-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SB4cefzmokpIWb4DxVk9ft9oIu+aQ1B3aon69XmvEGkVtDJ5o+cwkeilMJuXsck7 TcQP1Pg4XJqRrUxc6wirfw== /in/edgar/work/0000099106-00-000012/0000099106-00-000012.txt : 20001115 0000099106-00-000012.hdr.sgml : 20001115 ACCESSION NUMBER: 0000099106-00-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANS LUX CORP CENTRAL INDEX KEY: 0000099106 STANDARD INDUSTRIAL CLASSIFICATION: [3990 ] IRS NUMBER: 131394750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-02257 FILM NUMBER: 765164 BUSINESS ADDRESS: STREET 1: 110 RICHARDS AVE CITY: NORWALK STATE: CT ZIP: 06856-5090 BUSINESS PHONE: 2038534321 MAIL ADDRESS: STREET 1: 110 RICHARDS AVENUE CITY: NORWALK STATE: CT ZIP: 06856-5090 10-Q 1 0001.txt TRANS-LUX CORP FORM 10-Q PERIOD ENDING 09/30/00 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from____________to____________ Commission file number 1-2257 ------ TRANS-LUX CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 13-1394750 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 110 Richards Avenue, Norwalk, CT 06856-5090 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) (203) 853-4321 ---------------------------------------------------- (Registrant's telephone number, including area code) - -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) 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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Date Class Shares Outstanding - -------- ------------------------------------ ------------------ 11/13/00 Common Stock - $1.00 Par Value 964,905 11/13/00 Class B Stock - $1.00 Par Value 295,843 (Immediately convertible into a like number of shares of Common Stock.) TRANS-LUX CORPORATION AND SUBSIDIARIES Index Part I - Financial Information Page No. -------- Consolidated Balance Sheets - September 30, 2000 (unaudited) and December 31, 1999 1 Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2000 and 1999 (unaudited) 2 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2000 and 1999 (unaudited) 3 Notes to Consolidated Financial Statements (unaudited) 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II - Other Information Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 Part I - Financial Information ------------------------------ TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September 30 December 31 In thousands, except share data 2000 1999 - ---------------------------------------------------------------------------------------------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,190 $ 3,651 Available-for-sale securities 1,250 3,666 Receivables 9,122 9,064 Unbilled receivables 1,456 114 Inventories 6,605 6,146 Prepaids and other 671 776 -------- -------- Total current assets 22,294 23,417 -------- -------- Equipment on rental 80,851 75,200 Less accumulated depreciation 36,300 31,487 -------- -------- 44,551 43,713 -------- -------- Property, plant and equipment 50,583 44,411 Less accumulated depreciation and amortization 10,453 8,832 -------- -------- 40,130 35,579 Other assets 6,075 6,449 Construction funds 291 3,290 -------- -------- $113,341 $112,448 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,503 $4,688 Accrued liabilities 5,485 5,093 Current portion of long-term debt 2,698 2,381 -------- -------- Total current liabilities 10,686 12,162 -------- -------- Long-term debt: 7 1/2% convertible subordinated notes due 2006 30,397 30,490 9 1/2% subordinated debentures due 2012 1,057 1,057 Notes payable 37,747 34,405 -------- -------- 69,201 65,952 Deferred revenue, deposits and other 3,950 3,715 Deferred income taxes 4,136 4,606 -------- -------- Commitments and contingencies Stockholders' equity: Capital stock Common - $1.00 par value Authorized - 5,500,000 shares Issued - 2,444,562 shares in 2000 and 2,444,400 in 1999 2,444 2,444 Class B - $1.00 par value Authorized - 1,000,000 shares Issued - 295,843 shares in 2000 and 296,005 in 1999 296 296 Additional paid-in-capital 13,901 13,901 Retained earnings 20,683 21,434 Accumulated other comprehensive loss (119) (225) -------- -------- 37,205 37,850 Less treasury stock - at cost 1,479,688 shares in 2000 and 1,479,672 in 1999 (excludes additional 295,843 shares held in 2000 and 296,005 in 1999 for conversion of Class B stock) 11,837 11,837 -------- -------- Total stockholders' equity 25,368 26,013 -------- -------- $113,341 $112,448 ======== ======== The accompanying notes are an integral part of these consolidated financial statements.
1 TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 ------------------------- ----------------------- In thousands, except per share data 2000 1999 2000 1999 - ------------------------------------------------------------------------------------------------------------------- Revenues: Equipment rentals and maintenance $ 6,052 $ 6,065 $18,073 $17,676 Equipment sales 9,689 9,258 23,741 23,599 Theatre receipts and other 3,152 2,246 8,343 5,782 ------- ------- ------- ------- Total revenues 18,893 17,569 50,157 47,057 ------- ------- ------- ------- Operating expenses: Cost of equipment rentals and maintenance 3,502 3,405 10,119 9,859 Cost of equipment sales 6,122 6,199 15,976 15,355 Cost of theatre receipts and other 2,656 1,735 7,006 4,609 ------- ------- ------- ------- Total operating expenses 12,280 11,339 33,101 29,823 ------- ------- ------- ------- Gross profit from operations 6,613 6,230 17,056 17,234 General and administrative expenses 5,065 4,689 14,292 13,766 ------- -------- ------- ------- 1,548 1,541 2,764 3,468 Interest income 83 112 315 364 Interest expense (1,586) (1,040) (4,350) (3,007) Other income (expense) (28) - (27) 145 Income from joint venture 65 81 170 152 ------- ------- ------- ------- Income (loss) before income taxes 82 694 (1,128) 1,122 Provision (benefit) for income taxes 38 313 (507) 505 ------- ------- ------- ------- Net income (loss) $ 44 $ 381 ($621) $ 617 ======= ======= ======= ======= Earnings (loss) per share: Basic $ 0.04 $ 0.30 ($0.49) $ 0.48 Diluted $ 0.04 $ 0.21 ($0.49) $ 0.48 Average common shares outstanding: Basic 1,261 1,292 1,261 1,292 Diluted 1,261 3,479 1,261 3,518 Cash dividends per share: Common stock $ 0.035 $ 0.035 $ 0.105 $ 0.105 Class B stock $0.0315 $0.0315 $0.0945 $0.0945 The accompanying notes are an integral part of these consolidated financial statements.
2 TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
NINE MONTHS ENDED SEPTEMBER 30 ------------------------- In thousands 2000 1999 - ---------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) ($621) $ 617 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 7,036 6,441 Net income of joint venture (170) (152) Deferred income taxes (507) (69) Loss on sale of securities 41 -- Gain on repurchase of Company's 7 1/2% convertible subordinated notes (15) (148) Changes in operating assets and liabilities: Receivables (1,400) (2,392) Inventories (459) 103 Prepaids and other assets 154 (554) Accounts payable and accruals (1,812) 1,726 Deferred revenue, deposits and other 135 (757) ------ ------- Net cash provided by operating activities 2,382 4,815 ------ ------- CASH FLOWS FROM INVESTING ACTIVITIES Equipment manufactured for rental (5,651) (5,013) Purchases of property, plant and equipment (7,623) (7,016) Usage of (increase in) construction funds 2,999 (4,694) Payments for acquisitions (net) -- (1,163) Proceeds from joint venture 72 71 Proceeds from sale of securities 2,458 1,056 Proceeds from the sale of fixed assets 1,451 -- ------ ------- Net cash used in investing activities (6,294) (16,759) ------ ------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt 5,249 14,696 Repayment of long-term debt (1,590) (865) Repurchase of Company's 7 1/2% convertible subordinated notes (78) (887) Purchase of treasury stock -- (7) Cash dividends (130) (132) ------ ------- Net cash provided by financing activities 3,451 12,805 ------ ------- Net increase (decrease) in cash and cash equivalents (461) 861 Cash and cash equivalents at beginning of year 3,651 1,298 ------ ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,190 $ 2,159 ====== ======= - --------------------------------------------------------------------------------------------------------- Interest paid $3,559 $ 2,486 Interest received 403 412 Income taxes paid 13 782 - --------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
3 TRANS-LUX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2000 (unaudited) Note 1 - Basis of Presentation Financial information included herein is unaudited, however, such information reflects all adjustments which are, in the opinion of management, necessary for the fair presentation of the consolidated financial statements for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the full year. It is suggested that the September 30, 2000 consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report and Form 10-K for the year ended December 31, 1999. Certain reclassifications of prior years' amounts have been made to conform to the current year's presentation. The Company will adopt the provisions of Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133) effective January 1, 2001. The standard requires companies to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The Company does not expect the adoption of SFAS 133 to have a significant impact on its consolidated financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in the Financial Statements" (SAB 101). The bulletin addresses the staff's views in applying accounting principles generally accepted in the United States to revenue recognition in financial statements, and must be implemented no later than the fourth quarter of 2000. The Company does not expect SAB 101 to have a significant impact on its consolidated financial statements. Note 2 - Inventories Inventories consist of the following:
September 30 December 31 In thousands 2000 1999 - -------------------------------------------------------------------------------- Raw materials and spare parts $4,395 $3,532 Work-in-progress 1,156 1,459 Finished goods 1,054 1,155 ------ ------ $6,605 $6,146 ====== ======
4 Note 3 - Long-Term Debt During the nine months ended September 30, 2000, long-term debt increased $3.2 million, of which $3.9 million represents additional long-term theatre construction mortgages at interest rates ranging from 7.5% to 9.5%, $1.3 million represents borrowings against the revolving credit facility and $1.6 million represents repayment of long-term debt. The Company has a bank Credit Agreement which provides for a $15.0 million revolving credit facility which is available until June 2002. At September 30, 2000, $10.1 million was outstanding leaving $4.9 million of additional borrowing capacity available under such facility. The Credit Agreement contains certain financial covenants, including a defined debt service coverage ratio which was reset as of September 30, 2000 to 1.40 to 1.0. At September 30, 2000 the Company was in compliance with such financial covenants. Note 4 - Reporting Comprehensive Income (Loss) The components of comprehensive income (loss) for the Company are foreign currency translation adjustments relating to the Company's foreign subsidiaries and unrealized holding gains or losses on the Company's available-for-sale securities. Comprehensive income is $83,000 and $341,000 for the three months ended September 30, 2000 and 1999, respectively; and comprehensive (loss) income of ($534,000) and $471,000 for the nine months ended September 30, 2000 and 1999, respectively. Note 5 - Earnings (Loss) per Share The following table represents the computation of basic and diluted earnings (loss) per common share:
Three months ended Sept. 30 Nine months ended Sept. 30 In thousands, except per share data 2000 1999 2000 1999 - ----------------------------------------------------------------------------------------------------------------------------------- Basic earnings (loss) per share computation: Net income (loss) $ 44 $ 381 $ (621) $ 617 ------ ------ ------ ------ Weighted average common shares outstanding 1,261 1,292 1,261 1,292 ------ ------ ------ ------ Basic earnings (loss) per common share $ 0.04 $ 0.30 $(0.49) $ 0.48 ====== ====== ====== ====== Diluted earnings (loss) per share computation: Net income (loss) $ 44 $ 381 $ (621) $ 617 Add: After tax interest expense applicable to convertible debt (1) - 344 - 1,055 ------ ------ ------ ------ Adjusted net income (loss) $ 44 $ 725 $ (621) $1,672 ====== ====== ====== ====== Weighted average common shares outstanding 1,261 1,292 1,261 1,292 Assumes exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options (2) - 1 - 33 Assumes conversion of 7 1/2% convertible subordinated notes (1) - 2,186 - 2,193 ------ ------ ------ ------ Total weighted average common shares 1,261 3,479 1,261 3,518 ====== ====== ====== ====== Diluted earnings (loss) per common share $ 0.04 $ 0.21 $(0.49) $ 0.48 ====== ====== ====== ====== (1) The 2000 diluted earnings (loss) per share computation does not include the assumed conversion of the Company's 7 1/2% convertible subordinated notes, as the effect is antidilutive. The 7 1/2% convertible subordinated notes were convertible into 2,169 shares at September 30, 2000 and 2,193 shares at September 30, 1999. (2) Options to purchase 130 shares of common stock with exercise prices ranging from $6.3125 to $15.1875 were outstanding at September 30, 2000, and options to purchase 59 shares of common stock with exercise prices ranging from $8.625 to $15.1875 were outstanding at September 30, 1999. These options were not included in the 2000 calculation because the options' exercise price was greater than the average market price of the common stock.
5 Note 6 - Business Segment Data The Company evaluates segment performance and allocates resources based upon operating income. The Company's operations are managed in three reportable business segments. The Display Division comprises two operating segments, indoor display and outdoor display. Both design, produce, lease, sell and service large-scale, multi-color, real-time electronic information displays. Both operating segments are conducted on a global basis, primarily through operations in the U.S. The Company also has operations in Canada and Australia. The indoor display and outdoor display segments are differentiated primarily by the customers they serve. The Entertainment and Real Estate Division owns a chain of motion picture theatres in the western Mountain States and owns real estate used for both corporate and income-producing purposes in the U.S. and Canada. Segment operating income is shown after general and administrative expenses directly associated with the segment and includes the operating results of the joint venture activities. Corporate items relate to resources and costs which are not directly identifiable with a segment. There are no intersegment sales. Information about the Company's operations in its three business segments is as follows:
Three months ended September 30 Nine months ended September 30 In thousands 2000 1999 2000 1999 - ---------------------------------------------------------------------------------------------------------------------------- Revenues: Indoor display $ 6,627 $ 5,884 $17,955 $17,442 Outdoor display 9,113 9,439 23,859 23,833 Entertainment and real estate 3,153 2,246 8,343 5,782 ----- ----- ----- ----- Total revenues $18,893 $17,569 $50,157 $47,057 ------ ------ ------ ------ Operating income: Indoor display $ 2,123 $ 1,842 $ 5,801 $ 5,178 Outdoor display 784 982 1,028 2,319 Entertainment and real estate 329 366 810 682 --- --- --- --- Total operating income $ 3,236 $ 3,190 $ 7,639 $ 8,179 Other income (expense) (28) - (27) 145 Corporate general and administrative expenses (1,623) (1,568) (4,705) (4,559) Interest expense-net (1,503) (928) (4,035) (2,643) ----- --- ----- ----- Income (loss) before income taxes $ 82 $ 694 $(1,128) $ 1,122 == === ===== =====
Note 7 - Litigation The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. The Company is appealing a 1999 verdict in a state of New Mexico court which awarded a former employee of the Company $15,000 in damages for lost wages and emotional distress and $393,000 in punitive damages on a retaliatory discharge claim. The Company denied the charges on the basis that the termination was proper. The Company believes it has made adequate provisions to cover such matters. The appeal is currently pending. In January 2000, a second former employee of the Company commenced a retaliatory discharge action seeking compensatory and punitive damages in an unspecified amount. The Company has denied such allegations and has asserted defenses including that the former employee resigned following her failure to timely report to work. This case is in the early stages and has yet to go to trial. Certain of the amounts are subject to insurance recoveries. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Nine Months Ended September 30, 2000 Compared to Nine Months Ended September 30, 1999 The Company's total revenues for the nine months ended September 30, 2000 increased 6.6% to $50.2 million from $47.1 million for the nine months ended September 30, 1999. Indoor display revenues increased $513,000 or 2.9%. Of this increase, $688,000 or 6.1% was due to the indoor display equipment rental and maintenance revenues, primarily due to new rental and maintenance contracts and renewal of existing contracts, offset by a decrease of $175,000 or 2.8% in indoor display equipment sales due to lower volume, mainly as a result of the advent of electronic trading on trading floors and consolidation within the financial industry. Outdoor display revenues remained level. Outdoor display equipment sales increased $317,000 or 1.8%, primarily in the outdoor sports segment, offset by a decrease of $291,000 or 4.5% in outdoor display equipment rental and maintenance revenues, primarily due to the continued expected decline in the outdoor lease and maintenance bases previously acquired. Entertainment and real estate revenues increased $2.6 million or 44.3% in 2000. This increase is primarily from the revenues from four newly constructed multiplex theatres consisting of 26 screens in Dillon, CO, Espanola, NM, Los Lunas, NM and Sahuarita, AZ which opened between August 1999 and May 2000, and the acquisition of two theatres in Laramie, WY in May 1999. Total operating income for the nine months ended September 30, 2000 decreased 6.6% to $7.6 million from $8.2 million for the nine months ended September 30, 1999. Indoor display operating income increased $623,000 or 12.0%. The cost of indoor displays represented 44.7% of related revenues for the nine months ended September 30, 2000 and 45.6% in 1999. Indoor display cost of equipment sales decreased $269,000 or 9.0% due to lower volume. This decrease was offset by the increase in indoor display cost of equipment rental and maintenance of $342,000 or 6.9%, primarily due to additional depreciation expense. The indoor display general and administrative expenses decreased $183,000 or 4.2%, primarily due to increased efforts to reduce expenses. Outdoor operating income decreased $1.3 million or 55.7%. The cost of outdoor displays represented 75.7% of related revenues for the nine months ended September 30, 2000 and 72.4% in 1999. Due to the competitive nature of the outdoor display market, primarily in the sports segment, the Company expects this erosion in the gross profit percentage to continue as it attempts to increase its market share in the sports segment of the outdoor display market. Outdoor display cost of equipment sales increased $890,000 or 7.2% due to increased volume and a higher content of raw materials, primarily due to the new LED technology, and installation costs. Outdoor display cost of equipment rental and maintenance decreased slightly. The outdoor display general and administrative expenses increased $509,000 or 12.0%, primarily due to expanded sales and marketing efforts related to the sports segment and the operating costs related to the new 55,000 square foot manufacturing facility in Logan Utah. Cost of indoor and outdoor equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. The entertainment and real estate operating income increased $128,000 or 18.8%. The cost of entertainment and real estate represented 84.0% of related revenues for the nine months ended September 30, 2000 and 79.7% in 1999. Cost of entertainment and real estate, which includes film rental costs and depreciation expense, increased $2.4 million or 52.0% in 2000, mainly as a result of the expansion of theatre operations and theatre start-up expenses for new theatre locations. The entertainment and real estate general and administrative expenses increased $54,000 or 8.4%, due to the expansion of theatre operations. 7 Corporate general and administrative expenses increased $146,000 or 3.2%, primarily due to a $511,000 negative impact of the effect of foreign currency exchange rates in 2000 versus a $168,000 positive impact in 1999 (a net change of $679,000) offset by increased efforts to reduce costs. Before the negative impact of the foreign currency exchange, corporate general and administrative expenses would have decreased $533,000 or 11.3%. The 1999 corporate general and administrative expenses included a special litigation charge of $408,000 on a retaliatory discharge claim (see Note 7). Net interest expense increased $1.4 million, which is primarily attributable to the increase in long-term debt due to the expansion of theatre operations and the new outdoor display manufacturing facility in Logan, Utah, and an increase in interest rates. The 1999 other income relates to the gain on the purchase of $1.0 million principal amount of the Company's 7 1/2% convertible subordinated notes at a discount. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatre in Loveland, CO. The effective tax rate at September 30, 2000 and 1999 was 45.0%. The Company has filed certain amended tax returns seeking additional refunds of state income taxes. Three Months Ended September 30, 2000 Compared to Three Months Ended September 30, 1999 The Company's total revenues for the three months ended September 30, 2000 increased 7.5% to $18.9 million from $17.6 million for the three months ended September 30, 1999. Indoor display revenues increased $743,000 or 12.6%. Of this increase, indoor display sales increased $649,000 or 33.0% due to increased volume in the corporate and international exchange markets and the indoor display rental and maintenance revenues increased $94,000 or 2.4%, primarily due to new rental and maintenance contracts and renewal of existing contracts. Outdoor display revenues decreased $326,000 or 3.4%. Of this decrease, outdoor display sales decreased $219,000 or 3.0%, primarily in the outdoor sports segment and outdoor display rental and maintenance revenues decreased $107,000 or 5.0%, due to the continued expected decline in the outdoor lease and maintenance bases previously acquired. Entertainment and real estate revenues increased $907,000 or 40.4% in 2000. This increase is primarily from the revenues from four newly constructed multiplex theatres consisting of 26 screens in Dillon, CO, Espanola, NM, Los Lunas, NM and Sahuarita, AZ, which opened between August 1999 and May 2000, partially offset by a decline in revenues from existing theatres resulting from the industry wide slump in attendance. Total operating income for the three months ended September 30, 2000 remained level at $3.2 million. Indoor display operating income increased $281,000 or 15.3%. The cost of indoor displays represented 45.0% of related revenues for the three months ended September 30, 2000 and 44.5% in 1999. Indoor display cost of equipment sales increased $167,000 or 17.8%, due to higher volume, and indoor display cost of equipment rental and maintenance increased $192,000 or 11.4%, primarily due to additional depreciation expense. The indoor display general and administrative expenses increased $103,000 or 7.2%, primarily due to increased sales expenses. Outdoor operating income decreased $198,000 or 20.2%. The cost of outdoor displays represented 72.9% of related revenues for the three months ended September 30, 2000 and 74.0% in 1999. Due to the competitive nature of the outdoor display market, primarily in the sports segment, the Company expects this erosion in the gross profit percentage to continue as it attempts to increase its market share in the sports segment of the outdoor display market. Outdoor display cost of equipment sales decreased $243,000 or 4.6% due to decreased volume and outdoor display cost of equipment rental and maintenance decreased $95,000 or 5.5% due to decreased volume. The outdoor display general and administrative expenses increased $212,000 or 14.4%, primarily due to expanded sales and marketing efforts related to the sports segment and the increase in operating costs related to the new 55,000 square foot manufacturing facility in Logan Utah. 8 The entertainment and real estate operating income decreased $37,000 or 10.1%. The cost of entertainment and real estate represented 84.3% of related revenues for the three months ended September 30, 2000 and 77.2% in 1999. The cost of entertainment and real estate increased $921,000 or 53.1% in 2000, mainly as a result of the expansion of the theatre operations and theatre start-up expenses for new theatre locations. The entertainment and real estate general and administrative expenses remained level. Corporate general and administrative expenses increased $55,000 or 3.5%. The 2000 corporate general and administrative expenses included a $239,000 negative impact of the effect of foreign currency exchange rates offset by increased efforts to reduce costs. Before the negative impact of the foreign currency exchange, corporate general and administrative expenes would have decreased $144,000 or 9.4%. Net interest expense increased $575,000, which is primarily attributable to the increase in long-term debt due to expansion of theatre operations and the new outdoor display manufacturing facility in Logan, Utah, and an increase in interest rates. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatre in Loveland, CO. Liquidity and Capital Resources The regular quarterly cash dividend for the third quarter of 2000 of $0.035 per share on the Company's Common Stock and $0.0315 per share on the Company's Class B Stock was declared by the Board of Directors on September 12, 2000 payable to stockholders of record as of October 9, 2000 and was paid October 20, 2000. The Company has a $15.0 million revolving credit facility under its Credit Agreement which is available until June 2002, and requires an annual facility fee on the total commitment of .375%. The Company has the option to convert the outstanding balance into a four-year term loan. At September 30, 2000, $10.1 million was outstanding leaving $4.9 million of additional borrowing capacity available under such facility. The Credit Agreement contains certain financial covenants, including a defined debt service coverage ratio which was reset as of September 30, 2000 to 1.40 to 1.0. At September 30, 2000 the Company was in compliance with such financial covenants. The Company is currently in discussion with the bank to reset certain financial covenants beyond September 30, 2000. The Company does not expect these discussions to have an impact in its existing borrowing capacity. The Company believes that cash generated from operations together with the cash and cash equivalents on hand and the availability under the revolving credit facility will be sufficient to fund its anticipated near term cash requirements. Cash and cash equivalents decreased $461,000 for the nine months ended September 30, 2000 compared to an increase of $861,000 in 1999. The decrease in 2000 is primarily attributable to cash utilized for investment in rental equipment and construction of theatres, the decrease in accounts payable and accruals, and the increase in receivables. The Company utilizes its revolving credit facility to finance the expansion of its theatre operations until long-term financing is in place. The $5.2 million proceeds from long-term debt for the nine months ended September 30, 2000 relate to construction borrowings for the new theatres, and borrowings under the revolving credit facility for purchases of equipment for rental and working capital use. The Company has limited involvement with derivative financial instruments and does not use them for trading purposes; they are only used to manage and fix well-defined interest rate risks. The Company has two interest rate swap agreements having a notional value of $7.5 million to reduce exposure to interest fluctuations. (See Note 1.) 9 Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 The Company may, from time to time, provide estimates as to future performance. These forward looking statements will be estimates, and may or may not be realized by the Company. The Company undertakes no duty to update such forward looking statements. Many factors could cause actual results to differ from these forward looking statements, including loss of market share through competition, introduction of competing products by others, pressure on prices from competition or purchasers of the Company's products, and interest rate and foreign exchange fluctuations such as the decline in the value of the Australian dollar. Part II - Other Information --------------------------- Item 6. Exhibits and Reports on Form 8-K - ------ -------------------------------- (a) Exhibits 10(a) Employment Agreement with Richard Brandt dated as of September 1, 2000. 27 Financial Data Schedule, which is submitted electronically to the Securities and Exchange Commission for information only and not filed. (b) No reports on Form 8-K were filed during the quarter covered by this report 10 SIGNATURES Pursuant to the requirements 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 --------------------- (Registrant) Date: November 14, 2000 by /s/ Angela D. Toppi ------------------------- Angela D. Toppi Senior Vice President and Chief Financial Officer by /s/ Robert P. Bosworth ------------------------- Robert P. Bosworth Vice President and Chief Accounting Officer 11 EX-10 2 0002.txt MATERIAL CONTRACTS AMENDED AND RESTATED AGREEMENT made October 11, 2000, as of September 1, 2000, by and between TRANS-LUX CORPORATION, a Delaware corporation, transacting business at 110 Richards Avenue, Norwalk, Connecticut (hereinafter referred to as "Company"), and RICHARD BRANDT, residing at P.O. Box 839, Tesuque, New Mexico 87574 (hereinafter referred to as "Brandt"). WHEREAS, the parties have heretofore entered into an employment agreement dated as of July 1, 1998; and WHEREAS, the parties desire to amend such agreement effective as of September 1, 2000, but (i) Brandt's right to change designees was waived and deleted as of July 1, 1998 and (ii) all rights and benefits which accrued or accrue to Brandt thereunder on or prior to September 1, 2000 shall not be abrogated and shall remain in full force and effect; and WHEREAS, the parties desire to restate such agreement in its entirety as amended hereby; and WHEREAS, Brandt for approximately fifty (50) years has been continuously engaged as an employee, officer, consultant and/or director of the Company, and for approximately thirty-six (36) years and thirty-two (32) years respectively has been an executive officer and chief executive manager of the affairs of the Company and its subsidiaries and affiliates; and WHEREAS, Brandt has had a long, continuously successful experience and performance in the business operations of the Company and has a unique and deep knowledge of the management, needs, trade secrets, know-how and affairs of the Company and its subsidiaries and affiliates; and WHEREAS, by reason of all of the aforesaid, Brandt's services are uniquely valuable and advantageous to the Company; and WHEREAS, it is the considered judgment of the Board of Directors of the Company that it is in the best interests and to the advantage of the Company that it secure to itself additional commitments from Brandt for the performance of employment and consulting services to the Company to the extent and upon the terms hereinafter provided; NOW, THEREFORE, in consideration of the mutual premises herein contained, the parties agree with each other that the following is their amended and restated agreement ("Agreement") in its entirety effective September 1, 2000: 1. The Company hereby engages Brandt to perform employment and consulting services to the Company on the terms and conditions hereinafter set forth, and Brandt hereby accepts such employment and engagement with the Company for a term ("Term") of ten and one-third (10-1/3) years commencing on September 1, 2000 and ending on December 31, 2010. The employment term ("Employment Term") shall be for a period of one and one-third (1 1/3) years commencing on September 1, 2000 and ending December 31, 2001. The consulting term ("Consulting Term") shall be for a period of nine (9) years commencing on January 1, 2002 and ending on December 31, 2010. Notwithstanding the foregoing, (i) Brandt may terminate the Term of this Agreement on December 31, 2001 and on December 31 of each year thereafter, on no less than six (6) months prior written notice, in which event the Term shall end on such December 31 to the same effect as if such date was fixed herein as the date for the end of the Term, and (ii) on no less than thirty (30) days prior written notice, Brandt may terminate the Employment Term, in which case the Consulting Term shall commence on the day following the effective date of termination of the Employment Term in lieu of January 1, 2002. 2 (a) During the Employment Term, Brandt will serve the Company faithfully and diligently and shall render to the Company such services as are appropriate to be rendered by the Chairman of the Board and such additional executive services as may be reasonably assigned to him from time to time by the Board of Directors of the Company, or by the Executive Committee of the Board of Directors of the Company, provided that such services are of a type, dignity and nature appropriate to the Chairman of the Board of Directors and former chief executive officer and executive manager of the Company and of similar responsibility and authority as presently being rendered by Brandt. Brandt shall render such services primarily in Santa Fe, New Mexico, or such other location in the United States designated by Brandt and shall devote such time and attention as may be reasonably necessary to effect the efficient discharge of his duties hereunder. (b) During the Consulting Term, Brandt will render to the Company such consulting services as may be reasonably assigned to him from time to time by the Board of Directors of the Company, or by the Executive Committee of the Company, provided that such services are of a type, dignity and nature appropriate to the Chairman of the Board of Directors and former chief executive officer and executive manager of the Company and further provided that: (i) such consulting services shall be required to be rendered by him only in Santa Fe, New Mexico or such other location in the United States designated by Brandt, (ii) Brandt's inability to act as such consultant by reason of illness, disability or lack of capacity shall not be deemed a breach of this Agreement, and (iii) in Brandt's sole opinion the rendition of such services shall not be detrimental or injurious to his health. It is further agreed that such services shall not require more than sixty (60) hours service during any month; that Brandt's unavailability at any particular time shall not constitute a breach of this Agreement; that Brandt may, in his sole opinion, determine that such services may be rendered by telephone, mail or other means of communication; and that Brandt's failure to render such services because of his absence from Santa Fe, New Mexico or such other location in the United States designated by Brandt shall not be deemed a breach of this Agreement. Brandt shall be the sole and absolute judge of his ability to render such consulting services, and Brandt's conclusion that the rendition thereof would be harmful to him shall absolve and excuse Brandt from the rendition of such consulting services. (c) During the Term the Company shall use its best efforts to nominate and elect Brandt from year to year as the Chairman of the Board, a director, and a member of the Executive Committee of the Company. In the event that Brandt shall not be elected at all times during the Term hereof as the Company's Chairman of the Board of Directors, as a member of its Board of Directors, and as a member of the Executive Committee, the same shall, at Brandt's option, constitute a material breach of this Agreement by the Company unless the Company shall completely cure such breach within thirty (30) days from receiving notice from Brandt specifically setting forth the claimed breach. Upon (i) failure of the Company to cure such breach, or (ii) in the event there is a "Change-in-Control" as hereinafter defined, Brandt, at his option, shall at any time thereafter be entitled to terminate his obligations hereunder by notice ("Notice") to the Company, specifically including the rendition of any services by him to the Company. After the giving of the Notice, the Company shall pay to Brandt, notwithstanding such termination, all sums payable or otherwise provided to Brandt under this Agreement for the balance of the Term, including, but not limited to: (i) the salary and fees, Profit Participation and Bonus payments provided to be paid to him pursuant to Paragraphs 3(a), (b), (c) and (d) for the period from the date of such Notice of termination through December 31, 2010; and (ii) the insurance and other benefits provided under this Agreement. The aforesaid sums and benefits shall be paid or provided to Brandt as follows: (i) the aggregate salary and fees provided to be paid for the balance of the Term pursuant to Paragraphs 3(a) and (b) shall be paid to Brandt in one lump sum ten (10) days after such Notice of termination, in the same aggregate amounts as are so provided in said Paragraphs 3(a) and (b) to be paid for the balance of the Term (adjusted for the CPI Adjustment, as hereinafter defined, to the date of such payment); and (ii) the sums provided to be paid pursuant to Paragraphs 3(c) and (d) and the insurance and other benefits provided under this Agreement, shall be paid or provided to Brandt in the same manner, at the same times, and in the same amounts as is provided in the said Paragraphs (c) and (d) and in Paragraph 4 and elsewhere in the Agreement to be paid or provided during the balance of the Term. (d) Nothing contained in this Agreement shall in any way limit or prevent Brandt from: (i) being connected with, in any manner whatsoever, including, without limiting the generality of the foregoing, as owner, investor, executive or director or otherwise in any business whatsoever, including, without limiting the generality thereof, the business of producing, distributing or exhibiting motion pictures, or the business of film booking and buying, so long as the business is not directly competitive with any business of the Company; (ii) owning or dealing in the stock or securities of any corporation whose stocks or securities are traded on any public market provided that such holdings of Brandt in any individual corporation that is a direct competitor of the Company shall not exceed five (5%) percent of the outstanding securities of any class of any such corporation. (e) A "Change-in-Control" shall occur if, after the date hereof (i) any Person is or becomes the beneficial owner, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions of shares of capital stock of the Company entitling such Person to exercise 20% or more of the total voting power of all shares of capital stock of the Company entitled to vote generally in the election of directors; (ii) the Company sells or transfers all or substantially all of the assets of the Company to another Person; (iii) there occurs any consolidation of the Company with, or merger of the Company into, any other Person, any merger of another Person into the Company other than (a) a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock and Class B Stock, (b) a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock, or (c) a transaction in which the stockholders of the Company immediately prior to such transaction owned, directly or indirectly, immediately following such transaction, a majority of the combined voting power of the voting capital stock of the corporation resulting from the transaction, such stock to be owned by such stockholders in substantially the same proportion as their ownership of the voting stock of the Company immediately prior to such transaction; (iv) a change in the Board of Directors in which the individuals who constituted the Board of Directors at the beginning of the 24-month period immediately preceding such change (together with any other director whose election by the Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of at least a majority of the directors then in office either who were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; or (v) the Common Stock is the subject of a "Rule 13e-3 transaction" as defined under the Securities Exchange Act of 1934 ("Exchange Act"). For purposes of this Section 2, the term "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. Such term also (i) includes any syndicate or group deemed to be a "Person" under Section 13(d)(3) of the Exchange Act, but (ii) excludes Brandt, the Company, any Subsidiary, any existing Person (including, directly or indirectly, the immediate family (parents, spouse, children, stepchildren, brothers or sisters) of any such Person), who currently beneficially owns shares of the Company's capital stock with 20% or more of the voting power as described above, or any current or future employee or director benefit plan of the Company or any Subsidiary of the Company or any entity holding capital stock of the Company for or pursuant to the terms of such plan, or any underwriter engaged in a firm commitment underwriting in connection with a public offering of capital stock of the Company. "Subsidiary" means a corporation of which more than 50% of the issued and outstanding stock entitled to vote for the election of directors (otherwise than by reason of default in dividends) is at the time owned or controlled, directly or indirectly, by the Company. 3 (a) During the Employment Term the Company agrees to pay Brandt the following, in addition to Directors' fees and fees as a member of the Executive Committee and other Committees, if any, of the Board of Directors of the Company (such fees to be paid as if Brandt was not an employee of the Company and in the same amounts as non-employee directors are paid): (i) A salary at the rate of $325,307.33 per annum for the balance of 2000, and for each calendar year thereafter during the Employment Term, subject to the CPI Adjustment for calendar years subsequent to 2000, as hereinafter provided; (ii) A fee as Chairman at the rate of $65,771.28 per annum for the balance of 2000 and for each calendar year thereafter during the Employment Term, subject to the CPI Adjustment for calendar years subsequent to 2000, as hereinafter provided: (iii) An additional fee as Chairman at the rate of $25,555.55 per annum payable at the end of each calendar year. (b) During the Consulting Term the Company agrees to pay Brandt, in addition to Directors' fees and fees as a member of the Executive Committee and other Committees, if any, of the Board of Directors of the Company (such fees to be paid as if Brandt was not an employee of the Company and in the same amounts as non-employee directors are paid), a sum at the rate of $339,115.40 per annum, subject to the CPI Adjustment for calendar years subsequent to 2000, as hereinafter provided, plus a fee as Chairman at the rate of $28,500 per annum for each calendar year or portion thereof, subject to the CPI adjustment for calendar years subsequent to 2000, as hereinafter provided, plus the fee in Paragraph 3(a)(iii) through December 31, 2002. (c) During the Term the Company agrees to pay Brandt (i) an amount equal to one and one-half percent (1-1/2%) of the Company's pre-tax consolidated earnings, as hereinafter defined, in each calendar year (including the full 2000 calendar year) during the Employment Term hereof and the Consulting Term hereof, (hereinafter the amounts payable under this Paragraph 3(c) are collectively referred to as the "Profit Participation"). Such pre-tax consolidated earnings shall be fixed and determined by the independent certified public accountants regularly employed by the Company. Such independent certified public accountants, in ascertaining such pre-tax consolidated earnings, shall apply all accounting practices and procedures heretofore applied by the Company's independent certified public accountants in arriving at such annual pre-tax consolidated earnings as disclosed in the Company's annual statement for that year of profit and loss released to its stockholders. The determination by such independent certified public accountants shall be final, absolute and controlling upon the parties. Payment of such amount, if any is due, shall be made for each year by the Company to Brandt within thirty (30) days after such accountant shall have furnished such statement to the Company disclosing the Company's pre-tax consolidated earnings for such calendar year. The Company undertakes to use its reasonable efforts to cause said accountants to prepare and furnish such statements within one hundred thirty (130) days from the close of each such fiscal year and to cause said independent certified public accountants, concomitantly with the delivery of such statement by said accountants to it, to deliver a copy of such statement to Brandt. The Company shall not have any liability to Brandt arising out of any delays with respect to the foregoing. (d) The Board of Directors of the Company, upon the recommendation of the Compensation Committee of the Board of Directors, shall consider no later than May of each year the grant of a bonus ("Bonus") to Brandt based upon the performance of Brandt during the immediate preceding year during the Term. In determining whether to grant any such bonus and the amount thereof, consideration may be given to the performance of the Company in light of competitive and economic conditions. Notwithstanding the foregoing, the Company shall pay to Brandt the highest Bonus applicable for each calendar year ending December 31, commencing December 31, 2000, in the respective amounts hereinafter set forth, in the event the Company's pre-tax consolidated earnings for any year during the Term determined in accordance with Paragraph 3(c), meets or exceeds the respective amounts hereinafter set forth. If Pre-Tax Consolidated Annual Non-Cumulative Level of Earnings in Any Year Exceed Bonus Payable - --------------------------- ------------- $ 250,000 5,000 500,000 10,000 750,000 15,000 1,000,000 20,000 1,250,000 31,250 1,500,000 37,500 1,750,000 43,750 2,000,000 50,000 Over 2,000,000 $50,000 plus 2-1/2% of each full increment of $250,000 over $2,000,000, the total annual bonus not to exceed $130,429 (e.g., if $2,900,000, $50,000 plus 2-1/2% of $750,000 or $50,000 plus $18,750 = $68,750). The maximum of $130,429 payable hereunder shall be subject to the CPI Adjustment for years following 2000 as hereinafter provided. (e) Notwithstanding Paragraphs 3(c) and 3(d) of this Agreement, for purposes of Paragraphs 3(c) and 3(d) of this Agreement, there shall be excluded from the calculation of pre-tax consolidated earnings during the Term of this Agreement (i) the amount by which (x) any item or items of unusual or extraordinary gain in the aggregate exceeds 20% of the Company's net book value as at the end of the immediate preceding calendar year or (y) any item of unusual or extraordinary loss in the aggregate exceeds 20% of the Company's net book value as at the end of the immediate preceding calendar year, in each case in (x) and (y) above as determined in accordance with generally accepted accounting principles, and items of gain and loss shall not be netted against each other for purpose of the above 20% calculation, (ii) any effect of FASB 109 or similar promulgation, (iii) any direct effect on pre-tax consolidated earnings of write-offs of existing prepaid financing costs prior to the normal amortization schedule of such financings provided however that for the purposes of this Paragraph 3(e), such financing costs shall thereafter be amortized in accordance with such normal amortization schedule of such financings, or (iv) any contractual Bonuses and/or Profit Participations accrued or paid to Brandt and other employees. Each Bonus payment shall be made in accordance with the time provisions set forth in Paragraph 3(c). Notwithstanding the foregoing, the Board may, in any event, even if any of the aforesaid pre-tax consolidated earnings levels are not exceeded, grant Brandt the aforesaid Bonus or any portion thereof for any such year or any other bonus based on his performance. In the event Brandt is entitled to or is awarded a Bonus, the Company shall notify Brandt thereof no later than May 31 following such year and Brandt shall have the option of receiving such bonus in (i) cash, (ii) Common Stock and/or Class A Stock of the Company or (iii) cash and Common Stock and/or Class A Stock in such ratio as Brandt elects. Such election shall be made by Brandt by written notice to the Company and the Company shall pay said Bonus in the form elected by Brandt within fourteen (14) days after receipt of Brandt's written notice thereof. Upon Brandt's failure to make such election within sixty (60) days after notice to Brandt from the Company of the Bonus, such Bonus shall be paid in cash to Brandt on the day following the expiration of said sixty (60) day period. In the event Brandt elects to receive any such Bonus in Common Stock and/or Class A Stock of the Company, the same shall be valued at the latest closing price of such Common Stock and/or Class A Stock, as the case may be, on (i) the American Stock Exchange (or other principal stock exchange on which the Company's Common Stock and/or Class A Stock is listed or, (ii) if not so listed, on the Nasdaq National Market System ("NMS") or any comparable system if listed thereon, or (iii) if not quoted on the NMS or a comparable system, at the mean between the average of the high and low bid and asked prices on the over-the-counter market) on the date of Brandt's election. If there is no trade on such date on any such exchange or market, then the closing price on the date on which it last traded. (f) The Company may make appropriate deductions from the said payments required to be made in this Paragraph 3 to Brandt, to comply with all governmental withholding requirements. The payments provided in Paragraphs 3(a) and (b) shall be made in equal weekly installments, or as otherwise may be the practice of the Company in making similar payments, but not less often than once monthly. The payments provided to be made to Brandt pursuant to said Paragraphs 3(a) and (b), excluding Paragraph 3(a)(iii), shall each be appropriately adjusted upward ("CPI Adjustment") for inflation at the beginning of each calendar year commencing in 2001 based on the United States Department of Labor Bureau of Labor Statistics, Consumer Price Index, United States City Average, all items (2000=100). The CPI Adjustment shall be paid retroactively when determined, for payments already made in the applicable calendar year. Brandt shall also be entitled to reimbursement from the Company for the amount of the social security payments payable by Brandt based on amounts paid to him under this Agreement to the extent such social security payments would have been made by the Company if the fees under Paragraphs 3(a)(ii) and 3(b) were paid as a salary. Any such reimbursement payable by the Company hereunder shall be grossed up to take into account and reimburse Brandt for any tax consequences resulting therefrom. This Agreement shall not be deemed abrogated or terminated if the Company, in its discretion, shall determine to increase the compensation of Brandt for any period of time, or if Brandt shall accept such increase. (g) If, during the Term of this Agreement, Brandt shall be prevented from performing or be unable to perform, or fail to perform his duties by reason of illness or any other incapacity or disability, the payments and/or benefits provided in Paragraphs 3 and 4 and elsewhere in this Agreement to be made or provided to Brandt, shall continue to be made or provided to Brandt for the balance of the Term, without any reduction whatsoever, at the same times, in the same manner, and in the same amounts as provided in Paragraphs 3 and 4 and elsewhere in this Agreement. If Brandt shall die during the Term, the Company shall pay to Brandt's widow and/or issue, as provided below in this paragraph, an amount equal to the aggregate payments provided to be made under Paragraphs 3 (a), (b), (c) and (d) that otherwise would have been payable to Brandt during the Term but for his death, for the balance of the Term through December 31, 2010, without any reduction whatsoever. In calculating the respective payments hereunder to be made under Paragraphs 3(c) and 3(d), such amounts shall respectively equal (i) the highest Profit Participation provided for in Paragraph 3(c) hereof and (ii) the highest Bonus payment provided for in Paragraph 3(d) hereof, received in each case by Brandt during the seven (7) year period preceding his death (including for this calculation any payments of Profit Participation and Bonus paid to Brandt under any prior employment agreement). Such payments of the amounts provided in Paragraphs 3(a), (b), (c) and (d) shall be made at the same times, in the same manner, and in the same amounts as provided in Paragraphs 3(a), (b), (c) and (d) as follows: fifty percent (50%) to Brandt's widow, if she shall survive him, and in such event the remaining fifty percent (50%) shall be equally divided among his surviving issue, per stirpes and not per capita. In the event that Brandt's wife shall predecease him or, having survived him, shall die during the balance of the Term ending December 31, 2010, the entire amounts thereafter payable during the balance of the Term shall be payable as provided in Paragraphs 3(a), (b), (c) and (d) in equal shares to his surviving issue, per stirpes and not per capita. 4. (a) The Company will continue to furnish to Brandt (provided Brandt is insurable) a policy of life insurance upon Brandt's life, the term of which shall continue during the Term through December 31, 2010. Such policy shall provide that Brandt, upon the expiration of said policy, shall have a conversion right privilege, if same is available. Said policy shall provide for a death benefit of $250,000 payable as follows: Sixty (60%) percent of the death benefit of such policy to Helen K. Brandt, his wife, and in such event the remaining forty (40%) percent of such death benefit shall be equally divided among his surviving issue, per stirpes and not per capita. In the event that Brandt's wife shall predecease him, then such policy shall provide that the entire death benefit payable thereunder shall be payable in equal shares to his surviving issue, per stirpes and not per capita. If Brandt shall not be insurable, or if the amount of such insurance is less than $250,000, then, upon Brandt's death during the Term hereof, the Company shall in every event, pay to Brandt's said widow and/or issue as provided above in this Paragraph 4(a), the amount of such uninsured portion within 30 days after Brandt's said death. For example, if the amount of insurance is $130,000, then $120,000 shall be paid by the Company to Brandt's said widow and/or issue within 30 days after Brandt's death. (b) The Company shall also provide to Brandt and his wife during the Term, at the Company's expense, medical insurance coverage for Brandt and his wife at least at the same levels as in effect for him on the date of the execution of this Agreement, as well as any other group insurance plan, hospitalization plan (subject to Medicare reimbursements), medical service plan or any other benefit plan which Company may have in effect during the Term. Included in such plans and benefits that the Company will make available or pay to Brandt are travel and accident insurance and Christmas bonuses to the extent the same are made available or paid to the senior executives of the Company. Brandt shall also be entitled to any other insurance and other employee benefits, including life insurance, which are available to senior executives of the Company. Notwithstanding the foregoing, Brandt acknowledges and agrees that (i) Brandt is accepting $50,000 of group term life insurance in place of the larger amount of group term life that Brandt otherwise would be entitled to and (ii) Brandt is not entitled to participate in the Company's existing pension plan ("Pension Plan") and the Company agrees to reimburse Brandt for any and all tax liabilities relating to (x) said Pension Plan and (y) previous payments to Brandt from said Pension Plan, resulting from Brandt entering into this or prior employment agreements and/or becoming an employee of the Company. Any such reimbursement by the Company shall be grossed up to take into account and reimburse Brandt for any tax consequences resulting from such reimbursement. The Company shall also continue to pay for and/or reimburse Brandt or his widow for premiums paid (similarly grossed up for tax purposes) for second to die life insurance policy on their lives which is presently in place. Brandt's widow shall also be entitled to receive health benefits as and to the extent provided by resolution of the Board of Directors adopted on September 23, 1999. 5. The Company agrees that during the Term hereof Brandt shall be provided with appropriate secretarial and administrative support, office space and office equipment in connection with his services under this Agreement. The Company shall also reimburse Brandt for all out-of-pocket expenses incurred by him in furtherance of the business and activities of the Company, including travel, board and hotel expenses. During the Term hereof, Brandt shall be entitled to reasonable periods of sick-leave in each year and vacations not in excess of a total of six (6) weeks in any one year. The Company shall also furnish Brandt with a car and driver, as may be requested by Brandt during the Term hereof. 6. A waiver by either party of any of the terms and conditions of this Agreement in any instance shall be in writing and shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof. 7. Any and all notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given when deposited in the United States mails, certified or registered, addressed as follows: To Brandt: Richard Brandt P. O. Box 839 Tesuque, New Mexico 87574 To Company: Trans-Lux Corporation 110 Richards Avenue Norwalk, Connecticut 06854 Att: CEO Either party may, by written notice to the other, change the address to which notices are to be addressed. 8. The Company may itself, or through any of its subsidiaries or affiliates, make payment to Brandt of the compensation due him hereunder, provided, however, that if such payment be made by a company other than the Company, that fact shall not relieve the Company of its obligations hereunder, except with respect to the extent of the amounts so paid. 9. The provisions hereof shall be binding upon and shall inure to the benefit of Brandt, his heirs, executors and administrators and the Company and its successors. During the Term of this Agreement, if the Company shall at any time be consolidated or merged into any other corporation, or if substantially all of the assets of the Company are transferred to any other corporation, the provisions of this Agreement shall be binding upon and inure to the benefit of the corporation resulting in such merger, or to which such assets shall have been transferred, and this provision shall apply in the event of any subsequent merger, consolidation or transfer. 10. Whenever in this Agreement the term "issue" is used it shall mean natural issue except in the case of Brandt's grandchildren issue shall include grandchildren legally adopted by Brandt's natural children. 11. This Agreement contains all the understandings and agreements arrived at between the parties in relation to the subject matter and supersedes as of September 1, 2000 the employment agreement between the parties dated as of July 1, 1998. Notwithstanding this amendment and restatement of Brandt's employment agreement with the Company dated July 1, 1998 (i) the right of Brandt to change designees was waived and deleted as of July 1, 1998 and (ii) all rights and benefits which accrued or accrue to Brandt on or prior to September 1, 2000 under said July 1, 1998 employment agreement shall not be abrogated by this amendment and restatement and shall remain in full force and effect and this employment agreement shall not affect any agreement other than said July 1, 1998 employment agreement between Brandt and the Company including but not limited to any insurance agreements. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 12. This Agreement shall not be varied, altered, modified, changed or in any way amended, except by an instrument in writing, executed by the parties hereto, or their legal representatives. IN WITNESS WHEREOF, Brandt has executed and the Company has caused its Vice Chairman, on its behalf, to execute this Agreement, on the day and year first above written. TRANS-LUX CORPORATION /s/ Vic Liss By:------------------------------ Vice Chairman /s/ Richard Brandt ------------------------------- Richard Brandt EX-27 3 0003.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF OPERATIONS FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS ON FORM 10-Q. 1,000 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 3,190 1,250 10,578 0 6,605 22,294 131,434 46,753 113,341 10,686 31,454 2,740 0 0 22,628 113,341 32,084 50,157 22,982 33,101 0 0 4,350 (1,128) (507) (621) 0 0 0 (621) (0.49) (0.49)
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