445 Park Avenue, Suite 2001
New York, New York 10022_________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 29, 2015_________________________
NOTICE IS HEREBY GIVEN that
Dear Stockholder:
You are cordially invited to attend the
2016 Annual Meeting of Stockholders
(the “2016 Annual Meeting”) of
TRANS-LUX CORPORATIONTrans-Lux Corporation, a Delaware corporation (the
“Corporation” or the “Company”)
will, to be held
on July 11, 2016, beginning at 10:00 a.m. local time, at Olshan Frome Wolosky LLP, located at
Park1325 Avenue
Tower, 65 East 55th Street,of the Americas, New York,
NY 10022, on June 29, 2015New York 10019 and at
11:00 A.M. local time for the following purposes:
1.
To elect three directors to serve for a term of two years and elect two directors to serve for a term of three years; in each case until their respective successors shall have been duly elected and qualified, namely (a) Jean-Marc Allain, (b) Marco Elser and (c) George W. Schiele, respectively, for a term of two years, and (d) Alberto Shaio and (e) Salvatore J. Zizza, respectively, for a term of three years;
2.
To ratify the appointment of BDO USA, LLP, as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2015; and
3.
To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
Proxy materials, which include a Notice of the Meeting, proxy statement and proxy card, are enclosed with this letter. The enclosed proxy statement is first being mailed to the Company’s stockholders on or about June [__], 2016. We also have enclosed our 2015 Annual Report on Form 10-K.
At the 2016 Annual Meeting, you will be asked to consider and vote on:
| 1. | the election of the three nominees named in the accompanying proxy statement to serve as directors until the 2019 Annual Meeting of Stockholders or until the election and qualification of their successors, or their earlier death, resignation or removal; |
| 2. | the approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s “blank check” preferred stock, par value $0.001 per share, that it may issue from 500,000 shares to 2,000,000 shares, to be designated in such series or class as the board of directors of the Company shall determine; |
| 3. | the approval of a non-binding advisory resolution to approve the compensation of the Company’s named executive officers; |
| 4. | the ratification of the appointment of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016; and |
| 5. | the transaction of any other business that may properly come before the 2016 Annual Meeting or any adjournment or postponement thereof. |
Only stockholders of record at the close of business on May
21, 2015 has been fixed as27, 2016 are entitled to vote at the
record date2016 Annual Meeting. A list of stockholders entitled to vote at the 2016 Annual Meeting will be available for
the determinationinspection at our executive offices. The presence, in person or by proxy, of the
stockholders holders of a majority of the issued and outstanding shares of common stock entitled to notice of, and to vote at, the meeting, is required for a quorum to transact business.
Your vote is important to us and to our business. Whether or not you plan to attend the 2016 Annual Meeting.Meeting, we hope that you will vote as soon as possible. You may vote in person by ballot at the 2016 Annual Meeting, over the Internet, by telephone or, if you requested to receive printed proxy materials, by mailing a proxy or voting instruction form. If you would like to attend and your stock is not registered in your own name, please ask the broker, trust, bank or other nominee that holds the stock to provide you with evidence of your stock ownership.
We appreciate your continued support of the Company and look forward to either greeting you personally at the meeting or receiving your proxy.
| Sincerely, |
| By Order of the Board of Directors,
|
| |
| Robert J. Conologue
Corporate Secretary |
| Senior Vice President and Chief Financial Officer |
| Trans-Lux Corporation |
Dated and Mailed:
New York, New York
May 29, 2015
June [__], 2016
|
Please mark,
IMPORTANT Whether or not you attend the meeting in person, please vote by telephone or Internet, or, if you receive a paper copy of the proxy materials, please sign, date sign and return promptly mail the enclosed proxy so that your shares may be represented atcard or use the Annual Meeting. A return envelope, which requires no postage if mailed intelephone or Internet voting procedures described on the United States, is enclosedproxy card. The proxy statement and annual report are also available for your convenience.review at http://proxystatements.trans-lux.com/. |
TABLE OF CONTENTS
Page
TRANS-LUX CORPORATION
445 Park Avenue, Suite 2001
New York, New York 10022
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 11, 2016
The Board of
TRANS-LUX CORPORATION Directors (the “Board”) of Trans-Lux Corporation, a Delaware corporation (“we,” “our,” “Trans-Lux” or the “Company”), is furnishing this proxy statement for
use at the
2016 Annual Meeting of Stockholders
To Be Held on June 29, 2015_________________________Introduction
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of TRANS-LUX CORPORATION (the “Corporation” or the “Company”) of proxies in the accompanying form to be used at the“2016 Annual Meeting of the Stockholders of the CorporationMeeting”) to be held on Monday, June 29, 2015 (the “Meeting”),Wednesday, July 11, 2016, and at any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice ofthereof. The Annual Meeting. This Proxy Statement and the proxies solicited hereby are being mailed to stockholders on May 29, 2015. The shares represented by the proxies timely received and properly executed pursuant to the solicitation made hereby and not revoked will be voted at the Meeting.
Meeting of Stockholders
The Meeting will be held at 10:00 a.m. local time at Olshan Frome Wolosky LLP, located at Park1325 Avenue Tower, 65 East 55th Street,of the Americas, New York, NY 10022,New York 10019. This proxy statement and accompanying proxy card and our 2015 Annual Report on Form 10-K (the “2015 Annual Report”) will be made available to our stockholders on or about June 29, 2015[__], 2016.
Who Can Vote. Record holders of our common stock, par value $0.001 per share (the “Common Stock”) at 11:00 A.M. local time.Purposes of the Meeting
The purposes of the Meeting are to vote upon: (1) the election of three directors to serve for a term of two years and the election of two directors to serve for a term of three years, in each case until their respective successors shall have been duly elected and qualified, namely (a) Jean-Marc Allain, (b) Marco Elser and (c) George W. Schiele, respectively, for a term of two years, and (d) Alberto Shaio and (e) Salvatore Zizza, respectively, for a term of three years; (2) the ratification of the appointment of BDO USA, LLP, as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2015; and (3) to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.
Record Date and Voting
The close of business on May 21, 2015 has been fixed as the record date (the “Record Date”) for the determination of the stockholders entitled to notice of and to vote at the Meeting. There were outstanding as of the close of business on May 21, 2015 and27, 2016 (the “Record Date”), are entitled to notice of and to vote at the Meeting, approximately 1,685,085 shares of Common Stock, $0.001 par value of the Corporation ("Common Stock"). Each outstanding share of Common Stock is entitled to one vote on all matters voted on at the Meeting.
Voting Required
Only stockholders of record of the Common Stock as ofvote. At the close of business on the Record Date, [1,710,671] shares of Common Stock were issued and outstanding. Each share of Common Stock owned on the Record Date is entitled to one vote. In addition, the holders of our Series B Convertible Preferred Stock could vote an additional 330,240 votes. Each share of the Series B Convertible Preferred Stock is entitled to twenty (20) votes per share.
Quorum. A quorum will be entitledpresent at the 2016 Annual Meeting if the holders of a majority of the eligible shares as of the Record Date are present in person or by proxy. With respect to Proposal 2, the holders of the shares of Common Stock vote as a separate class and the holders of the Series B Convertible Preferred Stock vote as a separate class. A majority of the outstanding shares of Common Stock as a separate class and a majority of the outstanding shares of the Series B Convertible Preferred Stock as a separate class, in each case present in person or by proxy, constitutes a quorum. Shares of Common Stock and Series B Convertible Preferred Stock that are represented by a proxy marked “withhold” or “abstain” will be considered present at the 2016 Annual Meeting for purposes of determining a quorum.
How to Vote. If your shares are held in a brokerage account, by a trustee or by another nominee (typically referred to as being held in “street name”), you may receive a separate voting instruction form with this proxy statement, or you may need to contact your broker, bank or other stockholder of record to determine whether you will be able to vote electronically via the Internet or by telephone.
If you are a stockholder of record, you may vote in person at the 2016 Annual Meeting or by proxy without attending the 2016 Annual Meeting. You may vote by proxy in one of three convenient ways:
By mail: sign, date and return the proxy card in the enclosed prepaid envelope;
By Internet: visit the website shown on your proxy card and follow the instructions; or
By telephone: call the toll-free telephone number shown on your proxy card and follow the instructions.
If you sign and return the enclosed proxy card but do not indicate your vote, the designated proxy holders will vote your shares in accordance with the recommendations of the Board as follows: “FOR” each of the nominees for election as directors; “FOR” the approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of shares of “blank check” preferred stock that the Company can issue from 500,000 shares to 2,000,000 shares (the “Blank Check Preferred Stock Proposal”); “FOR” the approval of a non-binding advisory resolution to approve the compensation of the Company’s named executive officers; and “FOR” the ratification of the appointment of Marcum LLP as our independent registered public accounting firm. We are not aware of any other business to be acted upon at the 2016 Annual Meeting other than as set forth herein. If you grant a proxy, the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the
2016 Annual Meeting.
A
If your shares are held in a brokerage account, by a trustee or by another nominee, you are considered the “beneficial owner” of those shares. As the beneficial owner of those shares, you have the right to direct your broker, trustee or nominee how to vote and you also are invited to attend the 2016 Annual Meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the 2016 Annual Meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the 2016 Annual Meeting.
Vote Required to Adopt Proposals.
Proposal 1: Election of Directors. Directors are elected by a plurality of the votes cast at the 2016 Annual Meeting, either in person or by proxy. The three nominees receiving the greatest number of votes at this Annual Meeting will be elected to our Board, even if they receive less than a majority of such shares. Broker non-votes and abstentions will not be counted in determining the number of votes cast and will have no effect on the election of directors.
Proposal 2: Blank Check Preferred Stock Proposal. The affirmative vote of the holders of a majority of the outstanding shares of the Common Stock as a separate and distinct class, whether in person or by proxy, as well as the affirmative vote of a majority of the voting power of allthe outstanding shares of the Common Stock and Series B Convertible Preferred Stock voting together as one class and on an as-converted basis, as well as the affirmative vote of a majority of the shares of Series B Convertible Preferred Stock outstanding must be present or represented by proxyvoting as a separate and distinct class, at the 2016 Annual Meeting to constitute a quorum. Abstentions and broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the Meeting. If a quorum is not present, the Meeting may be adjournedrequired to a subsequent date for the purpose of obtaining a quorum.
On May 22, 2015, the Board of Directors of the Corporation unanimously adopted resolutions approving, declaring advisable and recommendingapprove an amendment to the Corporation’s stockholdersCompany’s Amended and Restated Certificate of Incorporation to effect an increase in the adoptionnumber of eachshares of “blank check” preferred stock, par value $0.001 per share, from 500,000 shares to 2,000,000 shares that can be issued. Broker non-votes and abstentions, if any, will have the Proposals.
effect of votes “AGAINST” this proposal.
Proposal Number 1 requires a plurality vote. Proposal Number 2 requires the3: Advisory Vote on Executive Compensation. The affirmative vote of a majority of the votes cast affirmativelyat the 2016 Annual Meeting, either in person or negativelyby proxy, will be required for approval of a non-binding advisory resolution to approve the compensation of the Common Stock.Company’s named executive officers. Broker Non-Votes
If stockholders donon-votes will not give their brokers instructions as to how tobe counted in determining the number of votes cast and will have no effect on the approval of this proposal. Abstentions will have the effect of votes “AGAINST” this proposal.
Proposal 4: Ratification of Independent Registered Public Accounting Firm. The affirmative vote shares held in street name, the brokers have discretionary authority to vote those shares on ‘routine’ matters, such as the ratificationof a majority of the votes cast at the 2016 Annual Meeting, either in person or by proxy, will be required to ratify the selection of our independent registered public accounting firm butat the 2016 Annual Meeting. Broker non-votes, if any, will not be counted in determining the number of votes cast and will have no effect on ‘non-routine’ proposals, such as the electionapproval of directors. As a result,this proposal. Abstentions will have the effect of votes “AGAINST” this proposal.
How Your Shares Will Be Voted if you holdYou do Not Provide Voting Instructions. If your broker holds your shares in street name, andyour broker, as the registered holder, must vote your shares in accordance with your instructions. If you do not provide voting instructions, to your broker yourhas the discretion to vote those shares willwith respect to routine proposals but not be voted on any proposal onwith respect to non-routine proposals. Shares for which your broker does not have discretionary authority to vote. Shares held by brokers who do not have discretionary authority to vote on a particular matter and who have not received votingreceive instructions, from their customerssometimes called “broker non-votes,” will be counted as present for the purpose of determining whether there is a quorum at the Meeting, and will have no effect for the purpose of determining whether our stockholders have approved a matter requiring a majority of votes cast affirmatively or negatively or a plurality vote.Abstentions
Abstentions will not affect the outcome of the vote on the election of Directors, but will have the same effect as a vote “AGAINST” themeeting. The proposal to ratify the appointmentselection of BDO USA, LLP.
Howour independent public accounting firm is considered a routine proposal and accordingly, we do not anticipate broker non-votes in this matter. Broker non-votes will not be included in determining the number of votes cast for this proposal. The proposals for the election of directors and the advisory resolution on compensation of the Company’s named executive officers will not include broker non-votes in determining the number of votes cast for these proposals. The Blank Check Preferred Stock Proposal will include broker non-votes in determining the number of votes cast for such proposal.
What to Votedo if You may own shares either (1) directly in your name, in which case you are the record holder of such shares, or (2) indirectly through a broker, bank or other nominee, in which case such nominee is the record holder. If your shares are registered directly in your name, we are sending these proxy materials directlyWish to you. If the record holder of your shares is a nominee, you will receive proxy materials from such nominee.Change Your Voting Instructions.
If you are a record holder,wish to change or revoke your voting instructions after you have submitted your proxy, you may vote in person at the Meeting or by proxy. We recommend that you vote by proxy even if you plan to attend the Meeting. You can always change your vote at the Meeting. To vote by proxy, mark your proxy card, date and sign it, and return it as soon as possible in the postage-paid envelope provided. If your shares are held by a broker, bank or other nominee, such nominee will provide you with instructions that you must follow in order to have your shares voted. If you plan to attend the Meeting and vote in person, you will need to contact the broker, bank or other nominee to obtain evidence of your ownership of shares on May 21, 2015.Proxies
A stockholder who shall sign and return a proxy in the form enclosed with this statement has the power to revoke itdo so at any time before it is exercised by giving written noticethe proxies are voted at the 2016 Annual Meeting by:
notifying the Corporate Secretary of revocationthe Company in writing at the address on the first page of this proxy statement that you wish to revoke your proxy;
delivering a subsequent proxy bearing a date after the date of the proxy being revoked and relating to the same shares; or a proxy of later date, or by
voting in person at the 2016 Annual Meeting each as more fully described inif you are the following paragraph. Unless otherwise specified, the proxies in the accompanying form will be voted in favorstockholder of all of the proposals set forth in the Notice of Annual Meeting. In the discretion of the proxy holders, the proxies will also be voted for or against such other matters as may properly come before the Meeting. The Board of Directors is not awarerecord.
Please note that
any other matters are to be presented for actionyour attendance at the
Meeting.
Revoking2016 Annual Meeting will not, by itself, revoke your proxy.
If you hold your shares in “street name,” please contact your bank, broker or other nominee for instructions on how to change your voting instructions.
Householding of Proxy Materials. In an effort to reduce printing costs and postage fees, we have adopted a ProxyApractice approved by the Securities and Exchange Commission (the “SEC”) called “householding.” Under this practice, stockholders who have the same address and last name will receive only one copy of our proxy may be revokedmaterials, unless one or more of these stockholders notifies us that he or she wishes to continue receiving individual copies. Stockholders who participate in householding will continue to receive separate proxy cards. If you share an address with another stockholder, received only one set of proxy materials and would like to request a separate paper copy of these materials, please contact our Corporate Secretary by mail at the address on the first page of this proxy statement, by telephone at (800) 243-5544 or by email at rconologue@trans-lux.com, and we will promptly deliver a separate copy. Stockholders sharing an address can request delivery of a written statement to Continental Stock Transfer & Trust, Co., Attention: Proxy Department, via email at: proxy@continentalstock.com or via facsimile at: 212-509-5152. Such revocation must state that thesingle copy of annual reports on Form 10-K and proxy is revoked. A proxy may also be revokedstatements if they are receiving multiple copies of these materials by a subsequent proxy executedcontacting our Chief Financial Officer by the person executing the prior proxy and presentedmail at the Meeting,address on the first page of this proxy statement, by telephone at (800) 243-5544 or by voting in personemail at the Meeting.
Proxyrconologue@trans-lux.com.
We Will Bear Solicitation and ExpensesThe CompanyExpenses.
We will pay forbear the entire cost of soliciting proxies on its behalf. Wesolicitation, including the preparation, assembly, printing and mailing of this proxy statement, the proxy and any additional solicitation materials furnished to the stockholders. Copies of solicitation materials will also reimbursebe furnished to brokerage firms, bankshouses, fiduciaries and other agents for the cost of forwarding the Company’s proxy materialscustodians holding shares in their names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners. In addition, we may reimburse such persons for their costs in forwarding the solicitation materials to such beneficial owners. The original solicitation of proxies by mail may be supplemented by a solicitation by telephone or other means by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services. How to Request a Copy of the Proxy Materials. For the 2016 Annual Meeting or any future annual meeting of stockholders, if you would like to request a copy of the proxy materials, including the proxy statement and employees may solicit proxies in person,form of proxy and the 2015 Annual Report, please contact our Chief Financial Officer by mail at the address on the first page of this proxy statement, by telephone viaat (800) 243-5544 or by email at rconologue@trans-lux.com, and we will promptly deliver a copy to you. You may also request a paper copy of the internet, press releases or advertisements. Directors and employees will not be paid any additional compensation for soliciting proxies.proxy materials at www.trans-lux.com.
Important Notice Regarding the Availability of Proxy Materials Availablefor the
Stockholder Meeting to be Held on
the InternetTheseJuly 6, 2016
The proxy materialsstatement and the Company’s 20142015 Annual Report on Form 10-K are available on the internet on the following website: at http://proxystatements.trans-lux.com/. ELECTION OF DIRECTORS
Proposal Nos. 1(a), 1(b), 1(c), 1(d)
Pursuant to the Company’s Amended and 1(e) (Items 1(a), 1(b), 1(c), 1(d)Restated Certificate of Incorporation and 1(e) on Proxy Card)TheAmended and Restated Bylaws, the Board of Directors of Trans-Lux Corporation is divided into three separate classes with theof directors. At each Annual Meeting of Stockholders, one class of directors is elected to a term of office of onethree years. Alan K. Greene, Ryan J. Morris and Yaozhong Shi have been nominated by the Board, upon the recommendation of the Nominating Committee, for election as directors at the 2016 Annual Meeting. Those elected will serve a three classesyear term until the 2019 annual meeting of directors expiring each yearstockholders (the “2019 Annual Meeting”) or until the election and with each class being elected for a three-year term.qualification of their successors, or their earlier death, resignation or removal. The BylawsAmended and Restated Certificate of Incorporation of the Corporation allowCompany allows for the Board of Directors to consist of a minimum of five and a maximum of fifteen members. The Company did not hold an annual meeting in 2014. If
Alan K. Greene is a current director who was elected at the Annual Meeting2013 annual meeting of Stockholdersstockholders. Yaozhong Shi is a current director who was selected by the Board to be heldserve as a director on June 29, 2015, (a)2014. Ryan J. Morris is a current director who was selected by the Board to serve as an independent director on April 25, 2016. Two of the nominees, Alan K. Greene and Ryan J. Morris are independent pursuant to the listing requirements of the NYSE MKT Company Guide. There are no family relationships among any of the directors, listed under Class A below will serve until the Annual Meeting of Stockholders in 2017, or until his successor is duly electeddirector nominees and qualified, (b) the directors listed under Class C below will serve until the Annual Meeting of Stockholders in 2018, or until his successor is duly elected and qualified, and (c) the directors listed under Class B below will continueexecutive officers.
Each nominee has agreed to serve
if elected. If a nominee becomes unavailable for election or cannot serve, an event that we do not expect, the
terms to which they were elected untilBoard may substitute another nominee or reduce the
Annual Meetingnumber of
Stockholders in 2016, respectively, or until their successors are duly elected and qualified.Management has no reason to believe that the directors will not be available or will not serve if elected, but if any director should not become available to serve, full discretion is reserved to the persons named as proxies to vote for such other persons as may be nominated. Proxiesnominees. The enclosed proxy will be voted “FOR”for such substitute, if any, as shall be designated by the nominee unless the stockholder specifies otherwise.
Directors Standing for Election
| | | |
Name | Age | Since | Expiration of Proposed Term |
CLASS A | | | |
Jean-Marc (J.M.) Allain | 45 | 2011 | 2017 |
Marco Elser | 56 | 2012 | 2017 |
George W. Schiele | 83 | 2009 | 2017 |
CLASS C | | | |
Alberto Shaio | 66 | 2013 | 2018 |
Salvatore J. Zizza | 69 | 2009 | 2018 |
Directors Whose Term Continues
| | | |
Name | Age | Since | Expiration of Term |
CLASS B | | | |
Alan K. Greene | 75 | 2013 | 2016 |
Yaozhong Shi | 46 | 2014 | 2016 |
Set forth below is a summaryBoard.
Each of the director nominees receiving a plurality of the votes cast at the 2016 Annual Meeting will be elected as a director. You may withhold votes from any or all nominees. Broker non-votes will have no effect on the result of this vote.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
Director Qualifications
The following paragraphs provide information as of the date of this proxy statement about each nominee and current director. The information presented includes information each nominee and director has given us about his age, all positions he holds, his principal occupation and business experience for
each of the
persons named abovepast five years and the
primary aspectsnames of
their experience, qualifications, attributesother publicly-held companies for which he currently serves as a director or
skills that led to the conclusion that each individual is qualified to serve on the Board. The members of the Nominating Committee recommended to the Board that each of the directors listed below serve as members of the Board of Directors.DIRECTORS STANDING FOR ELECTION –
CLASS A: Serving a Two-Year Term Expiring 2017
J.M. Allain became the President and CEO of Trans-Lux Corporation on February 16, 2010 and has served as a director since June 2011. Mr. Allain served as President of Panasonic Solutions Company from July 2008 through October 2009; Vice President of Duos Technologies from August 2007 through June 2008; General Manager of Netversant Solutions from October 2004 through June 2005; and Vice President of Adesta, LLC from May 2002 through September 2004. Mr. Allain has familiarity withduring the operational requirements of complex organizations and has experience dealing with reorganizations and turnarounds. Mr. Allain’s experience and deep understanding of the operations of the Corporation allow him to make valuable contributionspast five years. In addition to the Board.
Marco M. Elser has servedinformation presented below regarding each director and director nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he should serve as a director, we also believe that all of Trans-Lux Corporation since May 25, 2012. For over five years, Mr. Elser has beenour director nominees have a partner with AdviCorp Plc, a London-based investment banking firm. Mr. Elser also serves on the Board of Directors of Protalex, a Florham Park, NY based biotechnology company, since 2014. He is a also one of the independent directors of North Hills Signal Processing Corporation, a Long Island, NY based technology company. Mr. Elser previously served as International Vice President of Northeast Securities, managing distressed fundsreputation for family officesintegrity, honesty and small institutions from 1994adherence to 2001; he served as a first Vice President of Merrill Lynch Capital Markets in Romehigh ethical standards. They each have demonstrated business acumen and London until 1994. Mr. Elser was formerly Chairman of the Board of Pine Brook Capital, a Shelton, CT based engineering company and had served in that role for over five years. Mr. Elser was also the president of the Harvard Club of Italy until 2014, an association he founded in 2002 with other Alumni in Italy where he has been living since 1984. He received his BA in Economics from Harvard College in 1981. Mr. Elser’s extensive knowledge of international finance and commerce allows himability to make valuable contributions to the Board.
George W. Schiele has served as a director of Trans-Lux Corporation since 2009. Mr. Schiele was elected Chairman of the Board (a non-executive position) of Trans-Lux Corporation on September 29, 2010. Mr. Schiele currently serves as President of George W. Schiele, Inc., a trust management and private investment company and has held such position since 1974. He is also President of four other private companies since 1999, 2005, 2006 and 2009, respectively; from 2003 until 2013 he was a exercise sound judgment.
Director
of Connecticut Innovations, Inc., one of the nation’s five most active venture capital firms, and was Chairman of its Investment Advisory and Investment Committees from 2004 until 2013, responsible during his tenure for more than 200 VC investments. Mr. Schiele additionally serves as Trustee of seven private trusts since 1974, 1999, 2007, 2009, 2010, 2011 and 2012, respectively, serving as President of one since 2000, and as an Officer and Director of two others. Mr. Schiele also serves as a Trustee to various other private charitable foundations since 2006, as the Managing Partner of two private investment partnerships since 2008, and as a Director and Executive Board member of The Yankee Institute since 2000. Mr. Schiele was initially elected in accordance with a Settlement Agreement approved by the United States District Court for the Southern District of New York described in the Corporation’s proxy statement for the December 11, 2009 Annual Meeting of Stockholders and re-elected by the shareholders at the 2010/2011 Annual Meeting of Stockholders. Mr. Schiele’s long experience in previous start-ups and corporate restructurings and his service to other boards of directors allow him to make valuable contributions to the Board.
DIRECTORS STANDING FOR ELECTION –
CLASS C: Serving a Three-Year Term Expiring 2018
Alberto Shaio became the Chief Operating Officer of Trans-Lux Corporation on October 6, 2014 and has served as a director since October 2, 2013. He also serves on the Board of Advisors of Scorpion Capital. Previously, Mr. Shaio served as President and CEO of Craftsmen Industries from January 1, 2011 through September 1, 2013. Previously he held various posts with Farrel Corporation (Ansonia, CT and Rochdale, England) from 1986 until December 31, 2010, including the role of President and CEO since 2003. Mr. Shaio was a Director of the HF Mixing Group (Germany) from 2002 until 2010. From 1970 through 1986, Mr. Shaio was General Manager, Vice President or President of various companies such as Pavco, Filmtex (Columbia SA), and the Interamerican Investment Group. He has served on the board of directors of New Energy Corporation, Farrel Corporation, Interactive Systems, Polifilm, Filmtex, PAVCO SA, and Harburg Freudenberg Maschinenbau GmbH (Germany). Mr. Shaio’s extensive international experience and service to numerous other boards of directors allow him to provide valuable contributions to the Board.
Salvatore J. ZizzaNominees
Alan K. Greene, 76, has served as an independent director of Trans-Lux Corporation since 2009. Mr. Zizza was elected Vice Chairman of the Board (a non-executive position) of Trans-Lux Corporation on September 29, 2010. Mr. Zizza has previously served as Chief Executive Officer and Chairman of the Board of General Employment Enterprises Inc. from December 23, 2009 until December 26, 2012. Mr. Zizza had served as President and Chief Operating Officer of Bion Environmental Technologies Inc. from January 13, 2003 until December 31, 2005, and has served as Non Executive Chairman of Harbor BioSciences, Inc. since March 27, 2009. He currently serves as the Chairman of Zizza & Associates, LLC. Mr. Zizza serves as Chairman of Metropolitan Paper Recycling Inc. and as the Chairman of Bethlehem Advanced Materials. Additionally, Mr. Zizza serves as a Director of GAMCO Westwood Funds. He has been an Independent Trustee of GAMCO Global Gold, Natural Resources & Income Trust by Gabelli since November 2005 and serves as a Director/trustee of 26 funds in the fund complex of Gabelli Funds. He has been Director of General Employment Enterprises Inc. since January 8, 2010 and has been an Independent Trustee of Gabelli Dividend & Income Trust since 2003. Mr. Zizza has been Independent Director of Gabelli Convertible & Income Securities Fund Inc. since April 24, 1991 and has been a Director of Gabelli Equity Trust, Inc. since 1986 and a Trustee of Gabelli Utility Trust since 1999. He served as Lead Independent Director of Hollis-Eden Pharmaceuticals from March 2006 to March 2009 and as a Director of Earl Scheib Inc. from March 1, 2004 to April 2009. Mr. Zizza was initially elected in accordance with a Settlement Agreement approved by the United States District Court for the Southern District of New York described in the Corporation’s proxy statement for the December 11, 2009 Annual Meeting of Stockholders and re-elected by shareholders at the 2012 Annual Meeting of Shareholders. Mr. Zizza received his Bachelor of Arts in Political Science and his Master of Business Administration in Finance from St. John's University, which also has awarded him an Honorary Doctorate in Commercial Sciences. Mr. Zizza’s extensive experience and service to numerous other boards of directors allow him to provide valuable contributions to the Board. In addition, Mr. Zizza also serves as Chairman of the Audit Committee and is the “audit committee financial expert” as required under the rules of the United States Securities and Exchange Commission (the “SEC”).
DIRECTORS – CLASS B: Serving a Three-Year Term Expiring 2016
Alan K. Greene has served as an independent director of Trans-Lux Corporation since October 2, 2013. Mr. Greene has previously served as a Partner of Price Waterhouse from 1974 to 1995, acting at various times as Managing Partner for cross border transactions and as National Director of tax services for M&A, and in connection with foreign banks and mutual funds with respect to acquisition and investment strategies. Currently, Mr. Greene serves on the board of directors of Intellicorp, Inc. (since 2001) and RAVE, Inc. (since 2005). Previously, he was a director of Connecticut Innovations, Inc. from 2005 until 2015, the Connecticut Clean Energy Fund from 2007 until 2011, Metromedia International Group, Inc. from 2007 until 2011, Enduro Medical Technologies LLC from 2005 until 2013 and Greene Rees Technologies, LLC from 1995 until 2013. Mr. Greene has also held prior board positions at Fortistar Capital, Oswego Hydro, Access Shipping and various other public and private companies through the years. Mr. Greene’s experience serving as chairman of various audit committees of many of these organizations and strong aptitude for technologies allow him to provide valuable contributions to the Board.
Ryan J. Morris, 36, was appointed as an independent director on April 25, 2016. Mr. Morris serves as President of Meson Capital Partners LLC, a San Francisco-based investment partnership, which he founded in February 2009. Mr. Morris currently serves on the board of directors of InfuSystem Holdings, Inc. since April 2012 (and served as Executive Chairman from April 2012 to May 2015) and Sevcon, Inc. since December 2013. Previously, Mr. Morris served as a director of Lucas Energy, Inc. from October 2012 to October 2014 (and was Chairman of the Board from December 2012 to November 2013). From June 2011 to July 2012, Mr. Morris served as a member of the equity committee of HearUSA, Inc., responsible for maximizing value to the stockholders. Mr. Morris’ extensive knowledge of finance and his service to other boards of directors allow him to make valuable contributions to the Board.
Yaozhong Shi, 47, has served as a director of Trans-Lux Corporation since June 29, 2014. Mr. Shi was appointed as a director of Trans-Lux Corporationthe Company pursuant to the terms of that certain Securities Purchase.
Purchase Agreement dated as of June 27, 2014 between the Company and Retop Industrial (Hong Kong) Limited.Transtech LED Company Limited (“Transtech”). Mr. Shi has served as a Directorbeen an employee of Retop LED Display Co. Ltd.the Company since April 2005 and Director of Retop Lighting Landscape Design Engineering Co., Ltd. since April 2013.July 2015. Mr. Shi has also served as a Vice Presidentover 25 years of Elec-Tech International Co., Ltd. since July 2009. Previously, Mr. Shi served as General Manager and President of Retop Opto Electronic Co. Ltd. from January 2000 through March 2005.experience in the LED industry. Mr. Shi’s contributions to RetopTranstech have resulted in a successful, well-known brand in the LED display total solution industry that provides solutions for multiple indoor & outdoor applications primarily in the media, entertainment and sports sectors. Mr. Shi’s strong business knowledge and extensive history and resources in the LED display arena combined with his twenty years of experience in the LED industry, allow him to provide valuable contributions to the Board.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE “FOR” THE APPROVAL OF EACH OF THE DIRECTORS
STANDING FOR ELECTION LISTED ABOVE.
IT IS INTENDED THAT PROXIES SOLICITED HEREBY WILL BE
VOTED “FOR” EACH OF THE DIRECTOR NOMINEES UNLESS
THE STOCKHOLDER SPECIFIES OTHERWISE.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal No. 2 (Item 2
Other Company Directors
J.M. Allain, 46, became the President and CEO of the Company on Proxy Card)BackgroundFebruary 16, 2010 and Ratification Requirement
BDO USA, LLP (“BDO”) has served as our independent registered public accounting firma director since June 2011. Mr. Allain served as President of Panasonic Solutions Company from July 2008 through October 2009; Vice President of Duos Technologies from August 2007 through June 2008; General Manager of Netversant Solutions from October 2004 through June 2005; and Vice President of Adesta, LLC from May 2002 through September 2004. Mr. Allain has familiarity with the operational requirements of complex organizations and has experience dealing with reorganizations and turnarounds. Mr. Allain’s experience and deep understanding of the operations of the Company allow him to make valuable contributions to the Board.
Marco M. Elser, 57, has served as a director since May 17,25, 2012. Since 2015, Mr. Elser currently serves as a partner with Lonsin Capital, a London-based investment banking firm. Mr. Elser also serves on the Board of Directors of Protalex, a Florham Park, NY-based biotechnology company, since 2014. He is also one of the independent directors of North Hills Signal Processing Corporation, a Long Island, NY based technology company. Mr. Elser previously had been a partner with AdviCorp Plc, a London-based investment banking firm; served as International Vice President of Northeast Securities, managing distressed funds for family offices and small institutions from 1994 to 2001; and served as a first Vice President of Merrill Lynch Capital Markets in Rome and London until 1994. Mr. Elser was formerly Chairman of the Board of Pine Brook Capital, a Shelton, CT based engineering company. Mr. Elser was also the president of the Harvard Club of Italy until 2014, an association he founded in 2002 with other Alumni in Italy where he has been living since 1984. He received his BA in Economics from Harvard College in 1981. Mr. Elser’s extensive knowledge of international finance and commerce allows him to make valuable contributions to the Board.
George W. Schiele, 84, has served as a director since 2009. Mr. Schiele was elected Chairman of the Board (a non-executive position) of the Company on September 29, 2010. Mr. Schiele currently serves as President of George W. Schiele, Inc., a trust management and private investment company and has held such position since 1974. He is also President of four other private companies; from 2003 until 2013 he was a Director of Connecticut Innovations, Inc., one of the nation’s five most active venture capital firms, and was Chairman of its Investment Advisory and Investment Committees from 2004 until 2013, responsible during his tenure for more than 200 VC investments. Mr. Schiele additionally serves as Trustee of ten private trusts since 1974 through the present. Mr. Schiele serves as an officer of two charitable foundations since 2006 and is Managing Partner of two investment partnerships since 2008, and as a Director of The Yankee Institute since 1998. Mr. Schiele’s long experience in previous start-ups and corporate restructurings and his service to other boards of directors allow him to make valuable contributions to the Board.
Alberto Shaio, 68, became the Chief Operating Officer of the Company on October 6, 2014 and has served as a director since October 2, 2013. He also serves on the Board of Advisors of Scorpion Capital. Previously, Mr. Shaio served as President and CEO of Craftsmen Industries from January 1, 2011 through September 1, 2013. Previously he held various posts with Farrel Corporation (Ansonia CT and Rochdale England) from 1986 until December 31, 2010, whenincluding the role of President and CEO since 2003. Mr. Shaio was a Director of the HF Mixing Group (Germany) from 2002 until 2010. From 1970 through 1986, Mr. Shaio was General Manager, Vice President or President of various companies such as Pavco, Filmtex (Columbia SA), and the Interamerican Investment Group. He has served on the board of directors of New Energy Corporation, Farrel Corporation, Interactive Systems, Polifilm, Filmtex, PAVCO SA, and Harburg Freudenberg Maschinenbau GmbH (Germany). Mr. Shaio’s extensive international experience and service to numerous other boards of directors allow him to provide valuable contributions to the Board.
Salvatore J. Zizza, 70, has served as an independent director since 2009. Mr. Zizza was elected Vice Chairman of the Board (a non-executive position) of the Company on September 29, 2010. Mr. Zizza has previously served as Chief Executive Officer and Chairman of the Board of General Employment Enterprises Inc. from December 23, 2009 until December 26, 2012. Mr. Zizza had served as President and Chief Operating Officer of Bion Environmental Technologies Inc. from January 13, 2003 until December 31, 2005, and has served as Non Executive Chairman of Harbor BioSciences, Inc. since March 27, 2009. He currently serves as the Chairman of Zizza & Associates, LLC. Mr. Zizza serves as the Chairman of Bethlehem Advanced Materials. Additionally, Mr. Zizza serves as a Director of GAMCO Westwood Funds. He has been an Independent Trustee of GAMCO Global Gold, Natural Resources & Income Trust by Gabelli since November 2005 and serves as a Director/trustee of 26 funds in the fund complex of Gabelli Funds. He has been Director of General Employment Enterprises Inc. since January 8, 2010 and has been an Independent Trustee of Gabelli Dividend & Income Trust since 2003. Mr. Zizza has been Independent Director of Gabelli Convertible & Income Securities Fund Inc. since April 24, 1991 and has been a Director of Gabelli Equity Trust, Inc. since 1986 and a Trustee of Gabelli Utility Trust since 1999. He served as Lead Independent Director of Hollis-Eden Pharmaceuticals from March 2006 to March 2009 and as a Director of Earl Scheib Inc. from March 1, 2004 to April 2009. As previously disclosed in the Company’s Prospectus filed on October 14, 2015, the SEC issued a cease and desist order which provides that Mr. Zizza violated Rule 13b2.2 of the Securities Exchange Act of 1934 and in connection therewith Mr. Zizza agreed to pay a $150,000 fine. Mr. Zizza received his Bachelor of Arts in Political Science and his Master of Business Administration in Finance from St. John's University, which also has awarded him an Honorary Doctorate in Commercial Sciences. Mr. Zizza’s extensive experience and service to numerous other boards of directors allow him to provide valuable contributions to the Board. In addition, Mr. Zizza also serves as Chairman of the Audit Committee and is the “audit committee financial expert” as required under the rules of the Corporation’s SEC.
CORPORATE GOVERNANCE AND RELATED MATTERS Board of Directors approved their engagement to audit
Board Composition and Election of Directors
We operate under the Corporation’s financial statementsdirection of our Board. Our Board is responsible for the fiscal year ended December 31, 2010. The Audit Committee has appointed BDO asmanagement of our independent registered public accounting firm forbusiness and affairs. Our Certificate of Incorporation provides that the fiscal year ending December 31, 2015.The ratificationnumber of the appointmentdirectors may be determined pursuant to our Amended and Restated Bylaws, which provide that such number may be determined from time to time by our Audit Committee of BDO asBoard. However, under our independent registered public accounting firm forAmended and Restated Bylaws, the fiscal year ending December 31, 2015 requires the affirmative voteBoard shall consist of a majorityminimum of the votes cast affirmatively or negativelyfive and a maximum of Common Stockfifteen directors. Our directors are divided into three separate classes of the Corporation voting in person or by proxy. Although stockholder approval of the appointment is not required by law and is not binding on the Audit Committee, the Committee will take the appointment under advisement if such appointment is not approved by the affirmative vote of a majority of the votes cast at the Meeting.
Representatives of BDO may be present at the Annual Meeting to answer appropriate questions and to make a statement if they wish.
The Audit Committee is not aware of any disagreements between management and BDO regarding accounting principles and their application or otherwise.
Audit Committee Pre-Approval of Independent Auditor Services: All audit services provided by BDO for 2014 and 2013 were approved by the Audit Committee in advance of the work being performed.
Audit Fees: BDO audit fees were $183,339 in 2014 and $202,525 in 2013. BDO audit fees for both 2014 and 2013 included, but were not limited to, fees associated with the annual audit of the Corporation’s financial statements, reviews of the Corporation’s quarterly reports on Form 10-Q and reviews of the Corporation’s proxy statements.
Audit-Related Fees: There were no audit-related services provided by BDO in 2014 or in 2013.
Tax Fees: BDO did not provide any tax services during 2014 or in 2013.
All Other Fees: BDO did not provide any non-audit related services during 2014 or in 2013.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
PROPOSAL TO RATIFY THE APPOINTMENT OF BDO, AS
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO AUDIT THE FINANCIAL STATEMENTS OF THE
CORPORATION FOR THE 2015 FISCAL YEAR.
IT IS INTENDED THAT PROXIES SOLICITED HEREBY WILL BE VOTED “FOR” THE
RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP, AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO AUDIT THE
FINANCIAL STATEMENTS OF THE CORPORATION FOR
THE 2015 FISCAL YEAR UNLESS THE STOCKHOLDER SPECIFIES OTHERWISE.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of May 21, 2015 (or such other date specified) with respect to (A) the beneficial ownership of Common Stock or shares acquirable within 60 days of such date by (i)directors. At each person known by the Corporation to own more than 5% of the Common Stock and who is deemed to be such beneficial owner of Common Stock under Rule 13d-3(a)(ii); (ii) each person who is a director of the Corporation or a nominee for director of the Corporation; (iii) each named executive in the Summary Compensation Table and (iv) all persons as a group who are executive officers and directors of the Corporation, and (B) the percentage of outstanding shares held by them on that date:
| | | |
Name, Status and Mailing Address | Number of Shares Beneficially Owned | | Percent Of Class (%) |
5% Stockholders: | | | |
Gabelli Funds, LLC One Corporate Center Rye, NY 10580-1434 | 425,860 | (1) | 25.0 |
Retop Industrial (Hong Kong) Limited Unit 27, 13/F Shing Yip Industrial Building 19-21 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong | 366,666 | (2) | 21.1 |
Carlisle Investments Inc. Trident Chambers Wickhams Cay P.O. Box 146 Road Town, Tortola, British Virgin Islands | 180,366 | (3) | 10.6 |
Bard Associates, Inc | 104,480 | (4) | 6.1 |
135 South LaSalle Street, Suite 3700 Chicago, IL 60603 |
| |
|
Non-Employee Directors: | | | |
Marco Elser | 192,389 | (5) | 11.3 |
Alan K. Greene | 8,333 | | * |
George W. Schiele | 47,073 | (6) | 2.8 |
Yaozhong Shi | 366,666 | (7) | 21.1 |
Salvatore J. Zizza | 6,620 | (8) | * |
| | | |
Named Executive Officers: | | | |
J.M. Allain | 2,144 | | * |
Robert J. Conologue | - | | * |
Alberto Shaio | 8,333 | | * |
Alexandro Gomez | - | | * |
Todd Dupee | - | | * |
All directors and executive officers as a group | 631,558 | (9) | 36.2 |
*Represents less than 1% of total number of outstanding shares.
(1) | | Based on Schedule 13D, as amended, dated August 19, 2014 by Mario J. Gabelli, Gabelli Funds, LLC, Teton Advisors, Inc., Gamco Investors, Inc., GGCP, Inc., and Gamco Asset Management Inc., which companies are parent holding companies and/or registered investment advisers. All securities are held as agent for the account of various investment company fund accounts managed by such reporting person. Except under certain conditions, Gabelli Funds, LLC has sole voting power and sole dispositive power over such shares. On January 27, 2015, Gabelli Equity Series Funds, Inc. – The Gabelli Small Cap Growth Fund filed a Schedule 13G relating to 404,180 of the aforementioned 425,860 shares. |
(2) | | The amount includes 33,333 shares of Common Stock acquirable upon exercise of vested warrants. Mr. Shi, a director of Trans-Lux Corporation, is a director of Retop Industrial (Hong Kong) Limited. |
(3) | | Based on Schedule 13D dated June 20, 2014. Mr. Elser, a director of Trans-Lux Corporation, exercises voting and dispositive power as investment manager of Carlisle Investments Inc. |
(4) | | Based on Schedule 13G dated February 13, 2015. Bard Associates, Inc. has sole voting power over 12,280 of such shares and sole dispositive power over all of such shares. |
(5) | | The amount includes 190,244 shares of Common Stock owned by Carlisle Investments, Elser & Co. and Advicorp plc, of which Mr. Elser exercises voting and dispositive power as investment manager. |
(6) | | The amount includes 6,620 shares of Common Stock acquirable upon exercise of 6,600 vested warrants and 20 stock options. This amount does not include 13,400 shares of Common Stock acquirable upon exercise of warrants that are not yet vested or exercisable. |
(7) | | The amount includes 333,333 shares of Common Stock owned by Retop Industrial (Hong Kong) Limited and 33,333 shares of Common Stock acquirable upon exercise of vested warrants owned by Retop Industrial (Hong Kong) Limited. |
(8) | | Mr. Zizza disclaims any interest in the shares set forth in footnote 1 above. The amount includes 6,620 shares of Common Stock acquirable upon conversion of 6,600 vested warrants and 20 stock options. This amount does not include 13,400 shares of Common Stock acquirable upon exercise of warrants that are not yet vested or exercisable. |
(9) | | The amount includes 46,573 shares of Common Stock, as set forth in footnotes above, which members of the group have the right to acquire upon exercise of stock options and warrants. This amount does not include 26,800 shares of Common Stock acquirable upon exercise of warrants that are not yet exercisable. |
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
The Board of Directors held five (5) meetings during 2014 and seven (7) meetings during 2013. All directors attended 75% or more of such meetings and of the committee meetings for which they were members. The Corporation does not have a formal policy regarding directors’ attendance at annual stockholders meetings, but strongly encourages and prefers that directors attend regular and special Board meetings as well as the Annual Meeting of Stockholders, in person, although attendance by teleconferenceone class of directors is elected to a term of three years or until the election and qualification of their successors, or their earlier death, resignation or removal. There are no family relationships among any of our directors or executive officers.
Independent Directors
While the Company’s common stock is traded on the OTCQB, the Company follows the NYSE MKT Company Guide regarding the determination of independence of the Company’s directors. A director is considered
adequate. The Corporation recognizesindependent if the Board determines that
attendancethe director does not have any direct or indirect material relationship with the Company. Mr. Allain and Mr. Shaio are employees of the
board members at all meetings may not be possibleCompany and
excuses absences for good cause.Non-employeetherefore have been determined by the Board to fall outside the definition of “independent director.” Messrs. Elser, Greene, Morris, Schiele, Shi and Zizza are non-employee directors (other than our Chairman and Vice Chairman) are due to receive an annual fee of $10,000, as well as $1,000 for each meeting of the Board attended in personCompany. Mr. Elser, via Carlisle Investments, Inc. (“Carlisle”) over which he exercised voting and $500 for each telephonic meeting attended, while employee directors are not entitled to receive any fees for their attendance to any meetings or otherwise. Mr. George Schieledispositive power as investment manager, and Mr. Salvatore Zizza,Schiele have made loans to the ChairmanCompany and Vice Chairman, respectively, receive an annual fee of $15,000 each, monthly fees of $3,000 each, $1,500 for each meeting oftherefore have been determined by the Board attended in personto fall outside the definition of “independent director.” Mr. Shi is a Director of Transtech, which is the Company’s main supplier of LED modules and $750 for each telephonic meeting attended. Fees fortherefore has been determined by the Board to fall outside the definition of “independent director.”
The Board has determined that Messrs. Greene, Morris and Zizza are “independent directors” because they had no relationship with the Company other than their capacities as members of the Board and Committeescommittees thereof. The Board has determined that its two Audit Committee members, Messrs. Greene and Zizza, are determined annually“independent directors”. In addition, our Board has made a subjective determination as to each independent director and independent director nominee that no relationships exist which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the entiredirectors, the director nominees and us with regard to each director and director nominee’s business and personal activities and relationships as they may relate to us and to our management. In addition, our Board has concluded that each of Directors basedMessrs. Greene and Zizza satisfies the heightened audit committee independence standards set forth in Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Board Committees
Our Board has established a standing Audit Committee, Compensation Committee, Executive Committee and Nominating Committee. Each committee operates under a charter approved by our Board. Copies of each committee’s charter are posted on the Investor Relations section of our website at www.trans-lux.com.
Audit Committee
Our Audit Committee consists of Messrs. Greene and Zizza, with Mr. Zizza serving as chairman. Our Board has determined that Mr. Zizza is an “audit committee financial expert” as defined in applicable SEC rules. Our Audit Committee’s responsibilities include:
appointing, compensating, retaining and overseeing the work of any public accounting firm engaged by us for the purpose of preparing or issuing an audit report or performing other audit, review or attest services;
reviewing and discussing with management and the external auditors our audited financial statements;
considering the effectiveness of compensation paid by other similar size companies,our internal control system;
reviewing and discussing with management the amounts currently paid by the Company, the overallCompany’s major financial risk exposures and steps management has taken to monitor and control such exposures and liabilities;
establishing our policy
for determining compensation paid to officers andregarding our hiring of employees or former employees of the
Companyexternal auditors and
the general financial condition of the Company. During 2014 and 2013, certain board members deferred payment of their fees. In lieu of a cash payment, certain board members and former board members have agreed to receive restricted shares of Common Stock of the Company or a combination of cash and restricted shares of Common Stock of the Company, which such restricted shares shall contain a legend under the Securities Act of 1933, as amended (the "Securities Act") and shall not be transferable unless and until registered or otherwise in accordance with applicable securities laws. Certain of these restricted shares were issued in December 2013.
Corporate Governance Policies and Procedures
The Board of Directors has adopted a Code of Business Conduct and Ethics Guidelines (the “Ethics Code”) that applies specifically to board members and executive officers. The Ethics Code is designed to promote compliance with applicable laws and regulations, to promote honest and ethical conduct, including full, fair, accurate and timely disclosure in reports and communications with the public. The Ethics Code is available for viewing on the Corporation’s website at www.trans-lux.com. Any amendments to, or waivers from, the Ethics Code will be posted on the website. In addition, the Board of Directors adopted a Whistle Blowing policy, which provides procedures for the receipt, retention and treatment of accounting related complaints receivedand concerns;
meeting independently with our external auditors and management;
reviewing and updating the Audit Committee Charter; and
preparing the Audit Committee report required by the
Corporation regarding accounting, internal accounting controls and auditing matters, as well as the confidential, anonymous submission of concerns regarding questionable accounting or auditing practices.Corporate Leadership Structure
Two separate individuals serve as the Corporation’s Chairmanproxy rules of the Board and Chief Executive Officer. The Chairman is not an executive officer. The Chairman provides leadership to the Board in the fulfillment of his responsibilities in presiding over Board meetings. The Chairman also presides over all meetings of the stockholders. The Chief Executive Officer is responsible for directing the operational activities of the Corporation.
Risk Management
SEC.
Compensation Committee
Our
Board of Directors and its Audit Committee are actively involved in risk management. Both the Board and Audit Committee regularly review the financial position of the Corporation and its operations, and other relevant information, including cash management and the risks associated with the Corporation’s financial position and operations.Communication with the Board of Directors
Security holders are permitted to communicate with the members of the Board by forwarding written communications to the Corporation’s Corporate Secretary at the Corporation’s headquarters in New York, New York. The Corporate Secretary will present all communications, as received and without screening, to the Board at its next regularly scheduled meeting.
Committees of the Board of Directors
The Board of Directors has appointed a Compensation Committee an Audit Committee, an Executive Committeeconsists of Messrs. Elser, Greene and a Nominating Committee.
Zizza, with Mr. Greene serving as chairman. Our Compensation Committee
TheCommittee’s responsibilities include:
providing guidance and periodic monitoring for all of our corporate compensation;
considering the effectiveness of our employee equity programs;
administering our stock incentive plans with respect to our executive officers and employee Board members, including the adjustment of the Compensation Committee ofbase salary each year;
implementing and administering our incentive compensation programs and authorizing all awards under these incentive programs;
administering our employee benefit plans; and
approving all perquisites, equity incentive awards, special cash payments or loans made or paid to executive officers and employee Board members and assisting the Board of Directors are Messrs. Elser, Greenein succession planning for executive officers.
At the end of each fiscal year, the Compensation Committee meets to review the performance of executive officers and Zizza.employee Board members subject to the short-swing profit restrictions of Section 16 of the Exchange Act under those programs and award bonuses thereunder. At that time, the Compensation Committee may also adjust base salary levels for executive officers and employee Board members subject to the short-swing profit restrictions of Section 16 of the Exchange Act and review the overall performance of our employee benefit plans. The Compensation Committee operates under a formal written charter approved by the Compensation Committee and adopted by the Board of Directors. also meets when necessary to administer our stock incentive plan.
The Compensation Committee reviewshas determined and reviewed the value and forms of compensation for our named executive officers and other benefits.officers based on the committee members’ knowledge and experience, competitive proxy and market compensation information and management recommendations. The Compensation Committee did not hold any meetingsengage a compensation consulting firm in 2014 or 2013. Nonefiscal year 2015. The Compensation Committee does not delegate its authority to review, determine and recommend, as applicable, the forms and values of the membersvarious elements of thecompensation for executive officers and directors. The Compensation Committee is or has been an officer or employee ofdoes delegate to Company management the Corporation. There are no Compensation Committee interlock relationships with respectimplementation and record-keeping functions related to the Corporation. Membersvarious elements of saidcompensation it has approved.
Nominating Committee receive
Our Nominating Committee consists of Messrs. Elser, Schiele and Shaio. Our Nominating Committee’s responsibilities include:
reviewing any stockholder nominations for directors and presenting to our Board a feelist of $320individuals recommended for eachnomination for election to our Board at the annual meeting of stockholders;
reviewing the Committee they attenddisclosure included in our proxy statement regarding our director nomination process;
reviewing the composition of each Board committee and presenting recommendations for committee memberships to our Board as needed; and
reviewing the
Chairperson, Mr. Greene, receives an annual feecharter and composition of
$1,600.
Audit Committee
The memberseach Board committee and making recommendations to our Board for the creation of additional Board committees or the Audit Committeechange in mandate or dissolution of the Board of Directors are Messrs. Zizza and Greene. The Audit Committee operates under a formal written charter approved by the Committee and adopted by the Board of Directors, a copy of which is available on the Corporation’s website at http://www.trans-lux.com/about/investor-information. The Board of Directors has determined that Mr. Zizza meets the definition of “audit committee financial expert” set forth in Item 407 of Regulation S-K, as promulgated by the SEC. The Audit Committee held five (5) telephonic meetings with the independent auditors in 2014 and two (2) such meetings in 2013. The responsibilities of the Audit Committee include the appointment of the independent registered public accounting firm, review of the audit function and the material aspects thereof with the Corporation’s independent registered public accounting firm, and compliance with the Corporation’s policies and applicable laws and regulations. Members of said Committee receive a fee of $400 for each meeting of the Committee they attend (other than the quarterly telephonic meetings held with the independent auditors) and the Chairman, Mr. Zizza, receives an annual fee of $2,400 and a fee of $100 for his participation in each quarterly telephonic meeting held with the independent auditors.
committees.
Executive CommitteeThe members of the
Our Executive Committee consists of the Board of Directors are Messrs. Elser, Schiele and Zizza. The Executive Committee operates under a formal written charter approved by the CommitteeMessrs. Schiele and adopted by the Board of Directors. Mr. Zizza isare independent, in accordance withmeeting the requirements of Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Each of the members of the Executive Committee qualify as "non-employee directors"“non-employee directors” for the purposes of Rule 16b-3 under the Securities Exchange Act, of 1934,and Messrs. Schiele and Zizza qualify as amended (the "Securities Exchange Act"), and Mr. Zizza is an "outside director"directors" for the purposes of Section 162(m) of the Internal Revenue Code, as amended. The primary purpose of theOur Executive Committee is to provide the President and Chief Executive Officer of the Company with a confidential sounding board for insights and advice, and to provide the Board with a more active formal interface with management and its day to day policy and actions. Additionally, the secondary objective of the Executive Committee is to exercise the powers and authority of the Board, subject to certain limitations set forth in the charter, during the intervals between meetings of the Board, when, based on the business needs of the Company, it is desirable for the Board to meet but the convening of a special board meeting is not warranted as determined by the Chairman of the Board. Committee’s responsibilities include:
| · | providing the President and Chief Executive Officer of the Company with a confidential sounding board for insights and advice, and to provide the Board with a more active formal interface with management and its day to day policy and actions; and |
| · | exercising the powers and authority of the Board, subject to certain limitations set forth in the Company’s charter, during the intervals between meetings of the Board, when, based on the business needs of the Company, it is desirable for the Board to meet but the convening of a special board meeting is not warranted as determined by the Chairman of the Board. |
It is the general intention that all substantive matters in the ordinary course of business be brought before the full Board for action, but the Board recognizes the need for flexibility to act on substantive matters where action may be necessary between Board meetings, which, in the opinion of the Chairman of the Board, should not be postponed until the next previously scheduled meeting of the Board. Members
Directors’ Attendance at Meetings
During fiscal year 2015, the Board and each of its committees held the following meetings:
the Board held five meetings;
the Audit Committee held four telephonic meetings;
the Compensation Committee held one meeting;
the Nominating Committee held [__] meetings; and
the Executive Committee did not hold any meetings.
In fiscal year 2015, all directors attended 60% or more of meetings of the Board and committees on which they serve. The Company does not have a formal policy regarding directors’ attendance at annual stockholders meetings, but strongly encourages and prefers that directors attend regular and special Board meetings as well as the annual meeting of stockholders in person, although attendance by teleconference is considered adequate. The Company recognizes that attendance of the Board members at all meetings may not be possible and excuses absences for good cause.
Board Leadership Structure
The roles of Chairman and Chief Executive Officer are separate positions. Mr. Schiele serves as our Chairman and Mr. Allain serves as our Chief Executive Officer. We separate the roles of Chairman and Chief Executive Officer in recognition of the differences between the two roles. The Chief Executive Officer is responsible for setting our strategic direction and our day-to-day leadership and performance, while the Chairman of the Board provides guidance to the Chief Executive Officer and presides over meetings of the Board. We do not receive any feeshave a lead independent director.
Risk Oversight
Our Board of Directors and its Audit Committee are actively involved in risk management. Both the Board and Audit Committee regularly review the financial position of the Company and its operations, and other relevant information, including cash management and the risks associated with the Company’s financial position and operations. The Board regularly receives reports from senior management on areas of material risk to our Company, including our liquidity, operational and legal and regulatory risks. Pursuant to its charter, the Audit Committee reviews our major financial risk exposures and the steps management has taken to monitor and control such exposures, and it also meets periodically with management to discuss policies with respect to risk assessment and risk management.
Nominations for
their participation.Directors
Director Qualifications
The full Board is responsible for selecting persons to fill vacancies on the Board and recommending candidates for election by the stockholders. The Board has delegated the process of considering candidates to the Nominating
CommitteeThe members ofCommittee. In evaluating director nominees, the Nominating Committee of the Board of Directors are Messrs. Schiele, Elser and Shaio. The Nominating Committee operates under a formal written charter approved by the Committee and adopted by the Board of Directors. The Nominating Committee recommends for consideration by the Board of Directors,considers director nominees for election of directors at the Corporation’s Annual Meeting of Stockholders. Director nominees are considered on the basis of, among other things, experience, expertise, skills, knowledge, integrity, understanding the Corporation’sCompany’s business and willingness to devote time and effort to Board responsibilities. Members of
In assessing potential new directors, the Nominating Committee
do not receive any fees for their participation.considers individuals from various disciplines and diverse backgrounds so that the Board has a broad diversity of experience, professions, skills and backgrounds. The Nominating Committee does not
have a separateassign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. Our Board has no formal policy
regardingwith regard to the consideration of diversity
in identifying director nominees, but the Board believes that the backgrounds and qualifications of the
Board.
Corporate Governance Committee
The Boarddirectors, considered as a group, should provide a composite mix of Directors has not established a corporate governance committee. The Board of Directors acts as the corporate governance committee.
Independence of Non-Employee Directors
The Corporation follows the NYSE MKT Company Guide regarding the independence of directors. A director is considered independent if the Board of Directors determinesexperience, knowledge and abilities that the director does not have any direct or indirect material relationship with the Corporation. Mr. Allain and Mr. Shaio are employees of the Corporation and therefore have been determined bywill allow the Board to fall outsidefulfill its responsibilities. Other than the definitionforegoing, there are no specific minimum qualifications that the Nominating Committee believes that a Committee-recommended nominee to the Board must possess, although the Nominating Committee may also consider such other factors as it may deem are in our best interests or the best interests of “independent director.” Messrs. Elser, Greene, Schiele, Shi and Zizzaour stockholders. Nominees are non-employee directorsnot discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law.
In its deliberations, the Nominating Committee is aware that our Board must have at least one director who qualifies as an “audit committee financial expert” as defined by SEC rules. The Nominating Committee also believes it appropriate for certain key members of our management to participate as members of the Corporation. Mr. Elser, via Carlisle Investments, Inc. over which he exercises votingBoard.
Stockholder Nominations
The Nominating and dispositive power as investment manager, and Mr. Schiele have made loansCorporate Governance Committee will evaluate any director candidates recommended by a stockholder according to the Corporation and therefore have been determinedsame criteria as a candidate identified by the BoardNominating Committee.
Any stockholder who intends to
fall outsidenominate a director at our 2016 Annual Meeting must notify our Corporate Secretary in writing at the
definitionaddress set forth at the beginning of
“independent director.” Mr. Shi isthis proxy statement of such intent in a
Directortimely manner in accordance with Article 5(c) of
Retop Industrial (Hong Kong) Ltd., which isour Amended and Restated Bylaws. In accordance with the
Corporation’s main supplieradvance notice provisions of
LED modules,our Amended and
therefore has been determinedRestated Bylaws, to be timely, director nominations must be delivered to or mailed and received by the
Board to fall outsideCorporate Secretary of the
definitionCompany not later than the close of
“independent director.” The Board of Directors has determined that Messrs. Greene and Zizza are “independent directors” since they have no relationship with the Corporation other than their status and payment as non-employee directors and as stockholders. The Board of Directors has determined that its Audit Committee members, namely Messrs. Greene and Zizza, are “independent directors”.Non-Employee Director Stock Option Plan
The Board of Directors has previously established a Non-Employee Director Stock Option Plan which, as amended, covers a maximum of 800 shares for grant. Such options are granted for a term of six years and are priced at fair market valuebusiness on the grant date. The determination as120th day prior to the amount of options to be granted to directors is based on years of service, and are calculated on a yearly basis as follows: a minimum of 20 stock options are granted for each director; an additional 20 stock options are granted if a director has served for five years or more; an additional 20 stock options are granted if a director has served for ten years or more; and an additional 40 stock options are granted if a director has served for twenty years or more. Such options are exercisable at any time upon the first anniversary of the grant date. The Corporation grants additional stock options uponpreceding year’s annual meeting. However, in the expiration or exercise of any such option if such exercise or expiration occurs no earlier than four years afterevent that the date of grant, in an amount equalthe 2016 Annual Meeting is advanced more than 30 days prior to such anniversary date or delayed more than 60 days after such anniversary date, then to be timely such notice must be received by us on or before the later of (i) 90 days prior to the number of options that have been exercised or that have expired. In addition to the foregoing, the shareholders approved a proposal to grant warrants to purchase 20,000, 20,000 and 2,000 shares to Messrs. Zizza and Schiele and Ms. Firstenberg, respectively, which warrants were granted in 2013.
Compensation of Directors
The following table represents director compensation for 2014 and 2013:
| | | | | | | | |
Name | Year | Fees Earned
($) | Stock Awards
($) | Option Awards
($) | Non-Equity Incentive Plan Compensation
($) | Nonqualified Deferred Compensation Earnings
($) | All Other Compensation
($) | Total
($) |
J.M. Allain | 2013 | - | - | - | - | - | - | - |
| 2014 | - | - | - | - | - | - | - |
Marco Elser | 2013 | 13,500 | - | - | - | - | - | 13,500 |
| 2014 | 16,600 | - | - | - | - | - | 16,600 |
Jean Firstenberg (1) | 2013 | 14,100 | - | - | - | - | - | 14,100 |
| 2014 | - | - | - | - | - | - | - |
Alan K. Greene (2) | 2013 | 2,500 | - | - | - | - | - | 2,500 |
| 2014 | 15,000 | - | - | - | - | - | 15,000 |
Richard Nummi (3) | 2013 | 11,000 | - | - | - | - | - | 11,000 |
| 2014 | - | - | - | - | - | - | - |
George W. Schiele (4) | 2013 | 21,750 | - | - | - | - | - | 21,750 |
| 2014 | 133,500 | - | - | - | - | - | 133,500 |
Alberto Shaio (5) | 2013 | 2,500 | - | - | - | - | - | 2,500 |
| 2014 | 13,000 | - | - | - | - | - | 13,000 |
Yaozhang Shi (6) | 2013 | - | - | - | - | - | - | - |
| 2014 | 11,500 | - | - | - | - | - | 11,500 |
Elliot Sloyer (7) | 2013 | 11,500 | - | - | - | - | - | 11,500 |
| 2014 | - | - | - | - | - | - | - |
Salvatore J. Zizza (4) | 2013 | 23,600 | - | - | - | - | - | 23,600 |
| 2014 | 135,650 | | | | | | 135,650 |
(1) | | Ms. Firstenberg resigned from the Board effective March 17, 2014. |
(2) | | Mr. Greene was elected a director by shareholders on October 2, 2013. |
(3) | | Mr. Nummi was appointed a director by the Board of Directors on March 6, 2012 and his term expired October 2, 2013. |
(4) | | As of December 31, 2014, also holds warrants and stock options to purchase 20,020 shares of the Company’s Common Stock from prior year awards. |
(5) | | Mr. Shaio was elected a director by shareholders on October 2, 2013. |
(6) | | Mr. Shi was appointed a director by the Board of Directors on June 29, 2014. |
(7) | | Mr. Sloyer was appointed a director by the Board of Directors on March 6, 2012 and retired from the Board effective October 2, 2013. |
Audit Committee Report
The information contained in this Proxy Statement shall not be deemed to be “soliciting material” or “filed with the SEC” or subject to the liabilities of Section 18date of the Exchange Act, except tomeeting or (ii) the extent that it is specifically incorporated by reference into a document filed undertenth day following the Securities Act or Exchange Act.
The following is a reportday on which public announcement of the Audit Committeedate of the Boardmeeting was made. The notice must include the information specified in our Amended and Restated Bylaws.
Code of
Directors:The members of the Audit Committee of the Board of Directors listed below are independent directors as defined by Section 952 of the Dodd-Frank Wall Street ReformBusiness Conduct and Consumer Protection Act. Ethics
The Board of Directors has adopted a written charter for the Audit Committee.Code of Business Conduct and Ethics Guidelines (the “Ethics Code”) that applies specifically to board members and executive officers. The responsibilities of the Audit Committee include recommending to the Board of Directors an accounting firm to be engaged as the Corporation’s independent registered public accounting firm. Management is responsible for the preparation of the Corporation’s financial statements and the financial reporting process, including the system of internal controls. The independent registered public accountants are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States of America. The Audit Committee’s responsibility is to oversee these processes.
The Audit Committee has met and held discussions with management and the independent registered public accountants. The Audit Committee has reviewed and discussed the matters required to be discussed by Statement on Auditing Standards No. 61, “Communication with Audit Committees,” as amended. The Corporation’s independent registered public accountants have provided to the Audit Committee the written disclosures and the letter required under Independence Standards of the Public Company Accounting Oversight Board (PCAOB) Rule 3526, “Communication with Audit Committees Concerning Independence.” The Audit Committee also considered the compatibilities of non-audit services with the accountants’ independence.
In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed with management the Corporation’s audited consolidated financial statements contained in the Corporation’s Annual Report on Form 10-K for the year ended December 31 2013 and the year ended December 31, 2014. The Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC on May 13, 2014, and for the year ended December 31, 2014, as filed with the SEC on April 2. 2015.
The Audit Committee has discussed the overall scope and plans for the audit with the independent registered public accountants. The Audit Committee will meet with the independent accountants, with and without management present, to discuss the results of their examination and the overall quality of the Corporation’s financial reporting.
Independent Registered Public Accounting Firms’ Fees
During the year ended December 31, 2014, audit fees of $183,339 were paid or accrued to BDO, the Corporation’s independent registered public accounting firm. During the year ended December 31, 2013, audit fees of $202,525 were paid or accrued to BDO. Audit fees for 2013 and for 2014 were for the annual audits of the Corporation’s financial statements, reviews of the Corporation’s quarterly reports on Form 10-Q, and a review of the Corporation’s proxy statement.
The Audit Committee of the Board of Directors has considered the absence of non-audit services by the auditors for financial information systems design and implementation and the absence of all other non-audit services as compatible with maintaining the auditor’s independence.
This report is submitted by the Audit Committee. Its members are:
Salvatore J. Zizza, Chairman
Alan K. Greene
COMPENSATION OF EXECUTIVE OFFICERS
AND TRANSACTIONS WITH MANAGEMENT
Compensation Discussion and Analysis
All matters concerning executive compensation for the Chief Executive Officer and other executive officers whose annual base salaries are over $200,000 per year are considered by the Corporation’s Compensation Committee. Our compensation structure for our executivesEthics Code is designed to attract individualspromote compliance with applicable laws and regulations, to promote honest and ethical conduct, including full, fair, accurate and timely disclosure in reports and communications with the skills necessarypublic. The Ethics Code is available for usviewing on the Company’s website at www.trans-lux.com in the “Investor Relations” Section. Any amendments to, achieve our business plan, to reward those individualsor waivers from, the Ethics Code will be posted on the website. In addition, the Board adopted a Whistle Blowing policy, which provides procedures for successful performance over time,the receipt, retention and to retain those executives who continue to perform at or above our expectations, without incurring risk-taking incentives that may adversely affect the Corporation. Our executives’ compensation has three primary components: a base salary, cash incentive bonuses and equity awards.
Base Salary. We fix the base salarytreatment of each of our executives at a level we believe enables us to hire and retain individuals in a competitive environment and rewards satisfactory individual performance and a satisfactory level of contribution to our overall business goals. We also take into account the base salaries paidcomplaints received by similarly sized companies and the base salaries of other companies with which we believe we compete for talent. Named executive officer compensation currently reflects amounts of cash consistent with periods of economic stress and lower earnings, as we focus on actions to stabilize the Company regarding accounting, internal accounting controls and to position it for a continued recovery.
Cash Incentive Bonus. We design the cash incentive bonuses for our executives to focus the executive on achieving key financial and/or operational objectives within a yearly time horizon, as described in more detail below. Cash incentive bonuses for our executives are established as part of their respective individual employment agreements, as applicable. Currently, J.M. Allain, our President and Chief Executive Officer, is the only executive officer of the Corporation entitled to a cash incentive bonus; his cash incentive bonus is determined in accordance with the terms of his employment agreement with the Company. As a general matter, the Compensation Committee is responsible for determining all criteria for the provision of any cash incentive bonuses awarded by the Corporation, and any such decisions by the Compensation Committee must be approved by the Board of Directors at the time any employment agreement contemplating a cash incentive bonus is entered into. Based on the financial standing of the Corporation, no cash incentive bonuses were paid for the years ended December 31, 2013 or December 31, 2014.
Equity Awards. We occasionally grant stock options, restricted stock or warrants relating to employment agreements and/or to reward long-term performance. We believe that such compensation incentivizes each executive to create value for the Corporation, and ties executive performance directly to the financial performance of the Corporation as a whole. We take into consideration the executives’ tenure with the Corporation,auditing matters, as well as the availabilityconfidential, anonymous submission of equity awards, in additionconcerns regarding questionable accounting or auditing practices.
Stockholder Communication with the Board
The Board maintains a process for stockholders to communicate with the executives’ performance in determining grantsBoard or with individual directors. Stockholders who wish to communicate with the Board or with individual directors should direct written correspondence to our Corporate Secretary at our Company’s headquarters located at 445 Park Avenue, Suite 2001, New York, New York 10022. Any such communication must contain:
a representation that the stockholder is a holder of
equity awards.We view the three primary componentsrecord of our executive compensationcapital stock;
the name and address, as related but distinct. Although we review total compensation, we do not believethey appear on our books, of the stockholder sending such communication; and
the class and number of shares of our capital stock that significant compensation derived from one component of compensation should negateare beneficially owned by such stockholder.
The Corporate Secretary will forward such communications to our Board or
reduce compensation from other components. We determinethe specified individual director to whom the communication is directed unless such communication is unduly hostile, threatening, illegal or similarly inappropriate, in which case the Corporate Secretary has the authority to discard the communication or to take the appropriate
level for each compensation component based in part, but not exclusively, on our view of internal equity and consistency, individual performance and other information we deem relevant. We believe that salary and cash incentive bonuses are primary considerations and that equity awards are secondary considerations. Except as described below, we have not adopted any formal policies or guidelines for allocating compensation between long-term and currently paid out compensation, between cash and non-cash compensation, or among different forms of compensation. This is due to the small size of our executive team, and our need to remain flexible and to tailor each executive’s award to attract and retain that executive. Other Benefits. In addition to the three primary components of compensation described above, we provide our executives with benefits that are generally available to our salaried employees. Our executives are eligible to participate in all of our employee benefit plans,legal action regarding such as medical, group life and disability insurance, flexible spending plans, and our 401(k) plan, in each case on the same basis as our other employees. Additionally, as a special perquisite for our executives we provide additional life insurance benefits which are paid for by the Company.
communication. 13
Supplemental Executive Retirement Agreement. In accordance with the former President and Chief Executive Officer’s agreement, he was due a supplemental executive retirement payment on July 1, 2010 in the amount of $353,000 plus tax effect of approximately $170,000, but has not yet been paid.
2015 Director Compensation
Consultants. The Corporation has not engaged the services of any outside compensation consultant for 2013 or for 2014.Compensation Committee Report
The information contained in this Proxy Statement shall not be deemed to be “soliciting material” or “filed with the SEC” or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or Exchange Act.
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
This report is submitted by the Compensation Committee. Its members are:
Alan K. Greene, Chairman
Marco Elser
Salvatore J. Zizza
EXECUTIVE COMPENSATION AND
TRANSACTIONS WITH MANAGEMENT
Compensation of Executive Officers
The following table provides certain summary information for the last two fiscal years of the Corporation concerning compensation paid or accrued by the Corporation and its subsidiaries to or on behalf of the Corporation’s Chief Executive Officer, Chief Financial Officer and other Named Executive Officers of the Corporation:
Summary Compensation Table
Annual Compensation
| | | | | | | | | |
Name and
Principal Position | Year | Salary ($) | Bonus
($) | Stock Awards
($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value of Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) (1) | Total
($) |
J.M. Allain | 2014 | 285,576 | - | - | - | - | - | 18,000 | 303,576 |
President and Chief Executive Officer | 2013 | 275,001 | - | - | - | - | - | 18,000 | 293,001 |
| | | | | | | | | |
Robert J. Conologue (2). | 2014 | 105,924 | - | - | - | - | - | - | 105,924 |
Senior Vice President and Chief Financial Officer | 2013 | - | - | - | - | - | - | - | - |
| | | | | | | | | |
Alberto Shaio (3) | 2014 | 41,539 | - | - | - | - | - | 13,000 | 54,539 |
Senior Vice President and Chief Operating Officer | 2013 | - | - | - | - | - | - | 2,500 | 2,500 |
| | | | | | | | | |
Alexandro Gomez (4) | 2014 | 31,732 | - | - | - | - | - | - | 31,732 |
Senior Vice President and Chief Revenue Officer | 2013 | - | - | - | - | - | - | - | - |
| | | | | | | | | |
Todd Dupee | 2014 | 85,795 | - | - | - | - | - | - | 85,795 |
Vice President and Controller | 2013 | 73,770 | - | - | - | - | - | - | 73,770 |
| | | | | | | | | |
Kristin Kreuder (5) | 2014 | 118,164 | - | - | - | - | - | 34,616 | 152,780 |
Vice President, General Counsel and Secretary | 2013 | 150,003 | - | - | - | - | - | - | 150,003 |
(1) | | See “All Other Compensation” below for further details. |
(2) | | Elected an Executive Officer on May 29, 2014. |
(3) | | Elected an Executive Officer on November 4, 2014. |
(4) | | Elected an Executive Officer on November 4, 2014. |
(5) | | Mr. Shaio was elected a director by shareholders on October 2, 2013. |
All Other Compensation
During 2014 and 2013, “All Other Compensation” consisted of director and/or trustee fees, insurance premiums and other items. The following is a table of amounts per named individual:
| | | | |
Name | Year | Director and/or Trustee Fees
($) | Other
($) | Total All Other Compensation ($) |
J.M. Allain(1) | 2014 | - | 18,000 | 18,000 |
| 2013 | - | 18,000 | 18,000 |
Robert J Conologue | 2014 | - | - | - |
| 2013 | - | - | - |
Alberto Shaio | 2014 | 13,000 | - | 13,000 |
| 2013 | 2,500 | - | 2,500 |
Alexandro Gomez | 2014 | - | - | - |
| 2013 | - | - | - |
Todd Dupee | 2014 | - | - | - |
| 2013 | - | - | - |
Kristin Kreuder(2) | 2014 | - | 34,616 | 34,616 |
| 2013 | - | - | - |
(1) | | Other consists of vehicle allowance. |
(2) | | Other consists of severance. |
Stock Option Plans and Stock Options
2012 Long-Term Incentive Plan
The Company has adopted the 2012 Long-Term Incentive Plan to allow for an aggregate of 200,000 shares of Common Stock that may be issued under the 2012 Long-Term Incentive Plan. The 2012 Long-Term Incentive Plan was adopted by the Corporation’s Board of Directors on July 2, 2010, with amendments adopted by the Corporation’s Board of Directors on December 21, 2011, and approved by the Corporation’s stockholders at the 2012 Annual Meeting of Stockholders held on June 26, 2012. No awards have been issued to any employees under the 2012 Long-Term Incentive Plan.
Non-Employee Director Stock Option Plan
The Board
of Directors has previously established a Non-Employee Director Stock Option Plan which, as amended, covers a maximum of 1,200 shares for grant. Such options are granted for a term of six years and are priced at fair market value on the grant date. The determination as to the amount of options to be granted to directors is based on years of service, and are calculated on a yearly basis as follows: a minimum of 20 stock options are granted for each director; an additional 20 stock options are granted if a director has served for five years or more; an additional 20 stock options are granted if a director has served for ten years or more; and an additional 40 stock options are granted if a director has served for twenty years or more. Such options are exercisable at any time upon the first anniversary of the grant date. The
CorporationCompany grants additional stock options upon the expiration or exercise of any such option if such exercise or expiration occurs no earlier than four years after date of grant, in an amount equal to the number of options that have been exercised or that have expired. In addition to the foregoing, the
CorporationCompany received
shareholderstockholder approval of a proposal to grant warrants to purchase 20,000
20,000 and 2,000 shares to
each of Salvatore J. Zizza
and George W. Schiele,
and Jean Firstenberg, respectively, which warrants were granted in 2013.
Compensation of Directors
The following table sets forth the compensation awarded to, earned by, or paid to each person who served as a director during the fiscal year ended December 31, 2015.
| Name and Principal | | Fees Earned or Paid in Cash | | Option Awards | | Total |
| Position | | ($) | | ($) | | ($) |
| | | | | | | | | | |
| Jean-Marc (J.M.) Allain | | | – | | | | | | – |
| | | | | | | | | | |
| Marco Elser | | | 13,000 | | | | | | 13,000 |
| | | | | | | | | | |
| Alan K. Greene | | | 14,600 | | | | | | 14,600 |
| | | | | | | | | | |
| Ryan J. Morris (1) | | | – | | | | | | – |
| | | | | | | | | | |
| George W. Schiele (2) | | | 57,000 | | | | | | 57,000 |
| | | | | | | | | | |
| Alberto Shaio | | | – | | | | | | – |
| | | | | | | | | | |
| Yaozhong Shi (3) | | | 6,000 | | | | | | 6,000 |
| | | | | | | | | | |
| Salvatore J. Zizza (2) | | | 60,550 | | | | | | 60,550 |
| (1) | Mr. Morris was appointed a director by the Board on April 25, 2016. |
| (2) | As of December 31, 2015, Messrs Schiele and Zizza also hold warrants to purchase 20,000 shares of the Company’s Common Stock from a prior year award. |
| (3) | Mr. Shi was appointed a director by the Board of Directors on June 29, 2014 and was hired as an employee on July 22, 2015. |
Certain Relationships and Related Transactions
Except as described below, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds the lesser of $120,000 or 1% of our total assets and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers and the transactions described or referred to below.
Yaozhong Shi, a director of the Company, is the Chairman of Transtech, which is our primary LED supplier. The Company purchased $3.5 million and $2.4 million of product from Transtech in 2015 and 2014, respectively, at prices that approximate fair market value. Amounts payable by the Company to Transtech were $145,000 and $89,000 as of December 31, 2015 and 2014, respectively.
On June 27, 2014, the Company entered into a Securities Purchase Agreement with Transtech, pursuant to which Transtech purchased 333,333 shares of the Company’s Common Stock for a purchase price of $2,000,000. In connection with the agreement, the Company issued warrants to purchase 33,333 shares of the Company’s Common Stock to Transtech at an exercise price of $8.00 per share, which expire on June 27, 2016.
Marco Elser, a director of the Company, provided $500,000 of funding to BFI Capital Fund II, LLC, with whom the Company entered into a Credit Agreement (the “Credit Agreement”) on April 23, 2015 for a $1.5 million credit line at a fixed rate of interest of 12.00%, with a maturity date of May 1, 2016. The Company had borrowed $1.0 million under the Credit Agreement, which has been used for working capital. The Credit Agreement was satisfied and terminated on November 23, 2015.
On April 27, 2016, the Company received a $500,000 loan from Carlisle at a fixed interest rate of 12.00%, which is due to mature on April 27, 2019 with a bullet payment of all principal due at such time. Interest is payable monthly. Marco Elser exercises voting and dispositive power as investment manager of Carlisle.
On December 3, 2013, the Company received a $1.0 million loan from Carlisle at a fixed interest rate of 10.00%, which was due to mature on June 1, 2014 with a bullet payment of all principal and accrued interest due at such time, which maturity date was subsequently extended to July 1, 2014. Marco Elser exercises voting and dispositive power as investment manager of Carlisle. On June 20, 2014, this loan was converted into shares of the Company’s Common Stock at an exchange rate of 1 share for every $6.00 of principal, resulting in the issuance of 166,666 shares of Common Stock to Carlisle. On September 3, 2014, the interest was converted into shares of the Company’s Common Stock at an exchange rate of 1 share for every $6.00 of interest, resulting in the issuance of 9,178 shares of Common Stock to Carlisle. As a result of the conversion to Common Stock, the loan has been satisfied in full.
In connection with the Company’s rights offering consummated in November 2015, George W. Schiele, Alan K. Greene and Alberto Shaio, each a director of the Company, exercised rights to purchase 250, 252 and 252 of Series B Convertible Preferred Stock, respectively, at an exercise price of $200 per share. Each share of Series B Convertible Preferred Stock is convertible into 20 shares of Common Stock.
In June 2014, the Company received a $200,000 loan from Mr. Schiele at a fixed interest rate of 10.00%, which was due to mature on July 1, 2014 with a bullet payment of all principal and accrued interest due at such time. On June 20, 2014, this loan was converted into shares of the Company’s Common Stock at an exchange rate of 1 share for every $6.00 of principal, resulting in the issuance of 33,333 shares of Common Stock to Mr. Schiele. As a result of the conversion to Common Stock, the loan has been satisfied in full.
Management is responsible for our system of internal controls over financial reporting and for preparing our financial statements. Our independent registered public accounting firm, Marcum LLP, is responsible for performing an independent audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and to issue a report thereon. The Audit Committee is responsible for overseeing management’s conduct of the financial reporting process and system of internal control.
During 2015, the Audit Committee met regularly and held discussions with management and the independent registered public accounting firm. During these meetings and in meetings concerning our 2015 Annual Report for the year ended December 31, 2015, the Audit Committee has:
reviewed and discussed the audited financial statements included in our 2015 Annual Report for the year ended December 31, 2015 with management and our independent registered public accounting firm;
received the written disclosures and communications from the independent registered public accounting firm that are required by the applicable requirements of the PCAOB regarding such firm’s communications with the Audit Committee concerning independence and has discussed with such firm its independence; and
discussed with the independent registered public accounting firm the matters required to be discussed under Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the PCAOB in Rule 3200T, or any successor rule.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements of the Company and its subsidiaries be included in the 2015 Annual Report for the year ended December 31, 2015 for filing with the SEC.
The Audit Committee has relied, without independent verification, on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States and on the representations of the independent registered public accounting firm included in its report on our financial statements. The Audit Committee’s considerations and discussions with management and the independent registered public accounting firm do not, however, ensure that our financial statements are presented in accordance with generally accepted accounting principles or that the audit of our financial statements has been carried out in accordance with the standards of the PCAOB.
The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.
MEMBERS OF THE AUDIT COMMITTEE
Salvatore J. Zizza, Chairman
Alan K. Greene
Our executive officers and their ages as of the Record Date are listed below. Information regarding Jean-Marc (J.M.) Allain, our President and Chief Executive Officer, and regarding Alberto Shaio, our Senior Vice President and Chief Operating Officer, is listed above under the heading “Election of Directors—Director Qualifications.”
| Name | | Age | | Position |
| Robert J. Conologue | | 67 | | Senior Vice President and Chief Financial Officer |
| Alexandro Gomez | | 46 | | Senior Vice President and Chief Revenue Officer |
| Todd Dupee | | 44 | | Vice President and Controller |
Robert J. Conologue, became Senior Vice President and Chief Financial Officer of the Company on May 29, 2014. Mr. Conologue has previously served as Chief Financial Officer for Utrecht Art Supplies from June 2012 to November 2013. Prior to that, he worked at Twinlab Corporation in the role of Executive Vice President and Chief Financial Officer from May 2005 to December 2011.
Alexandro Gomez, became Senior Vice President and Chief Revenue Officer of the Company on October 13, 2014. Mr. Alex Gomez previously worked for xclr8 Media from 2011 to 2014, Van Wagner Sports and Entertainment from 2003 to 2011, One-On-One Sports Radio Network from 2000 to 2001, Foot Locker Worldwide from 1998-2000 and News Corporation’s Fox Sports and Fox Video from 1992 to 1998.
Todd Dupee, became Vice President of the Company in 2009, has been Controller since 2004 (except when he served as Chief Financial Officer and Interim Chief Financial Officer between December 3, 2012 and May 29, 2014) and has been with the Company since 1994.
Our named executive officers for 2015 (collectively, our “Named Executive Officers”) were as follows:
| Name | | Title |
| J.M. Allain | | President and Chief Executive Officer |
Robert J. Conologue (1) | | Senior Vice President and Chief Financial Officer |
Alberto Shaio (2) | | Senior Vice President and Chief Operating Officer |
Alexandro Gomez (3) | | Senior Vice President and Chief Revenue Officer |
___________
(1) Elected an Executive Officer on May 29, 2014.
(2) Elected an Executive Officer on November 4, 2014.
(3) Elected an Executive Officer on November 4, 2014.
Summary Compensation Table
The following table sets forth the total compensation awarded to, earned by, or paid to our Named Executive Officers, whose compensation exceeded $100,000, during the years ended December 31, 2015 and 2014:
Name and Principal Position | | Year | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Nonequity Incentive Compensation ($) | | | All Other Compensation ($)(1) | | | Total ($) | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| J.M. Allain | | 2015 | | | 301,405 | | | | - | | | | - | | | | - | | | | - | | | | 18,000 | | | | 319,405 | |
| President and Chief | | 2014 | | | 285,576 | | | | - | | | | - | | | | - | | | | - | | | | 18,000 | | | | 303,576 | |
| Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Robert J. Conologue | | 2015 | | | 195,522 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 195,522 | |
| Senior Vice President and | | 2014 | | | 105,924 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 105,924 | |
| Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alberto Shaio | | 2015 | | | 180,002 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 180,002 | |
| Senior Vice President and | | 2014 | | | 41,539 | | | | - | | | | - | | | | - | | | | - | | | | 13,000 | | | | 54,539 | |
| Chief Operating Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alexandro Gomez | | 2015 | | | 150,003 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 150,003 | |
| Senior Vice President and | | 2014 | | | 31,732 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 31,732 | |
| Chief Revenue Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
_________
(1) See “All Other Compensation” below for further details.
All Other Compensation
During 2015 and 2014, “All Other Compensation” consisted of director fees and other items. The following is a table of amounts per named individual:
| | | | Director and/or | | All Other | | |
| | | | | | | | | |
J.M. Allain (1) | | 2015 | | - | | 18,000 | | 18,000 |
| | | 2014 | | - | | 18,000 | | 18,000 |
| | | | | | | | | |
| | | | | | | | | |
| Robert J. Conologue | | 2015 | | - | | - | | - |
| | | 2014 | | - | | - | | - |
| | | | | | | | | |
| Alberto Shaio | | 2015 | | - | | - | | - |
| | | 2014 | | 13,000 | | - | | 13,000 |
| | | | | | | | | |
| | | | | | | | | |
| Alexandro Gomez | | 2015 | | - | | - | | - |
| | | 2014 | | - | | - | | - |
| ___________ | | | | | | | | |
| (1) Other consists of vehicle allowance. | |
Stock Option Plans and Stock Options
2012 Long-Term Incentive Plan
The Company has adopted the 2012 Long-Term Incentive Plan to allow for an aggregate of 200,000 shares of Common Stock that may be issued under the 2012 Long-Term Incentive Plan. The 2012 Long-Term Incentive Plan was adopted by the Company’s Board on July 2, 2010, with amendments adopted by the Company’s Board on December 21, 2011, and approved by the Company’s stockholders at the 2012 Annual Meeting of Stockholders held on June 26, 2012. No awards have been issued to any employees or directors under the 2012 Long-Term Incentive Plan.
Non-Employee Director Stock Option Plan
The Company also had a Non-Employee Director Stock Option Plan, which as amended, covered a maximum of 1,200 shares for grant and which provided for the grant of incentive stock options priced at fair market value as of the date of grant. Options are for a period of six years from date of grant, are granted at fair market value on date of grant, may be exercised at any time after one year from date of grant while a director and are based on years of service, with a minimum of 20 stock options for each director, an additional 20 stock options based on five or more years of service, another 20 stock options based on 10 or more years of service and an additional 40 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 plan has expired. No stock options are currently outstanding.
There were no stock options granted in fiscal years 2013 or 20142015 to the named executive officers or any directors, and no stock options were exercised in fiscal years 20132015.
There have been no stock options issued to the named executive officers so there have been no values realized relating to the exercise of stock options, there are no fiscal year end option values and there are no unexercised option or
2014.
Retirementequity incentive plan awards as of the end of the fiscal year.
Defined Benefit Pension Plan
The
In 2015, the Company made
the required $1.2 million of cash contributions
of $669,000 during 2013 and $958,000 during 2014, which were less than the minimum required contributions for each such year, to the Company’s
retirementdefined benefit pension plan for all eligible employees and the eligible individuals listed in the Summary Compensation Table. The Company has been granted, subject to certain conditions, its requests for waivers of the 2009, 2010 and 2012 minimum funding standard as permitted under 412(d) of the Internal Revenue Code and section 303 of the Employee Retirement Income Security Act of 1974.
The Company’s defined benefit pension plan, prior to being frozen, covered 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 Company is a party. Retirement 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, is approximately $15,000 for an individual with ten years of credited service and with a final average salary of $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, $260,000 is the legislated annual cap on determining the final average salary and $210,000 is the maximum legislated annual benefit payable from a qualified pension plan.
Supplemental Executive Retirement Agreement
In accordance with the
Pursuant to an employment agreement, our former President and Chief Executive
Officer’s employment agreement, heOfficer was due a supplemental executive retirement payment on July 1, 2010 in the amount of $353,000 plus tax effect of approximately $170,000,
butwhich has not yet been paid.
Outstanding Equity Awards at Fiscal Year-End 2015
There was no unexercised options held by any of our Named Executive Officers as of December 31, 2015.
Employment Agreements
& Severance Benefits
The CorporationCompany executed an employment agreement with J.M. Allain, President and Chief Executive Officer, effective on February 16, 2015 which expires on February 16, 2018 (the "Allain Employment Agreement").2018. The agreement provides for compensation at the annual rate of $300,000 per annum. The agreement entitles Mr. Allain to twenty days’ paid vacation per year, a vehicle allowance, “key person” insurance, business expense reimbursement (including a business club membership) and certain employee benefits generally available to employees of the Corporation.Company. The agreement provides for certain severance benefits depending on whether Mr. Allain leaves the employ of the CorporationCompany for “Cause,” “Good Reason” or “Without Cause and for Good Reason” prior to the termination of the agreement. The agreement contains standard non-disparagement, confidentiality and non-solicitation provisions.The foregoing is merely a summary of the Allain Employment Agreementagreement and is qualified in its entirety by reference to the text of the Allain Employment Agreementagreement as filed with the SEC as Exhibit 10.5 to the Form 10-K filed by the Corporation on April 2, 2015.
2015 Annual Report.
The CorporationCompany executed an employment agreement with David PavlikAlberto Shaio, Senior Vice President and Chief Operating Officer, effective on May 27, 2014 (the “Pavlik Agreement”) pursuant toMarch 30, 2016 which Mr. Pavlik was appointed as President of Trans-Lux Energy Corporation, a subsidiary of the Corporation.expires on March 30, 2018. The Pavlik Agreementagreement provides for compensation at the annual rate of $125,000$250,000 per annum,annum. The agreement entitles Mr. Shaio to be increasedtwenty days’ paid vacation per year, business expense reimbursement (including a business club membership) and certain employee benefits generally available to employees of the Company. The agreement provides for certain severance benefits depending on whether Mr. Shaio leaves the employ of the Company for “Cause,” “Good Reason” or “Without Cause and for Good Reason” prior to the termination of the agreement. The agreement contains standard non-disparagement, confidentiality and non-solicitation provisions. The foregoing is merely a summary of the agreement and is qualified in its entirety by reference to the text of the agreement as filed as Exhibit 10.7 to the 2015 Annual Report.
The Company executed an employment agreement with David Pavlik, President of the Company’s TL Energy division, effective on May 27, 2014 which expires on May 27, 2016. The agreement provides for compensation at the annual rate of $150,000 per
annum as of August 1, 2014. Mr. Pavlik is entitled under the Pavlik Agreement to receive, on account of each of fiscal years 2014 and 2015, restricted shares of the Corporation’s Common Stock (the “Bonus Shares”) in an amount equal to ten thousand (10,000) Bonus Shares per each one million dollars ($1,000,000) of net profit earnings (as defined in the Pavlik Agreement) for such fiscal year.annum. The
Pavlik Agreement further provides that, on its effective date, Mr. Pavlik became entitled to a grant of 50,000 restricted shares of the Corporation’s Common Stock. The Pavlik Agreementagreement entitles Mr. Pavlik to twenty days’ paid vacation per year, business expense reimbursement and certain employee benefits generally available to employees of the
Corporation.Company. The
Pavlik Agreementagreement contains standard non-disparagement, confidentiality and non-solicitation provisions.
The foregoing is merely a summary of the Pavlik Agreementagreement and is qualified in its entirety by reference to the text of the Pavlik Agreementagreement as filed with the SEC as Exhibit 4.02 of Form 8-K filed by the Corporation on June 3, 2014.
Certain Transactions
On June 18, 2014, the Company issued 50,000 shares of the Company’s Common Stock to David Pavlik, President of Trans-Lux Energy Corporation, a subsidiary of the Company (the “Pavlik Issuance”). The Pavlik Issuance was made pursuant to the terms of that certain Restricted Stock Agreement dated as of May 27, 2014, which was previously disclosed pursuant to the Company’s reportCurrent Report on Form 8-K, filed with the Securities and Exchange Commission on June 2,dated May 27, 2014.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The
securities referenced above were issued pursuant to an exemption under Section 4(2)following table provides information concerning beneficial ownership of our capital stock as of the
Securities Act.
On June 27, 2014,Record Date by:
each stockholder, or group of affiliated stockholders, that we know owns more than 5% of our outstanding capital stock;
each of our named executive officers;
each of our directors and director nominees; and
all of our directors and executive officers as a group.
The following table lists the
Company entered into a Securities Purchase Agreement (the “SPA”) with Retop Industrial (Hong Kong) Limited (“Retop”), pursuant to which Retop purchased 333,333applicable percentage beneficial ownership based on [1,710,671] shares of
the Company’s Common Stock
for a purchase price of $2,000,000 (the “Purchase”). The SPA requires that the proceedsoutstanding as of the
Purchase are to be utilized solely in connection with the Company’s LED display business unit, including for working capital and general corporate purposes related thereto. In connection with the SPA, the Company issued warrants to purchase 33,333 shares of the Company’s Common Stock to Retop at an exercise price of $8.00 per share, which expire on June 27, 2016. These warrants were part of a direct investment in our equity, so they are considered indexed to the Company’s Common Stock and were accounted for as equity.
On December 2, 2013, the Company executed a promissory note (as amended, the “Note”) in favor of Carlisle Investments, Inc. (“Carlisle”), pursuant to which Carlisle has loaned $1,000,000 to the Company in order to provide the Company with temporary financing (the “Loan”). Mr. Marco Elser, a director of the Company, exercises voting and dispositive power as investment manager of Carlisle. In connection with the Loan, the Company had granted to Carlisle a first-priority (excluding the liens held by the Pension Benefit Guaranty Corporation, which are senior to the liens and security interest granted in connection with the Loan) continuing security interest in and lien upon all assets of the Company (excluding those assets subject to the security interest granted to AXIS Capital, Inc. by the Company pursuant to that certain Master Agreement for Sale and Assignment of Leases dated as of June 2013),Record Date. Beneficial ownership is determined in accordance with the terms of a security agreement entered into between the parties and dated as of December 2, 2013. The Note bears interest at the rate of ten percent per annum and has a maturity date of June 1, 2014, with a bullet payment of all principal and accrued interest due at such time; provided, however, that the parties may agree in writing to convert or exchange all or any partrules of the Note into a long termSEC, and generally includes voting power or investment by Carlisle in Trans-Lux (a “Conversion Transaction”). Inpower with respect to the event the parties engage in a Conversion Transaction (of which there can be no assurance), all amounts due under the Note will be payable (or not, as the case may be) in accordance with the termssecurities held. Shares of Common Stock subject to options currently exercisable or exercisable within 60 days of the documentation executedRecord Date are deemed outstanding and beneficially owned by the parties in connection withperson holding such Conversion Transaction, if any. On December 4, 2013, net proceedsoptions for purposes of computing the number of shares and percentage beneficially owned by such person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the amount of $1,000,000 were received from Carlisle. On June 20, 2014,footnotes to this table, and subject to applicable community property laws, the Company entered into that certain Securities Purchase Agreement (the “Carlisle SPA”)persons or entities named have sole voting and investment power with Carlisle, pursuantrespect to which Carlisle purchased 166,666all shares of the Company’sour Common Stock for a purchase price of $1,000,000.shown as beneficially owned by them.
Name, Status and Mailing Address | | Number of Shares Beneficially Owned | | | Percent Of Class | |
| 5% Stockholders: | | | | | | |
Gabelli Funds, LLC One Corporate Center Rye, NY 10580-1434 | | | 744,234 | (1) | | | 37.0 | |
Transtech LED Company Limited Unit 27, 13/F Shing Yip Industrial Building 19-21 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong | | | 366,666 | (2) | | | 21.0 | |
Carlisle Investments Inc. Trident Chambers Wickhams Cay P.O. Box 146 Road Town, Tortola, British Virgin Islands | | | 180,366 | (3) | | | 10.5 | |
| Bard Associates, Inc | | | | | | | | |
| 135 South LaSalle Street, Suite 3700 Chicago, IL 60603 | | | 100,730 | (4) | | | 5.9 | |
| | | | Number of Shares | | | | Percent Of Class | |
| Name, Status and Mailing Address | | | Beneficially Owned | | | | (%) | |
| Non-Employee Directors: | | | | | | | | |
| Marco Elser | �� | | 206,189 | (5) | | | 12.1 | |
| Alan K. Greene | | | 13,373 | (6) | | | * | |
| Ryan J. Morris | | | - | | | | * | |
| George W. Schiele | | | 58,653 | (7) | | | 3.4 | |
| Salvatore J. Zizza | | | 13,200 | (8) | | | * | |
| Named Executive Officers or Employee Directors: | | | | | | | | |
| J.M. Allain | | | 2,144 | | | | * | |
| Robert J. Conologue | | | - | | | | * | |
| Alberto Shaio | | | 13,373 | (6) | | | * | |
| Alexandro Gomez | | | - | | | | * | |
| Yaozhong Shi | | | 366,666 | (9) | | | 21.0 | |
| All directors and executive officers as a group | | | 673,598 | (10) | | | 37.7 | |
| * Represents less than 1% of total number of outstanding shares. |
| (1) | Based on Schedule 13D, as amended, dated November 23, 2015 by Mario J. Gabelli, Gabelli Funds, LLC, Teton Advisors, Inc., Gamco Investors, Inc., GGCP, Inc., and Gamco Asset Management Inc., which companies are parent holding companies and/or registered investment advisers. All securities are held as agent for the account of various investment company fund accounts managed by such reporting person. Except under certain conditions, Gabelli Funds, LLC has beneficial ownership of such shares. On January 26, 2016, Gabelli Equity Series Funds, Inc. – The Gabelli Small Cap Growth Fund filed a Schedule 13G relating to 404,250 of the aforementioned 744,234 shares. The amount includes 302,200 shares of Common Stock issuable upon conversion of 15,110 shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock”), which is convertible into Common Stock at any time. |
| (2) | Based on a Schedule 13D filed November 13, 2015. The amount includes 33,333 shares of Common Stock issuable upon exercise of vested warrants. Mr. Shi, a director of the Company, is a director of Transtech. |
| (3) | Based on a Schedule 13D dated June 20, 2014. Mr. Marco Elser, a director of the Company, exercises voting and dispositive power as investment manager of Carlisle. |
| (4) | Based on a Schedule 13G dated January 29, 2016. Bard Associates, Inc. has sole voting power over 12,280 of such shares and sole dispositive power over all of such shares. |
| (5) | The amount includes 190,244 shares of Common Stock owned by Carlisle, Elser & Co. and Advicorp plc, of which Mr. Elser exercises voting and dispositive power as investment manager. |
| (6) | The amount includes 5,040 shares of Common Stock issuable upon conversion of 252 shares of Series B Preferred Stock. |
| (7) | The amount includes 5,000 shares of Common Stock issuable upon conversion of 250 shares of Series B Preferred Stock. The amount also includes 13,200 shares of Common Stock issuable upon exercise of vested warrants. This amount does not include 6,800 shares of Common Stock issuable upon exercise of warrants that are not yet vested or exercisable. |
| (8) | Mr. Zizza disclaims any interest in the shares set forth in footnote 1 above. The amount includes 13,200 shares of Common Stock issuable upon conversion of vested warrants. This amount does not include 6,800 shares of Common Stock issuable upon exercise of warrants that are not yet vested or exercisable. |
| (9) | Based on a Schedule 13D filed November 13, 2015. The amount includes 333,333 shares of Common Stock owned by Transtech and 33,333 shares of Common Stock issuable upon exercise of vested warrants owned by Transtech. Mr. Shi is a director of Transtech. |
| (10) | The amount includes 74,813 shares of Common Stock, as set forth in footnotes above, which members of the group have the right to acquire upon conversion of Series B Preferred Stock or exercise of vested warrants. This amount does not include 13,600 shares of Common Stock issuable upon exercise of warrants that are not yet exercisable. |
| Equity Compensation Plan Information |
December 31, 2015 | Securities to be issued upon exercise | Weighted average exercise price | Securities available for future issuance |
| Equity compensation plans approved by stockholders | - | - | 200,800 |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the
Company, exercises voting and dispositive power as investment manager of Carlisle. The transactions executed pursuant to the Carlisle SPA consisted of a “Conversion Transaction”, as such term is defined in the Note. The Carlisle SPA terminated the Note in its entirety, and also terminated that certain Security Agreement between the Company and Carlisle and the liens granted therein, which such agreement was entered into in connection with the Note. The securities referenced above were issued pursuant to an exemption under Section 4(2) of the Securities Act.
In the beginning of June 2014, the Company received a $200,000 loan from George W. Schiele, a director of the Company, at a fixed interest rate of 10.00%, which was due to mature on July 1, 2014 with a bullet payment of all principal and accrued interest due at such time. On June 20, 2014, the Company entered into that certain Securities Purchase Agreement (the “Schiele SPA”) with George Schiele, pursuant to which Mr. Schiele purchased 33,333 shares of the Company’s Common Stock for a purchase price of $200,000. Mr. Schiele is the Chairman of the Board of Directors of the Company. The transactions executed pursuant to the Schiele SPA consisted of a “Conversion Transaction”, as such term is defined in that certain Promissory Note dated June 4, 2014 and executed in favor of Mr. Schiele (the “Schiele Note”). The Schiele SPA terminated the Schiele Note in its entirety. The securities referenced above were issued pursuant to an exemption under Section 4(2) of the Securities Act.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Corporation’sExchange Act requires our executive officers and directors are required under Section 16(a)and persons who own more than 10% of the Securities Exchange Acta registered class of our securities, to file reports of ownership and changes inof ownership with the SEC. CopiesSuch persons are required by SEC regulations to furnish us with copies of those reports must alsoall Section 16(a) forms filed they file. Based solely on our review of copies of the forms received, we believe that, during the last fiscal year, all filings under Section 16(a) applicable to our executive officers, directors and 10% stockholders were timely other than purchases in November 2015 by Mr. Shaio, Mr. Greene and Mr. Schiele of 252, 252 and 250 shares, respectively, of the Company’s Series B Preferred Stock were reported on Form 5’s filed in February 2016 rather than Form 4’s filed within two business days of the purchase.
AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE COMPANY’S AUTHORIZED SHARES OF “BLANK CHECK” PREFERRED STOCK
General
In May, 2016, our Board unanimously approved, and recommended that our stockholders approve, an amendment to our Amended and Restated Certificate of Incorporation (the “Charter Amendment”), to increase the Company’s authorized shares of “blank check” preferred stock, par value $0.001 per share, from 500,000 shares to 2,000,000 shares (the “Preferred Stock Increase”). We are not increasing our authorized Common Stock which will remain unchanged at 60,500,000 shares. We are asking stockholders to approve this amendment which will be furnishedreflected in an amendment to our Amended and Restated Certificate of Incorporation in the form attached hereto as Annex A.
The Amended and Restated Certificate of Incorporation authorizes the issuance of “blank check” preferred stock with such designations, rights and preferences as may be determined from time to time by our Board. The Preferred Share Increase will not have any immediate effect on the rights of our existing stockholders. However, the Board will have the authority to issue authorized shares of preferred stock at such times, for such purposes and for such consideration as the Board may determine to be appropriate without requiring future stockholder approval of such issuances, except as may be required by applicable law or applicable regulations.
As of July [__], 2016, 467,500 of the 500,000 shares of the authorized preferred stock have been designated. Pursuant to an offering by the Company in 2011, the Company issued 416,500 shares of Series A Convertible Preferred Stock (all of which has been converted into Common Stock) and pursuant to a rights offering consummated in November 2015, the Company designated 51,000 shares of Series B Convertible Preferred Stock of which, 16,512 shares were issued. The Board believes that the approval of an increase in the number of authorized shares of “blank check” preferred stock will provide the Company with increased flexibility of action to meet ongoing demands. While the Company does not currently have any plans for the authorization or issuance of any additional shares of preferred stock, the issuance of such preferred stock could adversely affect the rights of the holders of our Common Stock or our Series B Convertible Preferred Stock and, therefore, reduce the value of such stock. It is not possible to state the actual effect of the future issuance of any additional series of preferred stock on the rights of holders of currently outstanding stock unless and until our Board determines the specific rights of the holders of any such additional preferred stock; however, these effects may include:
| · | diluting the voting power of the Common Stock; |
| · | impairing the liquidation rights of the Common Stock or preferred stock; or |
| · | delaying or preventing a change of control of the Company without further action by the stockholders. |
The approval of an amendment to the
Corporation.A Form 3 for Mr. Greene was filed 14 days after his appointmentAmended and Restated Certificate of Incorporation to effect the Preferred Stock Increase requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock as a director, rather than 10 days,separate and distinct class, whether in person or by proxy, as well as the affirmative vote of a Form 3 for Mr. Shaio was filed 15 days after his appointmentmajority of the voting power of the outstanding shares of Common Stock and Series B Convertible Preferred Stock voting together as one class and on an as-converted basis, as well as the affirmative vote of a majority of the shares of Series B Convertible Preferred Stock outstanding voting as a director, rather than 10 days. Form 4sseparate and distinct class.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FORTHE APPROVAL OF THE AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF THE COMPANY’S AUTHORIZED SHARES OF “BLANK CHECK” PREFERRED STOCK.
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Based on the preference expressed by stockholders at the 2013 Annual Meeting of Stockholders, the Board has determined to have an advisory vote on executive compensation occur every three years, until the next advisory vote on the frequency of our advisory vote on executive compensation is held. The next advisory vote on executive compensation will occur at our 2019 Annual Meeting of Stockholders, unless our Board determines otherwise.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) provides that our stockholders have the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of the Named Executive Officers as disclosed in this proxy statement in accordance with the SEC rules.
We are asking stockholders to indicate their support for (1) Ms. Firstenberg regarding a grant for warrants, (2) Mr. Schiele regarding a grantthe compensation of warrants, and (3) Mr. Schiele regardingour Named Executive Officers, who are named in the acquisition of common stock“Summary Compensation Table” included in this proxy statement. This proposal, commonly known as a result“say-on-pay” proposal, gives stockholders the opportunity to express their views on the compensation of our Named Executive Officers. Accordingly, we will ask stockholders to vote FOR the following resolution at the 2016 Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an
exercise of warrants, were each filed late in 2014. Based solely upon a review of Forms 3, 4, and 5, and amendments thereto furnished toadvisory basis, the
Company during the fiscal years ended December 31, 2013 and December 31, 2014, the Company is not aware of any other director, officer, or beneficial owner of more than 10 percent of any class of Company equities who failed to file on a timely basis any reports required by Section 16(a)compensation of the
Exchange Act, during the fiscal years ended December 31, 2013 or December 31, 2014.
STOCKHOLDER PROPOSALS – 2016 ANNUAL MEETING
If any stockholder desires to submit a stockholder proposal for inclusionnamed executive officers, as disclosed in the Corporation’sCompany’s proxy materials relating tostatement for the 2016 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Summary Compensation Table and the other related tables and disclosure.”
The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board. The Board and the Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns and the Board and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
The adoption of the advisory resolution to approve the compensation of the Named Executive Officers requires the affirmative vote of a majority of the votes cast on this proposal at the 2016 Annual Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF THE RESOLUTION APPROVING THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee appointed the firm of Marcum LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. The Audit Committee is asking the stockholders to ratify this appointment. The affirmative vote of a majority of the votes cast at the 2016 Annual Meeting, either in person or by proxy, is required to ratify the selection of Marcum LLP.
Stockholder ratification of the appointment of Marcum LLP as our independent registered public accounting firm is not required by our Amended and Restated Bylaws or other applicable legal requirements. However, the appointment of Marcum LLP is being submitted to the stockholders for ratification. If the stockholders fail to ratify the appointment, our Audit Committee will reconsider its selection of Marcum LLP, but will not be required to select another auditor. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it believes that such a change would be in the best interests of the Company and our stockholders.
Representatives of Marcum LLP are expected to be present at the 2016 Annual Meeting. They will have the opportunity to make a statement if they desire to do so and will also be available to respond to appropriate questions.
Change in Independent Registered Public Accounting Firm
We engaged Marcum LLP as our new independent registered public accounting firm on December 8, 2015, following our dismissal of BDO USA, LLP on December 8, 2015. The dismissal of BDO USA, LLP was approved by the Audit Committee. The reports of BDO USA, LLP on our financial statements for the fiscal years ended December 31, 2014 and 2013 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles. During the fiscal years ended December 31, 2014 and 2013 and through the date of their dismissal, (i) there were no disagreements with BDO USA, LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BDO USA, LLP, would have caused it to make reference to such disagreement in its reports and (ii) there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
Audit and Non-Audit Fees
The following table presents aggregate fees billed for professional services rendered by Marcum LLP for fiscal years 2015. There were no other professional services rendered or fees billed by Marcum LLP for fiscal years 2015 or 2014.
| | | 2015 | |
Audit fees (1) | | $ | 144,000 | |
| Audit-related fees | | | — | |
| Tax fees | | | — | |
| All other fees | | | — | |
_______________
| (1) | Audit fees. These are fees and expenses associated with the professional services performed by Marcum LLP for the audit of our annual financial statements and services that are normally provided in connection with statutory regulatory filings or engagements. |
The following table presents aggregate fees billed for professional services rendered by BDO USA, LLP for fiscal year 2015 and 2014. There were no other professional services rendered or fees billed by BDO USA, LLP for fiscal years 2015 or 2014.
| | | 2015 | | | 2014 | |
Audit fees (1) | | $ | 55,000 | | | $ | 254,000 | |
| Audit-related fees | | | — | | | | — | |
| Tax fees | | | — | | | | — | |
| All other fees | | | — | | | | — | |
_______________
| (1) | Audit fees. For 2015, these are fees and expenses associated with the professional services performed by BDO USA, LLP for the audit and review of interim financial statements included in our Form 10-Q filings and services that are normally provided in connection with statutory regulatory filings or engagements. For 2014, these are fees and expenses associated with the professional services performed by BDO USA, LLP for the audit of our annual financial statements and review of interim financial statements included in our Form 10-Q filings, reviews of the Company’s proxy statement, and services that are normally provided in connection with statutory regulatory filings or engagements. |
Pre-Approval Policies and Procedures
Our Audit Committee must provide advance approval for all audit and non-audit services, other than de minimis non-audit services. Before granting any approval, the Audit Committee gives due consideration to whether approval of the proposed service will have a detrimental impact on the independence of the independent registered public accounting firm. The full Audit Committee then serving pre-approved all services provided by Marcum LLP and BDO USA, LLP in fiscal year 2015.
The ratification of the Company’s selection of Marcum LLP as the Company’s independent registered public accounting firm for fiscal year 2016 requires the affirmative vote of a majority of the votes cast at the 2016 Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF MARCUM LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2016.
Stockholders who desire to present a proposal to be included in our proxy statement for our 2017 Annual Meeting must submit the proposal to us no later than [_______], 2016 and must otherwise comply with the requirements of Rule 14a-8 of the Securities Exchange Act Rule 14a-8,of 1934. Any such proposal must be received bysent in writing to the Corporation’s Corporate Secretary on or before January 31, 2016 and comply withof the terms of, and be requiredCompany at 445 Park Avenue, Suite 2001, New York, New York 10022.
Stockholders who desire to
be included in the Corporation’s proxy materials under, Exchange Act Rule 14a-8.If any stockholder desires to submitpresent a stockholder proposal not for inclusion in the Corporation’sCompany’s proxy materials but for action upon at the 20162017 Annual Meeting, of Stockholders, such proposalnotice must be received no earlier than [_____], 2017 and no later than [______], 2017. Pursuant to the Company’s Amended and Restated Bylaws, business items or director nominations must be properly brought before an annual meeting in order to be considered by stockholders. The Company’s Amended and Restated Bylaws specify the procedure for stockholders to follow in order to bring business before, or nominate directors for election at, an annual meeting. A stockholder who wants to nominate a person for election as a director or propose business to be considered at an annual meeting must deliver a written notice, by certified mail, to the Company’s Corporate Secretary. Such notice must be received at least 90 days and not more than 120 days prior to the anniversary date of the prior year’s annual meeting. The notice must set forth the information required by the Corporation’sCompany’s Amended and Restated Bylaws and should be sent to our Corporate Secretary on orin writing at 445 Park Avenue, Suite 2001, New York, New York 10022 of such intent in a timely manner in accordance with our Amended and Restated Bylaws. A copy of our Amended and Restated Bylaws is available upon request from our Corporate Secretary.
Management knows of no other matters to be brought before
April 15, 2016. Such proposal must comply with the
requirements of Article 5(b) of the Corporation’s Bylaws for consideration at2016 Annual Meeting. However, if any other matters do properly come before the 2016 Annual Meeting,
of Stockholders.Nominations for directors to be voted on atit is intended that the 2016 Annual Meeting of Stockholders must be madeproxy holders will vote the shares represented by the proxies in the accompanying form as recommended by the Board or, if no recommendation is given, in accordance with Article 5(c)the best judgment of the Corporation’s Bylaws as to both form and substance, and must be received on or before April 15, 2016 for consideration atperson voting the 2016 Annual Meeting of Stockholders.
proxies.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange Act, and file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read our SEC filings, including the proxy statement, through the internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room.
You may obtain any of the documents we file with the SEC, without charge, by requesting them in writing or by telephone from us at the following address:
Trans-Lux Corporation
445 Park Avenue, Suite 2001
New York, New York 10022
Attn: Investor Relations
Phone: (800) 243-5544
243-5544You can also read the proxy statement and the 20142015 annual report through the internet at the following website: http://proxystatements.trans-lux.com/.
* * * *
It is important that you vote promptly to avoid unnecessary expense. Please vote by telephone or Internet, or, if you receive a paper copy of the proxy materials, please sign, date and promptly mail the enclosed proxy card or use the telephone or Internet voting procedures described on the proxy card.
| By Order of the Board of Directors, |
|
| /s/ Robert J. Conologue |
|
| Robert J. Conologue |
| Senior Vice President and Chief Financial Officer |
June [__], 2016
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TRANS-LUX CORPORATION
Pursuant to Section 242 of the General Corporation Law of the State of Delaware
Trans-Lux Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Company”),
DOES HEREBY CERTIFY:
FIRST: That resolutions were duly adopted by the Board of Directors of the Company setting forth this proposed Amendment (this “Amendment”) to the Amended and Restated Certificate of Incorporation of the Company, as amended (the “Certificate of Incorporation”), to increase the Company’s number of authorized shares of preferred stock, par value $0.001 per share, from 500,000 shares to 2,000,000 shares, and declaring said Amendment to be advisable and recommended for approval by the stockholders of the Company.
SECOND: Article FOURTH of the Certificate of Incorporation is hereby deleted in its entirety and replaced with new Article FOURTH, which reads in full as follows:
“FOURTH: The aggregate number of shares of stock of all classes which the Corporation shall have authority to issue is 60,500,000, consisting of 58,500,000 shares of the Corporation’s Common Stock (the “Common Stock”) having a par value of $0.001 per share and 2,000,000 shares of the Corporation’s Preferred Stock (the “Preferred Stock”) having a par value of $0.001 per share.”
THIRD: That, pursuant to resolution of the Company’s Board of Directors, an annual meeting of the stockholders of the Company was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by applicable law was voted in favor of the Amendment.
FOURTH: That said Amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
FIFTH: That this Amendment shall be effective as of __________, at 12:01 a.m., [___].
IN WITNESS WHEREOF, the Company has caused this Certificate of Amendment of the Certificate of Incorporation to be executed on this ___ day of ________, 2016.
| TRANS-LUX CORPORATION |
| |
| By: | _________________________________ |
| | Name: | |
| | Title: | |
TRANS-LUX CORPORATION
ANNUAL MEETING OF STOCKHOLDERS JULY 11, 2016
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Trans-Lux Corporation, a Delaware corporation (the “Company”), hereby appoints J.M. Allain and Robert J. Conologue,
Corporate Secretary
Dated:
each with full power of substitution, as proxies, to vote all capital stock of the Company that the stockholder would be entitled to vote on all matters that may properly come before the Company’s Annual Meeting of the Stockholders to be held at 10:00 a.m., local time, on Wednesday, July 11, 2016 (the “Annual Meeting”) at Olshan Frome Wolosky LLP, located at 1325 Avenue of the Americas, New York, New York
May 29, 2015
10019, and any adjournments or postponements thereof, including to vote for the election of such substitute nominee for director as such proxies (or their substitutes) may select in the event that the nominee named in this proxy card become unable to serve. The undersigned stockholder hereby revokes any proxy or proxies heretofore given by the undersigned for the Annual Meeting.
This proxy when properly executed and returned will be voted in the manner directed by the undersigned stockholder. If no direction is made, this proxy will be voted in accordance with the recommendations of the Board. The proxies are also authorized to vote upon such other matters as may properly come before the Annual Meeting in accordance with their discretion.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE T
The Board recommends a vote FOR the election of the listed nominees and FOR Proposals 2, 3 and 4.
| 1. | Election of nominees named below to the Board of Directors of the Company. |
¨ FOR ALL NOMINEES.
¨ WITHHOLD AUTHORITY FOR ALL NOMINEES.
¨ FOR ALL EXCEPT
(See instructions below)
| Nominees: | š | Alan K. Greene |
| | š | Ryan J. Morris |
| | š | Yaozhong Shi |
INSTRUCTIONS: | To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: ˜ |
| 2. | To approve an amended to the Company’s Amended and Restated Certificate of Incorporation to increase the amount of the Company’s authorized shares of blank check preferred stock. |
FOR ¨ AGAINST ¨ ABSTAIN ¨
| 3. | To approve an advisory resolution regarding the compensation of the Company’s named executive officers. |
FOR ¨ AGAINST ¨ ABSTAIN ¨
| 4. | To ratify the appointment of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016. |
FOR ¨ AGAINST ¨ ABSTAIN ¨
This proxy may be revoked prior to the time it is voted by delivering to the Secretary of the Company either a written revocation or a proxy bearing a later date, or by appearing at the Annual Meeting and voting in person.
PLEASE ACT PROMPTLY
PLEASE SIGN AND DATE THIS PROXY CARD
AND RETURN IT IN THE ENCLOSED ENVELOPE TODAY
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. ¨
| DATE: ___________________ | |
| (Signature of Stockholder) |
| |
| DATE: ___________________ | |
| (Signature of Stockholder) |
| |
| Please sign exactly as your name or names appear on this proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF
PROXY MATERIALS FOR THE TRANS-LUX CORPORATION ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 11, 2016.
AND PROXY STATEMENT
JUNE 29,
Our proxy materials relating to our Annual Meeting (Notice of Meeting, Proxy Statement, Proxy and 2015
NEW YORK, NEW YORK
Annual Report to Stockholders on Form 10-K) are also available on the Internet. Please go to http://proxystatements.trans-lux.com/to view and obtain proxy materials online. 