stock, the Holders shall not be more than 30,000 shares, subjecthave the right to adjustment as provided in the Plan.
Shares subject to but not delivered under any option terminating or expiringreceive, for any reasoneach Share of Common Stock that would have been issuable upon such conversion immediately prior to the exercise thereofoccurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock.
(k) Distribution. If the Corporation shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by the optionee in full shall be deemed
available for options thereafter granted during the continuanceway of the Plan.
3. Administrationreturn of the Plan: The Compensation Committee of the Board of
Directors (hereinafter called "Committee"), subjectcapital or otherwise (including any dividend or distribution to the provisionsCorporation’s stockholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Plan,holders of Series A Preferred Stock shall have plenary authority in its sole discretion to interpret the Plan;
and to prescribe, amend, and rescind rules and regulations relating to it.
4. Non-Employee Directors to Whom Options May be Granted: Subject to the terms
and conditions set forth herein, the Corporation:
(a) hereby grants to each new Non-Employee Director who becomes a member
of the Board following September 25, 2009, options to purchase shares based on
the following schedule of Years of Service which each such person has served as
a member of the Board.
Years of Service No. of Options (Cumulative)
---------------- ---------------------------
Less than 5 500
5 or more 1,000
10 or more 1,500
20 or more 2,500
(b) shall grant to each Non-Employee Director who receives an option
hereunder an option to purchase additional shares based on the following
schedule of Years of Service which each such person has served as a member of
the Board after the Effective Date.
Years of Service No. of Options (Non-Cumulative)
---------------- -------------------------------
5th full year 500
10th full year 500
20th full year 1,000
(c) shall grant to each Non-Employee Director who is hereafter elected
to the Board an option to purchase 500 shares on the date of election to the
Board. Such persons shall also be entitled to such Distribution, to receive the grantamount of options in
accordance with (b) above.
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For purposes hereof, Year of Service shall mean a calendar year or aggregate
portions thereof duringsuch assets which a Director is a Non-Employee Director. A
Non-Employee Director shall mean a person who is or becomes a Director of the
Corporation and is not an employee of the Corporation.
(d) shall grant to each Non-Employee Director additional options to
purchase additional shares in an amount equal to (i) the number of options
granted under Section 4(a) (x) whichwould have previously expired, on the effective
date of this amendmentbeen payable to the Plan, or (y) which hereafter expire, on the date
of expiration of such option, and (ii) which were heretofore exercised or
hereafter are exercised, on the laterholder with respect to occur of (x) four (4) years from the
date of grant, (y) the date of exercise of such exercised option or (z) the
effective date of this amendment to the Plan.
5. Option Price: The purchase price of the shares of Common Stock which shall
be covered by each option shall be 100% ofissuable upon conversion had such holder been the fair market value
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holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.
D.
Authorized Shares of Capital Stock.
Except as may be provided in the terms and conditions fixed by the Board of Directors for any series of Preferred Stock, and in addition to any other vote that may be required by statute, stock exchange regulations, this Certificate of Incorporation or any amendment hereof, the number of authorized shares of any class or classes of stock of the dateCorporation may be increased or decreased by the affirmative vote of the grantingholders of a majority of the option. Such fair market valueoutstanding shares of stock of the Corporation entitled to vote.
FIFTH: The business and affairs of the Corporation shall be deemed to bemanaged by or under the meandirection of the highBoard of Directors. In addition to the powers and low pricesauthority expressly conferred upon them by Statute or by this Certificate of Incorporation or the by-laws of the Common StockCorporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation. Election of thisdirectors need not be by written ballot unless the by-laws so provide.
SIXTH: The Corporation as quoted on a national securities exchange(s) onis to have perpetual existence.
SEVENTH: The private property of the day on whichstockholders of the option shall be granted and such option by its termsCorporation shall not be exercisable aftersubject to the expirationpayment of six (6) years fromcorporate debts to any extent whatsoever.
EIGHTH: The number of directors of the date such option is
granted.
6. Duration of Options: The duration of each optionCorporation shall be not moresuch number no less than six
(6) years from the date of the granting thereof, but may be for a lesser termfive (5) and no greater than fifteen (15) as shall be fixed by the by-laws and may be altered from time to time as may be prescribed in the by-laws. In case of any increase in the number of directors, the additional directors may be elected, as provided in the by-laws, by the Board of Directors, butor, at any meeting of the stockholders, by the stockholders entitled to vote thereat. Directors need not be stockholders.
Directors shall be subjectdivided into three classes, each class to earlier
termination as hereinafter provided.
7. Exercisebe determined by the directors prior to the election of Options: An option when and after it becomes exercisable may be
exerciseda particular class. In the event that at any time or from time to time duringthe number of directors is increased, the newly created directorships resulting therefrom shall be filled by a vote of the majority of the directors in office immediately prior to such increase, and directors so elected shall serve until the term of the class to which they are assigned expires. Vacancies in any class of directors shall be filled by the vote of the remaining directors, and directors so elected shall serve until the term of such class expires. At the 2010/2011 Annual Meeting of Stockholders, Class A directors shall be elected to a term of three years, Class B directors to a term of two years, and Class C directors to a term of one year; and at each subsequent annual meeting, the successors to directors whose terms shall expire that year shall be elected to a term of three years.
NINTH: (1) Except as set forth in Part (2) of this Article, the affirmative vote of four-fifths (4/5) of the outstanding stock entitled to vote in elections of directors (considered for this purpose as one class) shall be required for:
(a) any merger or consolidation to which the corporation, or any of its term assubsidiaries, and an Interested Person (as hereinafter defined) are parties;
(b) any sale or other disposition by the corporation, or any of its subsidiaries, of all or substantially all of its assets to an Interested Person;
(c) any partpurchase or other acquisition by the corporation, or any of its subsidiaries, of all or substantially all of the sharesassets of an Interested Person; or
(d) any other transaction with an Interested Person which requires the approval of the stockholders of the Corporation under the Delaware Corporation Law.
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(2) The provisions of Part (1) of this Article shall not be applicable to any transaction described therein, if such transaction is approved by resolution of the Board of Directors of the corporation, provided that a majority of the members of the Board of Directors voting for the approval of such transaction were duly elected and acting members of the Board of Directors prior to the date that the person, firm or corporation, or any group thereof, with whom such transaction is proposed, became an Interested Person.
(3) As used in this Article, the term “Interested Person” shall mean any person, firm or corporation, or any group thereof, whether acting singly or in concert, which owns of record or beneficially, directly or indirectly, ten (10%) percent or more of any class of voting securities of the corporation. As used in this Article the term "Interested Person" shall include, in addition to an Interested Person, any person directly or indirectly controlling or controlled by the Interested Person, or any person under direct or indirect common control with the Interested Person.
(4) For purposes of this Article, the Board of Directors shall have the power to determine, on the basis of information known to the Board, if and when there is an Interested Person. Any such determination shall be optioned, provided, however, that:
(a) an optionconclusive and binding for all purposes of this Article.
TENTH: In addition to any other vote that may not be exercisedrequired by statute, stock exchange regulations, this Certificate of Incorporation or any amendment hereof, or the by-laws of the corporation, the vote of the holders of four-fifths (4/5) of all classes of stock of the Corporation entitled to vote in elections of directors (considered for this purpose as one class) shall be required to less than 100amend, alter, change or repeal Article EIGHTH, Article NINTH or this Article TENTH of this Certificate of Incorporation.
ELEVENTH: No holder of stock of the Corporation of whatsoever class shall have any pre-emptive right of subscription of any shares of any class of the stock of the corporation, at any one
time (orissued or sold, or to any obligations convertible into such stock, or any right of subscription to any thereof, other than such, if any, as the remainingBoard of Directors in its discretion may determine and any shares then purchasable underof stock, or obligations convertible into such stock, which the option ifBoard of Directors may determine to offer for subscription may be offered to any class of stock to the same be
less than 100 shares);
(b) the purchase priceexclusion of the shares as to which an option shall be
exercised shall be paid in full in cash and/or by delivery ofother.
The Common Stock of the Corporation valuedwithout nominal or par value may be issued, from time to time, for such consideration as may be fixed, from time to time, by the Board of Directors of the Corporation.
In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized:
To make and alter the by-laws of the Corporation subject to the power of the stockholders, at the time entitled to vote, to alter or repeal by-laws made by the Board of Directors;
To fix the amount to be reserved as working capital and, subject to the other provisions of this Certificate of Incorporation, to authorize and cause to be executed mortgages and liens upon the property and franchises of the corporation;
If a resolution passed by majority of the whole Board so provides, to designate two or more of their number to constitute an executive committee, which committee shall for the time being, to the extent provided in said resolution or in the by-laws of the corporation, have and exercise any or all of the powers of the Board of Directors in the management of the business and affairs of the Corporation and have power to authorize the seal of the Corporation to be affixed to all papers which may require it;
From time to time to determine whether, to what extent, at what times and places and under what conditions and regulations the books and accounts of the corporation, or any of them, other than the stock ledger, shall be open to the inspection of the stockholders; and no stockholder shall have the right to inspect any account or book or document of the corporation, except as conferred by law or authorized by resolution of the directors or of the stockholders.
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If the by-laws so provide, the stockholders and directors shall have power to hold their meetings, to have an office or offices and to keep the books of the Corporation (subject to the provisions of the statutes of the State of Delaware) outside of the State of Delaware at such places as may from time to time be designated by them, whether within or without the United States of America.
The Corporation may in its by-laws confer powers additional to the foregoing upon the directors, in addition to the powers and authority expressly conferred upon them by law.
No contract or other transaction between the Corporation and any other corporation and no act of the Corporation shall in any way be affected or invalidated by the fact that any of the directors of the Corporation are pecuniarily or otherwise interested in, or are directors of or officers of, such other corporation; any director individually, or any firm of which any director may be a member, may be a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the corporation, provided that the fact that he or such firm is so interested shall be disclosed or shall have been known to the Board of Directors or a majority thereof; and any director of the Corporation who is also a director or officer of such other corporation or who is so interested may be counted in determining the existence of a quorum at any meeting of the Board of Directors of the Corporation which shall authorize any such contract or transaction, and may vote thereat to authorize any such contract or transaction, with like force and effect as if he were not such director or officer of such other corporation or not so interested.
TWELFTH: No director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction for which the director derived an improper personal benefit.
Signed on March , 2012
Angela D. Toppi, Executive Vice President
AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION OF TRANS-LUX CORPORATION
(UNDER SECTION 245 OF THE DELAWARE
GENERAL CORPORATION LAW)
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APPENDIX B
TRANS-LUX CORPORATION
2012 LONG-TERM INCENTIVE PLAN
ARTICLE 1
GENERAL PLAN INFORMATION
1.1 Background. The Plan permits the grant to Employees and Directors of equity-based incentive compensation opportunities, including Restricted Stock, Restricted Stock Units, Options, ISOs, NQSOsand Other Awards.
1.2 Objectives. The objectives of the Plan are to optimize the profitability and growth of the Company through long-term incentives that are consistent with the Company's goals and that link the interests of Participants to those of the Company's stockholders; to provide Participants with incentives for excellence in individual performance; to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Participants who make significant contributions to the Company's success; and to allow Participants to share in the success of the Company.
1.3 Duration of the Plan. The Plan shall be effective on the date on which it is approved by stockholders. The Plan shall remain in effect until terminated pursuant to Article 15, subject to the right of the Committee to amend or terminate the Plan at any time or until there are no more Shares available for issuance under the Plan.
ARTICLE 2
DEFINITIONS
As used herein, the masculine includes the feminine and the singular includes the plural, and vice versa, and the following terms shall have the meanings set forth below, unless otherwise clearly required by the context.
2.1 “Award” means a grant under the Plan of Options, Restricted Stock, Restricted Stock Units and Other Awards.
2.2 “Award Agreement” means an agreement entered into by the Company and a Participant, or another instrument prepared by the Company in lieu of such an agreement, setting forth the terms and conditions applicable to an Award pursuant to the Plan. An Award Agreement may be in hard copy, electronic form or such other form as the Company may permit.
2.3 “Board” means the Board of Directors of the Company.
2.4 “Change of Control” unless otherwise defined by the Committee shall be deemed to have occurred if and when, after the Effective Date: the Company's stockholders approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 60% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or the Company's stockholders approve a plan of complete liquidation of the Company or an agreement of sale or disposition of all or substantially all of the Company's assets.
2.5 “Code” means the Internal Revenue Code of 1986, as amended.
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2.6 “Committee” means the Compensation Committee of the Board or any other committee appointed by the Board to administer the Plan and Awards to Participants who are Employees or Directors.
2.7 “Company” means Trans-Lux Corporation, a Delaware corporation, and any successor thereto.
2.8 “Director” means a member of the Board.
2.9 “Effective Date” means the date the Plan becomes effective in accordance with Section 1.3.
2.10 “Employee” means any employee of the Company or a Subsidiary.
2.11 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
2.12 “Fair Market Value” means, as of any date, the value of the respective class of Shares determined as follows:
a) if the respective Shares are listed on any established stock exchange or a national market system, including without limitation, NYSE American Exchange, its fair market value will be the closing sales price of such respective Shares (or the closing bid, if no sales were reported) as quoted on such system or exchange (or the exchange or system with the greatest volume of trading in the respective Shares) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Committee or Board deems reliable; or
b) if the respective Shares are regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer (including the pink sheets), but selling prices are not reported, the fair market value of such Common Stock as
determined in paragraph 5respective Shares will be the mean between the high bid and high asked prices for such Shares on the date of exercise;
(c) eachdetermination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Committee or the Board deems reliable; or
c) in the absence of an established market for such respective Shares of the type described in (a) and (b), above, the fair market value thereof will be determined by the Committee or the Board in good faith.
2.13 “ISO” means an Option that is designated by the Committee as an "incentive stock option" within the meaning of Section 422 of the Code.
2.14 “NQSO” means an Option that is not designated by the Committee as an ISO and is therefore a “nonqualified stock option.”
2.15 “Option” means an incentive stock option or a nonqualified stock option granted pursuant to the Plan.
2.16 “Other Award” means an Award granted to a Participant pursuant to Article 8.
2.17 “Participant” means an Employee or Director who has been selected to receive an Award or who holds an outstanding Award.
2.18 “Performance-Based Exception” means the performance-based exception from the tax deductibility limitation imposed by Code Section 162(m), as set forth in Code Section 162(m)(4)(C).
2.19 “Plan” means the Trans-Lux Corporation 2012 Long-Term Incentive Plan, as it is set forth herein and as it may be amended and restated from time to time.
2.20 “Restricted Stock” means an Award granted pursuant to Section 7.1.
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2.21 “Restricted Stock Unit” means an Award granted pursuant to Section 7.5.
2.22 “Restricted Period” means the period during which the transfer of Shares of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance goals or the occurrence of other events determined by the Committee in its discretion) and the Shares are subject to a substantial risk of forfeiture, as provided in Article 7.
2.23 “Share” means a share of the Company's Common Stock, $0.001 par value per share, as the case may be.
2.24 “Share Pool” means the number of Shares available under Section 4.1, as adjusted pursuant to Section 4.3.
2.25 “Subsidiary” means a corporation, partnership, joint venture or other entity in which the Company has a direct or indirect ownership interest of at least fifty percent (50%) provided that the Shares subject to any Award constitute "service recipient stock" for purposes of Section 409A of the Code or otherwise do not subject the Award to Section 409A of the Code.
2.26 “Ten Percent Stockholder” means a Participant who owns stock of the Company possessing more than ten percent of the total combined voting of all classes of stock of the Company or its parent or subsidiary corporation (within the meaning of Section 422(b) of the Code).
ARTICLE 3
ADMINISTRATION
3.1 General. Except as otherwise determined by the Board in its discretion, the Plan shall be administered by the Committee provided that the Board may, in its sole discretion, make Awards under the Plan.
3.2 Authority of the Committee. Except as limited by law or by the Certificate of Incorporation or By-Laws of the Company, and subject to the following additionalprovisions hereof, the Committee shall have full power in its discretion to select Employees or Directors who shall participate in the Plan; determine the sizes and types of Awards; determine the terms and conditions precedentof Awards in a manner consistent with the Plan; construe and restrictions thereoninterpret the Plan and any Award Agreement or other agreement or instrument entered into or issued under the Plan; establish, amend or waive rules and regulations for the Plan’s administration; amend the terms and conditions of any outstanding Award; determine whether and on what terms and conditions outstanding Awards will be adjusted for dividend equivalents (i.e., a credit, made at the discretion of the Committee, to the account of a Participant in an amount equal to the cash dividends, if any, paid on one Share for each Share represented or covered by an outstanding Award held by the Participant); and establish a program pursuant to which designated Participants may receive an Award under the Plan in lieu of compensation otherwise payable in cash. Further, the Committee shall make all other determinations that may be necessary or advisable for the administration of the Plan.
3.3 Delegation of Authority. Subject to the requirements of applicable law, the Committee may delegate to any person or group or subcommittee of persons (who may, but need not be members of the Committee) such Plan-related functions within the scope of its responsibility, power and authority as it deems appropriate. Without limiting the foregoing, the Committee may delegate administrative duties to such person or persons as it deems appropriate. The Committee may not delegate its authority with respect to (a) non-ministerial actions with respect to individuals who are subject to the reporting requirements of Section 16(a) of the Exchange Act; (b) non-ministerial actions with respect to Awards that are intended to qualify for the Performance-Based Exception and (c) certifying the satisfaction of performance goals and other material terms attributable to Awards intended to qualify for the Performance-Based Exception.
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3.4 Decisions Binding. All determinations and decisions made by the Committee, and all related orders and resolutions of such committee shall be final, conclusive and binding on all persons.
3.5 Performance-Based Awards. For purposes of the Plan, it shall be presumed, unless the Committee indicates to the contrary, that all Awards to Employees are intended to qualify for the Performance-Based Exception. If the Committee does not intend an Award to an Employee to qualify for the Performance-Based Exception, the Committee shall reflect its exercise:
(i) Each Non-Employee Directorintent in its records in such manner as the Committee determines to be appropriate.
ARTICLE 4
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 Number of Shares Issuable under the Plan. Shares that may be issued pursuant to Awards may be either authorized and unissued Shares, or authorized and issued Shares held in the Company's treasury, or any combination of the foregoing. Subject to adjustment as provided in Section 4.3, there shall be reserved for issuance under Awards an aggregate of 5,000,000 shares of Common Stock. For the purposes hereof, the following Shares covered by previously-granted Awards will be deemed not to have been issued under the Plan and will remain in the Share Pool: (a) Shares covered by the unexercised portion of an Option that terminates, expires, is canceled or is settled in cash, (b) Shares forfeited or repurchased under the Plan, (c) Shares covered by Awards that are forfeited, canceled, terminated or settled in cash, and (d) Shares withheld in order to pay the exercise or purchase price under an Award or to satisfy the tax withholding obligations associated with the exercise, vesting or settlement of an Award.
4.2 Individual Award Limitations. The maximum aggregate number of Shares that may be granted to any one Participant in any one year under the Plan with respect to Options shall be 2,000,000. The maximum aggregate number of Shares that may be granted to any one Participant in any one year with respect to Restricted Stock or Restricted Stock Units shall be 2,000,000. There are no cash awards under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Code Section 368) or any partial or complete liquidation of the Company, such adjustment shall be made in the number and class of Shares available for grant under Section 4.1, in the number and class of and/or price of Shares subject to outstanding Awards, and in the per-Participant Award limits set forth in Section 4.2 hereof, as may be determined to be appropriate and equitable by the Committee, in its discretion, to prevent dilution or enlargement of the benefits available under the Plan and of the rights of Participants; provided that the number of Shares subject to any Award shall always be a whole number. In a stock-for-stock acquisition of the Company, the Committee may, in its discretion, substitute securities of another issuer for any Shares subject to outstanding Awards.
ARTICLE 5
ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. All Employees or Directors are eligible to participate in the Plan. Only Employees or Directors of the Company or a Subsidiary may be granted ISOs.
5.2 Actual Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from all Employees or Directors those to whom Awards shall be granted and shall determine the nature and size of each Award.
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ARTICLE 6
STOCK OPTIONS
6.1 Grant of Options. Subject to the terms of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee.
6.2 Option Exercise Price. The Option exercise price under each Option shall not be less than one hundred percent (100%) of the Fair Market Value of the respective Share on the date the Option is granted. Notwithstanding the foregoing, in the case of an optionISO granted to a Ten Percent Stockholder, the Option exercise price under each ISO shall not be less than one hundred ten percent (110%) of the Fair Market Value of the respective Share on the date the Option is granted. The Board and the Committee may not reprice Options granted under the Plan, must remaineither by amending an existing award agreement or by substituting a new Award at a lower price.
6.3 Term of Options. Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant provided that no Option shall be exercisable after the tenth (10th) anniversary of its date of grant. Notwithstanding the foregoing, in the case of an ISO granted to a DirectorTen Percent Stockholder, the Option shall not be exercisable after the fifth (5th) anniversary of its date of grant.
6.4 Exercise of Options. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant. Options shall be exercised by the delivery of a written notice of exercise to the Company, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.
6.5 Payment. The purchase price for the Shares as to which an Option is exercised shall be paid to the Company in full at the time of exercise as follows:
a) in cash or its equivalent;
b) at the discretion of the CorporationCommittee, in Shares having a Fair Market Value equal to the aggregate Option exercise price for one year from the date
the option is granted orShares being purchased and satisfying such shorter periodother requirements as permittedmay be imposed by the Committee before he shall(which Shares may be previously owned or may be Shares that would otherwise have the right tobeen issuable upon exercise any part thereof. Thereafter all or
any part of the shares coveredOption if the exercise price had been paid in cash);
c) at the discretion of the Committee, partly in cash or its equivalent and partly in Shares;
d) through the delivery of irrevocable instructions to a broker to deliver promptly to the Company an amount equal to the aggregate Option exercise price for the Shares being purchased or
e) through such other means as shall be prescribed in the Award Agreement or by each optionthe Committee or the Board.
Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment of the Option exercise price, the Company may bedeliver to the Participant, in the Participant’s name (or, at the direction of the Participant, jointly in the names of the Participant and the Participant’s spouse), one or more Share certificates for the Shares purchased at any time orunder the Option(s).
6.6 Limitations on ISOs. Notwithstanding anything in the Plan to the contrary, to the extent required from time to time by the Code and/or applicable regulations, the following additional provisions shall apply to the grant of Options that are intended to qualify as ISOs:
Fair Market Value Limitation. The aggregate Fair Market Value (determined as of the date the ISO is granted) of the Shares with respect to which ISOs are exercisable for the first time by any Participant
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during any calendar year (under all plans of the option period,Company (or any parent or subsidiary corporation within the meaning of Code Section 424) shall not exceed one hundred thousand dollars ($100,000) or such other amount as may subsequently be specified by the Code and/or applicable regulations; provided however, that, to the extent that such limitation is exceeded, any Options on Shares with a Fair Market Value in excess of such amount shall be deemed to be NQSOs.
Code Section 422. ISOs shall contain such other provisions as the Committee shall deem advisable, but shall in all events be consistent with and contain or be deemed to contain all provisions required in order to qualify as incentive stock options under Section 422 of the Code. Only Employees may receive ISOs. Moreover, no optionISOs may be exercised unlessgranted more than ten (10) years from the optioneeearlier of the date on which the Plan was adopted by the Board or the date the Plan received stockholder approval.
ARTICLE 7
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
7.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to Participants in such amounts as the Committee shall determine.
7.2 Restrictions. The Committee shall impose such conditions and/or restrictions on any Shares of Restricted Stock as the Committee may determine including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock, transfer restrictions, restrictions based upon the achievement of specific performance goals, time-based restrictions and/or restrictions under applicable federal or state securities laws.
The Company may retain the certificates representing Shares of Restricted Stock in the Company's possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied.
Except as otherwise provided in this Article and subject to satisfaction of applicable tax withholding requirements, Shares of Restricted Stock that have not yet been forfeited or canceled shall become freely transferable (subject to any restrictions under applicable securities laws) by the Participant if and when the Shares become vested and the applicable restrictions lapse.
7.3 Voting Rights. At the discretion of the Committee, Participants holding Shares of Restricted Stock may be granted full voting rights with respect to those Shares.
7.4 Dividends and other Distributions. At the discretion of the Committee, the holder of Shares of Restricted Stock may be credited with any cash dividends paid with respect to such Shares. The Committee may apply any restrictions to the dividends that the Committee deems appropriate. Without limiting the generality of the preceding sentence, if the grant or vesting of Restricted Stock is atdesigned to comply with the requirements of the Performance-Based Exception, the Committee may apply any restrictions it deems appropriate to the payment of dividends declared with respect to such Restricted Stock, so that the dividends and/or the Restricted Stock shall be eligible for the Performance-Based Exception.
7.5 Restricted Stock Units. The Committee may grant Restricted Stock Units to any Participant, subject to the terms and conditions of this Article being applied to such Awards as if those Awards were for Restricted Stock and subject to such other terms and conditions as the Committee may determine (including, but not limited to, requiring or permitting deferral of the payment of such Awards after the time that Participants become vested in them, notwithstanding any provision to the contrary in Section 7.2 above). Each Restricted Stock Unit shall have the value of one respective Share. Unless the Committee in its discretion determines otherwise, the holder of Restricted Stock Units shall not have any rights of a Stockholder (including, without limitation, dividend rights and voting rights) with respect to the Shares covered by the Restricted Stock Units. Restricted Stock Units may be paid at such time as the Committee may determine in its discretion and payments may be made in cash, Shares, or a combination thereof, as determined by the Committee in its
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discretion. Restricted Stock Units that become vested must be settled by the 15th day of the third month following the calendar year in which such vesting occurs. Alternatively, the Award may provide for deferred settlement, provided that the deferral election(s) and designated settlement date(s) or event(s), as well as the Award Agreement itself, satisfy the election, distribution timing and documentation requirements of Section 409A of the Code.
ARTICLE 8
OTHER AWARDS
Subject to the terms of the Plan, the Committee may grant any types of Awards other than those that are specifically set forth in Articles 6 through 7 hereof, including, but not limited to, the payment of Shares in lieu of cash under any Company incentive bonus plan or program. Subject to the terms of the Plan, the Committee, in its sole discretion, shall determine the terms and conditions of such Other Awards.
ARTICLE 9
AWARD AGREEMENTS
9.1 In General. Each Award shall be evidenced by an Award Agreement that shall include such provisions as the Committee shall determine and that shall specify –
in the case of an Option, the number of respective Shares to which the Option pertains, the Option exercise a Directorprice or grant price, the term of the Corporation.
(ii) No optionOption, the schedule on which the Option becomes exercisable and whether it is intended to be an ISO or an NQSO;
in the case of Restricted Stock or Restricted Stock Units, the number of respective Shares of Restricted Stock or Restricted Stock Units granted, the applicable restrictions and the Restriction Period(s).
9.2 Severance from Service. Each Award Agreement shall set forth the extent to which the Participant shall have rights under the Award following the Participant’s severance from service with the Company and its Subsidiaries (within the meaning of Section 409A of the Code). The Award Agreement may make distinctions based on the reason for the Participant’s severance from service (subject to Section 409A of the Code).
9.3 Restrictions on Transferability. Subject to the provisions of the Plan, each Award Agreement shall set forth such restrictions on the transferability of the Award and on the transferability of Shares acquired pursuant to the Award as the Committee may deem advisable, including, without limitation, restrictions under applicable securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or then traded, and under any blue sky or state securities laws applicable to such Shares. In the case of an ISO (and in the case of any other Award, except as otherwise provided in the Award Agreement), a Participant’s Award may not be transferable by an optioneesold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by Willwill or by the laws of descent and distribution, and isshall be exercisable during optionee'sthe Participant’s lifetime only by the optionee.
(iii) Participant.
9.4 Uniformity Not Required. The provisions of the Award Agreements need not be uniform among all Awards, among all Awards of the same type, among all Awards granted to the same Participant or among all Awards granted at the same time.
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ARTICLE 10
PERFORMANCE MEASURES
10.1 Performance Criteria. Unless and until the Company's stockholders approve a change in the general performance measures set forth in this Article 10, the attainment of which may determine the degree of payout and/or vesting with respect to Awards that are designed to qualify for the Performance-Based Exception, the performance measure(s) to be used for purposes of such grants may be measured or applied to an individual, a business unit or division, the Company and any one or more of its subsidiaries, or such other operating units as the Committee may designate, may be expressed in absolute or relative terms, and shall be chosen from among, and may include any combination of, the following:
-income measures (including, but not limited to, gross profit, operating income, earnings before or after taxes, profits before or after taxes, net income or earnings per share);
-return measures (including, but not limited to, return on assets, investment, equity or sales or pre-tax margin);
-cash flow thresholds;
-gross revenues;
-sales results;
-market share results;
-economic value added; or
-share price (including, but not limited to, growth measures and total stockholder return).
10.2 Adjustments. The Committee shall have the discretion to adjust the determinations of the degree of attainment of the pre-established performance goals; provided that Awards that are designed to qualify for the Performance-Based Exception may not be adjusted upward (although the Committee shall retain the discretion to adjust such Awards downward).
10.3 Certification. In the case of any Award that is granted subject to the condition that a specified performance measure be achieved, no payment under such Award shall be made prior to the time that the Committee certifies in writing that the performance measure has been achieved. For this purpose, approved minutes of the Committee meeting at which the certification is made shall be treated as a written certification. No such certification is required, however, in the case of an Award that is based solely on an increase in the value of a Share from the date such Award was made.
ARTICLE 11
BENEFICIARY DESIGNATION
Each optioneeParticipant may, from time to time, name any beneficiary or beneficiaries to whom any benefit under the Plan is to be paid in case of the Participant’s death before the Participant receives any or all of such benefit. Each such designation shall agreerevoke all prior designations by the same Participant with respect to such benefit, shall be in a form prescribed by the Company, and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such designation, any benefits remaining unpaid under the Plan at the Participant’s death shall be paid to the Participant’s estate unless otherwise provided in the Award Agreement.
ARTICLE 12
DEFERRALS
The Committee may permit or require a Participant to defer receipt of the payment of cash or the delivery of Shares that optionee will purchasewould otherwise be due pursuant to the optionedterms of an Award, provided, however, that any such deferral arrangement shall be structured in a manner that is intended to satisfy the election and distribution timing and documentation requirements of Section 409A of the Code.
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ARTICLE 13
NO RIGHT TO EMPLOYMENT OR PARTICIPATION
13.1 Employment. The Plan shall not interfere with or limit in any way the right of the Company or of any Subsidiary to terminate any Employee's employment at any time, and the Plan shall not confer upon any Employee the right to continue in the employ of the Company or of any Subsidiary.
13.2 Participation. No Employee shall have the right to be selected to receive an Award or, having been so selected, to be selected to receive a future Award.
ARTICLE 14
CHANGE OF CONTROL
In the event of a Change of Control, the Board may in its sole discretion direct that (a) all option holders shall be permitted to exercise their outstanding Options in whole or in part (whether or not otherwise exercisable) immediately prior to such Change of Control or (b) if, as part of a Change of Control transaction, the stockholders of the Company receive capital stock of another corporation ("Exchange Stock") in exchange for their Shares (whether or not such Exchange Stock is the sole consideration), the Board may direct that all options for Shares that are outstanding at the time of the Change of Control transaction shall be converted into options (as the case may be) for shares for investmentof Exchange Stock, such that the vesting and other terms and conditions of the converted options shall be substantially the same as the vesting and corresponding other terms and conditions of the original options. The Board, acting in its discretion, may accelerate vesting of other non-vested awards, and cause cash settlements and/or other adjustments to be made to any outstanding awards (including, without limitation, options) as it deems appropriate in the context of a Change of Control transaction, taking into account with respect to other awards the manner in which outstanding options are being treated. To the extent determined by the Committee, any outstanding options that are not exercised before a Change of Control described in Section 2.5(c) or (d) shall thereupon terminate.
ARTICLE 15
AMENDMENT AND TERMINATION
15.1 Amendment and Termination. Subject to the terms of the Plan, the Committee may at any time and from time to time alter, amend, suspend or terminate the Plan in whole or in part; provided that, unless the Committee specifically provides otherwise, any revision or amendment that would cause the Plan to fail to comply with any present intention to resellrequirement of applicable law, regulation or rule if such amendment were not approved by the shares.
(iv) No shares acquiredStockholders of the Company shall not be effective unless and until stockholder approval is obtained.
15.2 Term of the Plan. Unless sooner terminated, the Plan shall terminate on exercise of options may in any event be
sold or otherwise disposed of for value within six (6) monthsthe tenth anniversary of the date of grantits adoption by the Company's stockholders.
15.3 Outstanding Awards. Notwithstanding any other provision of the options whether or not the shares are registered under the
Securities Act of l933 except on a sale to the Corporation in accordance with
Rule l6b-3(d) and (e).
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8. Limitations on Participation:
(a) If an optionee shall cease to be a Director of the Corporation for
any reason (other than death or disability), he may, but only within the 90 days
next succeeding such cessation of directorship, exercise his option to the
extent that he was entitled to exercise it at the date of such cessation, unless
he was removed for cause by the stockholders. If an optionee shall be removed
for cause, his option shall terminate on the date of such removal and he shall
forfeit any and all rights which may have accrued prior thereto. All options to
the extent not exercisable on the date of cessation of directorship shall be
forfeited.
(b) In the event of death of an optionee while a Director of the
Corporation, the option theretofore granted to him shall be exercisable only
within nine months next following the date of his death by the person or persons
to whom the optionee's rights under the option shall pass by the optionee's Will
or the laws of descent and distribution, or within six months after the date of
the appointment of an administrator or executor of the estate of such optionee,
whichever date shall sooner occur, and then only if and to the extent that he
was entitled to exercise it at the date of his death, provided, however, that he
shall be deemed to be so entitled even if such death shall have taken place
prior to the expiration of one year from the date of the granting of the option,
anything in this Plan to the contrary, notwithstanding.
(c) Inno termination, amendment or modification of the Plan shall cause, without the consent of the Participant, any previously granted Awards to be forfeited or altered in a way that adversely affects the Participant. After the termination of the Plan, any previously granted Award shall remain in effect and shall continue to be governed by the terms of the Plan, the Award and any applicable Award Agreement.
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ARTICLE 16
TAX WITHHOLDING
16.1 Tax Withholding. The Company and its Subsidiaries shall have the power and the right to deduct or withhold, or to require a Participant to remit to the Company or to a Subsidiary, an amount that the Company or a Subsidiary reasonably determines to be required to comply with federal, state, local or foreign tax withholding requirements.
16.2 Share Withholding. With respect to withholding required upon the exercise of Options, upon the lapse of restrictions on Restricted Stock or upon any other taxable event that an optionee becomes permanently and totally
disabled and resignsarising as a Director,result of Awards granted hereunder, Participants may elect, subject to the optionee may, but only within one year
next succeeding the dayapproval of the commencement of such disability, exercise his
optionCommittee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the extentminimum statutory withholding tax that he was entitled to exercise his option, but in no
event aftercould be imposed on the expiration of the option. For this purpose, an optioneetransaction. All such elections shall be considered permanentlyirrevocable, made in writing, signed by the Participant and totally disabled if he is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve
months. An optionee shall not be considered to be permanently and totally
disabled unless he furnishes proof of the existence thereof in such form and
manner, and at such times, as the Committee may require. The Committee's
determination of whether the optionee is permanently and totally disabled shall
be final and absolute, and shall not be subject to question byany restrictions or limitations that the optionee, a
representativeCommittee, in its discretion, deems appropriate.
ARTICLE 17
SUCCESSORS
All obligations of the optionee,Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or the Corporation.
9. Adjustments Upon Changes in Capitalization: In the eventindirect purchase, merger, consolidation or otherwise, of changes in the
outstanding Common Stockall or substantially all of the Corporation bybusiness and/or assets of the Company.
ARTICLE 18
LEGAL CONSTRUCTION
18.1 Severability. If any provision of the Plan shall be held illegal or invalid for any reason, of stock dividends,
split-ups, recapitalizations, mergers, consolidations, combinations,such illegality or exchangesinvalidity shall not affect the remaining parts of shares, separations, reorganizations, or liquidations, the number
and class of shares available under the Plan and the aggregatePlan shall be construed and enforced as if the illegal or invalid provision had not been included.
18.2 Requirements of Law. The granting of Awards and the maximum
numberissuance of shares as to which options may be granted to any Non-Employee Director
shall be correspondingly adjusted by the Committee. No adjustment shall be made
in the minimum number of shares which may be purchased at any time.
10. Effectiveness of the Plan: The Plan, as amended, shall be extended to
December 31, 2019, provided that:
(a) if not previously listed, the shares of the Common Stock reserved
forShares under the Plan shall have been duly listed, upon official notice of issuance, upon
the national exchange whereon they are traded and registered under the
Securities Exchange Act of 1934, as amended; and
(b) the Board of Directors shall have been advised by counsel thatbe subject to all applicable legal requirements have been complied with;laws, rules and (c)regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
18.3 Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the stockholders shall approve the amendment extending the Plan to
December 31, 2019.
Notwithstanding the foregoing, if all conditions are satisfied or inapplicable,
the effective datelaws of the amendment shall be the dateState of approved by the
stockholders.
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11. Time of Granting Options: Whenever a director is eligible under paragraph
4 for the receipt of an option, the Corporation shall forthwith send notice
thereofConnecticut (without regard to the designee. legislative or judicial conflict of laws rules of any state), except to the extent superseded by federal law.
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APPENDIX C
TRANS-LUX CORPORATION
NOMINATING COMMITTEE CHARTER
I.
Authority and Purpose
The date of eligibility shall be the date of granting
the option to such participant for all purposes of this Plan. The notice shall
be in the form of a Grant approved by the Board of Directors of this
Corporation.
12. Termination and Amendment of the Plan: The Plan shall terminate on
December 31, 2019, and an option shall not be granted under the Plan after that
date. The Board of Directors may at any time, or from time to time, modify or
amend the Plan including the form of option agreement, in such respects as it
shall deem advisable in order that options shall conform to any change in the
law, or in any other respects.
By OrderNominating Committee (the “Committee”) of the Board of Directors TRANS-LUX CORPORATION
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TRANS*LUX (R)
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
DECEMBER 11, 2009
NORWALK, CONNECTICUT
PROXY
TRANS-LUX CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - DECEMBER 11, 2009
(SOLICITED ON BEHALF OF BOARD OF DIRECTORS)
KNOW ALL MEN BY THESE PRESENTS, that(the “Board”) of Trans-Lux Corporation, a Delaware corporation (the “Company”), is appointed by the undersigned stockholderBoard and shall have the responsibility of TRANS-LUX
CORPORATION hereby constitutesidentifying and appoints MICHAEL R. MULCAHYrecommending to the Board potential candidates for nomination to the Board. The Committee shall undertake those specific duties and HOWARD S.
MODLIN,responsibilities listed below and each of them,such other duties as the attorneys and proxiesBoard shall from time to time prescribe. All powers of the undersigned, with
full power of substitution,Committee are subject to vote for andany restrictions in the name, placeCompany’s By-Laws and steadapplicable law.
II.
Membership Requirements
The Committee shall be comprised of that number of Directors as the Board shall determine from time to time, such number not to be less than two (2). The members of the undersigned, atCommittee shall meet the Annual Meetingindependence and experience requirements of the Stockholdersapplicable regulations, rules and orders of said Corporation,the Securities and Exchange Commission (the “SEC”). The members of the Committee, including the Chair thereof, shall be appointed annually by the Board. Unless otherwise directed by the Board, each member shall serve until such member ceases to serve as a member of the Board or until his or her successor has been duly appointed by the Board.
III. Meetings
The Committee shall meet at least once a year. Meetings may be called by the Chair of the Committee or the Chair of the Board. All meetings of and other actions by the Committee shall be held at Norwalk Community College, East Campus, Room 230, 188 Richards
Avenue, Norwalk, Connecticut, 06854 on December 11, 2009 at 10:00 A.M., and at
any adjournmentor otherwise taken pursuant to the Company’s By-Laws, including by-law provisions governing notices of meetings, waivers thereof, the number of votesCommittee members required to take actions at meetings or by written consent, and other related matters.
| a) | Unless otherwise authorized by an amendment to this Charter or as provided in the By-Laws of the Company, the Committee shall not delegate any of its authority to any subcommittee. |
| b) | The Committee shall maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board. |
IV. Duties and Responsibilities
The Committee shall have the undersigned would be entitledduty and responsibility of identifying and making recommendations to cast if presentthe Board of potential candidates for nominations or election to the following mattersBoard of the Company. Qualifications to consider, among others, in the selection of candidates are experience in business, finance, administration, familiarity with the Company’s industry, and reputation. In making its selection, the Committee will bear in their discretion, upon such
other matters as may properly come beforemind that the meeting or any adjournment
thereof:
Directors recommend vote FOR Items 1, 2a, 2b (provided Item 1foremost responsibility of a director of the Company is approved) 3
and 4.
Item 1 FOR AGAINST ABSTAIN Amendto represent the Corporation's Certificateinterests of ____ ____ ____ Incorporation to provide for the automatic
\___\ \___\ \___\ conversion of each share of Class B Stock
into 1.3 shares of Common Stock as provided
in a Settlement Agreement.
Item 2a FOR WITHHELD Election of Angela D. Toppi to servestockholders as a ____ ____ director for a three-year term, until her
\___\ \___\ successor is electedwhole.
V.
Assessment and Disclosure of Charter
The Committee shall have
qualified.
Item 2b FOR WITHHELD Electionperiodically review and reassess the adequacy of George W. Shiele to serve as a
____ ____ director for a two-year term,this charter and Glenn J.
\___\ \___\ Angiolillo and Salvatore J. Zizza to serve
as directors for a three-year term, until
their successors are elected and shall have
qualified.
Authority is withheld with respectpropose any changes to the following nominee(s).
________________________________
________________________________
Item 3 FOR AGAINST ABSTAIN AmendBoard for approval. This charter will be made available on the 1989 Non-Employee Director Stock
____ ____ ____ Option Plan to extend the Plan to 2019.
\___\ \___\ \___\
Item 4 FOR AGAINST ABSTAIN Ratify the retention of UHY LLP as the
____ ____ ____ independent registered accounting firm for
\___\ \___\ \___\ the Corporation for the ensuing year.
(Continued and to be signed on other side.)
(Continued from other side.)
UNLESS YOU SPECIFY OTHERWISE, THISCompany’s website at www.trans-lux.com.
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NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
AND PROXY WILL BE VOTED "FOR" ITEM 1, THE
AMENDMENT TO THE CORPORATION'S CERTIFICATE OF INCORPORATION, "FOR" ITEM 2a,
"FOR" ITEM 3, AMENDMENT TO THE NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN AND "FOR"
ITEM 4, RETENTION OF UHY LLP AS THE CORPORATION'S INDEPENDENT ACCOUNTING FIRM.
SUBJECT TO APPROVAL OF ITEM 1, THIS PROXY WILL BE VOTED "FOR" ITEM 2b, THE
ELECTION OF THE NOMINEES FOR DIRECTORS.
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 October 28, 2009.
Dated:__________________, 2009
________________________ (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, 26 Pearl Street,
Norwalk, Connecticut 06850. 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.
STATEMENT
MARCH 6, 2012
NORWALK, CONNECTICUT
