Attached files
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-K/A
Amendment No. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
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Commission file number 1-2257
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TRANS-LUX CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 13-1394750
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26 Pearl Street, Norwalk, CT 06850-1647
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(Address of Registrant's principal executive offices) (Zip code)
Registrant's telephone number, including area code: (203) 853-4321
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, $1.00 par value NYSE Amex
8 1/4% Limited Convertible Senior
Subordinated Notes due 2012 NYSE Amex
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes No X
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Indicate by check mark if the Registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes No X
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Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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CONTINUED
TRANS-LUX CORPORATION
2009 Form 10-K/A Amendment No. 1
Cover Page Continued
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer Accelerated filer Non-accelerated filer
--- --- ---
Smaller reporting company X
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Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes No X
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The aggregate market value of the Registrant's Common and Class B Stock held by
non-affiliates of the Registrant based upon the last sale price of the
Registrant's Common Stock reported on the NYSE Amex on June 30, 2009, was
approximately $1,891,000.
As of the close of business on April 28, 2010, there were outstanding 2,442,923
shares of the Registrant's Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE: None
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EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A amends our Annual Report on Form 10-K for
the fiscal year ended December 31, 2009, which was filed with the SEC on April
15, 2010 (the "Original Filing"). We are filing this Amendment solely for the
limited purpose of amending Part III, Items 10 - 14 to reflect the inclusion of
the information required by Form 10-K. The Original Filing contemplated the
incorporation by reference of such information from the Corporation's definitive
proxy statement relating to the Corporation's 2010 Annual Meeting of
Shareholders. The Corporation's definitive proxy statement will not be filed
within the requisite 120 days after the Corporation's 2009 fiscal year end, and
accordingly, the Corporation is including the information required by Part III,
Items 10 - 14 of Form 10-K through this Amendment as contemplated by
instruction G (3) to Form 10-K. The listing of the definitive proxy statement
on the cover page of the Original Filing as a document incorporated by reference
has been deleted in this Amendment.
Except as contained herein, this Amendment speaks as of the filing date of the
Original Filing and does not modify or update disclosures contained in the
Original Filing. Accordingly, this Amendment should be read in conjunction with
the Original Filing.
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TRANS-LUX CORPORATION
2009 Form 10-K/A Annual Report
Amendment No. 1
Table of Contents
Page
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PART III
ITEM 10. Directors, Executive Officers and Corporate Governance 1
ITEM 11. Executive Compensation 5
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 13
ITEM 13. Certain Relationships and Related Transactions, and Director
Independence 14
ITEM 14. Principal Accounting Firm Fees and Services 14
PART IV
ITEM 15. Exhibits and Financial Statement Schedules 15
Signatures 16
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The directors of the Corporation and their ages are as follows:
Name Age
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Glenn Angiolillo 56
Jean Firstenberg + 74
Gene Jankowski + 75
Victor Liss 73
Howard S. Modlin 79
Michael R. Mulcahy 62
George W. Schiele 78
Angela D. Toppi 54
Salvatore J. Zizza + 64
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(+) Member of the Audit Committee
Directors:
Glenn J. Angiolillo has served as a director since 2009 when he was elected an
independent director. Mr. Angiolillo is currently President of GJA Corp., a
consulting and advisory firm specializing in wealth management, since 1998; a
Director of LICT Corp., formerly known as Lynch Interactive Corp.; Director of
NYMagic, Inc.; and a Director of Gaylord Entertainment Co. Previously, Mr.
Angiolillo was a partner and member of the Management Committee in the law firm
of Cummings & Lockwood where he concentrated in the areas of corporate law,
mergers and acquisitions and banking and finance. Mr. Angiolillo was elected a
director 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. It is anticipated that with Mr. Angiolillo's experience and
service to other boards of directors will allow him to make valuable
contributions to the Board.
Jean Firstenberg has served as a director since 1989 when she was elected an
independent director. Ms. Firstenberg is President Emerita and a member of the
Board of Trustees of the American Film Institute. She was President and Chief
Executive Officer of the American Film Institute from 1980 to 2007. She is
Chair of the Citizen's Stamp Advisory Committee; a member of the Board of
Trustees of Women's Sports Foundation; and was formerly a Trustee of Boston
University. As President and Chief Executive Officer of the American Film
Institute for 27 years, Ms. Firstenberg brings valuable insight into the
operational requirements and strategic planning process of a company. In
addition, Ms. Firstenberg's more than 20 years of experience as a Director of
Trans-Lux and her prior role as Chairperson of the Audit Committee gives her a
deep understanding of the Corporation and its operations.
Gene Jankowski has served as a director since 1994 when he was elected an
independent director. In May 2003 he was elected by the Board to serve as
Chairman of the Board (a non-executive position) of Trans-Lux Corporation. Mr.
Jankowski is Chairman of Jankowski Communications System, Inc.; Advisor Managing
Director of Veronis Suhler & Associates Inc.; and Chairman Emeritus of the
American Film Institute. He was formerly a Director of TV Azteca; formerly
Co-Chairman of St. Vincent's College; formerly a Trustee of St. Vincent's
Medical Center; and formerly President and Chairman of the CBS Broadcast Group.
Mr. Jankowski has brought critical experience and insight to our board during
the more than 16 years of service as a Director and the last seven years as
Chairman. Mr. Jankowski's profound understanding of the Corporation made him
particularly qualified to serve as Chairman of the Board.
Victor Liss has served as a director since 1988 and has been an independent
director since January 2007. In 1991 he was elected by the Board to serve as
Vice Chairman of the Board (a non-executive position) of Trans-Lux Corporation.
Mr. Liss is a Director of Wellpoint, Inc.; a Trustee of Norwalk Hospital; a
Director of BNC Financial Group;
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and Chairman of the Board of the Bank of Fairfield. He was formerly Chairman of
the Board of Trustees of Norwalk Hospital; formerly Co-Chairman of the Advisory
Board to University College of Sacred Heart University; and formerly Consultant,
President and Chief Executive Officer of Trans-Lux Corporation. His service on
the boards of directors of numerous companies and organizations, and his more
than 22 years service on the Board make him a valuable Director.
Howard S. Modlin has served as a director since 1975 and is an attorney and
President of the firm Weisman Celler Spett & Modlin, P.C.; and Chairman and
Chief Executive Officer of General DataComm Industries, Inc. Previously, Mr.
Modlin was a Director of Fedders Corporation. Mr. Modlin's extensive legal
background, President of his law firm, and Chairman and Chief Executive Officer
of General DataComm Industries brings valuable insight into the operational
requirements and strategic planning process of a company. In addition, Mr.
Modlin's extensive experience and his more than 35 years of service on the Board
make him a valuable Director.
Michael R. Mulcahy has served as a director since 2002 and was the President
and Chief Executive Officer of Trans-Lux Corporation until his retirement on
December 31, 2009. He was formerly Co-Chief Executive Officer of Trans-Lux
Corporation. Mr. Mulcahy spent over 42 years employed at Trans-Lux and was
involved with numerous organization changes, including those initiated while he
was President and Chief Executive Officer, which gives him a deep knowledge and
insight of the Corporation. His service as both a Director and in management
makes him well qualified to serve as a Director.
George W. Schiele has served as a director since 2009 when he was elected an
independent director. Mr. Schiele is currently President of George W.
Schiele, Inc., a holding company; President and Trustee of LAL Family Partners
LP; President and Trustee of 4003 Corporation; a Director of Connecticut
Innovations, Inc. and Chairman of its Investment Committee; and a Director and
Executive Board member of The Yankee Institute. Mr. Schiele was 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. It is
anticipated that with Mr. Schiele's experience and service to other boards of
directors will allow him to make valuable contributions to the Board.
Angela D. Toppi has served as a director since 2009 and has been Executive Vice
President, Treasurer, Secretary and Chief Financial Officer of Trans-Lux
Corporation for the past eight years. Ms. Toppi's extensive leadership
experience at Trans-Lux for over 23 years of service and involvment with
numerous restructuring and organizational transactions gives her a deep
understanding of the Corporation. Ms. Toppi is a Certified Public Accountant.
As Chief Financial Officer, Ms. Toppi provides valuable insight to the Board.
Salvatore J. Zizza has served as a director since 2009 when he was elected an
independent director. Mr. Zizza is currently the Chairman of Zizza & Co.
Ltd.; Chairman of Metropolitan Paper Recycling; Chairman of Bethlehem Advanced
Materials; a Director of Hollis-Eden Pharmaceuticals; and a Director of several
of the Gabelli open and closed-end funds, including The Gabelli Equity Trust,
The Gabelli Asset Fund, The Gabelli Growth Fund, The Gabelli Convertible and
Income Securities Fund, The Gabelli Utility Trust Fund, The Gabelli Global
Multimedia Trust, The Gabelli Equity Series Fund, The Gabelli Dividend and
Income Trust, The Gabelli Gold Fund, The Gabelli International Growth Fund, The
Gabelli Global Gold & Natural Resources Fund, and the GAMCO Westwood Funds.
Previously, Mr. Zizza was a Director of Earl Scheib, Inc. Mr. Zizza was
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. It is anticipated that with Mr. Zizza's extensive experience and
service to numerous other boards of directors will allow Mr. Zizza to provide
valuable contributions to the Board, and in addition, also serve as Chairman of
the Audit Committee.
Meetings of the Board of Directors and Certain Committees:
During 2009, the Board of Directors held 16 meetings. All directors attended
75% or more of such meetings and of committees of which they were members. The
Corporation does not have a formal policy regarding directors' attendance at
annual stockholders meetings. Nevertheless, the Corporation strongly encourages
and prefers that directors attend regular and special Board meetings as well as
the annual meeting of stockholders in person,
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although attendance by teleconference is considered adequate. The Corporation
recognizes that attendance of the Board members at all meetings may not be
possible, and excuses absences for good cause.
Non-employee directors receive an annual fee of $2,800 and $800 for each meeting
of the Board attended ($400 for telephonic meetings), while employee directors
receive an annual fee of $1,360 and $320 for each meeting of the Board attended
($160 for telephonic meetings). Mr. Jankowski receives an annual fee of $6,400
as Chairman of the Board and Mr. Liss receives an annual fee of $800 as Vice
Chairman of the Board. Fees for members of the Board and Committees are
determined annually by the entire Board of Directors based on review of
compensation paid by other similar size companies, the amounts currently paid by
the Corporation, the overall policy for determining compensation paid to
officers and employees of the Corporation and the general financial condition of
the Corporation.
Corporate Governance Policies and Procedures
The Board of Directors has adopted a Code of Business Conduct and Ethics
Guidelines that applies specifically to Board Members and Executive Officers.
The 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 Code is available
for viewing on the Corporation's website at www.trans-lux.com. Any amendments
to, or waivers from, the Code of Business Conduct and Ethics Guidelines will be
posted on the website. In addition, the Board of Directors adopted a Whistle
Blowing policy, which provides procedures for the receipt, retention and
treatment of complaints received by the Corporation regarding accounting,
internal accounting controls and auditing matters, as well as the confidential,
anonymous submission of concerns regarding questionable accounting or auditing
practices.
The NYSE Amex Company Guide require that a listed company's Board of Directors
must consist of a majority of independent directors as defined in Section 803A
of such NYSE Amex Company Guide, unless the company is considered a Smaller
Reporting Company as defined in Securities Exchange Act of 1934 ("Exchange Act")
Rules. In accordance with the NYSE Amex Company Guide, Section 801(h), the
Corporation is presently considered a Smaller Reporting Company, and therefore,
is only required to maintain a board of directors of at least 50% independent
directors. Prior to December 11, 2009, the Corporation was exempt from NYSE
Amex Company Guide, Section 802 since the Corporation was considered a
controlled company, as over 50% of the voting power was held by an individual or
group. The Corporation is no longer considered a controlled company.
Corporate Leadership Structure
Two separate individuals serve as the Corporation's Chairman of the Board and
Chief Executive Officer. The Chairman is not an executive officer. He provides
leadership to the Board in the fulfillment of its responsibilities in presiding
over Board meetings. He also presides over meetings of the stockholders. The
Chief Executive Officer, who is newly elected and not currently a director, is
responsible for directing the operational activities of the Corporation.
Risk Management
Our Board and Audit Committee are actively involved in risk management. Both
the Board and Audit Committee regularly review the financial position of the
Corporation and operations of the Corporation and other relevant information,
especially cash management and 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 Norwalk, Connecticut. The Corporate Secretary
will present all communications, as received and without screening, to the Board
at its next regularly scheduled meeting.
3
Committees of the Board of Directors
The Board of Directors has appointed a Compensation Committee, an Audit
Committee and a Nominating Committee. During 2009, the Board of Directors
eliminated the Executive Committee. The Executive Committee did not meet in
2009.
Compensation Committee
The members of the Compensation Committee of the Board of Directors are Messrs.
Angiolillo, Jankowski, Modlin and Schiele and Ms. Firstenberg. The
Compensation Committee reviews compensation and other benefits. The
Compensation Committee held two meetings in 2009. None of the members of the
Compensation Committee during 2009 and continuing through 2010 is or has been an
officer or employee of the Corporation. The Compensation Committee does not
have a charter. There are no compensation committee interlock relationships
with respect to the Corporation. Members of said Committee receive a fee of
$320 for each meeting of the Committee they attend and the Chairman, Mr.
Modlin, receives an annual fee of $1,600.
Audit Committee
The members of the Audit Committee of the Board of Directors are Ms. Firstenberg
and Messrs. Jankowski and Zizza. Mr. Modlin served in an ex officio capacity
until February 10, 2010, and resigned in order to comply with NYSE Amex Company
Guide requirements. Each of the directors is considered "independent" as
defined by the NYSE Amex Company Guide. The Committee operates under a formal
written charter approved by the Committee and adopted by the Board of Directors.
The Board of Directors has determined that director Gene Jankowski meets the
definition of "audit committee financial expert" set forth in Item 407 of
Regulation S-K, as promulgated by the Securities and Exchange Commission
("SEC"). The Audit Committee held 6 meetings in 2009. The responsibilities of
the Audit Committee include the appointment of the auditors, review of the audit
function and material aspects thereof with the Corporation's independent
auditors, and compliance with Corporation policies and applicable laws and
regulations. Members of said Committee receive a fee of $400 for each meeting
of the Committee they attend and the Chairperson, Mr. Zizza, receives an annual
fee of $2,400 and $100 for each quarterly telephonic meeting with the
independent auditors.
Nominating Committee
The Corporation's Nominating Committee was established at the December 11, 2009
meeting of the Board of Directors in accordance with the NYSE Amex Company
Guide requirements. Previously the Corporation was considered a controlled
company, and therefore, was not required to have a nominating committee. A
written charter for the Nominating Committee has been adopted; a copy of the
Charter will be filed with the Proxy Statement. The Committee recommends for
consideration by the Board of Directors, Nominees for election of directors at
the Corporation's Annual Meeting. Except as qualified below in connection with
settlement of a lawsuit, director nominees are considered on the basis of, among
other things, experience, expertise, skills, knowledge, integrity, understanding
the Corporation's business and willingness to devote time and effort to Board
responsibilities. The Committee does not have a separate policy regarding
diversity of the Board. Three of the directors, Glenn J. Angiolillo, George W.
Schiele and Salvatore J. Zizza (the "Gamco Nominees") were 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. If any of
them or their replacements is unwilling or unable to serve as a director prior
to the 2012 Annual Meeting of Stockholders, the Corporation, consistent with
duties and obligations under Delaware law, shall use its best efforts to replace
said director with a nominee suggested by the Gabelli parties, the Settlement
Group, consisting of Gabelli Funds, LLC, Gamco Asset Management, Inc., Gabelli
Cap Growth Fund, Gabelli Global Multimedia Trust, Inc., Gabelli Dividend and
Income Trust and Gabelli Convertible Fund.
The members of the Nominating Committee of the Board of Directors are Messrs.
Angiolillo, Jankowski and Zizza and Ms. Firstenberg, each of whom is
independent in accordance with the NYSE Amex Company Guide requirements. The
Nominating Committee is responsible for identifying, researching and nominating
directors for
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election by our stockholders and selecting nominees to fill vacancies on our
Board of Directors or a committee of the Board. The Nominating Committee was
established on December 11, 2009 and did not meet in 2009. In March 2010, the
Nominating Committee met twice to discuss, among other things, nominating the
directors for election by our stockholders at our annual meeting.
Corporate Governance Committee
The Board of Directors has not established a corporate governance committee.
The Board of Directors acts as the corporate governance committee.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
The Corporation's executive officers and directors are required under Section
16(a) of the Securities Exchange Act of 1934 to file reports of ownership and
changes in ownership with the SEC and the NYSE Amex. Copies of those reports
must also be furnished to the Corporation. Based solely on a review of the
copies of reports furnished to the Corporation for the year ended December 31,
2009, the Corporation's executive officers and directors have complied with the
Section 16(a) filing requirements, with the exception of a Form 3 filed late by
Mr. Schiele due to a delay in obtaining a Securities and Exchange Commission
CIK code in order to electronically file the report although timely requested.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
Compensation Discussion and Analysis: All matters concerning executive
compensation for the Chief Executive Officer and other executive officers are
considered by the Corporation's Compensation Committee. The following
paragraphs discuss the principles underlying our executive compensation
decisions and the most important factors relevant to an analysis of these
decisions. It provides qualitative information regarding the manner and context
in which compensation is awarded to and earned by our executive officers and
places in perspective the data presented in the tables and other quantitative
information that follows this section.
Our compensation of executives is designed to attract, as needed, individuals
with the skills necessary for us to achieve our business plan, to reward those
individuals fairly over time, and to retain those individuals who continue to
perform at or above our expectations, without incurring risk-taking incentives
that are reasonable likely to have a material adverse effect on the Corporation.
Our executives' compensation has three primary components - base salary, a
yearly cash incentive bonus and stock option/restricted stock awards.
Base Salary. We fix the base salary 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 paid by similarly sized companies and the base salaries of other
companies with which we believe we compete for talent. To this end, we
subscribe to certain executive compensation surveys and other databases and
review them when making a crucial executive hiring decision and annually or at
the end of the term of the employment agreement when we review executive
compensation.
Cash Incentive Bonus. We designed the cash incentive bonuses for each of 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.
Stock Options/Restricted Stock. We use stock options or restricted stock awards
when employment agreements are entered into and/or to reward long-term
performance; these options are intended to produce value for each executive if
the Corporation's performance is outstanding and if the executive has an
extended tenure and are also based on availability of options.
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We view the three primary components of our executive compensation as related
but distinct. Although we review total compensation, we do not believe that
significant compensation derived from one component of compensation should
negate or reduce compensation from other components. We determine 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, such as the survey data
referred to above. We believe that salary and cash incentive bonuses are
primary considerations and that stock options are secondary considerations.
Except as described below, we have not adopted any formal or informal 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
the need to tailor each executive's award to attract and retain that executive.
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. These benefits include health and medical benefits,
flexible spending plans and life insurance. We also provide our executives with
severance and certain additional benefits in the event of a change of control of
the Corporation, as described in more detail below. However, for the first time
the Corporation, as an inducement to Mr. Allain to enter into an employment
contract, granted him 50,000 restricted shares of Common Stock which vest 50%
after one year and the remaining 50% after two years, provided Mr. Allain is
employed by Trans-Lux Corporation on the dates the shares vest.
We account for the equity compensation expense for our employees under FASB
Accounting Standards Codification Topic 718, which requires us to estimate and
record an expense for each award of equity compensation over the service period
of the award. Accounting rules also require us to record cash compensation as
an expense at the time the obligation is accrued. No stock options were awarded
during 2009 to any employees, and therefore, the Corporation did not record any
related compensation expense. There are no stock option plans currently in
effect providing for the grant of new options to employees.
Cash Incentive Bonuses. Yearly cash incentive bonuses for our executives are
established as part of their respective individual employment agreements. Each
of these employment agreements provides that the executive will receive a cash
incentive bonus determined in the discretion of our Board of Directors, based
upon the financial performance of the Corporation. These criteria are
established by the Compensation Committee and approved by the full Board of
Directors at the time the individual employment agreement is entered into and
includes specific objectives relating to the achievement of operational and/or
financial results. Based on the results of the Corporation, no cash incentive
bonuses were paid for the year ended December 31, 2009.
Severance and Change in Control Benefits. Each of our executives has a
provision in his/her employment agreement providing for certain severance
benefits in the event of termination without cause. The severance provisions
are described below in the section entitled "Employment Agreements."
In addition to the severance benefits, Ms. Toppi's employment agreement provides
for a "Change in Control of Employer" provision, entitling her to terminate the
agreement on 75 days prior written notice and receive a lump sum payment,
grossed up for taxes if subject to Section 4999 of the Internal Revenue Code of
1986 if such payment is deemed to be an "excess parachute payment" under Section
280G of the Internal Revenue Code of 1986, and the option of extending her
agreement for three (3) years at her then current salary subject to the
cost-of-living adjustment if such Change in Control is approved.
Supplemental Executive Retirement Agreement. Former President and Chief
Executive Officer Michael Mulcahy retired on December 31, 2009. In accordance
with his agreement, Mr. Mulcahy is due a Supplemental Executive Retirement
Payment ("SERP"). The benefit payment is due on July 1, 2010 in the amount of
$353,000 plus tax effect of approximately $170,000.
Other Benefits. Our executives are eligible to participate in all of our
employee benefit plans, such as medical, group life and disability insurance,
pension plan and our 401(k) plan, in each case on the same basis as our other
employees. Except for the SERP established approximately eight years ago for
Mr. Mulcahy, there were no special benefits or perquisites provided to any
executive officer in 2009.
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Compensation Consultants. The Company has not engaged the services of any
outside compensation consultant for 2009.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the foregoing Compensation
Discussion and Analysis with management and, based on such review and
discussions, the Compensation Committee has recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in this Form
10-K/A.
This report is submitted by the Compensation Committee. Its members are:
Howard S. Modlin, Chairman
Glenn J. Angiolillo
Jean Firstenberg
Gene Jankowski
George W. Schiele
The following table provides certain summary information for the last fiscal
year of the Corporation concerning compensation paid or accrued by the
Corporation and its subsidiaries to or on behalf of the Corporation's Chief
Executive Officer, Chief Financial Officer, one other Named Executive Officer of
the Corporation for 2009 and the management consultant.
Summary Compensation Table
Annual Compensation
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Nonqualified
Non-Equity Deferred
Stock Option Incentive Plan Compensation All Other
Name and Salary Bonus Awards Awards Compensation Earnings Compensation Total
Principal Position Year ($) ($) ($) ($) ($) ($) ($) (1) ($)
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Michael R. Mulcahy (2) ... 2009 259,700 - - - - - 536,659 796,359
President and Chief 2008 303,590 - - - - - 25,640 329,230
Executive Officer
Angela D. Toppi .......... 2009 174,839 - - - - - 3,132 177,971
Executive Vice President, 2008 193,658 - - - - - 3,065 196,723
Treasurer, Secretary and
Chief Financial Officer
Al L. Miller ............. 2009 140,997 25,713 - - - - 1,224 167,934
Executive Vice President 2008 160,787 26,867 - - - - 1,393 189,047
of Manufacturing
Richard Brandt (3) ....... 2009 150,000 - - - - - 24,217 174,217
Management Consultant 2008 300,000 - - - - - 51,903 351,903
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(1) See "All Other Compensation" below for further details.
(2) Mr. Mulcahy retired effective December 31, 2009. In accordance with his agreement, Mr. Mulcahy is due a
Supplemental Executive Retirement Payment ("SERP"). The SERP benefit payment is due on July 1, 2010 in the
amount of $353,000 plus tax effective of approximately $170,000 and is included in "All Other Compensation."
(3) For Mr. Brandt, reflects fees paid under a consulting agreement described below in the section entitled
"Employment Agreements."
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All Other Compensation
During 2009, "All Other Compensation" consisted of director and/or trustee fees,
insurance premiums, supplemental executive retirement payment and other items.
The following is a table of amounts per named individual:
Supplemental
Director and/or Insurance Executive Total
Trustee Fees Premiums Retirement Other All Other
Name ($) ($) Benefit ($) ($) (1) Compensation ($)
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Michael R. Mulcahy .. 6,400 6,715 522,976 568 536,659
Angela D. Toppi ..... 720 2,412 - - 3,132
Al L. Miller ........ - 847 - 377 1,224
Richard Brandt ...... 5,680 9,438 - 9,099 24,217
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(1) Other consists of personal use of company vehicle and for Mr. Brandt includes a tax
equalization payment.
During 2009, the named executives agreed to a voluntary reduction in their
salary for ten months; and during 2008, the named executives agreed to defer
their increases for nine months.
Retirement Plan
The Corporation made a cash contribution of $253,000 during 2009, which is less
than the minimum required contribution, to the Corporation's retirement plan for
all eligible employees and the individuals listed in the Summary Compensation
Table, except for Mr. Brandt who previously received his benefits and no longer
participates. The Corporation has filed a request for a waiver of the 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 Corporation's retirement plan covers all salaried employees over age 21 with
at least one year of service who are not covered by a collective bargaining
agreement to which the Corporation is a party. 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, $245,000 is the
legislated annual cap on determining the final average salary and $195,000 is
the maximum legislated annual benefit payable from a qualified pension plan.
As of January 1, 2010, Mr. Miller and Ms. Toppi had 36 and 17 years of
credited service, respectively. As of December 31, 2003, the benefit service
under the pension plan had been frozen, and, accordingly, no further years of
credited service have been allowed, and as of April 30, 2009, the benefit under
the pension plan has been frozen, and, accordingly, there is no further increase
in benefit being accrued. The normal annual retirement benefit for Mr. Miller
and Ms. Toppi is approximately $50,000 and $36,000, respectively.
Supplemental Executive Retirement Agreement
President and Chief Executive Officer Michael Mulcahy retired on December 31,
2009. In accordance with his agreement, Mr. Mulcahy is due a Supplemental
Executive Retirement Payment ("SERP"). The SERP benefit payment is due on July
1, 2010 in the amount of $353,000 plus tax effect of approximately $170,000.
Employment Agreements
The Corporation executed an employment agreement with Jean-Marc (J.M.) Allain on
February 16, 2010 for a term expiring on February 16, 2012. Mr. Allain was
appointed as President and Chief Executive Officer of the Corporation at that
time. The agreement provides for compensation at the annual rate of $250,000
through February 16, 2012. Mr. Allain is entitled to receive a one-time bonus
of $50,000 in the event that the cash flow of the Corporation, before financing
activities and sale of real estate, exceeds $2.5 million for 2010 or 2011,
during the term of the employment agreement. Payment of such bonus shall be
made only once, if earned, within 120 days after the end of the period earned.
In addition, Mr. Allain is entitled to receive up to 50,000 shares of
restricted Common Stock of the Corporation upon achieving specified levels of
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"),
excluding (i) sales of real estate and (ii) the amount by which (x) any item or
items
8
of unusual or extraordinary gain in the aggregate exceeds 20% of the
Corporation's net book value as at the end of the immediate preceding fiscal
year or (y) any items of unusual or extraordinary loss in the aggregate exceeds
20% of the Corporation's net book value as at the end of the immediate preceding
calendar year, in each case in (x) and (y) above as determined by accounting
principles generally accepted in the United States of America, and items of gain
and loss shall not be netted against each other for purpose of the above 20%
calculation. Mr. Allain will receive 10,000 shares of restricted stock if
EBITDA equals $4.6 million for 2010 or 2011, and for each $200,000 increase in
EBITDA over $4.6 million, Mr. Allain will receive an additional 10,000 shares
of restricted stock, not to exceed 50,000 shares of restricted stock in the
aggregate. Delivery of such restricted shares shall be made within 120 days
after the end of the period earned. Also, Mr. Allain executed, concurrently
with his employment agreement, a restricted stock agreement, awarding him 50,000
shares of restricted stock. The restricted stock vests at the rate of 50% on
February 16, 2011 and the remaining 50% on February 16, 2012, provided Mr.
Allain is employed by the Corporation on the respective vesting dates. His
employment agreement provides that if consistent with duties and obligations
under Delaware law, the Corporation will recommend his nomination to the Board
as and when a seat becomes available. If Mr. Allain's employment is terminated
for any reason, he is entitled to four months salary as severance pay, and he
has agreed to immediately resign as a director.
The Corporation had an employment agreement with Mr. Michael R. Mulcahy for a
term expiring March 31, 2010. Mr. Mulcahy retired on December 31, 2009 and
will receive a Supplemental Executive Retirement Payment of $353,000 due on July
1, 2010. Mr. Mulcahy's employment agreement provided for compensation at the
annual rate of $307,151 through March 31, 2010, subject to annual cost-of-living
adjustments. Mr. Mulcahy was entitled to receive as a profit participation 2
1/2% of the Corporation's pre-tax consolidated earnings if earnings were
$500,000 up to $1,000,000, 3 1/4% of the Corporation's pre-tax consolidated
earnings if earnings were over $1,000,000 up to $2,000,000 and 4% of the
Corporation's pre-tax consolidated earnings if earnings were over $2,000,000,
with a maximum of $150,000 for any fiscal year. Such pre-tax consolidated
earnings shall not include any defined extraordinary or unusual items of gain or
loss as determined by accounting principles generally accepted in the United
States of America to the extent such item exceeds 20% of net book value. The
agreement further provided that if Mr. Mulcahy was disabled, the Corporation
would pay to him 50% of the salary he was entitled to receive for the duration
of the disability during the term, but in no event less than twenty-four (24)
months. In the event Mr. Mulcahy died during the term of said agreement, the
Corporation would have paid to his widow death benefits in an amount equal to
50% of his then annual salary for the immediate preceding fiscal year for
twenty-four (24) months. The Corporation had purchased two life insurance
policies in the amount of $500,000 and $75,000 in favor of Mr. Mulcahy's
beneficiary. The agreement also provided for supplemental retirement benefits
in excess of the limitations on the maximum annual benefits imposed by Section
415 of the Internal Revenue Code of 1986 and if the Pension Plan were
discontinued following a Change in Control. The agreement further provided for
severance pay equal to 100% of his base salary in effect at time of termination
of employment for a period of three (3) years or until his 65th birthday,
whichever first occurred, unless he rejected a proposed renewal contract for a
term of at least three years and upon the same terms and conditions in effect at
such time but Mr. Mulcahy elected to retire. The agreement also contained a
"Change in Control of Employer" provision, entitling Mr. Mulcahy to terminate
the agreement on 75 days prior written notice and receive a lump sum payment of
$1,200,000, grossed up for taxes if subject to Section 4999 of the Internal
Revenue Code of 1986 if such payment is deemed to be an "excess parachute
payment" under Section 280G of the Internal Revenue Code of 1986. Mr. Mulcahy
also had the option of extending his agreement for three (3) years through March
31, 2013 at his then current salary subject to the cost-of-living adjustment in
the event such Change in Control was approved.
The Corporation has an employment agreement with Ms. Angela D. Toppi that
expired and is now on a 30-day basis, which provides for compensation at the
annual rate of $200,000. The agreement provides that if Ms. Toppi is disabled,
the Corporation will pay to her 50% of the salary she is entitled to receive for
the duration of the disability during the term, but in no event less than
eighteen (18) months. In the event Ms. Toppi dies during the term of said
agreement, the Corporation shall pay to her beneficiary death benefits in an
amount equal to 50% of her then annual salary for the immediate preceding fiscal
year for the duration of the term, but in no event less than eighteen (18)
months. The Corporation will reimburse Ms. Toppi up to $2,500 per annum for
the cost of long-term disability insurance and life insurance. The agreement
further provides for severance pay equal to 100% of her base salary in effect at
time of termination of employment for a period of one (1) year if the
Corporation continues a non-compete clause. The agreement also contains a
"Change in Control of Employer" provision, entitling Ms. Toppi to terminate
9
the agreement on 75 days prior written notice and receive a lump sum payment of
2.9 times her salary level then in effect, grossed up for taxes if subject to
Section 4999 of the Internal Revenue Code of 1986 if such payment is deemed to
be an "excess parachute payment" under Section 280G of the Internal Revenue Code
of 1986. Ms. Toppi also has the option of extending her agreement for three
(3) years through March 31, 2012 at her then current salary subject to the
cost-of-living adjustment if such Change in Control is approved as provided
above. The agreement also provides for supplemental retirement benefits in the
absence of the Pension Plan in the event of a Change in Control.
The Corporation has an employment agreement with Mr. Al L. Miller that expired
and is now on a 30-day basis, which provides for compensation at the annual rate
of $161,500. Mr. Miller is entitled to receive a performance bonus and sales
override target amount of earnings of $45,000 per annum. Mr. Miller is also
entitled to receive as a profit participation 1/2 of 1% of the Corporation's
pre-tax consolidated earnings if earnings exceed $500,000, with a maximum of
$40,000 for any fiscal year. Such pre-tax consolidated earnings shall not
include any defined extraordinary or unusual items of gain or loss as determined
by accounting principles generally accepted in the United States of America to
the extent such item exceeds 20% of net book value. The agreement provides that
if Mr. Miller is disabled, the Corporation will pay to him 40% of the salary he
is entitled to receive for the duration of the disability during the term, but
in no event less than ninety (90) days. In the event Mr. Miller dies during
the term of said agreement, the Corporation shall pay to his beneficiary death
benefits in an amount equal to 40% of his then annual salary for the immediate
preceding fiscal year for the duration of the term.
The Corporation has a consulting agreement with Moving Images, LLC, a private
company owned by family members of Mr. Richard Brandt, former Chairman Emeritus
of the Board. The consulting agreement, which replaced a similar agreement with
Mr. Brandt, who performs the consulting services on behalf of such company,
expires on December 31, 2014. The agreement provides for annual payments of
$300,000 through December 31, 2011 and $195,000 through December 31, 2014. The
agreement contains graduated bonus provisions based on the Corporation's defined
pre-tax consolidated earnings, not to exceed $142,976, subject to cost-of-living
adjustments and provides for profit participation of 1 1/2% of the Corporation's
defined pre-tax consolidated earnings. Such pre-tax consolidated earnings
shall not include any defined extraordinary or unusual items of gain or loss as
determined by accounting principles generally accepted in the United States of
America to the extent such item exceeds 20% of net book value. The agreement
further provides that if Mr. Brandt is disabled or dies during the term of said
agreement, the Corporation shall pay to Moving Images, LLC, at his then annual
consulting fee in effect, for the remaining term of the agreement. The
agreement further provides for severance pay for the term of said agreement
equal to his then annual consulting fee in effect at time of termination of
employment in a lump sum payment. If there is a "change in control" as defined
therein, or if the Corporation fails to elect Mr. Brandt to his present
positions, Moving Images, LLC has the right to receive the payments for the
balance of the term of its agreement, including certain lump sum payments
thereof. Moving Images, LLC agreed to reduce their 2008 fees by $90,406 plus
the cost-of-living adjustment, and 2009 fees by $150,000. On March 26, 2010,
the Board of Directors authorized that future payments, if any, to Moving
Images, LLC would only be made for specific services rendered as authorized by
the Corporation's Chief Executive Officer.
The foregoing is a summary of the agreements and reference is made to the
agreements, each of which has been filed with the SEC, for the full terms
thereof.
During 2009, the named executives agreed to a voluntary reduction in their
salary for ten months; and during 2008, the named executives agreed to defer
their increases for nine months. The named executives and other executives plus
Moving Images, LLC agreed to defer their increases for nine months during 2007,
for six months during 2006 and for three months during 2005, 2004 and 2003.
Director Compensation
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 30,000 shares for grant. Options are for a period of six years
from date of grant, are granted at fair market value on date of grant, may be
exercised at any time after one year from date of grant while a director and are
based on years of service, with a minimum of 500 stock
10
options for each director, an additional 500 stock options based on five or more
years of service, another 500 stock options based on 10 or more years of service
and an additional 1,000 stock options based on 20 or more years of service.
Additional stock options are granted upon the expiration or exercise of any such
option, which is no earlier than four years after date of grant, in an amount
equal to such exercised or expired options.
Compensation of Directors
The following table represents director compensation for 2009.
----------------------------------------------------------------------------------------------------
Nonqualified
Non-Equity Deferred
Fees Stock Option Incentive Plan Compensation All Other
Earned Awards Awards Compensation Earnings Compensation Total
Name ($) ($) ($) (1) ($) ($) ($) (2) ($)
----------------------------------------------------------------------------------------------------
Glenn J. Angiolillo .... 1,120 - 286 - - - 1,406
Matthew Brandt (3) ..... 2,600 - - - - - 2,600
Richard Brandt (4) ..... 5,680 - - - - 9,237 14,917
Thomas Brandt (3) ...... 2,600 - - - - - 2,600
Howard M. Brenner (4) .. 13,520 - 471 - - - 13,991
Jean Firstenberg ....... 18,940 - 233 - - - 19,173
Gene Jankowski ......... 21,620 - - - - - 21,620
Victor Liss ............ 15,200 - - - - 770 15,970
Howard S. Modlin ....... 17,940 - 700 - - - 18,640
Michael R. Mulcahy ..... 6,400 - - - - - 6,400
George W. Schiele ...... 800 - 286 - - - 1,086
Angela D. Toppi ........ 720 - - - - - 720
Salvatore J. Zizza ..... 800 - 286 - - - 1,086
----------------------------------------------------------------------------------------------------
(1) The options were granted pursuant to the 1989 Non-Employee Director Stock Option Plan described
above. Fair value has been computed in accordance with FASB ASC Topic 718.
(2) Messrs. M. Brandt and T. Brandt are sons of Mr. R. Brandt and resigned as directors on June
23, 2009 in accordance with the Settlement Agreement.
(3) Messrs. R. Brandt and Brenner's term as a board member expired on December 11, 2009.
(4) All other compensation consists of medical insurance premiums paid.
Stock Option Plans and Stock Options
The Corporation had an incentive stock option plan, which provided for the grant
of incentive stock options at fair market value on date of grant. The plan has
expired and no further options may be granted. Options outstanding are
exercisable during the period one to 10 years after date of grant and while the
holder is in the employ of the Corporation and survive the termination of the
plan. The Corporation has a Non-Employee Director Stock Option Plan, which
provides for the grant of incentive stock options at fair market value on date
of grant, pursuant to which the option set forth below was granted. Options
outstanding are exercisable during the period one to six years after date of
grant and while a director. There were no stock options granted in fiscal 2009
to the named executive officers or the management consultant and no stock
options were exercised in fiscal 2009.
11
The following table sets forth information as to the named executive officers
and the management consultant with respect to unexercised options and equity
incentive plan awards as of the end of the fiscal year.
-------------------------------------------------------------------------------------------------------------------
Outstanding Equity Awards at Fiscal Year-End
-------------------------------------------------------------------------------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Equity Plan Market or
Incentive Awards: Payout
Plan Market Number of Value of
Awards: Value of Unearned Unearned
Number of Number of Shares of Shares, Shares,
Number of Securities Shares or Units of Units or Units or
Securities Underlying Units of Stock Other other
Underlying Unexercised Option Stock that that have Rights that Rights that
Unexercised Unearned Exercise Option have not not have not have not
Options Options Price Expiration Vested Vested Vested Vested
Name # # $ Date # $ # $
-------------------------------------------------------------------------------------------------------------------
Michael R. Mulcahy - - - - - - -
Angela D. Toppi 5,000 - $7.00 03/24/14 - - - -
Al L. Miller - - - - - - -
Richard Brandt 1 10,000 - 4.03 09/25/11 - - - -
-------------------------------------------------------------------------------------------------------------------
(1) Mr. Brandt's stock options were granted under a Non-Statutory Stock Option Agreement, which provided for the
grant of incentive stock options at fair market value of the Common Stock on date of grant. Options
outstanding are exercisable during the period one to 10 years after date of grant.
12
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth information as of April 28, 2010 (or such other
date specified) with respect to the beneficial ownership of the Corporation's
Common Stock or shares acquirable within 60 days of such date by (i) each person
known by the Corporation to own more than 5% of the Corporation's Common Stock
and who is deemed to be such beneficial owner of the Corporation's Common Stock
under Rule 13d-3(a)(ii); (ii) each person who is a director of the Corporation;
(iii) each named executive in the Summary Compensation Table; and (iv) all
persons as a group who are executive officers and directors of the Corporation,
and as to the percentage of outstanding shares held by them on that date.
--------------------------------------------------------------------------------
Number of Shares
Beneficially Percent
Name, Status and Mailing Address Owned of Class
--------------------------------------------------------------------------------
5% Stockholders:
----------------
Richard Brandt ............................ 181,063 (1) 7.38%
Chairman Emeritus of the Board of Directors
and consultant to Trans-Lux Corporation
2209 Miguel Chavez Road Bldg A
Santa Fe, NM 87505
Gabelli Funds, LLC ........................ 535,000 (2) 21.90%
One Corporate Center
Rye, NY 10580-1434
Non-Employee Directors:
-----------------------
Glenn J. Angiolillo ....................... 100 *
Jean Firstenberg .......................... 1,420 (3) *
Gene Jankowski ............................ 4,000 (4) *
Victor Liss ............................... 23,552 (4) *
Howard S. Modlin .......................... 13,873 (5) *
George W. Schiele ......................... - *
Salvatore J. Zizza (6) .................... - *
Named Executive Officers:
-------------------------
J.M. Allain ............................... 50,000 (7) 2.05%
Al L. Miller .............................. 611 *
Michael R. Mulcahy ........................ 3,303 *
Angela D. Toppi ........................... 6,000 (8) *
All directors and executive officers ...... 104,588 (9) 4.26%
as a group (13 persons)
--------------------------------------------------------------------------------
* Represents less than 1% of total number of outstanding shares.
(1) The amount includes 10,000 shares of Common Stock acquirable upon exercise
of stock options. The amount excludes 54,690 shares owned by M. Brandt and
55,564 shares owned by T. Brandt, sons of Mr. R. Brandt and former
officers and directors of the Company.
(2) Based on Schedule 13D, Amendment No. 80 dated April 20, 2010 by Mario J.
Gabelli, GGCP, Inc., Gabelli Funds, LLC, Teton Advisors, Inc., Gamco
Investors, 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.
(3) The amount includes 1,000 shares of Common Stock acquirable upon exercise of
stock options.
(4) The amount includes 1,500 shares of Common Stock acquirable upon exercise of
stock options.
(5) The amount includes 7,719 shares of Common Stock owned by Mr. Modlin's
immediate family or held in trust for Mr. Modlin's immediate family and
2,500 shares of Common Stock acquirable upon exercise of stock options.
(6) Mr. Zizza disclaims any interest in the share set forth in footnote 2
above.
(7) The amount represents 50,000 shares of restricted stock granted on February
16, 2010 and vests 50% on the one-year anniversary date of grant and 50%
vests on the two-year anniversary date of grant, provided Mr. Allain is
employed by the Corporation on those dates.
(8) The amount includes 5,000 shares of Common Stock acquirable upon exercise of
stock options.
(9) The amount includes 12,500 shares of Common Stock set forth in footnotes
above which members of the group have the right to acquire by exercise of
stock options (including director stock options).
13
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Certain Transactions
During the year 2009, $150,000 in consulting fees for consulting services
rendered by Mr. Brandt was paid by the Corporation to Moving Images, LLC, which
is owned by members of his family, which includes Mr. Matthew Brandt and Mr.
Thomas Brandt, former directors and executive officers of the Corporation, as
more fully described below in the section entitled "Employment Agreements."
During the year 2009, $132,000 in fees for legal services rendered was paid by
the Corporation to the law firm of which Mr. Modlin, a director of the
Corporation, is the president.
Independence of Non-Employee Directors
A director is considered independent under NYSE Amex Company Guide if the Board
of Directors determines that the director does not have any direct or indirect
material relationship with the Corporation. Mr. Mulcahy is a former employee
of the Corporation and Ms. Toppi is an employee of the Corporation and,
therefore, have been determined by the Board to fall outside the definition of
"independent director." Messrs. Angiolillo, Jankowski, Liss, Modlin, Schiele
and Zizza and Ms. Firstenberg are non-employee directors of the Corporation.
Mr. Modlin is not considered independent due to the legal services rendered by
the law firm of which Mr. Modlin is the president. The Board of Directors has
determined that Messrs. Angiolillo, Jankowski, Liss, Schiele and Zizza and Ms.
Firstenberg are "independent directors" within the meaning of the rules of the
NYSE Amex Company Guide, since they had 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 Messrs. Jankowski and
Zizza and Ms. Firstenberg are independent under the SEC's audit committee
independence standards.
ITEM 14. PRINCIPAL ACCOUNTING FIRM FEES AND SERVICES
UHY LLP ("UHY") had served as our independent registered public accounting firm
since July 8, 2008, when the Audit Committee of the Corporation's Board of
Directors approved their engagement to audit the Corporation's financial
statements for the fiscal year ended December 31, 2008. On April 16, 2010, UHY
merged its New England practice into Marcum, LLP. As a result of the merger,
UHY declined reappointment as our independent registered public accountant firm
for the fiscal year ending December 31, 2010. The Corporation is in the process
of selecting a replacement firm.
The Audit Committee is not aware of any disagreements between management and UHY
regarding accounting principles and their application or otherwise. As a result
of the aforementioned merger, UHY issued a letter dated April 20, 2010,
addressed to the Securities and Exchange Commission, that UHY agrees that there
were no disagreements on any matters of accounting principles or practices,
financial statement disclosure or auditing scope or procedure.
Through and as of December 31, 2009, UHY and UHY Advisors, Inc. ("Advisors"),
as separate legal entities, collectively provide attest, accounting, tax and
business consulting services through an alternative practice structure which is
necessitated by most state statutes that prohibit corporate ownership of firms
that provide attest services. UHY is a licensed CPA firm and provides attest
services only, whereas Advisors provides the other services. UHY leases
auditing staff who are full time, permanent employees of Advisors. UHY has only
a few full time employees; however, the Partners of UHY are also Managing
Directors of Advisors. While few of the audit services performed were provided
by permanent, full time employees of UHY, for the most part, the leased staff
are CPA qualified and satisfy the continuing education and other professional
requirements. UHY trains, manages and supervises the audit services and audit
staff, and is exclusively responsible for the opinion rendered in connection
with its examination. During 2009, Advisors did not provide any services to the
Corporation.
Change in Auditors: As previously reported in our October 28, 2009 proxy
statement, the Corporation, on July 9, 2008, based on the Audit Committee's
recommendation and approval, dismissed Eisner LLP ("Eisner") as the
14
Corporation's independent registered public accounting firm. The Audit
Committee took this action after consultation with management to enable the
Corporation to obtain audit and related services at a lower annual cost. There
were no disagreements with Eisner on any matter of accounting principles and
their application or otherwise.
Audit Committee Pre-Approval of Independent Auditor Services: All audit
services provided by UHY for 2009 were approved by the Audit Committee in
advance of the work being performed.
Audit Fees: UHY audit fees were $229,000 and $258,000 in 2009 and 2008,
respectively. UHY audit fees include fees associated with the annual audit of
the Corporation's financial statements and the reviews of the Corporation's
quarterly reports on Form 10-Q (only the second and third quarter reviews in
2008). Eisner audit fees were $52,000 in 2008. Eisner audit fees in 2008
include fees associated with the review of the Corporation's annual report and
the first quarterly report on Form 10-Q.
Audit-Related Fees: There were no audit-related services in 2009 and 2008. In
2008, $6,000 was paid to Eisner for assistance related to various financial
reporting matters.
Tax Fees: Neither UHY nor Eisner provided any tax services.
All Other Fees: Neither UHY nor Eisner provided any non-audit services.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
31.1 Certification of Jean-Marc Allain, President and Chief Executive
Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Angela D. Toppi, Executive Vice President and
Chief Financial Officer, pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Jean-Marc Allain, President and Chief Executive
Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Angela D. Toppi, Executive Vice President and
Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized:
TRANS-LUX CORPORATION
by: /s/ Angela D. Toppi
------------------------------
Angela D. Toppi
Executive Vice President and
Chief Financial Officer
by: /s/ Todd Dupee
------------------------------
Todd Dupee
Vice President and Controller
Dated: April 30, 2010
16
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated:
/s/ Gene F. Jankowski April 30, 2010
-----------------------------------------------
Gene F. Jankowski, Chairman of the Board
/s/ Victor Liss April 30, 2010
-----------------------------------------------
Victor Liss, Vice Chairman of the Board
April 30, 2010
-----------------------------------------------
Glenn J. Angiolillo, Director
/s/ Jean Firstenberg April 30, 2010
-----------------------------------------------
Jean Firstenberg, Director
/s/ Howard S. Modlin April 30, 2010
-----------------------------------------------
Howard S. Modlin, Director
/s/ Michael R. Mulcahy April 30, 2010
-----------------------------------------------
Michael R. Mulcahy, Director
April 30, 2010
-----------------------------------------------
George W. Schiele, Director
/s/ Angela D. Toppi April 30, 2010
-----------------------------------------------
Angela D. Toppi, Executive Vice President,
Chief Financial Officer, Secretary and Director
/s/ Salvatore J. Zizza April 30, 2010
-----------------------------------------------
Salvatore J. Zizza, Director
17
