SUPPLEMENT NO. 1 TO PROSPECTUS DATED DECEMBER 10, 1998
PRINCETON VIDEO IMAGE, INC.
RELATING TO THE SALE OF UP TO
2,700,000 SHARES OF COMMON STOCK
The following information supplements and is a part of the
Prospectus of Princeton Video Image, Inc. (the "Company") dated
December 10, 1998 (the "Prospectus"):
Changes in Management
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Dennis P. Wilkinson Appointed President
and Chief Executive Officer
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In November 1998, Dennis P. Wilkinson, joined the Company as
its President and Chief Executive Officer. In December 1998, Mr.
Wilkinson was elected to the Board of Directors of the Company.
Before joining the Company, Mr. Wilkinson, 50, had been Senior
Vice President of Marketing and Programming at Primestar, Inc.
from May 1995 until September 1998. Prior to his tenure at
Primestar, Inc., Mr. Wilkinson had served as Senior Vice
President of Consumer Marketing at Time Warner Entertainment/Home
Box Office from 1992 to 1995.
Mr. Wilkinson succeeds Douglas J. Greenlaw, who, in April
of this year, announced that he planned to step down as President
and Chief Executive Officer of the Company by the end of calendar
year 1998.
On November 23, 1998, the Company and Mr. Wilkinson entered
into a three year employment agreement that provides for
automatic three year renewal and permits either party to
terminate the agreement upon 90 days' prior notice. Pursuant to
his employment agreement, Mr. Wilkinson's initial base salary is
$275,000 per year. At the end of the first 365 days of
employment, Mr. Wilkinson's base salary will be increased to
$300,000, and at the end of the second 365 days of employment,
his base salary will be increased again to $325,000 based on
performance as determined by the Board of Directors, in the
exercise of its sole discretion. In addition, Mr. Wilkinson is
eligible for an annual bonus in an amount up to $25,000 based on
performance measures determined by the Board of Directors, and a
bonus of $25,000 at the end of the first such 90-day period of
the initial three year term if he has discharged his duties to
the Company in a satisfactory manner during such 90-day period.
In the event Mr. Wilkinson's employment is terminated by the
Company without cause, his employment agreement provides for a
continuation of his then current salary for a period equal to the
balance of the then current term of his employment agreement but
in no case for less than 12 months; provided, however, that if
the Company elects to terminate Mr. Wilkinson's employment
without cause during the first six months of the initial three
year term, such period will be limited to 12 months.
Under the terms of his employment agreement, Mr. Wilkinson
will be granted two options pursuant to the Company's 1993
Stock Option Plan, as amended (the "Plan"). See the section of
the Prospectus entitled "Management - Stock Option Plan." The
first such option will be for the purchase of 200,000 shares of
the Company's Common Stock, exercisable at $4.5625 per share.
Such option grant will provide that, if Mr. Wilkinson is employed
by the Company and has discharged his duties to the Company in a
satisfactory manner on the relevant vesting dates, such option
will vest and become exercisable over a three year period, in
equal monthly increments during the first 36 months of the term
of his employment. The second of such option will be for the
purchase of 200,000 shares of Common Stock at an exercise price
equal to $7.00 per share. Certain of the options will vest and
become exercisable each year if the Company's revenues from
operations for certain specified fiscal years(as reflected on the
Company's audited financial statements for the relevant period)
meet or exceed specified milestones.
The options to be issued to Mr. Wilkinson will be for a term
of 10 years, subject to earlier termination 90 days after
termination of his employment, and will be in the form of, and on
such terms and conditions as provided in, the Company's standard
form of Stock Option Grant Agreement. See the section of the
Prospectus entitled "Management - Stock Option Plan." All
unvested options will become exercisable immediately upon a
change in control, 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.
At present, Mr. Wilkinson does not beneficially own any
shares of the Company's Common Stock, and therefore decreases the
number of shares beneficially owned by the Company's officers
and directors as a group to 2,876,520, representing 30.1% of the
Company's outstanding stock, based on the number of shares
outstanding as of September 15, 1998. See the section of the
Prospectus entitled "Security Ownership of Certain Beneficial
Owners and Management."
Resignation of Louis A. Lippincott as Director of
Hardware Development, Effective December 31, 1998
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Louis A. Lippincott tendered his resignation, effective
December 31, 1998, from the position of Director of Hardware
Development of the Company. The Company subsequently appointed a
new Director of Hardware Development.
THE DATE OF THIS SUPPLEMENT IS DECEMBER 11, 1998
