SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant[X]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CHYRON CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
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2) Aggregate Number of securities to which transaction
applies:
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
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for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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4) Date Filed:
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
(516) 845-2000
March 28, 1996
Dear Shareholders:
On behalf of the Board of Directors and management of Chyron
Corporation, I cordially invite you to attend the Annual
Meeting of Shareholders to be held on Wednesday, May 15, 1996,
at 10:00 a.m., at the Grand Hyatt Hotel, located at Park Avenue
at Grand Central, New York, New York 10017.
The matters to be acted upon at the meeting are fully described
in the attached Notice of Annual Meeting of Shareholders and
Proxy Statement. In addition, the directors and executive
officers of the Company will be present to respond to any
questions that you may have. Accompanying the attached Proxy
Statement is the Company's Annual Report for 1995. This report
describes the financial and operational activities of the
Company.
Whether or not you plan to attend the annual meeting, please
complete, sign and date the enclosed proxy card and return it
in the accompanying envelope as promptly as possible. If you
attend the Annual Meeting, and I hope you will, you may vote
your shares in person even if you have previously mailed in a
proxy card.
We look forward to greeting our shareholders at the meeting.
Sincerely,
/s/Michael I. Wellesley-Wesley
Michael I. Wellesley-Wesley
Chairman of the Board and
Chief Executive Officer
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 1996
TO THE SHAREHOLDERS OF
CHYRON CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
(the "Annual Meeting") of Chyron Corporation, a New York
corporation (hereinafter "Company"), will be held at the Grand
Hyatt Hotel, located at Park Avenue at Grand Central, New York,
New York 10017, on Wednesday, May 15, 1996, at 10:00 a.m., for
the following purposes:
1. To elect directors of the Company to hold office until the
next Annual Meeting or until their respective successors are
duly elected and qualified;
2. To amend the Company's 1995 Long-Term Incentive Plan; and
3. To transact such other business as may properly come before
the meeting or any adjournments
thereof.
The Board of Directors has fixed the close of business on March
27, 1996 as the record date for the determination of
shareholders entitled to notice of, and to vote at, the Annual
Meeting or any adjournments thereof. Representation of at
least a majority of all outstanding shares of Common Stock is
required to constitute a quorum. Accordingly, it is important
that your stock be represented at the meeting. The list of
shareholders entitled to vote at the Annual Meeting will be
available for examination by any shareholder at the Company's
offices at 5 Hub Drive, Melville, New York, 11747, for ten (10)
days prior to May 15, 1996.
Whether or not you plan to attend the Annual Meeting, please
complete, date and sign the enclosed proxy card and mail it
promptly in the self-addressed envelope enclosed for your
convenience. You may revoke your proxy at anytime before it is
voted.
By Order of the Board of Directors,
Daniel I. DeWolf,
Secretary
Melville, New York
March 28, 1996
YOUR VOTE IS IMPORTANT, ACCORDINGLY, WE URGE YOU TO DATE, SIGN
AND RETURN THE ENCLOSED PROXY CARD REGARDLESS OF WHETHER YOU
PLAN TO ATTEND THE MEETING.
CHYRON CORPORATION
TABLE OF CONTENTS
Page
INFORMATION CONCERNING VOTE. . . . . . . . . . 1
ELECTION OF THE BOARD OF DIRECTORS . . . . . . 2
EXECUTIVE COMPENSATION AND OTHER INFORMATION. . . 5
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION . . . . . . . . . . . 9
STOCK PERFORMANCE CHART. . . . . . . . . . . . . 9
PROPOSAL TO AMEND THE LONG-TERM INCENTIVE PLAN . 11
OTHER MATTERS ARISING AT THE ANNUAL MEETING . . 14
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . 14
INTERESTED PARTY TRANSACTIONS. . . . . . . . . . 19
SHAREHOLDER PROPOSALS. . . . . . . . . . . . . . 19
COST OF SOLICITATION OF PROXIES. . . . . . . . . 20
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . 20
SECTION 16(a) REPORTING DELINQUENCIES. . . . . . 20
ANNUAL REPORT ON FORM 10-K . . . . . . . . . . . 21
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
PROXY STATEMENT
For Annual Meeting of Shareholders
to be Held on May 15, 1996
Approximate Mailing Date of Proxy Statement and Form of Proxy:
March 28, 1996.
INFORMATION CONCERNING VOTE
GENERAL
This Proxy Statement and the enclosed form of proxy is
furnished in connection with the solicitation of proxies by the
Board of Directors of Chyron Corporation, a New York
corporation (hereinafter, the "Company"), for use at the annual
meeting of shareholders to be held on Wednesday, May 15, 1996,
at 10:00 a.m., and at any and all adjournments thereof (the
"Annual Meeting"), with respect to the matters referred to in
the accompanying notice. The Annual Meeting will be held at
the Grand Hyatt Hotel located at Park Avenue at Grand Central,
New York, New York 10017.
VOTING RIGHTS AND OUTSTANDING SHARES
Only shareholders of record at the close of business on March
27, 1996 are entitled to notice of and to vote at the Annual
Meeting. As of the close of business on March 18, 1996,
93,615,708 shares of common stock, par value $.01 per share
(the "Common Stock"), of the Company were issued and
outstanding. Each share of Common Stock entitles the record
holder thereof to one (1) vote on all matters properly brought
before the Annual Meeting.
REVOCABILITY OF PROXIES
A shareholder who executes and mails a proxy in the enclosed
return envelope may revoke such proxy at any time prior to its
use by notice in writing to the Secretary of the Company, at
the above address, or by revocation in person at the Annual
Meeting. Unless so revoked, the shares represented by duly
executed proxies received by the Company prior to the Annual
Meeting will be presented at the Annual Meeting and voted in
accordance with the shareholder's instructions marked thereon.
If no instructions are marked thereon, proxies will be voted
(1) FOR the election as directors of the nominees named below
under the caption "ELECTION OF DIRECTORS," and (2) FOR the
amendment of the Company's 1995 Long-Term Incentive Plan as
discussed below under the caption "PROPOSAL TO AMEND THE
LONG-TERM INCENTIVE PLAN." In their discretion, the proxies
are authorized to consider and vote upon such matters incident
to the conduct of the meeting and upon such other business
matters or proposals as may properly come before the meeting
that the Board of Directors of the Company does not know a
reasonable time prior to this solicitation will be presented at
the meeting.
VOTING PROCEDURES
All votes shall be tabulated by the inspector of elections
appointed for the meeting, who shall separately tabulate
affirmative and negative votes, abstentions and broker
non-votes. The presence of a quorum for the Annual Meeting,
defined here as a majority of the votes entitled to be cast at
the meeting, is required. Votes withheld from director
nominees and abstentions will be counted in determining whether
a quorum has been reached. Broker-dealer non-votes are not
counted for quorum purposes.
Assuming a quorum has been reached, a determination must be
made as to the results of the vote on each matter submitted for
shareholder approval. Director nominees must receive a
plurality of the votes cast at the meeting, which means that a
vote withheld from a particular nominee or nominees will not
affect the outcome of the meeting. The amendment of the
Company's Long-Term Incentive Plan must be approved by a
majority of the votes cast at the meeting. Abstentions are not
counted in determining the number of votes cast in connection
with the amendment of the Company's Long-Term Incentive Plan.
ELECTION OF THE BOARD OF DIRECTORS
The Board of Directors has nominated eight (8) persons to be
elected as Directors at the Annual Meeting and to hold office
until the next Annual Meeting or until their successors have
been duly elected and qualified. It is intended that each
proxy received by the Company will be voted FOR the election,
as directors of the Company, of the nominees listed below,
unless authority is withheld by the shareholder executing such
proxy. Shares may not be voted cumulatively. Each of such
nominees has consented to being nominated and to serve as a
director of the Company if elected. If any nominee should
become unavailable for election or unable to serve, it is
intended that the proxies will be voted for a substitute
nominee designated by the Board of Directors. At the present
time, the Board of Directors knows of no reason why any nominee
might be unavailable for election or unable to serve. The
Board is seeking to fill eight positions at this time instead
of the nine available. The ninth director position shall be
filled in due course subsequent to the Annual Meeting. The
proxies cannot be voted for a greater number of persons than
the number of nominees named herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS
PROPOSAL.
DIRECTOR NOMINEES
The following table sets forth certain information with respect
to the nominees for directors:
Name
Company Position and Offices Held
Director of the Company Since
Sheldon D. Camhy
Director, Member of the Compensation and Stock Option Committee
July, 1995
S. James Coppersmith
Director, Member of the Compensation and Stock Option Committee
March, 1996
Charles M. Diker
Director, Member of the Audit Committee
September, 1995
Isaac Hersly
President and Chief Operating Officer
March, 1996
Alan J. Hirschfield
Director, Member the Audit Committee
July, 1995
Wesley W. Lang, Jr.
Director, Member of the Compensation
and Stock Option Committee
July, 1995
Eugene M. Weber
Director, Member of the Audit Committee
July, 1995
Michael I. Wellesley-Wesley
Chairman of the Board and
Chief Executive Officer
May, 1995
Sheldon D. Camhy, age 66, is a senior partner of the law firm
of Camhy Karlinsky & Stein LLP, which acts as legal counsel to
the Company, and has held such position since January 1991.
From 1966 to 1990, Mr. Camhy was a partner with the law firm of
Shea & Gould.
S. James Coppersmith, age 63, is the Chairman of the Board of
Trustees of Emerson College since December 1993. From August
1990 to June 1994, Mr. Coppersmith was the President and
General Manager of WCVB-TV, New England's Channel 5, a division
of the Hearst Corporation. He is also a member of the Board of
Directors of Sun America Mutual Asset Management Corporation,
Waban Inc., The Pizzeria Uno Corporation,
The Kushner-Locke Corporation, and The Boston Stock Exchange.
Charles M. Diker, age 61, is a limited principal with the
investment management company of Weiss, Peck & Greer, L.L.C.
("WPG") and has been associated with such company since 1976.
WPG manages, directly or indirectly, the following funds: WPG
Corporate Development Associates IV, L.P., WPG Corporate
Development Associates IV (Overseas), L.P., Weiss, Peck & Greer
Venture Associates III, L.P., and WPG Enterprise Fund II, L.P.
These funds are shareholders of the Company. He is also the
Chairman of the Board of Directors of Cantel Industries, Inc.
Mr. Diker is also a member of the Board of Directors of Data
Broadcasting Corporation, BeautiControl Cosmetics, and
International Specialty Products.
Isaac Hersly, age 47, is President and Chief Operating Officer
of the Company since July 1995. Prior thereto, Mr. Hersly was
an Executive Vice President of the Company from December 1991
until July 26, 1995 and was President and Chief Operating
Officer of the Company from November 1989 until December 27,
1991. He was appointed Vice President in 1986 and was
appointed President of the Company's Telesystems and Video
Products division in 1988. Prior to joining the Company, Mr.
Hersly was employed from 1970 to 1986 by the American
Broadcasting Company ("ABC"), a New York based television
network, and from 1981 to 1986 was ABC's Vice President of
Engineering.
Alan J. Hirschfield, age 60, is Co-Chairman of the Board of
Directors and Co-Chief Executive Officer of Data Broadcasting
Corporation and has held such positions since June 1992. Prior
to his current positions, he served as Chief Executive Officer
of Twentieth Century-Fox Film Corp., from 1980-1985, and
Columbia Pictures Entertainment Inc., from 1973 to 1978. Mr.
Hirschfield is also a member of the Board of Directors of
Cantel Industries, Inc. Mr. Hirschfield is a member of CC
Acquisition Company A, L.L.C. ("CCA") and CC Acquisition
Company B, L.L.C. ("CCB") which are shareholders of the
Company.
Wesley W. Lang Jr., age 38, is currently a principal with the
investment management company of WPG and has been associated
with such company since 1985. WPG manages, directly or
indirectly, the following funds: WPG Corporate Development
Associates IV, L.P., WPG Corporate Development Associates IV
(Overseas), L.P., Weiss, Peck & Greer Venture Associates III,
L.P., and WPG Enterprise Fund II, L.P. These funds are
shareholders of the Company. He is also a member of the Board
of Directors of Durakon Industries, Inc.
Eugene M. Weber, age 45, is currently the President of
Bluewater Capital Management, Inc., an investment consulting
firm. From 1994 to 1995, Mr. Weber was an independent
consultant to Westpool Investment Trust plc and from 1983 to
1994, he was a partner with Weiss, Peck & Greer, an investment
management firm.
Michael I. Wellesley-Wesley, age 43, is Chairman and Chief
Executive Officer of the Company. Prior thereto, Mr.
Wellesley-Wesley was from 1992 until 1995, a Director and
Executive Vice President of Data Broadcasting Corporation and
from 1990 until 1992 he was a consultant to that corporation's
predecessor. Mr. Wellesley-Wesley was a managing director of
Stephen Rose & Partners Ltd., a London-based investment banking
firm, from 1980 to 1990. Mr. Wellesley-Wesley is also an
officer and indirectly a member of CCA and CCB, which are
shareholders of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDEES
The Board of Directors held thirteen (13) meetings during
fiscal year 1995. The Board of Directors appointed a
Compensation and Stock Option Committee (the "Compensation
Committee") and an Audit Committee.
The Compensation Committee is authorized to review and make
recommendations to the Board of Directors on all matters
regarding the remuneration of the Company's executive officers,
including the administration of the Company's compensation
plans. The current members of the Committee are Messrs. Camhy,
Coppersmith and Lang. The Committee held five (5) meetings
during fiscal year 1995.
The Audit Committee is responsible for making recommendations
to the Board of Directors as to the selection of the Company's
independent auditor, maintaining communication between the
Board and the independent auditor, reviewing the annual audit
report submitted by the independent auditor and determining the
nature and extent of problems, if any, presented by such audit
warranting consideration by the Board. The current members of
the Audit Committee are Messrs. Diker, Hirschfield and Weber.
The Committee held two (2) meetings during fiscal year 1995.
During the fiscal year ended December 31, 1995, all directors
who are nominated for election, and were members of the Board
and/or the respective committees thereof during that time,
attended at least 75% of the aggregate number of meetings of
the Board and all committees of the Board of which they were
members.
EXECUTIVE OFFICERS
In addition to Mr. Wellesley-Wesley and Mr. Hersly, the
executive officers of the Company are the following:
Patricia Arundell Lampe - Treasurer and Chief Financial
Officer, age 36. Ms. Lampe was appointed Treasurer and Chief
Financial Officer of the Company in October 1994. She had
served as Acting Treasurer, Chief Financial Officer and
Secretary since July 1994. Ms. Lampe joined the company in
July 1993 as Corporate Controller. Prior to that date, she was
an Audit Manager with Price Waterhouse.
Daniel I. DeWolf - Secretary, age 38. Mr. DeWolf was appointed
Secretary of the Company in July 1995. He is also a partner in
the law firm of Camhy Karlinsky & Stein LLP from 1994 to the
present, which acts as legal counsel to the Company. Mr.
DeWolf was affiliated with the law firm of Lacher &
Lovell-Taylor from 1992 to 1994. From 1990 to 1992, Mr. DeWolf
was general counsel to SMR Energy, Inc.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash
compensation awarded to or earned by all Chief Executive
Officers who served in that position during fiscal year 1995,
the most highly compensated executive officers of the Company
who held such positions at the end of fiscal year 1995, and the
two highest paid executive officers of the Company if they held
such positions during fiscal year 1995.
ANNUAL COMPENSATION LONG TERM COMPENSATION
OTHER
ANNUAL SECURITIES
COMPEN- UNDERLYING
NAME AND PRINCIPAL SALARY(1) BONUS SATION OPTIONS ALL
POSITION YEAR ($) ($) ($) SAR(#) OTHER $
Michael I. Wellesley-Wesley, 12/95 38,538 50,000 62,500(2)
Chairman of the Board and
Chief Executive Officer
Mark C. Gray (3), 12/95 247,726 34,625(3)
Former Chief Executive 12/94 207,846 27,000
Officer
John A. Servizio, 12/95 0(4)
Former Chief Executive
Officer
Isaac Hersly, 12/95 189,600 36,000 500,000
President 12/94 189,600 36,000
12/93 158,400 30,000
Patricia A. Lampe, 12/95 102,365 23,000 150,000
Treasurer and Chief 12/94 74,461 19,000
Financial Officer
Peter J. Lance (5), 12/95 177,512 37,500(5)
Former Secretary,
Vice President and
Chief Administrative
Officer
James F. Duca, 12/95 120,487
Vice President 12/94 33,160 6,705
Engineering
(1) Includes any annual car allowance.
(2) Pursuant to his contract, Mr. Wellesley-Wesley
received this amount as compensation for his efforts
prior to the effectiveness of his contract.
(3) Mr. Gray was terminated as President and Chief
Executive Officer of the Company on May 16, 1995.
Pursuant to his employment agreement, the Company paid
Mr. Gray $34,625 in 1995 and will pay him $190,385 in
1996 as severance.
(4) Mr. Servizio resigned as Chief Executive Officer of
the Company on July 25, 1995. Mr. Servizio did not
receive any additional compensation for being Chief
Executive Officer.
(5) Mr. Lance was terminated as Secretary, Vice
President and Chief Administrative Officer on
August 7, 1995. Pursuant to his termination agreement,
the Company agreed to pay Mr. Lance an aggregate of
$225,000 in twelve (12) equal monthly installments as
severance. For 1995, Mr. Lance received $37,500.
STOCK OPTION GRANTS
Set forth below is information on grants of stock options under
the Company's 1995 Long-Term Incentive Plan (the "Plan") for
the named executive officers for the period January 1, 1995 to
December 31, 1995.
OPTION GRANTS IN LAST FISCAL YEAR TABLE
INDIVIDUAL GRANTS GRANT VALUE
PERCENT
TOTAL
OPTIONS
GRANTED
NUMBER OF TO
SECURITIES EMPLOYEES GRANT
UNDERLYING IN EXERCISE DATE
OPTIONS FISCAL PRICE EXPIRATION PRESENT
NAME GRANTED YEAR ($ PERSHARE) DATE VALUE
Issac Hersly
500,000 16.0% $1.625 7/25/2000 $335,000
Patricia A. Lampe
150,000 4.8% $1.625 7/25/2000 $100,500
All options reported above were awarded under the Plan. The
Company has not granted any stock appreciation rights.
Pursuant to the terms of the Plan, the exercise price per share
for all options is the closing price of the Common Stock as
reported on the New York Stock Exchange on the date of grant.
The options reported above become exercisable in three equal
installments, on the first, second and third year anniversaries
of their date of grant. "Grant Date Value" is determined under
the Black-Scholes pricing model, a widely recognized method of
determining the present value of options. The factors used in
this model are as follows: stock price - $1.625; exercise price
- $1.625; dividend yield - 0.0%; volatility - 34.80%; risk-free
rate of return - 6.19%; and option term of 5 years. The actual
value, if any, an executive officer may realize will depend on
the extent to which conditions to exercisability of the option
are satisfied and the excess of the stock price over the
exercise price on the date the option is exercised. There is
no assurance that the value realized by an executive officer
will be consistent with the value estimated by the
Black-Scholes model. The model is used for valuing market
traded options and is not directly applicable to valuing stock
options granted under the Plan which cannot be transferred.
PENSION PLAN
The Company maintains a qualified non-contributory defined
benefit pension plan (hereinafter "Pension Plan") for all
employees of the Company, except for those employees who are
covered under a collective bargaining agreement (there are
currently no employees covered by collective bargaining
agreements). Under the Pension Plan, a participant retiring at
normal retirement age receives a monthly pension benefit equal
to 25% of his or her final average earnings up to the level of
social security covered compensation plus 38% of such earnings
in excess of social security covered earnings. A participant's
average monthly earnings is his or her monthly compensation
averaged during the five consecutive years during the ten-year
period prior to his or her termination that produces the
highest average monthly compensation.
Participants in the Pension Plan vest according to the
following schedule:
Years of Service Amount Vested
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
In addition, a participant who reaches age sixty-five, but who
has less than six years of participation in the Pension
Plan, becomes fully vested when he or she completes five years
of participation in the Pension Plan.
The following current executive officers of the Company, and
their credited years of service as of January 1, 1996,
are participants in the Pension Plan: Mr. Hersly, 9 years; and
Ms. Lampe, 2 years.
The following table shows the aggregate annual benefits under
the Pension Plan as now in effect that would be currently
payable to participants retiring at age sixty-five on a
single-life basis under various assumptions as to salary and
years of service. Benefits under the Pension Plan are payable
in the form of a monthly, lifetime annuity commencing on the
later of normal retirement age or the participant's date of
retirement, or, at the participant's election, in a lump sum or
installment payments. The amounts shown reflect the level of
social security covered compensation for a participant reaching
age sixty-five in 1995. In addition, the participant is
entitled to receive social security benefits. The Employee
Retirement Income Security Act of 1974 and the Internal Revenue
Code of 1986, as amended, limit the annual retirement benefit
that may be paid out of funds accumulated under a qualified
pension plan. The current maximum annual benefit payable under
the Pension Plan is $120,000. This maximum is proportionately
reduced for years of plan participation less than ten.
Effective from January 1, 1994, compensation in excess of
$150,000 may not be taken into account in the determination of
benefits under the Pension Plan.
PENSION PLAN TABLE
HIGHEST CONSECUTIVE
FIVE-YEAR AVERAGE
COMPENSATION
YEARS OF CREDITED SERVICE AT AGE 65
DURING THE LAST TEN
YEARS OF EMPLOYMENT 5 10 15 20
$50,000 $ 4,000 $ 8,000 $12,000 $16,000
$100,000 $ 8,800 $17,500 $26,300 $35,000
$150,000 $13,500 $27,000 $40,500 $54,000
DIRECTORS' COMPENSATION
Directors of the Company who are also salaried officers or
employees of the Company do not receive special or additional
compensation for serving on the Board of Directors or any of
its committees. Each director who is not a salaried officer or
employee of the Company receives $1,000 for each meeting of the
Board of Directors attended and $500 for each committee meeting
attended. In addition, if the amendment to the Company's Long
Term Incentive Plan is approved, each non-employee director
shall receive each year, as a formula grant, options to
purchase 10,000 shares of Common Stock at an exercise price
equal to their market value on the last trading day of July.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company entered into an employment agreement with Mr.
Wellesley-Wesley, Chief Executive Officer, as of July 26, 1995.
The agreement runs until August 1, 1996 and provides for a base
salary of $250,000 commencing as of November 1, 1995, a bonus
of up to 20% of his base salary at the discretion of the
Compensation Committee, and a one-time bonus payment of $62,500
for services rendered for the period of August 1, 1995 through
October 31, 1995. If during the term of the agreement Mr.
Wellesley-Wesley is terminated, regardless of whether such
termination is for cause or without cause, he shall continue to
receive his base salary, as severance, for a period of six
months. If Mr. Wellesley-Wesley continues to be employed by
the Company after the end of the employment term set forth in
the agreement, and such agreement has not been formally
extended, and he is terminated thereafter, regardless of the
reason, he shall continue to receive his base salary, as
severance, for a period of four months. The agreement also
contains certain restrictions on competition.
The Company has an employment agreement with Mr. Hersly,
President and Chief Operating Officer. Mr. Hersly currently
receives a base salary of $180,000 and is entitled to receive
a bonus of up to 20% of his base salary. If the agreement is
terminated with cause then Mr. Hersly is entitled only to
receive that portion of his base salary owed through the date
of termination. If the agreement is terminated without cause
then Mr. Hersly is entitled to receive a severance payment
equal to nine months salary. The agreement also contains
certain restrictions on competition.
The Company has an employment agreement with Ms. Lampe,
Treasurer and Chief Financial Officer, which expires on
December 31, 1996. Ms. Lampe currently receives a base salary
of $115,000 and is entitled to receive a bonus of up to 20% of
her base salary. If the agreement is terminated with cause
then Ms. Lampe is entitled only to receive that portion of base
salary owed through the date of termination. If the agreement
is terminated without cause then Ms. Lampe is entitled to
receive a severance payment equal to her entire annual base
salary payable in twelve equal monthly installments. The
agreement also contains certain restrictions on competition.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
During fiscal 1995, Mr. Mark C. Gray, former Chairman of the
Board, President and Chief Executive Officer, and Peter J.
Lance, former Director, Secretary and Vice President and Chief
Administrative Officer, served as members of the Compensation
Committee from January 1, 1995 until May 16, 1995.
COMPENSATION AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
It is the duty of the Compensation Committee to develop,
administer and review the Company's compensation plans,
programs and policies, to monitor the performance and
compensation of executive officers and other key employees and
to make appropriate recommendations and reports to the Board of
Directors relating to executive compensation.
The Company's compensation program is intended to motivate,
retain and attract management, linking incentives to financial
performance and enhanced shareholder value. The program's
fundamental philosophy is to tie the amount of compensation "at
risk" for an executive to his or her contribution to the
Company's success in achieving superior performance objectives.
The compensation program currently consists of two components:
(1) a base salary as set forth in each executive's employment
agreement, and (2) the potential for an annual cash bonus of up
to 20% of the executive's base salary, depending upon the
satisfaction of certain performance criteria annually set by
the Compensation Committee for each position. The criteria may
relate to overall Company performance, the individual
executive's performance, or a combination of the two, depending
upon the particular position at issue. The second component
constitutes the "at risk" portion of the compensation program.
All amounts paid or accrued during fiscal year 1995 under the
above-described compensation program are included in the table
found in the section captioned "Summary Compensation Table."
The Compensation and Stock Option Committee
February 22, 1996
Respectfully submitted,
Sheldon D. Camhy and Wesley W. Lang, Jr.
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in
the cumulative total shareholder return on the Common Stock
during the five fiscal years ended December 31, 1995 with the
cumulative total return on the Russell 2000 Index and a new
peer group selected by the Company as well as the old peer
group selected by the Company consisting of businesses engaged
in supplying equipment to the broadcast and video industry. A
new peer group was selected to more accurately reflect the
Company's business peers. The comparison assumes $100 was
invested on January 1, 1990, in the Common Stock and in each of
the foregoing indices and assumes reinvestment of dividends.
The businesses included in the Company-selected new peer group
are: Dynatech Corp., Avid Technology Inc., Carlton
Communications plc., and Scitex Ltd. The business included in
the Company-selected old peer group are: Andrew Corp., Dynatech
Corp., Harris Corp., Philips N.V., Tektronix Inc. and Vertex
Communications. The returns of each component issuer in the
foregoing group have been weighted according to the respective
issuer's stock market capitalization.
The data presented for the Company's Common Stock includes a
period (December 31, 1990 to December 27, 1991) in which the
Company operated under Chapter 11 of the U.S. Bankruptcy Code
and approximately 11,570,000 shares of Common Stock were
outstanding. Upon emerging from Chapter 11, the capitalization
of the Company was changed, and 60,987,726 shares of Common
Stock and 5,795,555 Common Stock Purchase Warrants (exercisable
for a total of 5,795,555 shares) were then outstanding. As of
December 31, 1995, an additional 25,000,000 shares have been
issued and are outstanding due to the conversion of the Chyron
Corporation Convertible Notes, and an additional 4,070,024
shares were issued and are outstanding due to the exercise of
the Common Stock Purchase Warrants.
PROPOSAL TO AMEND THE LONG-TERM INCENTIVE PLAN
Upon recommendation of the Board of Directors of the Company,
the Board is hereby submitting to the shareholders of the
Company for their approval the proposed amendment to the Plan.
The amendment to the Plan extends the persons eligible to be
granted options under the Plan to include non-employee
directors. Such directors shall receive a formula grant of
non-incentive stock options to purchase 10,000 shares of Common
Stock at an exercise price equal to the closing price of the
Common Stock on the last trading day in July for that year as
reported on the New York Stock Exchange (the "NYSE"). The
purpose of this amendment is to enable the Company to attract,
retain and motivate directors who are not employed by the
Company, by providing such individuals a proprietary interest
in the Company and to comply with Rule 16b-3 promulgated under
the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"). In all other respects the Plan will remain
unchanged.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS
PROPOSAL.
SUMMARY OF THE PLAN
The purpose of the Plan is to enable the Company to attract,
retain and motivate persons employed by the Company and its
subsidiaries, including officers and directors, in managerial
capacities on a full-time basis, by providing such persons with
a proprietary interest in the Company and its performance. The
Plan is administered by the Compensation Committee, consisting
of two or more members of the Board of Directors appointed by
the Board. The Plan does not limit the availability of awards
to any particular class or classes of employees. An aggregate
of 5,000,000 shares of Common Stock of the Company are subject
to awards under the Plan. The shares are either authorized and
unissued or held in the treasury of the Company, including
shares acquired by the Company in public and private
transactions. If an award were to lapse or rights to an award
otherwise were to terminate, the shares subject to the award
would be available for future awards to the extent permitted by
applicable federal securities laws.
Awards under the Plan are made in the form of restricted stock,
stock options, stock appreciation rights and long-term
performance awards. The Compensation Committee, in its sole
discretion, designates employees eligible to receive awards,
determines the form of each award, determines the number of
shares of stock subject to each award, establishes the exercise
price of each award and such other terms and conditions
applicable to the award as the Committee deems appropriate.
Restricted stock awards are awards of shares subject to a
restriction period established by the Compensation Committee,
which period may phase-in over time. The committee establishes
the price to be paid by the recipient of any such award. The
committee could, in its sole discretion, provide for the
acceleration or waiver of any restriction. Dividends on
restricted stock would, at the discretion of the committee, be
paid currently to the recipient or held by the Company until
the restriction period expires.
Stock option awards can be either incentive or non-incentive.
In either case, the exercise price of the option would not be
less than the fair market value of the underlying shares as of
the date the award is granted. Options would become exercisable
at such times as may be established by the Compensation
Committee when granting the award. No stock option could be
exercised more than ten years after the date the option is
granted.
Incentive stock options are subject to certain additional
restrictions, including that the exercise price of such options
granted to a holder of 10% or more of the Common Stock of the
Company must equal at least 110% of the fair market value of
the underlying shares at the time of the grant; the aggregate
fair market value of the underlying shares with respect to
which incentive stock options first become exercisable by a
participant in any year must not exceed $100,000; and such
options must expire within ninety (90) days of termination,
including termination due to death or disability.
A stock appreciation right (hereinafter "SAR") award allows the
holder, upon exercise, to receive, at the Compensation
Committee's election, cash or Common Stock equal to the amount
of the value of the shares of Common Stock of the Company at
the date of exercise less the purchase price specified in the
SAR. SARs could be awarded independently or in tandem with any
stock option granted under the Incentive Plan. SARs awarded in
tandem with stock options would be exercisable when the
accompanying option would be exercisable. SARs vest over a
period of time established by the Committee and have such other
terms, including any forfeiture provisions, as determined by
the Committee in its sole discretion.
Long-term performance awards could be granted independently or
in conjunction with any other award under the Plan. The
Compensation Committee determines the nature, length and
starting date of the performance period for each long-term
performance award. The Committee determines the performance
objectives to be used in valuing such awards and in determining
the extent to which such awards had been earned. Performance
objectives established by the Committee could vary with each
award, and awards are based upon such performance factors as
the Committee deems appropriate, including (but not limited to)
earnings per share or return on equity.
Awards granted under the Plan are not transferable, except in
the event of the participant's death.
The Board of Directors of the Company may amend or terminate
the Plan at any time. No amendment, however, may be made that
would impair the rights of a participant with respect to any
award that has been granted without that participant's consent.
The Plan currently qualifies as an employee benefit plan exempt
from the provisions of the reporting and short-swing profit
recapture provision of Section 16 of the Exchange Act. Rule
16b-3 of the Exchange Act requires that any amendment that
materially increases the benefits accruing to participants,
that materially increases the number of securities that may be
issued under the Plan or that materially modifies the
requirements for eligibility under the Plan must be approved by
the shareholders. Accordingly, the Board of Directors is
seeking the approval of the shareholders with respect to the
proposed amendment to the Plan so as to maintain the Plan's
qualification under Rule 16b-3.
AMENDMENT TO THE PLAN
Under the proposed amendment, the Plan would provide
non-employee directors with the opportunity to receive
non-incentive stock options. Members of the Compensation
Committee, as well as other non-employee directors, shall
receive a formula grant of options which allows the Plan to
continue to qualify as an employee benefit plan which is exempt
from the provisions of Section 16 of the Exchange Act.
Non-employee directors shall be granted options to purchase
10,000 shares of Common Stock at an exercise price equal to the
closing price as reported on the NYSE on the last trading day
in July of the year that such options are granted.
Non-employee directors have already been granted such options
for July 1995, subject to shareholder approval of this
amendment to the Plan. No other changes have been made to the
Plan.
NEW PLAN BENEFITS TABLE
NUMBER
EXERCISE OF EXPIRATION
NAME AND POSITION PRICE($) OPTIONS DATE
Sheldon D. Camhy, Director $1.875 10,000 07/31/2000
Charles M. Diker, Director $1.875 10,000 11/21/2000
Alan J. Hirschfield, Director $1.875 10,000 07/31/2000
Wesley W. Lang, Jr., Director $1.875 10,000 07/31/2000
Eugene M. Weber, Director $1.875 10,000 07/31/2000
NON-EXECUTIVE DIRECTOR GROUP 50,000
(5 INDIVIDUALS)
As of March 15, 1996, the closing price of a share of Common
Stock as reported on the NYSE
was $3.375.
Federal Income Tax Treatment of the Plan
The following is a brief description of the federal income tax
treatment which will generally apply to benefits or awards
(hereinafter, "awards") made under the Plan, based on federal
income tax laws in effect on the date hereof. The exact
federal income tax treatment of awards will depend on the
specific nature of any such award. Such an award may,
depending on the conditions applicable to the award, be taxable
as an option, an award of restricted or unrestricted stock, an
award which is payable in cash, or otherwise. BECAUSE THE
FOLLOWING PROVIDES ONLY A BRIEF SUMMARY OF THE GENERAL FEDERAL
INCOME TAX RULES, INDIVIDUALS SHOULD NOT RELY THEREON FOR
INDIVIDUAL TAX ADVICE, AS EACH TAXPAYER SITUATION AND THE
CONSEQUENCES OF ANY PARTICULAR TRANSACTION WILL VARY DEPENDING
UPON THE SPECIFIC FACTS AND CIRCUMSTANCES INVOLVED. RATHER,
EACH TAXPAYER IS ADVISED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR FOR PARTICULAR FEDERAL AS WELL AS STATE AND LOCAL
INCOME AND ANY OTHER TAX ADVICE.
The grant of an incentive stock option or a non-incentive stock
option would not result in income for the grantee or a
deduction for the Company.
The exercise of a non-incentive stock option would result in
ordinary income for the optionee and a deduction for the
Company measured by the difference between the option price and
the fair market value of the shares received at the time of
exercise.
The exercise of an incentive stock option would not result in
income for the grantee if the grantee (i) does not dispose of
the shares within two years after the date of grant or one year
after the transfer of shares upon exercise and (ii) is an
employee of the Company or a subsidiary of the Company from the
date of grant until three months before the exercise date. If
these requirements are met, the basis of the shares upon later
disposition would be the option exercise price. Any gain will
be taxed to the employee as long-term capital gain and the
Company would not be entitled to a deduction. The excess of
the market value on the exercise date over the option exercise
price is an item of tax preference, potentially subject to the
alternative minimum tax.
The grant of an SAR award would not result in ordinary income
for the grantee or in a deduction for the Company. Upon the
exercise of an SAR, the grantee would recognize ordinary income
and the Company would be entitled to a deduction measured by
the fair market value of the shares plus any cash received.
The grant of restricted stock should not result in ordinary
income for the grantee or in a deduction for the Company for
federal income tax purposes, assuming the shares transferred
are subject to restrictions resulting in a "substantial risk of
forfeiture" as intended by the Company. If there are no such
restrictions, the grantee would recognize ordinary income upon
receipt of the shares. Dividends paid to the grantee while the
stock remained subject to restriction would be treated as
compensation for federal income tax purposes. At the time the
restrictions lapse, the grantee would receive ordinary income,
and the Company would be entitled to a deduction measured by
the fair market value of the shares at the time of lapse.
The grant of a long-term performance award would have no tax
effect on the Company or the recipient at the time of the
grant. The recipient of any cash payment or shares issued
pursuant to the terms of such an award generally would
recognize ordinary income in an amount equal to the amount of
such cash and the fair market value of such shares as of the
date of issuance. The amount of ordinary income recognized by
the recipient generally would be deductible by the Company in
the year that the income was recognized.
Awards may be granted to participants under the Plan which do
not fall clearly into the categories described above. The
federal income tax treatment of these awards will depend upon
the specific terms of such awards. Generally, the Company will
receive a deduction equal to, and will be required to withhold
applicable taxes with respect to, any ordinary income
recognized by a participant in connection with awards made
under the Plan.
OTHER MATTERS ARISING AT THE ANNUAL MEETING
The matters referred to in the Notice of Annual Meeting and
described in this Proxy Statement are, to the knowledge of the
Board of Directors, the only matters that will be presented for
consideration at the Annual Meeting. If any other matters
should properly come before the Annual Meeting, the persons
appointed by the accompanying proxy will vote on such matters
in accordance with their best judgment pursuant to the
discretionary authority granted to them in the proxy.
PRINCIPAL SHAREHOLDERS
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of March 18, 1996, certain
information about all persons who, to the Company's knowledge,
were beneficial owners of 5% or more of Common Stock of the
Company.(1)
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNER CLASS
WPG Corporate Development 20,060,755(2) 21.43
Associates IV, L.P.
One New York Plaza
New York, New York 10004
WPG Corporate Development 4,837,540(3) 5.17
Associates IV (Overseas), L.P.
One New York Plaza
New York, New York 10004
WPG Enterprise Fund II, L.P. 4,984,717(4) 5.32
555 California Street
San Francisco, California 94104
WPG Private Equity Partners, L.P. 20,060,755(5) 21.43
One New York Plaza
New York, New York 10004
WPG CDA IV (Overseas), Ltd. 4,837,540(6) 5.17
BankAmerica Trust and
Banking Corp.
PO Box 1092
Georgetown, Grand Cayman Island
WPG Private Equity Partners 4,837,540(7) 5.17
(Overseas), L.P.
Bank America Trust and Banking Corp.
PO Box 1092
Georgetown, Grand Cayman Island
WPG Venture Partners III, L.P. 9,129,302(8) 9.75
555 California Street
San Francisco, California 94104
Steven N. Hutchison 24,898,295(9) 26.60
Weiss, Peck & Greer, L.L.C.
One New York Plaza
New York, New York 10004
Philip Greer 13,966,842(10) 14.92
Weiss, Peck & Greer, L.L.C.
555 California Street
San Francisco, California 94104
Gill Cogan 9,129,302(11) 9.75
Weiss, Peck & Greer, L.L.C.
555 California Street
San Francisco, California 94104
Westpool Investment Trust plc 7,884,491(12) 8.42
Carlton House
33 Robert Adam Street
London, W1M5AH
CC Acquisition Company A, L.L.C. 13,600,000(13) 14.53
3490 Clubhouse Drive
Box 7443
Jackson, Wyoming 83001
CC Acquisition Company B, L.L.C. 11,765,892 12.57
3490 Clubhouse Drive
Box 7443
Jackson, Wyoming 83001
Allan R. Tessler 25,365,892(14) 27.10
3490 Clubhouse Drive
Box 7443
Jackson, Wyoming 83001
Sepa Technologies Ltd., Co. 8,700,000 9.29
c/o Dow, Lohnes & Albertson
One Ravina Drive
Atlanta, Georgia 30346
John A. Servizio 8,700,000(15) 9.29
Calle Profesor Waksman 3
Piso 3A
Madrid, Spain 28036
(1) The table in this section is based upon information
supplied by Schedules 13D and 13G, if any, filed with
the SEC. Unless otherwise indicated in the footnotes to
the table and subject to the community property laws where
applicable, each of the shareholders named in this table
has sole voting and investment power with respect to
the shares shown as beneficially owned by him.
Applicable percentage of ownership is based on 93,615,708
shares of common stock, which were outstanding on March
18, 1996.
(2) Includes 2,290,140 shares of Common Stock owned by
Sepa Technologies Ltd. Co. ("Sepa") and Albert O.P.
Leubert Ltd. ("Leubert") over which it has voting control.
(3) Includes 551,420 shares of Common Stock owned by
Sepa and Leubert over which it has voting control.
(4) Includes 539,160 shares of Common Stock owned by
Sepa and Leubert over which it has voting control.
(5) WPG Private Equity Partners, L.P. ("PEP") serves
as the general partner of WPG Corporate Development
Associates IV, L.P. ("CDA"). PEP disclaims beneficial
ownership of such shares, except to the extent of its
interest in CDA.
(6) WPG CDA IV (Overseas), Ltd. ("Overseas") serves
as one of the general partners of WPG Corporate
Development Associates IV (Overseas), L.P. ("CDAO").
Overseas disclaims beneficial ownership of such shares,
except to the extent of its interest in CDAO.
(7) WPG Private Equity Partners (Overseas), L.P.
("PEPO") serves as one of the general partners of
CDAO. PEPO disclaims beneficial ownership of such shares,
except to the extent of its interest in CDAO.
(8) WPG Venture Partners III, L.P. ("WPGVP") serves as
the general partner of WPG Enterprise Fund II, L.P.
("WPGEF") and Weiss, Peck & Greer Venture Associates
III, L.P. ("WPGVA"). WPGVA has dispositive power over
3,671,545 shares of Common Stock and voting power over
473,040 shares of Common Stock owned by Sepa and Leubert.
WPGVP disclaims beneficial ownership of such shares,
except to the extent of its interest in WPGEF and WPGVA.
(9) Mr. Hutchinson is a co-managing partner of PEP and
PEPO and a director of Overseas. Mr. Hutchinson disclaims
beneficial ownership of such shares, except to the extent
of his interest in PEP, PEPO and Overseas.
(10) Mr. Greer is a co-managing partner of WPGVP, a general
partner of PEP and PEPO, and a director of Overseas.
Mr. Greer disclaims beneficial ownership of such shares,
except to the extent of his interests in PEPO, PEP,
Overseas and WPGVP.
(11) Mr. Cogan is a co-managing partner of WPGVP and a
director of Overseas. Mr. Cogan disclaims beneficial
ownership of such shares, except to the extent of his
interest in WPGVP and Overseas.
(12) Includes 900,180 shares of Common Stock owned by
SEPA and Leubert over which it has voting control.
(13) Includes 3,480,000 shares of Common Stock owned by
Sepa and 120,000 shares owned by Leubert over which it
has voting control.
(14) These shares are owned by CCA and CCB and includes
3,480,000 shares owned by Sepa and 120,000 shares owned
by Leubert over which CCA has voting control. Mr. Tessler
is the President and sole manager of CCA and CCB. Mr.
Tessler does not admit that he is, for purposes of
Section 16(a) of the Exchange Act or otherwise, the
beneficial owner of such shares.
(15) Mr. Servizio is the Chairman and Chief Executive Officer
of Sepa and owns the controlling equity interest in Sepa.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 18, 1996, certain
information with respect to the beneficial ownership of each
class of the Company's equity securities by each director,
director nominee and executive officer of the Company and all
directors and executive officers of the Company as a group.
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF TOTAL
Michael I. Wellesley-Wesley 25,365,892(2) 27.10
CEO and Chairman of the Board
Sheldon D. Camhy 10,000(3) *
Director
S. James Coppersmith 0 0
Director
Daniel I. DeWolf 71,415(3)(4) *
Secretary
Charles M. Diker 1,669,922(3)(5) 1.78
Director
Isaac Hersly 202,876 *
President, COO and Director
Alan J. Hirschfield 21,775,892(3)(6) 23.25
Director
Patricia A. Lampe 0 *
Treasurer and CFO
Wesley W. Lang, Jr. 24,908,295(3)(7) 26.60
Director
Eugene M. Weber 10,000(3) *
Director
All current directors, 52,238,400 55.74
nominees and executive
officers as a group
(10 persons)(8)
* Less than one percent (1%)
(1) The table in this section is based upon information
supplied by Schedules 13D and 13G, if any, filed
with the SEC. Unless otherwise indicated in the
footnotes to the table and subject to the community
property laws where applicable, each of the shareholders
named in this table has sole voting and investment power
with respect to the shares shown as beneficially owned
by him. Applicable percentage of ownership is based on
93,615,708 shares of common stock, which were outstanding
on March 18, 1996.
(2) CCA and CCB own these shares. Mr. Wellesley-Wesley
is indirectly one of several members of and the Vice
President of CCA and CCB. Mr. Wellesley-Wesley does not
admit that he is, for purposes of Section 16(a) of
the Exchange Act or otherwise, the beneficial owner of
such shares. Includes 3,600,000 shares owned by Sepa
and Leubert over which CCA has voting control.
(3) Includes 10,000 shares which may be acquired
upon the exercise of presently exercisable options
assuming the amendment to the Plan is approved by
shareholders.
(4) Pine Street Ventures, L.L.C. directly owns 61,415
of these shares. Mr. DeWolf is a manager of Pine Street
Ventures and disclaims beneficial ownership of such shares.
(5) Mr. Diker directly owns 1,470,382 shares of Common
Stock and has voting control over 189,540 shares owned
by Sepa and Leubert.
(6) CCA and CCB own these shares. Mr. Hirschfield is
one of several members of CCA and CCB and he does not
admit that he is, for purposes of Section 16(a) of
the Exchange Act or otherwise, the beneficial owner of
such shares.
(7) Includes 22,055,735 shares beneficially owned by CDA,
CDAO, PEP, PEPO and Overseas. Includes 2,842,560 shares
of Common Stock owned by Sepa and Leubert over which Mr.
Lang has indirect voting control. Mr. Lang is the
co-managing partner of PEP and PEPO and a director
of Overseas. Mr. Lang disclaims beneficial ownership
of such shares, except to the extent of his interests
in PEP, PEPO and Overseas. Mr. Lang has assigned his
economic benefit in the exercise of his options to
CDA and CDAO.
(8) Includes 60,000 shares which may be acquired
upon the exercise of presently exercisable warrants
assuming the amendment to the Plan is approved by
shareholders.
CHANGE IN CONTROL
On May 26, 1995, CCA, a Delaware limited liability company and
CCB, a Delaware limited liability company, entered into a stock
purchase agreement (the "Pesa Agreement") by and among CCA,
CCB, and Pesa, Inc. ("Pesa") with respect to the purchase of an
aggregate of 59,414,732 shares of Common Stock as follows:
(i)30,000,000 shares of Common Stock to be purchased by CCA for
an aggregate purchase price of $15,600,000, 10,000,000 shares
of which shares were delivered on May 26, 1995 concurrently
with the payment by CCA of $5,000,000 to Pesa and 20,000,000 of
which shares were placed in escrow; and (ii) 29,414,732 shares
of Common Stock to be purchased by CCB for an aggregate
purchase price of $14,119,071.36 payable in installments
commencing six months following the closing (the "Closing") of
the transaction contemplated by the Pesa Agreement and the Sepa
Agreement (as defined below). On May 26, 1995, CCA also
entered into a stock purchase agreement (the "Sepa Agreement")
by and among CCA, Sepa Technologies Ltd., Co. ("Sepa"), and
John A. Servizio with respect to the purchase by CCA of an
aggregate of 5,000,000 shares of Common Stock and the receipt
by CCA of a right of first refusal to acquire 9,000,000 shares
of Common Stock. Prior to May 26, 1995, Sepa, through Pesa,
directly and indirectly, was the controlling shareholder of the
Company and beneficially owned 73,414,732 shares of Common
Stock which accounted for approximately 84% of the shares
outstanding. On July 25, 1995, CCA entered into an agreement,
dated July 25, 1995 (the "Leubert Agreement") between CCA and
Albert O.P. Leubert Ltd., a New York corporation ("Leubert")
pursuant to which CCA was granted a right of first refusal to
acquire 300,000 shares of Common Stock, which shares were
acquired by Leubert from Sepa and which reduced from 9,000,000
to 8,700,000 the right of first refusal to acquire shares of
Common Stock as set forth in the Sepa Agreement.
On July 25, 1995, CCA and CCB entered into an assignment and
assumption agreement (the "Assignment Agreement") by and among
CCA, CCB, CDA, a Delaware limited partnership, CDAO, a Cayman
Islands exempt limited partnership, WPGEF, a Delaware limited
partnership, WPGVA, a Delaware limited partnership, Westpool
Investment Trust plc, a public limited company organized under
the laws of England ("WIT"), Lion Investments Limited, a
limited company organized under the laws of England ("Lion")
and Charles M. Diker (such individual together with CDA, CDAO,
WPGEF, WPGVA, WIT and Lion, the "New Investor Group") and
certain other persons (such persons together with the New
Investor Group, the "Assignees"), pursuant to which (i) CCA
assigned to the Assignees its rights under the Pesa Agreement
to acquire 20,000,000 shares, (ii) CCA assigned its right of
first refusal to acquire 5,400,000 of the 9,000,000 shares of
Common Stock as set forth in the Sepa Agreement and the Leubert
Agreement described above, and (iv) CCB assigned its rights
under the Pesa Agreement to acquire 17,648,839 shares of Common
Stock. The Closing occurred on July 25, 1995. The source
of the funds for these acquisitions were from the working
capital of such entities.
On July 25, 1995 CCA, CCB and the New Investor Group entered
into a shareholders agreement (the "Shareholders Agreement")
pursuant to which, the parties agreed, among other things, (i)
that the Board would be constituted to have nine members (ii)
that until such date as CCA and CCB collectively cease to
beneficially own 8% of the issued and outstanding shares of
Common Stock, they shall have the right to nominate three (3)
members to the Board (the "CCA Directors"), (iii) that until
such date as the New Investor Group cease to beneficially own
8% of the issued and outstanding shares of Common Stock, CDA,
CDAO, WPGEF and WPGVA (collectively, the "WP Group") have the
right to nominate one member to the Board, WIT and Lion
(collectively "WIT\Lion") have the right to nominate one member
to the Board, and the WP Group and WIT\Lion shall together have
the right to nominate one member to the Board (such three
members are referred to as the "WP Group Directors"), (iv) that
they would agree on who should serve as the three other
directors, and (v) to vote or cause to be voted all of the
shares of Common Stock of which such party is the beneficial
owner in favor of the actions contemplated by (i), (ii), and
(iii) above. The Sepa Agreement provides that Sepa will vote
all of its shares in accordance with the directions of CCA.
The Leubert Agreement gives voting control over the 300,000
shares to CCA. CCA assigned the voting rights to 5,220,000
shares of the Sepa shares to the Assignees, a proxy regarding
such shares was given to Mr. Lang, and CCA retained the voting
control over the remaining 3,480,000 shares, a proxy regarding
such shares was given to Mr. Wellesley-Wesley. Also, CCA
assigned the voting rights to 180,000 of the Leubert shares to
the Assignees, a proxy regarding such shares was given to Mr.
Lang, and CCA retained voting control over the remaining
120,000 shares, a proxy regarding such shares was given to Mr.
Wellesley-Wesley.
You are directed to the Security Ownership Table for the number
of shares currently owned, and the percentage of ownership, by
the above-mentioned shareholders.
INTERESTED PARTY TRANSACTIONS
John A. Servizio, a former Director of the Company who resigned
on February 9, 1996, is also a director and/or officer of Sepa
Technologies Ltd., Co., a Georgia limited liability company
(hereinafter "Sepa"), Sepa's wholly-owned Spanish subsidiary
Pesa Electronica, S.A. (hereinafter "Electronica"),
Electronica's wholly-owned Delaware subsidiary Pesa, Inc., and
Pesa, Inc's wholly-owned U.S. subsidiaries. As discussed in
the sections captioned "Security Ownership of Certain
Beneficial Owners" and "Change in Control", Sepa directly, and
indirectly through Pesa, Inc., was the controlling shareholder
of the Company up to July 25, 1995, and Sepa in turn is
controlled by Mr. Servizio.
On December 27, 1991, as amended March 12, 1992, the Company
entered into a Management Agreement (hereinafter "Management
Agreement") with Electronica for the provision by Electronica
or a wholly-owned subsidiary thereof of certain business and
technical services to the Company, including the expertise of
certain employees of Electronica. In consideration of the
services provided under the Management Agreement, the Company
agreed to pay Electronica an amount equal to 3% of Consolidated
Revenues (as defined in the Management Agreement). On March
10, 1992, Electronica assigned the Management Agreement to
Pesa, Inc., who as of July 1, 1994 assigned the Management
Agreement to Sepa. The Company subsequently negotiated with
Sepa an Amended and Restated Management Agreement, reducing the
management fee from 3% to 2.5% as of January 1, 1995 and
extending the expiration date to December 31, 1997. In
addition, the Company exercised its option to prepay the July
1, 1994 to December 31, 1995 management fee at a discount of
25%.
On December 8, 1995, the Company entered into an agreement with
Sepa to terminate the Management Agreement. The Company agreed
to pay $1 million on December 8, 1995 and an additional $1
million on January 26, 1996. These amounts have been paid.
Camhy Karlinsky & Stein LLP has acted as company counsel since
July 1995. Messrs. Camhy, a Director of the Company, and
DeWolf, the corporate Secretary to the Company, are both
partners in the firm. The Company paid the firm $180,000 for
legal services rendered during fiscal 1995.
SHAREHOLDER PROPOSALS
A shareholder of the Company who wishes to present a proposal
for action at the Company's 1997 Annual Meeting of Shareholders
must submit such proposal to the Company, and such proposal
must be received by the Company, no later than December 1,
1996.
COST OF SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is
made by and on behalf of the Company's Board of Directors. The
cost of such solicitation will be paid by the Company. Such
cost includes the preparation, printing and mailing of the
Notice of Annual Meeting, Proxy Statement, Annual Report and
form of proxy. The solicitation will be conducted principally
by mail, although directors, officers and employees of the
Company (at no additional compensation) may solicit proxies
personally or by telephone or telegram. Arrangements will be
made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of proxy material to the
beneficial owners of shares held of record by such fiduciaries,
and the Company may reimburse such persons for their reasonable
expenses in so doing.
INDEPENDENT PUBLIC ACCOUNTANTS
On October 19, 1995 the Audit Committee, with the approval of
the full Board of Directors, dismissed Ernst & Young LLP as the
Company's auditors and replaced them with Price Waterhouse LLP.
The reports of Ernst & Young LLP did not contain an adverse
opinion or a disclaimer of opinion, or was qualified or
modified as to uncertainty, audit scope, or accounting
principles. There were no disagreements with the former
auditors on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure
related to the financial statements which Ernst & Young LLP
reported on at the time of their dismissal which, if not
resolved to the former auditors' satisfaction, would have
caused them to make reference to the subject matter of the
disagreement in connection with their report. Prior to
retaining Price Waterhouse LLP, the Company had not consulted
with Price Waterhouse LLP regarding accounting principles. It
is expected that representativesof Price Waterhouse LLP will be
available at the Annual Meeting to respond to appropriate
questions.
SECTION 16(a) REPORTING DELINQUENCIES
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who
beneficially own more than ten percent (10%) of a registered
class of the Company's equity securities, to file with the U.S.
Securities and Exchange Commission (hereinafter "SEC"), New
York Stock Exchange and Chicago Stock Exchange reports of
ownership and changes in ownership of Common Stock and other
equity securities of the Company. Executive officers,
directors and greater than ten percent (10%) beneficial owners
are required by SEC regulation to furnish the Company with
copies of all Section 16(a) reports that they file. Based
solely upon a review of the copies of such reports furnished to
the Company or written representations that no other reports
were required, the Company believes that, during fiscal year
1995, all filing requirements applicable to its executive
officers, directors, and greater than ten percent (10%)
beneficial owners were met except that Form 4's for Mr. John A.
Servizio, a former Chief Executive Officer and Director of the
Company, were not filed in his own name on a timely basis with
respect to the sale by Sepa and Pesa, which did file timely, of
20,000,000 shares of Common Stock, the sale of 29,414,732
shares of Common Stock and the sale of 15,300,000 shares of
Common Stock.
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge to each person whose
proxy is solicited, upon the written request of any such
person, a copy of the Company's Annual Report on Form 10-K for
the period January 1, 1995 through December 31, 1995, filed
with the SEC, including the financial statements and the
schedules thereto. The Company does not undertake to furnish
without charge copies of all exhibits to its Form 10-K, but
will furnish any exhibit upon the payment of Twenty Cents
($0.20) per page or a minimum charge of Five Dollars ($5.00).
Such written requests should be directed to Ms. Judy Mauro,
Director of Corporate Communications, Chyron Corporation, 5 Hub
Drive, Melville, New York 11747. Each such request must set
forth a good faith representation that, as of March 27, 1996,
the person making the request was a beneficial owner of
securities entitled to vote at the Annual Meeting. The Company
incorporates herein the Annual Report by reference.
By Order of the Board of Directors,
Daniel I. DeWolf
Secretary
Melville, New York
March 28, 1996
CHYRON CORPORATION
CHYRON 1995 LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
SECTION CONTENTS PAGE
1. Purpose; Definitions. . . . . . 1
2. Administration. . . .. . . . . . 3
3. Stock Subject to the Plan. . . . 4
4. Eligibility.. . . . . . . . . . 6
5. Stock Options. . . . . . . . . . 6
6. Stock Appreciation Rights. . . . 10
7. Restricted Stock. . . . . . . . 12
8. Long Term Performance Awards.. . 14
9. Amendments and Termination . . . 16
10. Unfunded Status of Plan . .. . . 16
11. General Provisions. . . . . . . 17
12. Effective Date of Plan. .. . . . 18
13. Term of Plan. . . . . . . . . . 18
SECTION 1. PURPOSE; DEFINITIONS.
The name of this plan is the Chyron 1995 Long-Term Incentive
Plan (the "Plan"). The purpose of the Plan is to enable
employees of Chyron Corporation (the "Corporation") to (i) own
shares of stock in the Corporation, (ii) participate in the
shareholder value which has been created, (iii) have a
mutuality of interest with other shareholders and (iv) enable
the Corporation to attract, retain and motivate key employees
of particular merit.
For the purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Cause" means a felony conviction of a Participant or the
failure of a Participant to contest prosecution for a felony,
or a Participant's willful misconduct or dishonesty, any of
which is directly and materially harmful to the business or
reputation of the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(d) "Committee" means the Incentive Plan Committee of the
Board, or such other Board committee as may be designated by
the Board to administer the Plan, or any subcommittee of
either; provided, that the Committee, and any subcommittee
thereof, shall consist of two or more directors, each of whom
is a "disinterested person" within the meaning of Rule 16b-3
under the Exchange Act and an "outside director" within the
meaning of Section 162(m) of the Code.
(e) "Corporation" means Chyron Corporation, a corporation
organized under the laws of the State of New York or any
successor organization.
(f) "Disability" means permanent and total disability as
determined under the Corporation's long-term disability
program.
(g) "Early Retirement" means retirement with consent of the
Committee at the time of retirement from active employment with
the Corporation pursuant to the early retirement provisions of
the pension plan of the Corporation.
(h) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time. References to any provision of
the Exchange Act shall be deemed to include successor
provisions thereto and regulations thereunder.
(i) "Fair Market Value" means, as of any given date, the
closing selling price of the Stock on the New York Stock
Exchange (consolidated trading) or, if no such sale occurs on
the New York Stock Exchange on such date, the fair market value
of the Stock as determined by the Committee in good faith based
on the best available facts and circumstances at the time.
(j) "Incentive Stock Option" means any Stock Option intended to
be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
(k) "Insider" means a Participant who is subject to the
requirements of the Rules (as defined below).
(l) "Long-Term Performance Award" or "Long-Term Award" means
an award made pursuant to Section 8 below that is payable in
cash and/or Stock (including Restricted Stock) in accordance
with the terms of the grant, based on Corporation, business
unit and/or individual performance over a period of at least
two years.
(m) "Non-Qualified Stock option" means any Stock Option that is
not an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active employment
with the Corporation and any Subsidiary or Affiliate pursuant
to the normal retirement provisions of the pension plan of the
Corporation.
(o) "Parent" means any corporation that would constitute a
parent corporation of the Corporation, as that term is defined
in Section 424(e) of the Code.
(p) "Participant" means an employee, officer or director to
whom an Award is granted pursuant to the Plan.
(q) "Plan" means the Chyron 1995 Long-Term Incentive Plan, as
hereinafter amended from time to time.
(r) "Restricted Stock" means an award of shares of Stock that
is subject to restrictions pursuant to Section 7 below.
(s) "Retirement" means Normal or Early Retirement.
(t) "Rules" means Section 16 of the Exchange Act.
(u) "Securities Broker" means the registered securities broker
acceptable to the Corporation who agrees to effect the cashless
exercise of an Option pursuant to Section 5(1) hereof.
(v) "Stock" means the voting common stock, $0.01 par value per
share, of the Corporation.
(w) "Stock Appreciation Right" means the right, pursuant to an
award granted under Section 6 below, to surrender to the
Corporation all (or a portion) of a Stock Option in exchange
for an amount equal to the difference between (i) the Fair
Market Value, as of the date such Stock Option (or such portion
thereof) is surrendered, of the shares of Stock covered by such
Stock Option (or such portion thereof), and (ii) the aggregate
exercise price of such Stock Option (or such portion thereof).
(x) "Stock Option" or "Option" means any option to purchase
shares of Stock (including Restricted Stock, if the Committee
so determines) granted pursuant to Section 5 below.
(y) "Subsidiary" means any corporation that would constitute a
subsidiary corporation of the Corporation, as that term is
defined in Section 424(f) of the Code.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Committee which shall be
appointed by the
Board and which shall serve at the pleasure of the Board.
The Committee shall have the authority to grant to eligible
employees, pursuant to the terms of the Plan: (i) Stock
Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock
and/or (iv) Long-Term Performance Awards.
In particular, the Committee shall have the authority:
(i) to select the officers and other employees of the
Corporation to whom Stock Options, Stock Appreciation Rights,
Restricted Stock and Long-Term Performance Awards may from time
to time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock and Long-Term Performance Awards,
of any combination thereof, are to be granted hereunder;
(iii) to determine the number of shares to be covered by each
such award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder:
including, but not limited to, the share price and any
restriction or limitation or any vesting acceleration or
forfeiture waiver regarding any Stock Option or other award
and/or the shares of Stock relating thereto, based on such
factors as the Committee shall determine, in its sole
discretion;
(v) to determine whether and under what circumstances a Stock
Option may be settled in cash or stock, including Restricted
Stock under Section 5(k);
(vi) to determine whether and under what circumstances a Stock
Option may be exercised without a payment of cash under
section 5(l); and
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to
an award under this Plan shall be deferred.
The Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices
governing the Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of the Plan
and any award issued under the Plan (and any agreements
relating thereto); and to otherwise supervise the
administration of the Plan.
All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons,
including the Corporation and Plan Participants.
SECTION 3. STOCK SUBJECT TO THE PLAN.
(a) Stock Subject to Plan. The stock to be subject or related
to awards under the Plan shall be shares of the Corporation's
Stock and may be either authorized and unissued or held in the
treasury of the Corporation. The maximum number of shares of
Stock authorized with respect to the grant of awards under the
Plan, subject to adjustment in accordance with Section 3(d)
below, shall be five million (5,000,000) shares of Stock, any
or all of such five million (5,000,000) shares of Stock may be
granted for awards of Incentive Stock Options. Notwithstanding
the foregoing, no individual shall receive, over the term of
the Plan, more than an aggregate of 30% of the shares
authorized for grant under the Plan.
(b) Computation of Stock Available for the Plan. For the
purpose of computing the total number of shares of Stock
available for distribution at any time during which the Plan is
in effect in connection with the exercise of options awarded
under the Plan, there shall be debited against the total number
of shares of Stock determined to be available pursuant to
paragraphs (a) and (c) of this Section 3 the maximum number of
shares of Stock subject to issuance upon exercise of options or
other stock based awards made under the Plan.
(c) Unused, Forfeited and Reacquired Shares. Any unused
portion of the shares available for award shall be carried
forward and shall be made available for Plan awards in
succeeding calendar years. The shares related to the
unexercised or undistributed portion of any terminated, expired
or forfeited award for which no material benefit was received
by a participant (i.e. dividends) also shall be made available
for distribution in connection with future awards under the
Plan to the extent permitted to receive exemptive relief
pursuant to the Rules. Any shares made available for
distribution in connection with future awards under this Plan
pursuant to this paragraph (c) shall be in addition to the
shares available pursuant to paragraph (a) of this Section 3.
(d) Other Adjustment. In the event of any merger,
reorganization, consolidation, recapitalization, stock
dividend, or other change in corporate structure affecting the
Stock, such substitution or adjustment shall be made in the
aggregate number of shares reserved for issuance under the
Plan, in the number and option price of shares subject to
outstanding Options granted under the Plan and in the number
and price of shares subject to other Awards made under the
Plan, as may be determined to be appropriate by the Committee
in its sole discretion, provided that the number of shares
subject to any award shall always be a whole number. Such
adjusted option price shall also be used to determine the
amount payable by the Corporation upon the exercise of any
Stock Appreciation Right associated with any Stock
Option.
SECTION 4. ELIGIBILITY.
Officers, directors and other employees of the Corporation
and/or its Subsidiaries are eligible to be granted awards under
the Plan.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone, in addition to or in tandem
with other awards granted under the Plan. Any Stock Option
granted under the Plan shall be in such form as the Committee
may, from time to time, approve.
Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (11) Non-Qualified Stock Options.
The Committee shall have the authority to grant any participant
Incentive Stock Options, Non-Qualified Stock Options, or both
types of Stock Options (in each case with or without Stock
Appreciation Rights). To the extent that any Stock Option does
not qualify as an Incentive Stock Option, it shall constitute
a separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term
of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to
disqualify the Plan under Section 422 of the Code, or, without
the consent of the Participant(s) affected, to disqualify any
Incentive Stock Option under such Section 422. Options granted
under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem appropriate:
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
Committee at the time of grant but shall be not less than 100%
of the Fair Market Value of the Stock at the time of grant.
However, any Incentive Stock Option granted to any Participant
who, at the time the Option is granted owns, in accordance with
424(d) of the Code, more than 10% of the voting power of all
classes of Stock of the Corporation or of a Parent or
Subsidiary corporation shall have an exercise price no less
than 110% of the Fair Market Value of the Stock at the time of
grant.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more
than ten years after the date the Stock Option is granted.
However, any Incentive Stock Option granted to any Participant
who, at the time the Option is granted owns, in accordance with
424(d) of the Code, more than 10% of the voting power of all
classes of Stock of the Corporation or of a Parent or
Subsidiary corporation may not have a term of more than five
years. No Option may be exercised by any person after
expiration of the term of the Option.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall
be determined by the Committee at or after grant, provided,
however, that, except as provided in Section 5(f), unless
otherwise determined by the Committee at or after grant, no
Stock Option shall be exercisable during the six months
following the date of the granting of the Stock Option. If the
Committee provides, in its discretion that any Stock Option is
exercisable only in installments, the Committee may waive such
installment exercise provisions at any time at or after grant
in whole or in part, based on such factors as the Committee
shall determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment
exercise provisions apply under Section 5(c), Stock Options may
be exercised in whole or in part at any time and from time to
time during the option period, by giving written notice of
exercise to the Corporation specifying the number of shares to
be purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check, or such
other instrument as the Committee may accept. As determined by
the Committee, in its sole discretion, at or after grant,
payment in full or in part may also be made in the form of
shares of unrestricted Stock owned by the Participant in which
case, satisfaction of the Option price shall be based on the
Fair Market Value of the Stock, as determined by the Committee,
on the date the Option is exercised. In the case of an
Incentive Stock Option, the right to make payment in the form
of already owned shares may be authority only at the time of
Option grant.
The Committee, in its sole discretion, may at the time of grant
or such later time as it determines, permit payment of the
option exercise price of a Non-Qualified Stock Option to be
made in whole or in part in the form of Restricted Stock. If
such payment is permitted, then such Restricted Stock (and any
replacement shares relating thereto) shall remain (or be)
restricted in accordance with the original terms of the
Restricted Stock award in question, and any additional Stock
received upon the exercise shall be subject to the same
forfeiture restrictions, unless otherwise determined by the
Committee, in its sole discretion, at or after grant.
If payment of the Option exercise price of a Non-Qualified
Option is made in whole or in part in the form of unrestricted
Stock already owned by the Participant, the Corporation may
require that the Stock be owned by the Participant for a period
of six months or longer so that such payment would not result
in a pyramid exercise.
No shares of Stock shall be issued until full payment therefor
has been made. A Participant shall generally have the rights
to dividends or other rights of a shareholder with respect to
shares subject to the Option when the Participant has given
written notice of exercise, has paid in full for such shares,
and, if requested, has given the representation described in
Section 11(a).
(e) Non-transferability of Options. No Stock Option shall be
transferable by the Participant otherwise than by will or by
the laws of descent and distribution, and all Stock Options
shall be exercisable, during the Participant's lifetime, only
by the Participant
(f) Termination by Reason of Death. Subject to Section 5(j),
if a Participant's employment by the Corporation and any
Subsidiary terminates by reason of death, any Stock Option held
by such Participant may thereafter by exercised, to the extent
then exercisable or on such accelerated basis as the Committee
may determine at or after grant, by the legal representative of
the estate or by the legatee of the Participant under the will
of the Participant, for a period of one year (or such shorter
period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such
Stock Option, whichever period is the shorter.
(g) Termination by Reason of Disability. Subject to Section
5(j), if a Participant's employment by the Corporation and any
Subsidiary terminates by reason of Disability, any Stock Option
held by such Participant may thereafter be exercised by the
Participant, to the extent it was exercisable at the time of
termination, or on such accelerated basis as the Committee may
determine at or after grant, for a period of one year (or such
shorter period as the Committee may specify at grant) from the
date of such termination of employment or until the expiration
of the stated term of such Stock Option, whichever period is
the shorter.
(h) Termination by Reason of Retirement. Subject to Section
5(j), if a Participant's employment by the Corporation
terminates by reason of Normal or Early Retirement, any Stock
Option held by such Participant may thereafter be exercised by
the Participant, to the extent it was exercisable at the time
of such Retirement or on such accelerated basis as the
Committee may determine at or after grant, for a period of one
year (or such shorter period as Committee may specify at grant)
from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever
period is the shorter. Notwithstanding the foregoing,
Incentive Stock Options may be exercised for the lesser of
three months from the date of such termination of employment or
the balance of such Stock Option's term.
(i) Other Termination. Unless otherwise determined by the
Committee at or after grant, if an Participant's employment by
the Corporation terminates for any reason other than death,
Disability or Normal or Early Retirement, the Stock Option
shall thereupon terminate, except that such Stock Option may be
exercised for the lesser of three months or the balance of such
Stock Option's term if the Participant is involuntarily
terminated by the Corporation without Cause.
(j) Incentive Stock Option Limitations. To the extent required
for "Incentive Stock Option" status under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the
time of grant) of the Stock with respect to which Incentive
Stock Options are exercisable for the first time by the
Participant during any calendar year under the Plan and/or any
other stock option plan of the Corporation and its Parent and
Subsidiaries, if any, shall not exceed $100,000.
(k) Cash-out of Option; Settlement of Spread Value in
Restricted Stock. On receipt of written notice to exercise,
the Committee may, in its sole discretion, elect to cash out
all or part of the portion of the option(s) to be exercised by
paying the Participant an amount, in cash or Stock, equal to
the excess of the Fair Market Value of the Stock over the
option price (the "Spread Value") on the effective date of such
cash-Out.
In addition, if the option agreement so provides at grant or is
amended after grant and prior to exercise to so provide (with
the Participant's consent), the Committee may require that all
or part of the shares to be issued with respect to the Spread
Value of an exercised option take the form of Restricted Stock,
which shall be valued on the date of exercise on the basis of
the Fair Market Value of such Restricted Stock determined
without regard to the forfeiture restrictions involved.
(l) Cashless Exercise. To the extent permitted under the
applicable laws and regulations under Section 16 of the
Securities Exchange Act of 1934, as amended, and the Rules
promulgated thereunder, and with the consent of the Committee,
the Corporation agrees to cooperate in a "cashless exercise" of
an Option. The cashless exercise shall be effected by the
Participant delivering to the Securities Broker instructions to
sell a sufficient number of shares of Common Stock to cover the
costs and expenses associated therewith.
(m) Formula Grant to Directors. Directors who are not officers
of the Corporation, including, without limitation, Directors
who serve as members of the Corporation and Stock Option
Committee, shall receive as formula grants, on an annual basis
on the last trading day of each July, stock options for 10,000
shares of the Corporation's Common Stock, at an exercise price
equal to the Fair Market Value of the stock on the date of
grant.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option
granted under the Plan. In the case of a Non-Qualified Stock
Option, such rights may be granted either at or after the time
of the grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of
the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate
and no longer be exercisable upon the termination or exercise
of the related Stock Option, except that, unless otherwise
determined by the Committee, in its sole discretion, at the
time of grant, a Stock Appreciation Right granted with respect
to less than the full number of shares covered by a related
Stock Option shall not be reduced until the number of shares
covered by an exercise or termination of the related Stock
Option exceeds the number of shares not covered by the Stock
Appreciation Right.
A Stock Appreciation Right may be exercised by an Participant,
in accordance with Section 6(b), by surrendering the applicable
portion of the related Stock Option. Upon such exercise and
surrender, the Participant shall be entitled to receive an
amount determined in the manner described in Section 6(b).
Stock Options which have been so surrendered, in whole or in
part, shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the
provisions of the Plan, as shall be determined from time to
time by the Committee, including the following:
(i)Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that the Stock Options to which
they relate, if any, shall be exercisable in accordance with
the provisions of Section 5 and this Section 6 of the Plan;
provided, however, that any Stock Appreciation Right granted
subsequent to the grant of the related Stock Option shall not
be exercisable during the first six months of its term, except
that this special limitation shall not apply in the event of
death or Disability of the Participant prior to the expiration
of the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive up to, but not more
than, an amount in cash and/or shares of Stock equal in value
to the excess of the Fair Market Value of one share of Stock
over the option price per share specified in the related Stock
Option, multiplied by the number of shares in respect of which
the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of
payment.
(iii) Upon the exercise of a Stock Appreciation Right, the
Stock Option or part thereof to which such Stock Appreciation
Right is related shall be deemed to have been exercised for the
purpose of the limitation set forth in Section 3 of the Plan on
the number of shares of Stock to be issued under the Plan, but
only to the extent of the number of shares issued under the
Stock Appreciation Right at the time of exercise based on the
value of the Stock Appreciation Right at such time.
(iv) A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when the
market price of the Stock subject to the Incentive Stock Option
exceeds the exercise price of such Stock Option.
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be issued
either alone or in addition to other awards granted under the
Plan. The Committee shall determine the officers and key
employees of the Corporation and its Subsidiaries and
Affiliates to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be
awarded, the price (if any) to be paid by the recipient of
Restricted Stock (subject to Section 7(b)), the time or times
within which such awards may be subject to forfeiture, and all
other conditions of the awards.
The Committee may condition the grant of Restricted Stock upon
the attainment of specified performance goals or such other
factors as the Committee may determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same
with respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a
Restricted Stock award shall not have any rights with respect
to such award, unless and until such recipient has executed an
agreement evidencing the award and has delivered a fully
executed copy thereof to the Corporation, and has otherwise
complied with the applicable terms and conditions of such
award.
(i)The purchase price for shares of Restricted Stock shall be
at least equal to their par value.
(ii)Awards of Restricted Stock must be accepted within a period
of 60 days (or such shorter period as the Committee may specify
at grant) after the award date, by executing a Restricted Stock
Award Agreement and paying whatever price (if any) is required
under Section 7(b)(i).
(iii)Each participant receiving a Restricted Stock award shall
be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the
name of such participant, and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable
to such award, substantially in the following form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) of the Chyron 1995 Long-Term
Incentive Plan and an Agreement entered into between the
registered owner and Chyron Corporation. Copies of such Plan
and Agreement are on file in the offices of Chyron
Corporation."
(iv)The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Corporation
until the restrictions thereon shall have lapsed, and that as
a condition of any Restricted Stock award, the participant
shall have delivered a stock power, endorsed in blank, relating
to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted
Stock awarded pursuant to this Section 7 shall be subject to
the following restrictions and conditions:
(i)Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with
the date of such award (the "Restriction Period"), the
participant shall not be permitted to sell, transfer, pledge,
assign or otherwise encumber shares of Restricted Stock awarded
under the Plan. Within these limits, the Committee, in its
sole discretion, may provide for the lapse of such restrictions
in installments and may accelerate or waive such restrictions
in whole or in part, based on service, performance and/or such
other factors or criteria as the Committee may determine, in
its sole discretion.
(ii)Except as provided in this paragraph (ii) and Section
7(c)(i), the participant shall have, with respect to the shares
of Restricted Stock, all of the rights of a shareholder of the
Corporation, including the right to vote the shares, and the
right to receive any cash dividends. The Committee, in its
sole discretion, as determined at the time of award, may permit
or require the payment of cash dividends to be deferred and, if
the Committee so determines, reinvested in additional
Restricted Stock to the extent shares are available under
Section 3.
(iii)Subject to the applicable provisions of the award
agreement and this Section 7, upon termination of a
participant's employment with the Corporation for any reason
during the Restriction Period, all shares still subject to
restriction shall be forfeited by the participant.
(iv)In the event of hardship or other special circumstances of
a participant whose employment with the Corporation is
involuntarily terminated (other than for Cause), the Committee
may, in it sole discretion, waive in whole or in part any or
all remaining restrictions with respect to such participant's
shares of Restricted Stock, based on such factors as the
Committee may deem appropriate.
(v)If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction
Period, the certificates for such shares shall be delivered to
the participant promptly.
SECTION 8. LONG TERM PERFORMANCE AWARDS.
(a) Awards and Administration. Long Term Performance Awards
may be awarded either alone or in addition to other awards
granted under the Plan. The Committee shall determine the
nature, length and starting date of the performance period (the
"Performance Period") for each Long Term Performance Award,
which shall be at least two years, and shall determine the
performance objectives to be used in valuing Long Term
Performance Awards and determining the extent to which such
Long Term Performance Awards have been earned. Performance
objectives may vary from participant to participant and between
groups of participants and shall be based upon such
Corporation, business unit and/or individual performance
factors and criteria as the Committee may deem appropriate,
including, but not limited to, earnings per share or return on
equity. Performance Periods may overlap and participants may
participate simultaneously with respect to Long Term
Performance Awards that are subject to different Performance
Periods and/or different performance factors and criteria.
At the beginning of each Performance Period, the Committee
shall determine for each Long Term Performance Award subject to
such Performance period the range of dollar values or number of
shares of Stock to be awarded to the participant at the end of
the Performance Period if and to the extent that the relevant
measure(s) of performance for such Long Term Performance Award
is (are) met. Such dollar values or number of shares of Stock
may be fixed or may vary in accordance with such performance
and/or other criteria as may be specified by the Committee, in
its sole discretion.
(b) Adjustment of Awards. In the event of special or unusual
events or circumstances affecting the application of one or
more performance objectives to a Long Term Performance Award,
the Committee may revise the performance objectives and/or
underlying factors and criteria applicable to the Long Term
Performance Awards affected, to the extent deemed appropriate
by the Committee, in its sole discretion, to avoid unintended
windfalls or hardship.
(c) Termination of Employment. If a Participant terminates
employment with the Corporation during a Performance Period
because of death, Disability or Retirement such Participant
shall be entitled to a payment with respect to each outstanding
Long Term Performance Award at the end of the applicable
Performance Period, but only to the extent provided in the
relevant award agreement(s). All determinations hereunder
shall be made by the Committee, in its sole discretion.
However, the Committee may provide for an earlier payment in
settlement of such award in such amount and under such terms
and conditions as the Committee deems appropriate.
If a Participant terminates employment with the Corporation
during a Performance Period for any other reason, then such
participant shall not be entitled to any payment with respect
to the Long Term Performance Awards subject to such Performance
Period, unless the Committee shall otherwise determine, in its
sole discretion.
(d) Form of Payment. The earned portion of a Long Term
Performance Award may be paid currently or on a deferred basis
with such interest or earnings equivalent as may be determined
by the Committee, in its sole discretion. Payment shall be
made in the form of cash or whole shares of Stock, including
Restricted Stock, either in a lump sum payment or in annual
installments commencing as soon as practicable after the end of
the relevant Performance Period, all as the Committee shall
determine at or after grant. If and to the extent a Long Term
Performance Award is payable in Stock and the fill amount of
such value is not paid in Stock, then the shares of Stock
representing the portion of the value of the Long Term
Performance Award not paid in Stock shall again become
available for award under the Plan.
SECTION 9. AMENDMENTS AND TERMINATION.
The Board may amend, alter, or discontinue the Plan at any time
and from time to time, but no amendment, alteration, or
discontinuation shall be made which would impair the rights of
an Participant or participant with respect to a Stock Option,
Stock Appreciation Right, Restricted Stock or Long Term
Performance Award which has been granted under the Plan,
without the Participant's or Participant's consent or which,
without the approval of the Corporation's stockholders, would:
(a) except as expressly provided in this Plan, materially
increase the total number of shares reserved for the purpose of
the Plan;
(b) decrease the option price of any Stock Option to less than
100% of the Fair Market Value on the date of grant;
(c) change the employees or class of employees eligible to
participate in the Plan; or
(d) extend the maximum option period under Section 5(b) of the
Plan.
The Committee may amend the terms of any Stock Option or other
award theretofore granted, prospectively or retroactively, but,
subject to Section 3 above, no such amendment shall impair the
rights of any holder without the holder's consent. The
Committee may also substitute new Stock Options for previously
granted Stock Options, including previously granted Stock
Options having higher option prices.
Subject to the above provision, the Board shall have broad
authority to amend the Plan to take into account changes in
applicable tax laws and accounting rules, as well as other
developments.
SECTION 10.UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded: plan for
incentive and deferred compensation. With respect to any
payments not yet made to a Participant by the Corporation,
nothing contained herein shall give any such Participant any
rights that are greater than those of a general creditor of the
Corporation. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver Stock or
payments in lieu of or with respect to awards hereunder;
provided, however, that, unless the Committee otherwise
determines with the consent of the affected participant, the
existence of such trusts or other arrangements is consistent
with "unfunded" status of the Plan.
SECTION 11.GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares
pursuant to a Stock Option under the Plan to represent to and
agree with the Corporation in writing that the Participant is
acquiring the shares without a view to distribution thereof.
The certificates for such shares may include any legend which
the Committee deems appropriate to reflect any restrictions on
transfer.
All certificates for shares of Stock or other securities
delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other
requirements of the Exchange Act, any stock exchange upon which
the Stock is then listed, and any applicable Federal or State
securities law, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board of
Directors from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval
is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee
of the Corporation any right to continued employment with the
Corporation, as the case may be, nor shall it interfere in any
way with the right of the Corporation to terminate the
employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includable in the gross income of the participant for Federal
income tax purposes with respect to any award under the Plan,
the participant shall pay to the Corporation, or make
arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such
amount. Unless otherwise determined by the Committee, the
minimum required withholding obligations may be settled with
Stock, including Stock that is part of the award that gives
rise to the withholding requirement. The obligations of the
Corporation under the Plan shall be conditional on such payment
or arrangements, and the Corporation shall, to the extent
permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the
participant.
(e) At the time of grant, the Committee may provide in
connection with any grant made under this Plan that the shares
of Stock received as a result of such grant shall be subject to
a right of first refusal, pursuant to which the participant
shall be required to offer to the Corporation
any shares that the participant wishes to sell, with the price
being the then Fair Market Value of the Stock, subject to such
other terms and conditions as the Committee may specify at the
time of grant.
(f) The reinvestment of dividends in additional Restricted
Stock (or in other types of Plan awards) at the time of any
dividend payment shall only be permissible if sufficient shares
of Stock are available under Section 3 for such reinvestment
(taking into account then outstanding
Stock Options and other Plan awards).
(g) The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to
whom any amounts payable in the event of the participant's
death are to be paid.
(h) The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws
of the State of New York.
SECTION 12.EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is approved by a
vote of the holders of a majority of the total outstanding
Stock.
SECTION 13.TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock or
Long Term Performance Award shall be granted pursuant to the
Plan on or after the tenth anniversary of the date of
stockholder approval, but awards granted prior to such tenth
anniversary may extend beyond that date.
CHYRON CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 15,
1996
The undersigned hereby appoints Michael I. Wellesley-Wesley and
Isaac Hersly, each with the full authority to act without the
other and with the power to appoint his substitute, as Proxies
and hereby authorizes each of them to represent and vote, as
designated on this proxy card, all the shares of Common Stock
of Chyron Corporation held on record by the undersigned on
March 27, 1996 at the Annual Meeting of Shareholders to be held
on May 15, 1996, or any adjournment or adjournments thereof.
1. Election of Directors:
___ FOR all nominees listed below: ___ WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
listed below:
Sheldon D. Camhy
S. James Coppersmith
Charles M. Diker
Isaac Hersly
Alan J. Hirschfield
Wesley W. Lang, Jr.
Eugene M. Weber
Michael I. Wellesley-Wesley.
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write that nominees's name on the space
provided below.)
2. Proposal to Amend Chyron's 1995 Long-Term Incentive Plan:
___ FOR ___ AGAINST ___ ABSTAIN
3. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting or any adjournment or adjournments thereof. This
Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no
direction is made, it will be voted "FOR" Proposals 1 and 2 as
described above and in the accompanying Proxy Statement, and as
the Proxies deem advisable on any other matters as
may properly come before the meeting.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
Dated___________, 1996
Signature
Signature if held jointly(This Proxy should be signed by the
shareholder(s) exactly as his or her name appears hereon. When
shares are held by joint tenants or as community property, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.)
