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.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[] Fee paid previously with preliminary materials.
[] Check box if any part of the fee is offset as provided by Exchange Act
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paid previously. Identify the previous filing by registration statement
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4) Date Filed:
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
(516) 845-2000
March 31, 1997
Dear Shareholders:
On behalf of the Board of Directors and management of Chyron
Corporation (the "Company"), I cordially invite you to attend the
Annual Meeting of Shareholders to be held on Wednesday, May 14, 1997,
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 1996. 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 14, 1997
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 14, 1997, 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 26,
1997 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 14, 1997.
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,
/s/Daniel I. DeWolf
Daniel I. DeWolf,
Secretary
Melville, New York
March 31, 1997
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 13
PRINCIPAL SHAREHOLDERS 13
INTERESTED PARTY TRANSACTIONS 17
INDEMNIFICATION OF DIRECTORS AND OFFICERS 18
SHAREHOLDER PROPOSALS 18
COST OF SOLICITATION OF PROXIES 18
INDEPENDENT PUBLIC ACCOUNTANTS 18
SECTION 16(a) REPORTING DELINQUENCIES 18
ANNUAL REPORT ON FORM 10-K 19
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
PROXY STATEMENT
For Annual Meeting of Shareholders
to be Held on May 14, 1997
Approximate Mailing Date of Proxy Statement and Form of Proxy: March
31, 1997.
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 14, 1997, 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 26, 1997
are entitled to notice of and to vote at the Annual Meeting. As of
the close of business on March 14, 1997, 32,384,635 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 ten (10) 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 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:
Company Position Director of the
Name and Offices Held Company Since
Sheldon D. Camhy Director, Member of July, 1995
the Compensation and
Stock Option Committee
S. James Coppersmith Director, Member of March, 1996
the Compensation and
Stock Option Committee
Charles M. Diker Director, Member of September, 1995
the Audit Committee
Donald P. Greenberg Director September, 1996
Raymond W. Hartman Director, Deputy May, 1996
Chairman of Pro-Bel
Isaac Hersly President and Chief March, 1996
Operating Officer,
Director
Alan J. Hirschfield Director, Member of July, 1995
the Audit Committee
Wesley W. Lang, Jr. Director, Member of July, 1995
the Compensation and
Stock Option Committee
Eugene M. Weber Director, Member of July, 1995
the Audit Committee
Michael I. Wellesley-Wesley Chairman of the Board May, 1995
and Chief Executive
Officer
Sheldon D. Camhy, age 67, is 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 64, 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., an operator
of wholesale clubs, The Pizzeria Uno Corporation, The Kushner-Locke
Corporation, a marketing company, The Boston Stock Exchange, and
All-Comm Media Corporation, a direct mail and marketing company.
Charles M. Diker, age 62, is a non-managing principal with the
investment management company of Weiss, Peck & Greer LLC ("Weiss, Peck
& Greer") and has been associated with such company since 1976.
Weiss, Peck & Greer 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. ("Cantel"), a
manufacturer of infection control equipment and distributor of
diagnostic devices. Mr. Diker is also a member of the Board of
Directors of Data Broadcasting Corporation ("DBC") a provider of
various financial data and proprietary information, BeautiControl
Cosmetics, Inc., International Specialty Products Inc., a manufacturer
of specialty chemicals, and AMF Group Inc., an operator of bowling
centers.
Donald P. Greenberg, age 63, is the Jacob Gould Schuman Professor of
Computer Graphics and Founding Director, Program of Computer Graphics,
at Cornell University. He has been a professor at Cornell University
since 1968. He is also a member of the Board of Directors of DBC and
PCA International, an operator of portrait studios.
Raymond W. Hartman, age 62, is the Deputy Chairman of Pro-Bel. From
1993 until April 1996, he was the Chairman of Pro-Bel. From
1978-1993, he was the Finance Director of Pro-Bel.
Isaac Hersly, age 48, is President and Chief Operating Officer of the
Company and has held such positions since July 1995. He was an
Executive Vice President of the Company from December 1991 until July
1995. He was also President and Chief Operating Officer of the
Company from November 1989 until December 1991, during which time the
Company filed for bankruptcy. He was appointed President of the
Company's Telesystems and Video Products division in 1988 and prior to
such position he was appointed a Vice President in 1988. Prior to
joining the Company, Mr. Hersly was employed from 1970 to 1986 by ABC,
a New York-based television network, and from 1981 to 1986 he was
ABC's Vice President of Engineering.
Alan J. Hirschfield, age 61, is Co-Chairman of the Board of Directors
and Co-Chief Executive Officer of DBC and has held such positions
since June 1992. In October 1990, Mr. Hirschfield was appointed to
serve as part of a restructuring team to address the financial
problems of Financial News Network Inc. ("FNN") and in that capacity
he served as Co-Chief Executive Officer of FNN from October 1990 until
June 1992. As part of this restructuring, FNN filed for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code in
March 1991. Pursuant to FNN's plan of reorganization, DBC was spun
off in June 1992. Prior to his current positions, he served as Chief
Executive Officer of Twentieth Century-Fox Film Corp., from 1980 to
1985, and Columbia Pictures Entertainment Inc., from 1973 to 1978.
Mr. Hirschfield is also a member of the Board of Directors of Cantel.
Mr. Hirschfield is a member of CC Acquisition Company A, L.L.C., a
Delaware limited Liability company ("CCA") and CC Acquisition Company
B, L.L.C., a Delaware limited liability company ("CCB"). CCA and CCB
are shareholders of the Company.
Wesley W. Lang Jr., age 39, is a principal with the investment
management company of Weiss, Peck & Greer and has been associated with
such company since 1985. Weiss, Peck & Greer 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.
Eugene M. Weber, age 46, is 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, a shareholder in the Company, and, from 1983 to 1994, he was a
partner with Weiss, Peck & Greer, an investment management firm.
Michael I. Wellesley-Wesley, age 44, is the Chief Executive Officer
and Chairman of the Board of Directors and has held such positions
since July 1995. From May 1995 until July 1995, he was a member of
the Board of Directors. From 1992 until 1995, he was a Director and
Executive Vice President of DBC and from 1990 until 1992 he was a
consultant to that corporation's predecessor. Mr. Wellesley-Wesley
was an executive 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 Attendance
The Board of Directors held seven (7) meetings during fiscal year
1996. 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 three (3) meetings during fiscal year 1996.
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 1996.
During the fiscal year ended December 31, 1996, all directors who are
nominated for election attended at least 75% of the aggregate number
of meetings of the Board held during the period for which they have
been a director and all committees of the Board of which they were
members held during the period which they have been members.
Executive Officers
In addition to Mr. Wellesley-Wesley and Mr. Hersly, the executive
officers of the Company are the following:
Patricia Arundell Lampe - Chief Financial Officer and Treasurer, age
37. Ms. Lampe was appointed Chief Financial Officer and Treasurer of
the Company in October 1994. She had served as Acting Vice President,
Chief Financial Officer, Treasurer and Secretary since July 1994. Ms.
Lampe joined the Company in July 1993 as Corporate Controller. From
1990-1993, she was an Audit Manager with Price Waterhouse LLP.
Roi Agneta - Executive Vice President, age 50. Mr. Agneta was
appointed Executive Vice President of Strategic Planning in May 1996.
From October 1995 to May 1996, Mr. Agneta was Vice President of the
Company. From 1974 to 1993, he held several executive management
positions at the Company, including Vice President of Engineering and
Corporate Marketing. From 1993 to October 1995, he held several
senior management positions with Dynatech Corporation's Video Group,
including General Manager, Production Business Unit.
Roger Henderson - Executive Vice President, age 40. Mr. Henderson was
appointed Executive Vice President in May 1996. He has been Managing
Director of Pro-Bel since April 1996. From 1987 to March 1996, he was
Software Director of Pro-Bel and Managing Director of Pro-Bel Software
Ltd.
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 1996, the most highly compensated
executive officers of the Company who held such positions at the end
of fiscal year 1996, and the two highest paid executive officers of
the Company if they held such positions during fiscal year 1996.
Other
Name and Principal Position Annual Securities
Compen- Underlying
Salary(1) Bonus sation Options All Other
Year ($) ($) ($) SAR (#) ($)
Michael I. Wellesley-Wesley,
Chairman of the Board and Chief Executive Officer
12/96 262,000 50,000
12/95 38,538 50,000 62,500(2)
Isaac Hersly,
President, Director
12/96 217,215 40,000 166,666
12/95 189,600 36,000
12/94 189,600 36,000
Patricia Lampe,
Treasurer and Chief Financial Officer
12/96 118,000 23,000 50,000
12/95 102,365 23,000
12/94 74,461 19,000
Roger Henderson
Group Managing Director, Pro-Bel
12/96 88,329 16,900 50,000
Roi Agneta
Executive Vice President
12/96 156,105 31,320 50,000
12/95 37,750 7,250
(1) Includes any annual car allowance.
(2)Pursuant to his contract, Mr. Wellesley-Wesley received this amount
as compensation for his efforts prior to the effectiveness of his
contract.
Stock Option Grants
Set forth below is information on grants of stock options under the
Company's 1995 Long-Term Incentive Plan (the "Plan") for the named
executive officers for the period January 1, 1996 to December 31,
1996.
Option Grants in Last Fiscal Year Table
Individual Grants Grant Value
Percent
of
Number Total
of Options
Secur- Granted
ities to Exer-
Under- Employees cise Grant
lying in price Date
Options Fiscal ($ per Expiration Present
Name Granted Year share) Date Value
Roger Henderson 50,000 11.0% $12.80 9/18/2001 $331,500
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 - $12.75;
exercise price - $12.75; dividend yield - 0.0%; volatility -50.00;
risk-free rate of return - 6.62% 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 estimated values
under the model are based on assumptions regarding interest rates,
stock price volatility and future dividend yield. 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 Plans
The Company maintains a domestic qualified non-contributory defined
benefit pension plan ("the U.S. Pension Plan") for all employees of
Chyron Corporation, except for those employees who are covered under a
collective bargaining agreement (there are currently no employees
covered by collective bargaining agreements). Under the U.S. 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 U.S. 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 U.S. Pension Plan, becomes
fully vested when he or she completes five years of participation in
the U.S. Pension Plan.
The following current executive officers of the Company, and their
credited years of service as of January 1, 1997, are participants in
the U.S. Pension Plan: Mr. Wellesley-Wesley, 1 year; Mr. Hersly, 10
years; Ms. Lampe, 3 years; and Mr. Roi Agneta, 1 year.
The following table shows the aggregate annual benefits under the U.S.
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 U.S. 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 1996. 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 U.S. 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 U.S. Pension Plan.
U.S. Pension Plan Table
Highest Consecutive
Five-Year Average
Compensation Years of Credited Service at
During the Last Ten Retirement at Age 65
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
The Company's U.K. subsidiary, Pro-Bel, has a non-contributory defined
benefit pension plan (the "U.K. Pension Plan") covering all permanent
employees of Pro-Bel. Under the U.K. Pension Plan, a participant
retiring after working 40 years with Pro-Bel will receive 66.66% of
his or her basic earnings averaged over the last thirty-six (36)
months of employment in addition to the U.K.'s basic and earnings
related pension. Under U.K. legislation, benefits vest on a pro rata
basis following completion of two (2) years membership. Spouses'
pension of 50% of the members pension are payable on the death of the
plan member whether in service or following retirement.
The following current executive officer of the Company and his
credited years of service at January 1, 1997 is a participant in the
U.K. Pension Plan: Roger Henderson, 18 years.
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, each
non-employee director has received options, as a formula grant, to
purchase 3,333 shares of Common Stock at an exercise price equal to
their market value on the last trading day of each July.
Employment Contracts and Termination of Employment
and Change-In-Control Arrangements
The Company has an employment agreement with Mr. Wellesley-Wesley,
Chief Executive Officer. The agreement runs until August 1, 1997 and
contains an automatic renewal for an additional one (1) year unless
terminated by the Company or Mr. Wellesley-Wesley. Mr.
Wellesley-Wesley currently receives a base salary of $250,000 and is
eligible to receive a bonus of up to 20% of his base salary at the
discretion of the Compensation Committee. 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 (6) 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 (4) months. The
agreement also contains certain restrictions on competition.
The Company has an employment agreement with Mr. Hersly, President and
Chief Operating Officer. The agreement runs until April 30, 1998 and
contains an automatic renewal for an additional one (1) year unless
terminated by the Company or Mr. Hersly. Mr. Hersly currently
receives a base salary of $200,000 and is eligible 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 the higher of (i) one (1) year of his base
salary or (ii) the balance of the contract term; payable in twelve
equal monthly installments. In the event of a change-in-control of
the Company, the Company shall pay Mr. Hersly $100,000. The
agreement also contains certain restrictions on competition.
The Company has an employment agreement with Ms. Lampe, Treasurer and
Chief Financial Officer. The Agreement runs until December 31, 1997
and contains an automatic renewal provision for successive one (1)
year terms unless terminated by the Company or Ms. Lampe. Ms. Lampe
currently receives a base salary of $125,000 and is eligible 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 her 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.
The Company has an employment agreement with Mr. Agneta, Executive
Vice President of Strategic Planning. The Agreement runs until
October 1, 1997 and contains an automatic renewal for an additional
one (1) year unless terminated by the Company or Mr. Agneta. Mr.
Agneta currently receives a base salary of $156,000 and is eligible
to receive a bonus of up to 20% of his base salary. If the agreement
is terminated with cause then Mr. Agneta is entitled only to receive
that portion of his base salary owed through date of termination. If
the agreement is terminated without cause then Mr. Agneta is entitled
to receive a severance payment equal to the pro rata portion of his
salary payable for a nine (9) month period. The agreement contains
certain restrictions on competition.
The Company has an employment agreement with Mr. Roger Henderson,
Group Managing Director, Pro-Bel. The agreement runs until April 12,
1998. Mr. Henderson is entitled to receive a base salary of pounds
sterling 70,000 and is eligible to receive a bonus of up to 20% of his
base salary. If the agreement is terminated with cause then Mr.
Henderson is entitled only to receive that portion of his base salary
owed through date of termination. If the agreement is terminated
without cause Mr. Henderson is entitled to receive a severance payment
equal to two years annual base salary. The agreement also contains
certain restrictions on competition.
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. Additionally, employees (including executive officers) are
eligible to receive awards pursuant to the Company's long-term
incentive plan.
All amounts paid or accrued during fiscal year 1996 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
March 31, 1997
Respectfully submitted,
Sheldon D. Camhy, S. James Coppersmith, 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, 1996 with the cumulative total
return on the Russell 2000 Index and a peer group selected by the
Company consisting of businesses engaged in supplying equipment to the
broadcast and video industry. The comparison assumes $100 was
invested on January 1, 1991, 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:
Avid Technology Inc., Carlton Communications Plc, Leitch Technology
Corp., Philips Electronics NV, Scitex Ltd, Sony Corp., Tektronix Inc.
The business included in the Company-selected old peer group are:
Dynatech Corp., Avid Technology Inc., Carlton communications plc, and
Scitex Ltd. 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
(January 1, 1991 to December 27, 1991) in which the Company operated
under Chapter 11 of the U.S. Bankruptcy Code and approximately
3,856,666 shares of Common Stock were outstanding. Upon emerging from
Chapter 11, the capitalization of the Company was changed, and
20,329,242 shares of Common Stock and 1,931,851 Common Stock Purchase
Warrants (exercisable for a total of 1,931,851 shares) were then
outstanding. By December 31, 1996, an additional 8,333,333 shares had
been issued and were outstanding due to the conversion of the Chyron
Corporation Convertible Notes, and an additional 1,736,182 shares were
issued and were then outstanding due to the exercise of the Common
Stock Purchase Warrants. On February 7, 1997 the Company effected a
one-for-three reverse stock split of its Common Stock. The table
above reflects the one-for-three reverse stock split. On March 14,
1997, 32,384,635 share of Common Stock were outstanding.
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 of the Plan. Pursuant to the
Plan, an aggregate of 1,666,666 shares, adjusted to reflect the
one-for-three reverse stock split effect on February 7, 1997, of
Common Stock of the Company are authorized for issuance under the Plan
and as of March 14, 1997, options to purchase 1,533,332 shares of
Common Stock have been granted. The Board of Directors believes that
awards under the plan have been and will continue to be an important
compensation element in attracting and retaining quality personnel.
The Board of Directors believes that an increase in the authorized
shares under the Plan is in the best interests of the Company in order
to attract and retain key personnel. Accordingly, on February 12,
1997, the Board of Directors adopted, subject to shareholder approval,
an amendment to the Plan that provides for an increase in the number
of shares authorized for issuance under the Plan by an additional
1,333,334 shares to an aggregate of 3,000,000 shares. This change is
consistent with the original purpose of the Plan which is to enable
the Company to attract, retain, and motivate key personnel by
providing them with equity or equity-based compensation. 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 ("Eligible Employees") and directors who are not
Eligible Employees, 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
Eligible Employees. Currently, an aggregate of 1,666,666 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 to Eligible Employees under the Plan are made in the form of
restricted stock, stock options, stock appreciation rights, and
long-term performance awards. Non-employee directors only receive a
formula grant of non-incentive stock options. The Compensation
Committee, in its sole discretion, designates whom is 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 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. SAR's could be awarded
independently or in tandem with any stock option granted under the
Plan. SAR's awarded in tandem with stock options would be exercisable
when the accompanying option would be exercisable. SAR's 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 number of shares of Common Stock of
the Company authorized for issuance under the Plan would be increased
by 1,333,334 shares to an aggregate of 3,000,000 shares.
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 14, 1997, 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)
Amount and
Nature of Percent
Beneficial of
Ownership Class
Name and Address of Beneficial Owner (2)(3) (2)(3)
WPG Corporate Development Associates IV, 6,686,918 20.6%
L.P.(4)
One New York Plaza
New York, New York 10004
WPG CDA IV (Overseas), Ltd.(5) 1,612,513 5.0%
BankAmerica Trust and Banking Corp.
P.O. Box 1092
Georgetown, Grand Cayman Island
WPG Private Equity Partners L.P.(6) 6,686,918 20.6%
One New York Plaza
New York, New York 10004
WPG Enterprise Fund II, L.P.(7) 1,661,572 5.1%
555 California Street
San Francisco, California 94104
WPG Private Equity Partners (Overseas), 1,612,513 5.0%
L.P.(8)
One New York Plaza
New York, New York 10004
WPG Venture Partners III, L.P.(9) 3,043,100 9.3%
555 California Street
San Francisco, California 94104
WPG Corporate Development Associates IV 1,612,513 5.0%
(Overseas), L.P.(10)
BankAmerica Trust and Banking Corp.
P.O. Box 1092
Georgetown, Grand Cayman Island
Steven N. Hutchinson(11) 8,299,431 25.4%
Weiss, Peck & Greer, L.L.C.
One New York Plaza
New York, New York 10004
Philip Greer(12) 4,655,613 14.4%
Weiss, Peck & Greer, L.L.C.
555 California Street
San Francisco, California 94104
Gill Cogan(13) 3,043,100 9.4%
Weiss, Peck & Greer, L.L.C.
555 California Street
San Francisco, California 94104
Westpool Investment Trust plc(14) 2,642,363 8.1%
Carlton House
33 Robert Adam Street
London, W1M 5AH
England
CC Acquisition Company A, L.L.C.(15) 4,533,333 14.0%
P.O. Box 9205
Jackson, Wyoming 83001
CC Acquisition Company B, L.L.C. 3,921,964 12.1%
P.O. Box 9205
Jackson, Wyoming 83001
Allan R. Tessler(16) 8,455,297 26.1%
3490 Clubhouse Drive
Box 7443
Jackson, Wyoming 83001
Security Ownership of Management
The following table sets forth, as of March 14, 1997, certain information
with respect to the beneficial ownership of each class of the Company's
equity securities by each director, and executive officer of the Company
and all directors and executive officers of the Company as a group.
Amount and
Nature of Percent
Beneficial of
Ownership Class
Name and Address of Beneficial Owner (2)(3) (2)(3)
Michael I. Wellesley-Wesley(17) 8,455,297 26.1%
Isaac Hersly(18) 123,180 *
Roi Agneta(19) 18,864 *
Patricia Arundell Lampe(19) 16,666 *
Roger Henderson(20) 34,530 *
Sheldon D. Camhy(21) 6,666 *
S. James Coppersmith(22) 3,333 *
Charles M. Diker(21,23) 559,794 1.7%
Donald P. Greenberg(22) 3,333 *
Raymond W. Hartman 191,119 *
Alan J. Hirschfield(21,24) 7,261,964 22.4%
Wesley W. Lang(21,25) 8,306,097 25.6%
Eugene M. Weber(21) 6,666 *
All directors and executive officers as
a group (13 persons) 17,725,545 54.7%
* Less than one percent (1%).
(1)These tables are based upon information supplied by Schedules 13D
and 13G, if any, filed with the Securities and Exchange Commission
(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 32,384,635 shares of
Common Stock, which were outstanding on March 14, 1997.
(2)Beneficial ownership is determined in accordance with the rules of
the SEC. In computing the number of shares beneficially owned by a
person and the percentage of ownership of that person, shares of
Common Stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of March 14, 1997 are deemed
outstanding. To the Company's knowledge, except as set forth in the
footnotes to this table and subject to applicable community property
laws, each person named in the table has sole voting and investment
power with respect to the shares set forth opposite such person's
name.
(3)In calculating the percent of the outstanding shares of Common
Stock, all shares issuable on exercise of stock options held by the
particular beneficial owner that are included in the column to the
left of this column are deemed to be outstanding.
(4)Includes 763,380 shares of Common Stock owned in the aggregate by
Sepa Technologies Ltd., Co. ("Sepa"), The DSF Investment Trust I
("DSF") and Alfred O.P. Leubert Ltd. ("Leubert"), a New York
corporation, over which it has voting control.
(5)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. The
shares beneficially owned by Overseas are included in the total shown
and aggregate to 428 shares.
(6)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. The shares beneficially owned by PEP
are included in the total shown and aggregate to 241,562 shares.
(7)Includes 189,720 shares of Common Stock owned by Sepa, DSF and
Leubert over which it has voting control.
(8)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. The
shares beneficially owned by PEPO are included in the total shown and
aggregate to 6,713 shares.
(9)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 voting power
over 157,680 shares of Common Stock owned by Sepa, DSF and Leubert.
WPGVP disclaims beneficial ownership of such shares, except to the
extent of its interest in WPGEF and WPGVA. The shares beneficially
owned by WPGVP are included in the total shown and aggregate to
111,714 shares.
(10)Includes 184,140 shares of Common Stock owned by Sepa, DSF and
Leubert over which its general partners, Overseas and PEPO have voting
control.
(11)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. The shares beneficially owned by Mr. Hutchinson are
included in the total shown and aggregate to 10,812 shares.
(12)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. The shares beneficially
owned by Mr. Greer are included in the total shown and aggregate to
one share.
(13)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. The
shares beneficially owned by Mr. Cogan are included in the total shown
and aggregate to 2,735 shares.
(14)Includes 300,060 shares of Common Stock owned by Sepa, DSF and
Leubert over which it has voting control.
(15)Includes 1,200,000 shares of Common Stock owned by Sepa, DSF and
Leubert over which it has voting control.
(16)Mr. Tessler is the President and sole manager of CCA and CCB. Mr.
Tessler disclaims beneficial ownership of such shares, except to the
extent of his interest in CCA and CCB. The shares beneficially owned
by Mr. Tessler are included in the total shown and aggregate to
3,555,095 shares.
(17)Mr. Wellesley-Wesley is indirectly one of several members of and
the Vice President of CCA and CCB. Mr. Wellesley-Wesley disclaims
beneficial ownership of such shares, except to the extent of his
interest in CCA and CCB. The shares beneficially owned by Mr.
Wellesley-Wesley are included in the total shown and aggregate to
1,960,982 shares. Includes 1,200,000 shares owned by Sepa, DSF and
Leubert over which he has voting control.
(18)Includes 55,555 shares that may be acquired upon the exercise of
presently exercisable options.
(19)Includes 16,666 shares that may be acquired upon the exercise of
presently exercisable options.
(20)Includes 1,158 shares of Common Stock owned by his spouse, as to
which Mr. Henderson disclaims beneficial ownership.
(21)Includes 6,666 shares that may be acquired upon the exercise of
presently exercisable options.
(22)Includes 3,333 shares that may be acquired upon the exercise of
presently exercisable options.
(23)Mr. Diker directly owns 490,127 shares of Common Stock and has
voting control over 63,000 shares owned by Sepa, DSF and Leubert.
(24)Of these shares, 7,255,297 are owned by CCA and CCB. Mr.
Hirschfield is one of several members of CCA and CCB and he disclaims
beneficial ownership of such shares, except to the extent of his
interest in CCA and CCB. The shares beneficially owned by Mr.
Hirschfield are included in the total shown and aggregate to 666,036
shares.
(25)Includes 7,351,911 shares beneficially owned by CDA, CDAO, PEP,
PEPO and Overseas. Includes 947,520 shares of Common Stock owned by
Sepa, DSF 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. The
shares beneficially owned by Mr. Lang are included in the total shown
and aggregate to 10,812 shares.
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 ("Sepa"),
Sepa's wholly-owned Spanish subsidiary Pesa Electronica, S.A.
("Electronica"), Electronica's wholly-owned Delaware subsidiary Pesa,
Inc., and Pesa, Inc's wholly-owned U.S. subsidiaries. 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 ("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. Mr. Camhy, a Director of the Company, and Mr. Daniel I. DeWolf,
the corporate Secretary to the Company, are both partners in the firm.
The Company paid the firm $861,000 for legal services and expenses
rendered during fiscal 1996.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has entered into indemnity agreements with each of its
directors and executive officers. The indemnity agreements provide
that directors and executive officers (the "Indemnities") will be
indemnified and held harmless to the fullest possible extent permitted
by law including against all expenses (including attorney's fees),
judgments, fines, penalties and settlement amounts paid or incurred by
them in any action, suit or proceeding on account of their services as
director, officer, employee, agent or fiduciary of the Company or as
directors, officers, employees or agents of any other company or
entity at the request of the Company. The Company will not, however,
be obligated pursuant to the agreements to indemnify or advance
expenses to an indemnified party with respect to any action (1) in
which a judgment adverse to the Indemnitee establishes (a) that the
Indemnitee's acts were committed in bad faith or were the result of
active and deliberate dishonesty and, in either case, were material,
or (b) that the Indemnitee personally gained in fact a financial
profit or other advantage to which he or she was not legally entitled,
or (2) which the Indemnitee initiated, prior to a change in control of
the company, against the Company or any director or officer of the
Company unless the Company consented to the initiation of such claim.
The indemnity agreements require a Indemnitee to reimburse the Company
for expenses advanced only to the extent that it is ultimately
determined that the director or executive officer is not entitled,
under Section 723(a) of the New York Business Corporation Law and the
indemnity agreement, to indemnification for such expenses.
SHAREHOLDER PROPOSALS
A shareholder of the Company who wishes to present a proposal for
action at the Company's 1998 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, 1997.
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 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.
Representatives of Price Waterhouse LLP, which audited the Company's
1996 financial statements, are expected to be present at the Annual
Meeting. They will have the opportunity to make a statement if they
so desire, and they are expected to be available to respond to
appropriate questions.
SECTION 16(a) REPORTING DELINQUENCIES
Section 16(a) of the Securities and 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 SEC and The New York
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 1996, all filing requirements
applicable to its executive officers, directors, and greater than ten
percent (10%) beneficial owners were met except that one Form 4 for Mr
Henderson and one Form 3 for Mr. Greenberg were not filed timely.
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, 1996
through December 31, 1996, 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 26, 1997, 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,
/s/ Daniel I. Dewolf
Daniel I. DeWolf
Secretary
Melville, New York
March 31, 1997
