SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_____________________________
Date of report (Date of earliest event reported) January 29, 1998
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PRINCETON VIDEO IMAGE, INC.
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(Exact Name of Registrant as Specified in Charter)
New Jersey 000-23415 22-3062052
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(State or Other Juris- (Commission (I.R.S. Employer
diction of Incorporation) File Number) Identification No.)
15 Princess Road, Lawrenceville, New Jersey 08648
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (609) 912-9400
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(Former Name or Former Address, If Changed Since Last Report)
Item 5. Other Events.
At a meeting held on January 29, 1998, the Board of Directors
of the Registrant adopted amendments to the Registrant's By-laws to
create the office of Chief Financial Officer.
The Registrant and Lawrence Epstein have entered into an
Employment Agreement dated as of February 5, 1998 (the
"Agreement"), pursuant to which Mr. Epstein will serve as Chief
Financial Officer and Vice President of Finance of the Registrant
until February 5, 1999, subject to automatic annual extensions.
Mr. Epstein was also elected by the Registrant's Board of Directors
to the office of Treasurer of the Registrant. Brown F Williams,
who resigned as the Treasurer of the Registrant, will continue to
serve as the Chairman of the Board of the Registrant.
On February 6, 1998 the Registrant issued the following press
release relating to the Agreement:
"PRINCETON VIDEO IMAGE, INC. NAMES LAWRENCE EPSTEIN AS
NEW CHIEF FINANCIAL OFFICER
"Lawrenceville, NJ, February 6, 1998 -- Princeton Video Image,
Inc. (Nasdaq: PVII) today announced that it has named Lawrence
Epstein to the new positions of Chief Financial Officer and Vice
President of Finance.
"Mr. Epstein, 43, is currently Chief Financial Officer and Vice
President of Finance and Administration for Primestar Partners, LP,
the nation's second largest Direct Broadcast Satellite provider,
where he is responsible for overall financial management as well as
strategic and long-range planning. Prior to his tenure at Primestar,
Mr. Epstein held several senior financial positions with a number of
CBS, Inc. (NYSE: CBS) units, including the CBS Television Network,
CBS News and CBS owned-and-operated stations.
"Brown Williams, Chairman of Princeton Video Image, Inc.
commented, 'Larry's exceptional background makes him highly qualified
for his new position. His twenty years' experience in the TV
industry, combined with his track record of helping a small company
become a dominant player in the industry, makes Larry an extremely
valuable addition to our management team.'
"Princeton Video Image, Inc. developed and is marketing a
real-time video insertion system that, through patented pattern
recognition technology places computer-generated electronic
advertising images into television broadcasts of sporting and other
events. As seen most recently in the international broadcast of
SuperBowl XXXII, these electronic images can range from simple
corporate names or logos to sophisticated, 3-D animated productions."
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
The following Exhibits are furnished in accordance with
the provisions of Item 601 of Regulation S-K.
3.1 By-laws, as amended.
10.1 Employment Agreement, dated as of February 5, 1998, between
the Registrant and Lawrence Epstein.
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SIGNATURE
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 hereunto duly authorized.
Princeton Video Image, Inc.
By: /s/ Brown F Williams
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Brown F Williams
Chairman of the Board
Date: February 11, 1998
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EXHIBIT INDEX
Exhibit
No. Description of Exhibit
3.1 By-laws, as amended.
10.1 Employment Agreement, dated as of February 5, 1998, between
the Registrant and Lawrence Epstein.
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EXHIBIT 3.1
BY-LAWS
OF
PRINCETON VIDEO IMAGE, INC.
_________________________________________________________________
ARTICLE I - OFFICES
The registered office of the Corporation shall be at such place
in the State of New Jersey as shall be designated by the Board of
Directors (hereinafter called the "Board").
The Corporation may also have offices at such other places
within or without the State of New Jersey as the Board may from time
to time determine or the business of the Corporation may require.
ARTICLE II - SHAREHOLDERS
1. PLACE OF MEETINGS.
Meetings of shareholders shall be held at the principal
office of the Corporation or at such place within or without the
State of New Jersey as the Board shall authorize.
2. ANNUAL MEETING.
The annual meeting of the shareholders shall be held at
such time, date and place as the Board shall determine by resolution,
when the shareholders shall elect a Board and transact such other
business as may properly come before the meeting.
3. SPECIAL MEETINGS.
Special meetings of the shareholders may be called by the
Board or by the president and shall be called by the president or the
secretary at the request in writing of a majority of the Board or at
the request in writing by any shareholder owning shares of the
Corporation's capital stock. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at a special
meeting shall be confined to the purposes stated in the notice.
4. NOTICE OF MEETINGS OF SHAREHOLDERS.
Written notice of the time, place and purpose or purposes
of every meeting of shareholders shall be given not less than 10 nor
more than 60 days before the date of the meeting, either personally
or by mail, to each shareholder of record entitled to vote at the
meeting.
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When a meeting is adjourned to another time or place, it
shall not be necessary, unless the by-laws otherwise provide, to give
notice of the adjourned meeting if the time and place to which the
meeting is adjourned are announced at the meeting at which the
adjournment is taken and at the adjourned meeting only such business
is transacted as might have been transacted at the original meeting.
However, if after the adjournment the Board fixes a new record date
for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record on the new record date entitled
to notice.
5. WAIVER OF NOTICE OR OF LAPSE OF TIME.
Notice of meeting need not be given to any shareholder who
signs a waiver of notice, in person or by proxy, whether before or
after the meeting. The attendance of any shareholder at a meeting,
in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of such meeting, shall constitute a
waiver of notice by him.
Whenever shareholders are authorized to take any action
after the lapse of a prescribed period of time, the action may be
taken without such lapse if such requirement is waived in writing, in
person or by proxy, before or after the taking of such action, by
every shareholder entitled to vote thereon as at the date of the
taking of such action.
6. ACTION BY SHAREHOLDERS WITHOUT A MEETING.
Any action required or permitted to be taken at a meeting
of shareholders by statute, the certificate of incorporation, or
by-laws, other than the annual election of directors, may be taken
without a meeting upon the written consent of shareholders who would
have been entitled to cast the minimum number of votes which would be
necessary to authorize such action at a meeting at which all
shareholders entitled to vote thereon were present and voting. The
written consents of the shareholders consenting thereto shall be
filed with the minutes of proceedings of shareholders.
7. QUORUM OF SHAREHOLDERS.
Unless otherwise provided in the certificate of
incorporation, the holders of shares entitled to cast a majority of
the votes at a meeting shall constitute a quorum at such meeting.
The shareholders present in person or by proxy at a duly organized
meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less
than a quorum. Less than a quorum may adjourn a meeting.
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Whenever the holders of any class or series of shares are
entitled to vote separately on a specified item of business, the
provisions of the preceding paragraph shall apply in determining the
presence of a quorum of such class or series for the transaction of
such specified item of business.
ARTICLE III - DIRECTORS
1. BOARD OF DIRECTORS.
Subject to any provision in the certificate of
incorporation, the business of the Corporation shall be managed by
its Board, each of whom shall be at least 18 years of age.
2. NUMBER OF DIRECTORS.
The authorized number of the directors of the Corporation
shall be established from time to time by the Board and shall not be
less than one (1) nor more than seven (7).
3. TERM OF DIRECTORS.
The directors named in the certificate of incorporation
shall hold office until the first annual meeting of shareholders, and
until their successors shall have been elected and qualified. At the
first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office
until the next succeeding annual meeting, except as otherwise
required by the certificate of incorporation or the by-laws in the
case of classification of directors. Each director shall hold office
for the term for which he is elected and until his successor shall
have been elected and qualified. A director may resign by written
notice to the Corporation. The resignation shall be effective upon
receipt thereof by the Corporation or at such subsequent time as
shall be specified in the notice of resignation.
4. VACANCIES AND NEWLY CREATED DIRECTORSHIPS.
Any directorship not filled at the annual meeting and any
vacancy, however caused, occurring in the Board may be filled by the
affirmative vote of a majority of the remaining directors even though
less than a quorum of the Board, or by a sole remaining director. A
director so elected by the Board shall hold office until the next
succeeding annual meeting of shareholders and until his successor
shall have been elected and qualified.
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When one or more directors shall resign from the Board
effective at a future date, a majority of the directors then in
office including those who have so resigned, shall have power to fill
such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each director
so chosen shall hold office as herein provided in the filling of
other vacancies.
Any directorship to be filled by reason of an increase in
the number of directors shall be filled by election at an annual
meeting or at a special meeting of shareholders called for that
purpose, unless the certificate of incorporation or a by-law adopted
by the shareholders authorizes the Board to fill such directorship.
A director elected by the Board to fill any such directorship shall
hold office until the next succeeding annual meeting of shareholders
and until his successor shall have been elected and qualified.
If by reason of death, resignation or other cause the
Corporation has no directors in office, any shareholder or the
executor or administrator of a deceased shareholder may call a
special meeting of shareholders for the election of directors and,
over his own signature, shall give notice of said meeting in
accordance with the by-laws.
5. REMOVAL OF DIRECTORS.
One or more or all of the directors of the Corporation may
be removed for cause by the shareholders by the affirmative vote of
the majority of the votes cast by the holders of share entitled to
vote for the election of directors.
6. QUORUM OF BOARD OF DIRECTORS AND COMMITTEES;
ACTION OF DIRECTORS WITHOUT A MEETING.
A majority of the entire Board, or of any committee
thereof, shall constitute a quorum for the transaction of business,
unless the certificate of incorporation shall provide that a greater
or lesser number shall constitute a quorum, which in no case shall be
less than the greater of two persons or one-third of the entire Board
or committee, except that when a Board of one director is authorized,
one director shall constitute a quorum. Any action required or
permitted to be taken pursuant to authorization voted at a meeting of
the Board or any committee thereof, may be taken without a meeting
if, prior or subsequent to such action, all members of the Board or
of such committee, as the case may be, consent thereto in writing and
such written consents are filed with the minutes of the proceedings
of the Board or committee. Such consent shall have the same effect
as a unanimous vote of the Board or committee for all purposes.
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7. PLACE OF BOARD MEETINGS.
Meetings of the Board may be held either within or without
the State of New Jersey.
8. REGULAR ANNUAL MEETING.
A regular annual meeting of the Board shall be held
immediately following the annual meeting of shareholders at the place
of such annual meeting of shareholders.
9. NOTICE OF MEETINGS OF THE BOARD; ADJOURNMENT.
Regular meetings of the Board may be held with or without
notice. Special meetings of the Board shall be held upon notice to
the directors and may be called by the president upon three days'
notice to each director either personally or by mail or by wire.
Special meetings shall be called by the president or by the secretary
in a like manner on written request of two directors. Notice of any
meeting need not be given to any director who signs a waiver of
notice, whether before or after the meeting. The attendance of any
director at a meeting without protesting prior to the conclusion of
the meeting the lack of notice of such meeting shall constitute a
waiver of notice by him. Neither the business to be transacted at,
nor the purpose of, any meeting of the Board need be specified in the
notice or waiver of notice of such meeting. Notice of an adjourned
meeting need not be given if the time and place are fixed at the
meeting adjourning and if the period of adjournment does not exceed
ten days in any one adjournment.
A majority of the directors present, whether or not a
quorum is present, may adjourn any meeting to another time and place.
Notice of the adjournment shall be given all directors who were
absent at the time of the adjournment and, unless such time and place
are announced at the meeting, to the other directors.
10. EXECUTIVE AND OTHER COMMITTEES.
The Board, by resolution adopted by a majority of the
entire Board, may designate from among its members an executive
committee and other committees, each consisting of three or more
directors. Each such committee shall serve at the pleasure of the
Board.
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11. INDEMNIFICATION.
A director shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director; provided that this sentence shall not
eliminate or limit the liability of a director (i) for any breach of
his duty of loyalty to the Corporation or its shareholders, (ii) for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law, (iii) under Section
14A:6-12 of the New Jersey Business Corporation Act, or (iv) for any
transaction from which the director derives an improper personal
benefit. No amendment to or repeal of this Section Eleven shall
apply to or have any effect on the liability or alleged liability of
any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment.
12. COMPENSATION.
No compensation shall be paid to directors, as such, for
their services, but by resolution of the Board a fixed sum and
expenses for actual attendance, at each regular or special meeting of
the Board may be authorized. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in
any other capacity and receiving compensation therefor.
ARTICLE IV - OFFICERS
1. OFFICES, ELECTION, TERM, SALARIES, SECURITY.
The officers of the Corporation shall be a chairman of the
Board, a chief executive officer, a chief financial officer, a chief
operating officer, a president, a secretary and a treasurer. In
addition, the Board may elect additional officers such as one or more
vice presidents and such assistant secretaries and assistant
treasurers as the Board may deem proper. The officers shall be
elected or appointed by the Board.
Any two or more offices may be held by the same person.
Any officer elected or appointed as herein provided shall
hold office until the next regular meeting of the Board following the
annual meeting of shareholders or until a successor is elected or
appointed and has qualified subject to earlier termination by removal
or resignation.
All officers of the Corporation, as between themselves and
the Corporation, shall have such authority and perform such duties in
the management of the Corporation as may be provided in
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the by-laws, or as may be determined by resolution of the Board not
inconsistent with the by-laws.
The salaries of all officers shall be fixed by the Board.
In case the Board shall so require, any officer or agent of
the Corporation shall execute to the Corporation a bond in such sum
and with such surety or sureties as the Board may direct, conditioned
upon the faithful performance of his duties to the Corporation and
including responsibility for negligence and for the accounting for
all property, funds or securities of the Corporation which may come
into his hands.
2. DELEGATION OF DUTIES.
In case of the absence of any officer of the Corporation,
or for any other reason that may seem sufficient to the Board, the
directors may, by a majority vote of the Board, delegate the powers
and duties of such officer, for the time being, to any other officer,
or to any director.
3. REMOVAL AND RESIGNATION OF OFFICERS; FILLING OF
VACANCIES.
Any officer elected or appointed by the Board may be
removed by the Board with or without cause. An officer elected by
the shareholders may be removed, with or without cause, only by vote
of the shareholders but his authority to act as an officer may be
suspended by the Board for cause.
An officer may resign by written notice to the Corporation.
The resignation shall be effective upon receipt thereof by the
Corporation or at such subsequent time as shall be specified in the
notice of resignation.
Any vacancy occurring among the officers, however caused,
may be filled by election or appointment by the Board for the
unexpired term.
4. CHAIRMAN OF THE BOARD.
The chairman of the Board shall preside at all meetings of
the shareholders and of the Board. He shall have general and active
management of the business of the Corporation, shall oversee the
fulfillment of the Corporation's mission, and shall see that all
orders and resolutions of the Board are carried into effect, subject,
however, to the right of the directors to delegate any specific
powers, except such as may be by statute exclusively conferred on the
chairman of the Board, to any other officer or
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officers of the Corporation. He shall have the authority to execute
bonds, mortgages and other contracts under the seal of the
Corporation except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer
or agent of the Corporation. He shall have the general powers and
duties of supervision and management usually vested in an executive
officer and the chairman of the board of a corporation. He shall
present a report of the condition of the business of the Corporation
at each annual meeting of the shareholders and the Board. He shall
perform such other duties as may from time to time be requested by
the Board.
5. CHIEF EXECUTIVE OFFICER.
The chief executive officer shall, in the absence of the
chairman of the Board, preside at all meetings of the shareholders
and of the Board. Acting under the direction of the Board and the
chairman of the Board, he shall have general and active management of
the business of the Corporation, shall oversee the marketing,
business and strategic development efforts of the Corporation and
shall see that all orders and resolutions of the Board are carried
into effect, subject, however, to the right of the directors to
delegate any specific powers to any other officer or officers of the
Corporation. He shall have the authority to executive bonds,
mortgages and other contracts under the seal of the Corporation
except where the signing and execution thereof shall be expressly
designated by the Board to some other officer or agent of the
Corporation. He shall have the general powers and duties of
supervision and management usually vested in the chief executive
officer of a corporation. He shall perform such other duties as may
from time to time be requested by the Board or by the chairman of the
Board.
6. CHIEF FINANCIAL OFFICER
A chief financial officer, if one has been appointed, shall
be vested with all of the powers, and shall be required to perform
all of the duties, as may be properly assigned by the Board, the
chairman of the Board, the chief executive officer or the president.
7. PRESIDENT.
The president shall be vested with all of the powers, and
shall be required to perform all of the duties, as may be properly
assigned by the Board or the chairman of the Board.
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8. CHIEF OPERATING OFFICER.
A chief operating officer, if one has been appointed, shall
be vested with all of the powers, and shall be required to perform
all of the duties, as may be properly assigned by the Board, the
chairman of the Board, the chief executive officer or the president.
9. VICE-PRESIDENTS.
During the absence or disability of the president, the
vice-president, or if there are more than one, the executive
vice-president shall have all the powers and functions of the president.
Each vice-president shall perform such other duties as the Board
shall prescribe.
10. SECRETARY.
The secretary shall attend all meetings of the Board and of
the shareholders; record all votes and minutes of all proceedings in
a book to be kept for that purpose; give or cause to be given notice
of all meetings of shareholders and of special meetings of the Board;
keep in safe custody the seal of the Corporation and affix it to any
instrument when authorized by the Board; when required, prepare a
list of shareholders or cause to be prepared and available at each
meeting of shareholders entitled to vote thereat, indicating the
number of shares of each respective class held by each; keep all the
documents and records of the Corporation as required by law or
otherwise in a proper and same manner; and perform such other duties
as may be prescribed by the Board.
11. ASSISTANT-SECRETARIES.
During the absence or disability of the secretary, the
assistant-secretary, or if there are more than one, the one so
designated by the secretary or by the Board, shall have all the
powers and functions of the secretary.
12. TREASURER.
The treasurer shall: have the custody of the corporate
funds and securities; keep full and accurate accounts of receipts and
disbursements in the corporate books; deposit all money and other
valuables in the name and to the credit of the Corporation in such
depositories as may be designated by the Board; disburse the funds of
the Corporation as may be ordered or authorized by the Board and
preserve proper vouchers for such disbursements; render
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to the president and Board at the regular meetings of the Board, or
whenever they require it, an account of all his transactions as
treasurer and of the financial condition of the Corporation; render
a full financial report at the annual meeting of the shareholders if
so requested; be furnished by all corporate officers and agents at
his request, with such reports and statements as he may require as to
all financial transactions of the Corporation; and perform such other
duties as are given to him by the by-laws or as from time to time are
assigned to him by the Board, the chairman of the Board, the chief
executive officer or the president.
13. ASSISTANT-TREASURER.
During the absence or disability of the treasurer, the
assistant-treasurer, or if there are more than one, the one so
designated by the secretary or by the Board, shall have all the
powers and functions of the treasurer.
ARTICLE V - CERTIFICATES FOR SHARES AND DIVIDENDS
1. CERTIFICATES REPRESENTING SHARES.
The shares of the Corporation shall be represented by
certificates signed by, or in the name of the Corporation by, the
chairman or vice-chairman of the Board, or the president or a
vice-president, and by the treasurer or an assistant-treasurer, or the
secretary or an assistant-secretary of the Corporation and shall be
sealed with the seal of the Corporation or a facsimile thereof.
2. LOST OR DESTROYED CERTIFICATES.
The Board may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore
issued by the Corporation, alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming
the certificate to be lost or destroyed. When authorizing such issue
of a new certificate or certificates, the Board may, in its
discretion and as a condition precedent to the issuance thereof,
require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in
such manner as it shall require and/or give the Corporation a bond in
such sum and with such surety or sureties as it may direct as
indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost or
destroyed.
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3. TRANSFER OF SHARES.
Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority
to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, and cancel the old
certificate. Every such transfer shall be entered on the transfer
book of the Corporation which shall be kept at its principal office.
No transfer shall be made within ten days next preceding the annual
meeting of shareholders.
The Corporation shall be entitled to treat the holder of
record of any share as the holder in fact thereof and, accordingly,
shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person whether or not
it shall have express or other notice thereof, except as expressly
provided by New Jersey statutes.
4. CLOSING TRANSFER BOOKS.
The Board shall have the power to close the share transfer
books of the Corporation for a period of not more than ten days
during the thirty-day period immediately preceding (a) any
shareholders' meeting, or (b) any date upon which shareholders shall
be called upon to or have a right to take action without a meeting,
or (c) any date fixed for the payment of a dividend or any other form
of distribution, and only those shareholders of record at the time
the transfer books are closed, shall be recognized as such for the
purpose of (a) receiving notice of or voting at such meeting, or (b)
allowing them to take appropriate action, or (c) entitling them to
receive any dividend or other form of distribution.
5. DIVIDENDS.
Subject to the provisions of the certificate of
incorporation and to applicable law, the Corporation may, from time
to time, by action of its Board, declare and pay dividends or make
other distribution on its outstanding shares in cash or in its own
shares or in its bonds or other property, including the shares or
bonds of other corporations, except when the Corporation is insolvent
or would thereby be made insolvent.
Dividends may be declared or paid and other distributions
may be made out of surplus only, except as otherwise provided by
statute.
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ARTICLE VI - CORPORATE SEAL
The seal of the Corporation shall be circular in form and
bear the name of the Corporation, the year of its organization and
the words "Princeton Electronic Billboard, Inc., Corporate Seal 1990
New Jersey." The seal may be used by causing it to be impressed
directly on the instrument or writing to be sealed, or upon adhesive
substance affixed thereto. The seal on the certificates for shares
or any corporate obligation for payment of money may be a facsimile,
engraved or printed.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall begin on the first
day of July of each year.
ARTICLE VIII - BY-LAW CHANGES
AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.
Except as otherwise provided in the certificate of
incorporation, the by-laws may be amended, repealed or adopted by
vote of the holders of the shares at the time entitled to vote in the
election of any directors. By-laws may also be amended, repealed or
adopted by the Board but any by-law adopted by the Board may be
amended by the shareholders entitled to vote thereon.
If any by-law regulating an impending election of directors
is adopted, amended or repealed by the Board, there shall be set
forth in the notice of the next meeting of shareholders for the
election of directors the by-law so adopted, amended or repealed,
together with a concise statement of the changes made.
Dated: January 29, 1998
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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of
February 5, 1998, by and between Princeton Video Image, Inc., a New
Jersey corporation (the "Company"), and Lawrence Epstein (the
"Employee").
WHEREAS, the Company and the Employee wish to enter into an
agreement whereby the Employee shall be employed by the Company as
its Vice President, Finance, and Chief Financial Officer, as set
forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as
follows:
1. Term of Employment. Subject to the terms and conditions
hereof, the Company will employ the Employee, and the Employee will
serve the Company, as Vice President, Finance, and Chief Financial
Officer, or such other senior executive position or positions as the
Company may request from time to time, for a period beginning on the
date hereof and terminating on the first anniversary of such date
(the "Initial Term"); provided, however, that from the date of this
Agreement until a date no later than May 1, 1998, the Employee will
provide services on a part time basis no less than one day per week
(at a daily rate of $576.92 per day), except for weeks when the
Employee is unable to provide such services due to illness in his
family or travel; and provided, further, that the Employee's full
time employment with the Company shall commence not later than May 2,
1998. Following the expiration of the Initial Term and of each
extension period referred to in this sentence, the term of this
Agreement automatically shall be extended for a period of one (1)
year thereafter (such term, as it may be shortened by termination of
the Employee's employment hereunder pursuant to the provisions hereof
or extended, the "Term of Employment").
2. Duties. During the Term of Employment, the Employee will
serve as Chief Financial Officer, subject to the terms of this
Agreement and the direction and control of the Board of Directors of
the Company, its Chairman and its Chief Executive Officer ("CEO").
The primary location of the Employee's employment hereunder shall be
the headquarters of the Company in Lawrenceville, New Jersey. In his
position as Vice President, Finance, and Chief Financial Officer of
the Company, the Employee shall be responsible for overseeing and
managing all financial aspects of the Company, including negotiating
licensing agreements, finance, accounting, banking, treasury, SEC
reporting, management information systems and M&A. More
particularly, in such positions, the Employee shall be responsible
for:
(a) Providing sound financial leadership to the
Company and functioning as a full member of the executive team
developing and executing business strategy;
(b) Working with the marketing and sales team to
develop short and long term revenue forecasts to form the basis for
capital investments, operations budgeting (including SG&A, product
design, development and manufacturing) and overall business
forecasting;
(c) Overseeing all financial systems to ensure
effective operations, controls, MIS reporting, SEC reporting and
business growth;
(d) Participating in negotiation of licensing
arrangements with all parties, working in conjunction with the
Company's sales and marketing organization and legal
<PAGE>
counsel, while ensuring the execution of comprehensive due diligence
and management of contracts, partnering arrangements and mergers and
acquisitions;
(e) Leading, managing, training and recruiting a
high-caliber finance team, as appropriate;
(f) Managing the cash-flow position of the Company,
and improving credit, collection and purchasing policies and payment
schedules, as deemed appropriate;
(g) Functioning as the liaison with the Company's
outside auditors on annual reports and audits; and
(h) Developing and maintaining effective Wall Street
relationships.
The Employee will hold, in addition to the offices of Vice
President, Finance, and Chief Financial Officer the Company, such
other offices in the Company to which he may be appointed or assigned
from time to time by the Board of Directors of the Company and will
discharge such duties in connection therewith. Once full time
employment has begun, the Employee shall devote all of his business
time to the performance of his duties hereunder, provided, that the
Employee shall not be precluded from serving as a member of up to two
boards of directors or advisory boards of companies or organizations
so long as such service does not violate the provisions of Section 9
of this Agreement or interfere with the performance of the Employee's
duties hereunder.
3. Compensation. The Company will, during the Term of
Employment but only after full time employment has begun, pay to the
Employee as compensation for the performance of his duties and
obligations hereunder an initial base salary at the rate of $150,000
per annum ("Salary"), payable in equal semi-monthly installments.
Such Salary shall be reviewed annually by the Board of Directors of
the Company in accordance with the Company's compensation program
solely for the purpose of determining increases. During the Term of
Employment but only after full time employment has begun, the
Employee shall be eligible to receive a bonus, to be awarded at the
sole discretion of the Board of Directors of the Company, upon the
attainment of stated goals and objectives for the Employee to be set
by the Compensation Committee of the Board after consultation with
the Employee.
4. Other Benefits. During the Term of Employment:
(a) The Employee shall be entitled to participate in
employee benefit plans and programs of the Company to the extent that
his position, tenure, salary, age, health and other qualifications
make him eligible to participate. The Company does not guarantee the
adoption or continuance of any particular employee benefit plan or
program during the Term of Employment, and the Employee's
participation in any such plan or program shall be subject to the
provisions, rules, regulations and laws applicable thereto; provided,
however, that the Employee shall be entitled to health and hospital
insurance benefits consistent with the past practices of the Company
in effect with respect to Company personnel generally.
(b) While employed hereunder, the Employee shall be
entitled to vacation benefits consistent with the past practices of
the Company in effect with respect to Company personnel generally,
plus one additional week per year. Such vacation may be taken by the
Employee at such times as do not unreasonably interfere with the
business of the Company. The accumulation of annual vacation time
earned but not taken will be in accordance with the Company policy
guidelines. Additional vacation will be earned in accordance with
Company policy.
(c) Within thirty days of the date of this Agreement, the
Company shall grant to the Employee a stock option, pursuant to the
Company's 1993 Stock Option Plan (the "Plan"), to
<PAGE>
purchase 100,000 shares of Common Stock of the Company ("Common
Stock") with an exercise price equal to the fair market value of the
shares on the day this Agreement is signed. Such option shall be for
a term of ten years, subject to earlier termination ninety days after
termination of Employee's employment (or such later date after such
termination as is as provided in the Plan or Stock Option Grant
Agreement), and shall be in the form of, and on such terms and
conditions as provided in, the Company's standard form of Stock
Option Grant Agreement in effect as of the date of this Agreement.
Such option grant shall provide, on condition that the Employee is
employed by the Company on the relevant vesting dates, that such
options shall vest and become exercisable over a three year period at
the rate of 1/36 for each calendar month of Employee's employment
with the Company, beginning with the first day on which the
Employee's full time employment begins.
(d) The stock option grant agreement for the options
described in Section 4(c) of this Agreement will also provide that
the applicable number of all unvested options will become exercisable
immediately upon a merger, consolidation, acquisition of property or
stock, reorganization (other than a mere reincorporation or the
creation of a holding company) or liquidation of the Company, as a
result of which the shareholders of the Company receive cash, stock
or other property in exchange for or in connection with their shares
of the Company's Common Stock. In addition, the applicable number of
all unvested options shall become immediately exercisable in the
event of a change in control of the Company. A change in control of
the Company shall be deemed to occur if (a) the Company is merged
with or into or consolidated with another corporation or other entity
under circumstances where the shareholders of the Company immediately
prior to such merger or consolidation do not own after such merger or
consolidation shares representing at least fifty percent (50%) of the
voting power of the Company or the surviving or resulting corporation
or other entity, as the case may be, or (b) if the Company is
liquidated or sells or otherwise disposes of substantially all of its
assets to another corporation or entity, or (c) if any person (as
such term is used in Sections 13(d) and 14 (d) (2) of the Securities
Exchange Act of 1934) shall become the beneficial owner (within the
meaning of Rule 13d-3 under such Act) of forty (40%) percent or more
of the Common Stock of the Company other than pursuant to a plan or
arrangement entered into by such person and the Company or otherwise
approved by the Board of Directors, or (d) during any period of two
(2) consecutive years, individuals who at the beginning of such
period constitute the entire Board of Directors shall cease for any
reason to constitute a majority of the Board unless the election or
nomination for election by the Company's shareholders of each new
director was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of
the period. For the purpose of this Section 4(d), the "applicable
number" of all unvested options shall mean: (i) at commencement of
the first twelve (12) months of the Employee's employment, fifty
percent (50%) of such unvested options, such number to increase
linearly during such twelve-month period to one hundred percent
(100%), and (ii) following such twelve-month period, one hundred
percent (100%) of such unvested options.
(e) In the event that the acceleration, as set forth in
Section 4(d) of this Agreement, of any option to be granted to the
Employee pursuant to the Plan which causes the option to be
exercisable immediately (such options, the "Accelerated Options") (i)
constitutes a "parachute payment" within the meaning of section 280G
of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) but for this Section 4(e), would be subject to the excise tax
imposed by section 4999 of the Code (the "Excise Tax"), then the
amount of the Accelerated Options may be reduced to the largest
amount which the Employee, in his sole discretion, determines would
result in no portion of the Accelerated Options (or only such portion
thereof as is acceptable to the Employee) being subject to the Excise
Tax. The determination by the Employee of any reduction shall be
conclusive and binding upon the Company. The Company shall reduce
such Accelerated Options only upon written notice by the Employee
indicating the amount of such reduction.
<PAGE>
5. Expenses. During the Term of Employment, all travel and
other reasonable business expenses incident to the rendering of
services by the Employee under this Agreement will be paid or
reimbursed by the Company subject to the submission of appropriate
vouchers and receipts in accordance with the Company's policy from
time to time in effect.
6. Death or Disability.
(a) The Employee's employment under this Agreement shall
be terminated by the death of the Employee. In addition, the
Employee's employment under this Agreement may be terminated by the
Board of Directors of the Company if the Employee shall be rendered
incapable by illness or any other disability from complying with the
terms, conditions and provisions on his part to be kept, observed and
performed for a period in excess of 180 days (whether or not
consecutive) or 90 days consecutively, as the case may be, during a
12-month period during the Term of Employment ("Disability"). If the
Employee's employment under this Agreement is terminated by reason of
Disability of the Employee, the Company shall give notice to that
effect to the Employee in the manner provided herein. In the event
that the Employee receives disability insurance benefits for which
payment was made by the Company after the date of this Agreement and
prior to termination of the Employee's employment under this
Agreement pursuant to this Section 6(a), the Employee's Salary shall
be reduced by an amount equal to such disability insurance benefits
during such period.
(b) In addition to and not in substitution for any other
benefits which may be payable by the Company in respect of the death
of the Employee, in the event of such death after the Employee's
employment has begun, the Salary payable hereunder shall continue to
be paid at the then current rate for three (3) months after the
termination of employment, and any bonus to which the Employee would
have been entitled for the year in which his death occurs shall be
pro rated to the date of his death and paid not later than three (3)
months after the termination of employment. All sums payable
pursuant to this Section 6(b) shall be paid to the Employee's
personal representative.
(c) In addition to and not in substitution for any other
benefits which may be payable by the Company in respect of the
Disability of the Employee, in the event of the termination of the
Employee's employment hereunder due to such Disability pursuant to
Section 6(a) after the Employee's employment has begun, the Company
shall pay the Employee, in twelve (12) equal semi-monthly
installments, an aggregate amount equal to six (6) months' Salary at
the rate in effect on the effective date of such termination;
provided, however, that the Company shall deduct from such payments
the amount of any and all disability insurance benefits paid during
such six-month period with respect to the Employee that were paid for
by the Company during any period for which payment was made by the
Company after the date of this Agreement and prior to the termination
of the Employee's employment. In addition, any bonus to which the
Employee would have been entitled for the year in which such
termination of employment occurs shall be pro rated to the date of
such termination and paid not later than twelve (12) months after
such termination.
7. Disclosure of Information, Inventions and Discoveries. The
Employee shall promptly disclose to the Company all processes,
trademarks, inventions, improvements discoveries and other
information related to the business of the Company (collectively,
"Developments") conceived, developed or acquired by him alone or with
others during the Term of Employment or during any earlier period of
employment by the Company or any predecessor of the Company, whether
or not during regular working hours or through the use of materials
or facilities of the Company. All such Developments shall be the
sole and exclusive property of the Company, and, upon request, the
Employee shall promptly deliver to the Company all drawings,
sketches, models and other data and records relating to such
Developments. In the event any such Development shall be deemed by
the Company to be patentable, the Employee shall, at the expense
<PAGE>
of the Company, assist the Company in obtaining a patent or patents
thereon and execute all documents and do all such other acts and
things necessary or proper to obtain letters patent and to invest in
the Company full right, title and interest in and to such
Developments.
8. Non-Disclosure. The Employee shall not, at any time during
or after the Term of Employment or any earlier period of employment
by the Company or any predecessor of the Company, divulge, furnish or
make accessible to anyone (otherwise than in the regular course of
business of the Company) or use for his own account or for the
account of any other person any knowledge or information with respect
to confidential or secret processes, inventions, discoveries,
improvements, formulae, plans, materials, devices or ideas or other
know-how, whether patentable or not, with respect to any confidential
or secret development or research work or with respect to any other
confidential or secret aspects of the Company's business (including,
without limitation, customer lists, supplier lists and pricing
arrangements with customers or suppliers) (collectively, the
"Confidential Information"). This Section 8 shall not apply to any
information which (i) is or becomes generally available to the public
other than as a result of a disclosure directly or indirectly by the
Employee, or (ii) is or becomes available to the Employee on a
non-confidential basis from a person other than the Company or its
officers, directors or agents who, to the Employee's knowledge after
due inquiry, is not and was not bound by a confidentiality obligation
to the Company and was not otherwise prohibited from transmitting
such information to the Employee.
9. Non-Competition. The Company and the Employee agree that
the services rendered by the Employee are unique and irreplaceable.
In addition to and in furtherance of Section 8 of this Agreement, the
Company and the Employee agree that the Employee has had, and will
continue to have, unlimited access to the Confidential Information
and that preserving the proprietary nature of the Confidential
Information is of utmost importance to the Company. By giving the
Employee an opportunity or incentive to breach his obligations to the
Company under Section 8 of the Agreement, any relationship between
the Employee and a competitor of the Company during or following the
Term of Employment will potentially cause the Company irreparable
injury, regardless (in the event of termination or expiration of the
Term of Employment) of the circumstances under which the Term of
Employment ends, and even if the Employee is terminated by the
Company for cause. Therefore, in light of the foregoing, the
Employee agrees that during the Term of Employment and for a period
of two (2) years thereafter, the Employee shall not, directly or
indirectly, through any other person, firm, corporation or other
entity (whether as an officer, director, employee, partner,
consultant, holder of equity or debt investment, lender or in any
other manner or capacity):
(a) in any geographical area in the United States or in
those foreign countries where the Company, during the Term of
Employment, conducts or has undertaken activities to begin to conduct
business or initiate activities, design, manufacture, sell, market,
offer to sell or supply video or television technology similar to
that being developed or sold by the Company on the date of the
termination of Employee's employment under this Agreement for any
reason;
(b) initiate conversations to solicit, induce, encourage
or attempt to induce or encourage any employee of the Company to
terminate his or her employment with the Company or to breach any
other obligation to the Company;
(c) solicit, interfere with, disrupt, alter or attempt to
disrupt or alter the relationship, contractual or otherwise, between
the Company and any customer, potential customer, or supplier of the
Company; or
(d) engage in or participate in any business conducted
under any name that shall be the same as or similar to the name of
the Company or any trade name used by it,
<PAGE>
provided, however, that in the event the Employee's employment is
terminated by the Company for cause pursuant to Section 11 of this
Agreement, then following such termination Employee shall have no
further obligations under this Section 9 unless the Company, in its
sole discretion, elects to make additional payments to Employee as
provided under Section 12.
The Employee acknowledges that the foregoing geographic,
activity and time limitations contained in this Section 9 are
reasonable and properly required for the adequate protection of the
Company's business. In the event that any such geographic, activity
or time limitation is deemed to be unreasonable by a court, the
Employee shall submit to the reduction of either said activity or
time limitation to such activity or period as the court shall deem
reasonable. In the event that the Employee is in violation of the
restrictive covenants set forth in this Section 9, then the time
limitation for such covenants shall be extended for a period of time
equal to the pendency of any proceedings brought to enforce such
covenants, including any appeals.
10. Remedies.
(a) The Employee acknowledges that irreparable injury
would result to the Company if the provisions of Section 7, 8, 9 or
14 of this Agreement were not specifically enforced and agrees that
the Company shall be entitled to any appropriate legal, equitable or
other remedy, including injunctive relief, in respect to any failure
to comply with the provisions of Section 7, 8, 9 or 14, as determined
by a court of competent jurisdiction.
(b) In furtherance of and not in limitation of Section
10(a), in the event that, subsequent to the Term of Employment, the
Employee breaches any of his obligations to the Company under Section
7, 8, 9 or 14 of this Agreement, then the Company's obligation to
make further payments to the Employee pursuant to this Agreement
shall terminate. Any such termination shall not limit or affect the
Company's right to pursue any other remedy available to the Company
at law or in equity.
11. Termination for Cause. In addition to any other remedy
available to the Company, either at law or in equity, the Employee's
employment with the Company may be terminated by the Board of
Directors for cause, which shall include (i) the Employee's
conviction from which no further appeal may be taken for, or plea of
nolo contendere to, a felony or a crime involving moral turpitude,
(ii) the Employee's commission of a breach of fiduciary duty
involving personal profit in connection with the Employee's
employment by the Company, (iii) the Employee's commission of an act
which the Board of Directors shall reasonably have found to have
involved willful misconduct or gross negligence on the part of the
Employee, in the conduct of his duties under this Agreement, (iv)
habitual absenteeism, (v) the Employee's material breach of any
material provision of this Agreement which remains uncured for a
period of thirty (30) days following notice by the Company, or (vi)
the willful and continued failure by the Employee to perform
substantially his duties with the Company (other than any such
failure resulting from his incapacity due to physical or mental
illness). With respect to the matters set forth in subsections (iii),
(iv), (v) and (vi) of this Section 11, the Company may not terminate
the Employee's employment unless the Employee has first been given
notice of the conduct forming the cause for such termination and an
opportunity to explain such conduct to the Company. In the event of
termination under this Section 11, the Company's obligations under
this Agreement shall cease, and the Employee shall forfeit all rights
to receive any future compensation under this Agreement.
Notwithstanding any termination of this Agreement pursuant to this
Section 11, the Employee, in consideration of his employment
hereunder to the date of such termination, shall remain bound by the
provisions of Section 7, 8, 9 and 14 hereof following any such
termination.
<PAGE>
12. Termination Without Cause.
(a) Each of the Company and the Employee may terminate the
Employee's employment under this Agreement at any time for any reason
whatsoever, without any further liability or obligation of the
Company to the Employee or of the Employee to the Company from and
after the date of such termination (other than liabilities or
obligations accrued but unsatisfied on, or surviving, the date of
such termination), by sending ninety (90) days' prior notice to the
other party. In the event the Company elects to terminate the
Employee's employment under this Agreement pursuant to this Section
12, the Company shall continue to pay the Employee, in equal
semi-monthly installments, the full Salary (inclusive of paid medical
plan, but exclusive of bonuses, if any) as such Salary otherwise
would have accrued for a period equal to six (6) months; provided,
however, that if the Company elects to terminate this Agreement
during the Employee's first year of employment with the Company, such
amount shall be twelve (12) months' salary. In the event the Employee
terminates his employment hereunder within ninety (90) days after a
Detrimental Change (as hereinafter defined), the Company shall
continue to pay the Employee, in equal semi-monthly installments, the
full Salary (inclusive of paid medical plan, but exclusive of
bonuses, if any) as such Salary otherwise would have accrued until
the latest of (i) the expiration of the then current Term of
Employment, or (ii) the expiration of six (6) months following the
effective date of termination of the Employee's employment hereunder,
or (iii) the expiration of twelve (12) months following the effective
date of termination of the Employee's employment hereunder if such
termination takes place during the Employee's first year of
employment with the Company. In the event the Employee elects to
terminate the Employee's employment under this Agreement, other than
as set forth in the immediately preceding sentence, prior to the end
of the Term of Employment, the Company's obligation to pay Salary
shall cease as of the effective date of termination. Any termination
of the Employee's employment under this Agreement by the Company as
provided in this Section 12 shall be in addition to, and not in
substitution for, any rights with respect to termination of the
Employee which the Company may have pursuant to Section 11.
Notwithstanding any termination of the Employee's employment under
this Agreement pursuant to this Section 12, the Employee, in
consideration of his employment hereunder to the date of such
termination, shall remain bound by the provisions of Section 7, 8, 9
and 14 hereof following any such termination.
(b) As used in this Agreement, "Detrimental Change" shall
mean a detrimental change in the nature or scope of the Employee's
employment or duties which is inconsistent with those duties
customarily performed by a company's Chief Financial Officer.
Detrimental Change shall include, without limitation, the assignment
of the Employee to any duties substantially inconsistent with those
of senior executive management, the removal of the Employee from, or
any failure to re-elect him as an officer of the Company, the
assignment of the Employee to be under the direct supervision of
anyone reporting directly or indirectly to the Chairman or CEO of the
Company, a reduction in Salary or other employee benefits, the
failure by the Company to continue to provide the Employee with
substantially similar bonus opportunities, the relocation of the
Employee's primary office of employment to a location other than New
York city and more than fifty (50) miles from the location of such
office prior to the relocation, and substantially increased travel
requirements.
13. Resignation. In the event that the Employee's services
under this Agreement are terminated under any of the provisions of
this Agreement (except by death), the Employee agrees that he will
deliver to the Board of Directors his written resignation from all
positions held with the Company, such resignation to become effective
immediately; provided, however, that nothing herein shall be deemed
to affect the provisions of Section 7, 8, 9 and 14 hereof relating to
the survival thereof following termination of the Employee's services
hereunder; and provided, further, that except as expressly provided
in this Agreement, the Employee shall be entitled to no further
compensation hereunder.
<PAGE>
14. Data. Upon expiration or termination of the Term of
Employment or termination pursuant to Section 1, 6, 11 or 12 hereof,
the Employee or his personal representative shall promptly deliver to
the Company all books, memoranda plans, records and written data of
every kind relating to the business and affairs of the Company which
are then in his possession or control.
15. Insurance. The Company shall have the right, at its own
cost and expense to apply for and to secure in its own name, or
otherwise, life, health or accident insurance or any or all of them
covering the Employee, and the Employee agrees to submit to usual and
customary medical examinations and otherwise to cooperate with the
Company in connection with the procurement of any such insurance and
any claims thereunder.
16. Waiver of Breach. Any waiver of any breach of this
Agreement shall not be construed to be a continuing waiver or consent
to any subsequent breach on the part either of the Employee or the
Company.
17. Assignment. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the Company upon
any sale of all or substantially all of the Company's assets, or upon
any merger or consolidation of the Company with or into any other
entity (including, without limitation, any change in control of the
Company), all as though such successors and assigns of the Company
and their respective successors and assigns were the Company.
Insofar as the Employee is concerned, this Agreement, being personal,
may not be assigned, and any such purported assignment shall be void
and of no effect.
18. Severability. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered
deleted herefrom, and the remainder of such provision and of this
Agreement shall be unaffected and shall continue in full force and
effect. In furtherance and not in limitation of the foregoing,
should the duration or geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that
which is valid and enforceable under applicable law, then such
provision shall be construed to cover only that duration, extent or
activities which may be validly and enforceably covered.
19. Notices. All notices, requests and other communications
pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given, if delivered in person or by courier,
telegraphed, telexed or by facsimile transmission (receipt confirmed)
or five (5) business days after being sent by registered or certified
mail, return receipt requested, postage paid, addressed as follows:
(a) If to the Employee:
Lawrence L. Epstein
21 Landing lane
Princeton Junction, NJ 08550
Fax No.: 609-799-2120
(b) If to the Company:
Princeton Video Image, Inc.
15 Princess Road
Lawrenceville, NJ 08648
Fax No.: (609) 912-0044
Attn: Chairman of the Board of Directors
<PAGE>
with a copy to:
Richard J. Pinto, Esq.
Smith, Stratton, Wise, Heher & Brennan
600 College Road East
Princeton, NJ 08540
Fax No.: (609) 987-6651
Any party may, by written notice to the other in accordance with this
Section 19, change the address to which notices to such party are to
be delivered or mailed.
20. General. Except as otherwise provided herein, the terms
and provisions of this Agreement shall constitute the entire
agreement by the Company and the Employee with respect to the subject
matter hereof and shall supersede any and all prior agreements or
understandings between the Employee and the Company, whether written
or oral. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey. This Agreement
may be amended or modified only by a written instrument executed by
the Employee and the Company. The headings of the sections of this
Agreement are for convenience of reference only and do not constitute
part of this Agreement. This Agreement may be executed in any number
of counterparts, each of which, when executed, shall be deemed to be
an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the parties have executed or caused
to be executed by its duly authorized representative this Employment
Agreement as of the day and year first above written.
PRINCETON VIDEO IMAGE, INC.
By: /s/ Brown F Williams
Name: Brown F Williams
Title: Chairman /s/ Lawrence Epstein
Lawrence Epstein
