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 Rule 14a-11(c) or Rule 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] No fee required.
1) Title of each class of securities to which transaction applies:
2) Aggregate Number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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5) Total fee paid:
[] Fee paid previously with preliminary materials.
[] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing 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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2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
(516) 845-2000
March 31, 1998
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 13,
1998, at 9:30 a.m., at the Museum of Television and Radio, located
at 25 West 52nd Street, New York, New York 10019.
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 1997. 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/ Edward Grebow
Edward Grebow
President, Chief Executive Officer
and Director
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 1998
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 Museum of Television
and Radio, located at 25 West 52nd Street, New York, New York 10019,
on Wednesday, May 13, 1998, at 9:30 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 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,
1998 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 13, 1998.
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 DeWolf
Daniel I. DeWolf,
Secretary
Melville, New York
March 31, 1998
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
INFORMATION CONCERNING VOTE - page 1
ELECTION OF THE BOARD OF DIRECTORS - page 2
EXECUTIVE COMPENSATION AND OTHER INFORMATION - page 4
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION - page 9
STOCK PERFORMANCE CHART - page 10
OTHER MATTERS ARISING AT THE ANNUAL MEETING - page 11
PRINCIPAL SHAREHOLDERS - page 11
INTERESTED PARTY TRANSACTIONS - page 14
INDEMNIFICATION OF DIRECTORS AND OFFICERS - page 14
SHAREHOLDER PROPOSALS - page 14
COST OF SOLICITATION OF PROXIES - page 14
INDEPENDENT PUBLIC ACCOUNTANTS - page 15
SECTION 16(a) REPORTING DELINQUENCIES - page 15
ANNUAL REPORT ON FORM 10-K - page 15
CHYRON CORPORATION
5 Hub Drive
Melville, New York 11747
PROXY STATEMENT
For Annual Meeting of Shareholders
to be Held on May 13, 1998
Approximate Mailing Date of Proxy Statement and Form of Proxy:
March 31, 1998.
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 13, 1998, at 9:30 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 Museum of Television and Radio,
located at 25 West 52nd Street, New York, New York 10019.
Voting Rights and Outstanding Shares
Only shareholders of record at the close of business on March 26,
1998 are entitled to notice of and to vote at the Annual Meeting.
As of the close of business on March 13, 1998, 32,605,706 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 FOR the election as directors of the
nominees named below under the caption "ELECTION OF DIRECTORS." 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.
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
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 and Company Position Director of the
and Offices Held Company Since
Charles M. Diker
Director, Member of the Audit Committee,
Member of the Compensation and Stock
Option Committee September, 1995
Edward Grebow
President and Chief Executive Officer,
Director June, 1997
Donald P. Greenberg
Director September, 1996
Raymond W. Hartman
Director May, 1996
Alan J. Hirschfield
Director, Member of 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 May, 1995
Charles M. Diker, age 63, 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., an international direct sales skin care, cosmetics,
health and image company, International Specialty Products Inc., a
manufacturer of specialty chemicals, and AMF Bowling Inc., an
operator of bowling centers.
Edward Grebow, age 48, is President and Chief Executive Officer of
the Company and has held such positions since June 1997. Prior to
joining Chyron, Mr. Grebow was President of TELE-TV Systems, a joint
venture of Bell Atlantic, NYNEX and Pacific Telesis, from July 1995
through June 1997. From February 1988 to July 1995 Mr. Grebow was
Senior Vice President Operations and Administration at CBS, Inc.
Prior to his position at CBS, Inc., Mr. Grebow served as Executive
Vice President of the Bowery Savings Bank from 1985 to 1988 and Vice
President of JP Morgan & Co. Inc. from 1972 to 1985. Mr. Grebow is
a member of the Board of Trustees of The George Washington
University.
Donald P. Greenberg, age 64, 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 63, formerly held the position of Deputy
Chairman of Pro-Bel Limited ("Pro-Bel") a subsidiary of the Company,
from April 1996 through February 1998. From 1993 until April 1996,
he was the Chairman of Pro-Bel. From 1978-1993, he was the Finance
Director of Pro-Bel.
Alan J. Hirschfield, age 62, 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.
Wesley W. Lang Jr., age 40, is a managing director 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 47, 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.
Michael I. Wellesley-Wesley, age 45, is Chairman of the Board of
Directors and formerly held the position of Chief Executive Officer
of the Company from July 1995 through June 1997. 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.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors held five (5) meetings during fiscal year
1997. 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. Diker and Lang. The Committee
held two (2) meetings during fiscal year 1997.
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 1997.
During the fiscal year ended December 31, 1997, 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. Grebow, the executive officers of the Company are
the following:
Patricia Arundell Lampe - Chief Financial Officer and Treasurer, age
38. 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 51. 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 41. 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.
James M. Paul - Senior Vice President, Human Resources. Mr. Paul
joined the Company as Senior Vice President Human Resources in
October 1997. From February 1995 through September 1997 he held the
position of Senior Vice President, Human Resources with TELE-TV.
From 1993 to 1995, Mr. Paul held management positions at Bell
Atlantic Corporation and, from 1975 to 1993 he held a management
position at PRC, Inc., a subsidiary of Black and Decker Corporation.
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 1997 and, the most highly
compensated executive officers of the Company who held such
positions at the end of fiscal year 1997.
Summary Compensation Table
Annual Compensation Long Term Compensation
Other
Name and Principal Position Annual Securities
Compen- Underlying
Salary(1) Bonus sation Options/ All Other
Year ($) ($) ($) SAR (#) ($)
Edward Grebow - President, Chief Executive Officer and Director
12/97 215,385 105,000 700,000
Michael I. Wellesley-Wesley - Chairman of the Board and Former Chief
Executive Officer
12/97 172,667
12/96 262,000 50,000
12/95 38,538 50,000 62,500(2)
Roi Agneta - Executive Vice President
12/97 164,146 30,000 20,000
12/96 156,105 31,320 50,000
12/95 37,750 7,250
Roger Henderson - Group Managing Director, Pro-Bel
12/97 131,040 26,200 25,000
12/96 88,329 16,900 50,000
Patricia A. Lampe - Chief Financial Officer and Treasurer
12/97 128,462 20,000 20,000
12/96 118,000 23,000 50,000
12/95 102,365 23,000
Isaac Hersly(3) - Former President and Chief Operating Officer
12/97 212,484
12/96 217,215 40,000 166,666
12/95 189,600 36,000
(1) Includes any annual car allowance.
(2) Pursuant to his contract, Mr. Wellesley-Wesley received this
amount as compensation for his efforts prior to the effectiveness of
his contract.
(3) Mr. Hersly ceased being an executive officer of the Company in
September 1997.
Stock Option Grants
Set forth below is information on grants of stock options under the
Company's 1995 Long-Term Incentive Plan (the "Plan") for the named
executive officers for the period January 1, 1997 to December 31,
1997.
Stock Option Grants
Option Grants in Last Fiscal Year Table
Individual Grants Grant Value
Percent
of
Name Total
Options
Number of Granted
Securities to Exercise
Underlying Employees Price Grant Date
Options in Fiscal ($ per Expiration Present
Granted Year share) Date Value
Patricia Arundell-Lampe
20,000 1.7% $5.375 10/28/2007 $74,645
Roi Agneta
20,000 1.7% 5.375 10/28/2007 $74,645
Edward Grebow
700,000 60.3% 4.250 06/04/2007(1) $2,095,952
Roger Henderson
25,000 2.0% 5.375 10/28/2007 $93,307
James M. Paul
25,000 2.0% 5.375 10/28/2007 $93,307
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 ("NYSE") on the date of grant. The 700,000 options
granted to Mr. Grebow include 500,000 options which vest in three
equal installments; the first installment is exercisable at date of
grant, the second and third installments vest on the first and
second anniversaries of their date of grant, the remaining 200,000
options vest on the sixth anniversary of the date of grant or on
such earlier date as the following events shall occur: (i) the
option shall vest as to 100,000 shares when the average closing
price of Common Stock as reported by the NYSE for any consecutive 30
trading days during the term of Mr. Grebow's employment (the
"Employment Term") is $7.50 or greater; (ii) the remaining options
shall vest when the average closing price of a share of Common Stock
as reported by NYSE for any consecutive 30 trading days during the
Employment Term is $10.00 or greater; or (iii) all of the options
shall vest if the Company's earnings per share equal or exceed an
aggregate of $.66 from the current operations of the Company,
excluding certain extraordinary items. The other options reported
above become exercisable in three equal installments, on the first,
second and third year anniversaries of their date of grant. "Grant
Date Present 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 for the grant to Edward
Grebow are as follows: stock price - $4.25; exercise price - $4.25;
dividend yield - 0.0%; volatility -50.00; risk-free rate of return
- 6.67% and option term of 10 years. The factors used in this model
for the grant to the executive officers, other than Edward Grebow
are as follows: stock price - $5.375; exercise price - $5.375;
dividend yield - 0.0%; volatility - 50.00; risk free rates of return
- 6.12% and option terms of 10 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.
(1) 70,580 options expire 6/24/2004, 629,420 options expire
6/24/2007.
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, 1998, are participants in
the U.S. Pension Plan: Ms. Lampe, 4 years; and Mr. Agneta, 2 years;
Mr. Grebow, 0; Mr. Paul, 0.
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 1997. 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 $125,000. This maximum is
proportionately reduced for years of plan participation less than
ten. Effective from January 1, 1997 compensation in excess of
$160,000 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 Years of Credited Service
Average Compensation at Retirement Age 65
During the Last Ten Years of
Employment 5 10 15 20
$50,000 $ 3,800 $7,600 $11,400 $15,200
$100,000 $ 8,500 $17,100 $25,600 $34,200
$150,000 $13,300 $26,600 $39,900 $53,200
$160,000 $14,200 $28,500 $42,700 $57,000
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, 1998 is a participant in the
U.K. Pension Plan: Roger Henderson, 19 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 an annual fee of $5,000, plus $1,000 for each meeting of
the Board of Directors attended and $500 for each committee meeting
attended. In addition, each non-employee director receives options,
as a formula grant, to purchase 5,000 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. Edward Grebow,
President and Chief Executive Officer. The agreement runs until
June 4, 2000 and contains an automatic renewal provision for
successive one (1) year terms unless terminated by the Company or
Mr. Grebow. Mr. Grebow currently receives a base salary of $400,000
and is eligible to receive an additional bonus of up to 50% of his
base salary, of which $50,000 is guaranteed. If the agreement is
terminated with cause than Mr. Grebow is entitled only to receive
that portion of his base salary and guaranteed bonus owed through
date of termination. If he is terminated without cause on or after
the commencement of the agreement and prior to the end of the first
two years of employment, Mr. Grebow is entitled to a severance
payment equal to eighteen months of his base salary plus the pro-
rata portion of his guaranteed bonus for such period and
additionally, all options granted to Mr. Grebow that have not vested
at date of termination shall immediately vest. If the agreement is
terminated without cause or Mr. Grebow resigns for good reason
during the third-year of the employment term, Mr. Grebow is
entitled to receive a severance payment equal to his entire base
salary and the pro-rata portion of his guaranteed bonus for a period
of twelve months and all options granted which have not vested at
the date of termination shall immediately vest. In the event of a
change-in control of the Company, the Company shall pay Mr. Grebow
all compensation due under his employment agreement through the
remainder of the employment term and all options that were not
vested shall vest immediately. The agreement also contains certain
restrictions on competition.
The Company has an employment agreement with Ms. Lampe, Chief
Financial Officer and Treasurer. The agreement runs until December
31, 1999 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 $132,000 and is
eligible to receive a bonus of up to 20% of her base salary. If the
agreement is terminated with cause, 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, 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, 1998 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 $163,300 and is eligible
to receive a bonus of up to 20% of his base salary. If the
agreement is terminated with cause, 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, 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. Mr. Henderson is entitled to
receive a base salary of pounds sterling 80,000 and is eligible to
receive a bonus of up to 20% of his base salary. The agreement
runs until normal retirement age unless terminated prior to that
time because (i) of cause; (ii) the Company provides two year notice
of termination; or (iii) Mr. Henderson provides six months notice of
termination. If the agreement is terminated with cause, 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 50% of the
Chief Executive Officers base salary, and 20% of the other executive
officers 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 1997 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
Respectfully submitted,
Charles Diker and Wesley W. Lang, Jr.
March 31, 1998
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, 1997 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, 1992, in the Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends.
The businesses included in the Company-selected peer group are: Avid
Technology Inc., Carlton Communications Plc, Leitch Technology
Corp., Philips Electronics NV, Scitex Ltd, Sony Corp., Tektronix
Inc. The returns of each component issuer in the foregoing group
have been weighted according to the respective issuer's stock market
capitalization.
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 13, 1998, 32,605,706 share
of Common Stock were outstanding.
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 13, 1998, 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
Beneficial Percent
Name and Address of Ownership of Class
Beneficial Owner (2)(3) (2)(3)
WPG Corporate Development Associates, IV, L.P.(4)
One New York Plaza
New York, New York 10004
6,686,918 20.5%
WPG CDA IV (Overseas), Ltd. (5)
BankAmerica Trust and Banking Corp.
P.O. Box 1092
Georgetown, Grand Cayman Island
1,612,513 5.0%
WPG Private Equity Partners, L.P. (6)
One New York Plaza
New York, New York 10004
6,686,918 20.6%
WPG Enterprise Fund II, L.P.(7)
555 California Street
San Francisco, California 94104
1,661,572 5.1%
WPG Private Equity Partners (Overseas), L.P.(8)
One New York Plaza
New York, New York 10004
1,612,513 5.0%
WPG Venture Partners III, L.P.(9)
555 California Street
San Francisco, California 94104
3,043,100 9.3%
WPG Corporate Development Associates IV (Overseas) L.P.(10)
BankAmerica Trust and Banking Corp.
P.O. Box 1092
Georgetown, Grand Cayman Island
1,612,513 5.0%
Philip Greer(11)
Weiss Peck & Greer, L.L.C.
555 California Street
San Francisco, California 94104
4,655,613 14.3%
Gill Cogan(12)
Weiss Peck & Greer, L.L.C.
555 California Street
San Francisco, California 94104
3,043,100 9.3%
Westpool Investment Trust plc(13)
Carlton House
33 Robert Adam Street
London W1M 5AH
England
2,628,163 8.1%
Security Ownership of Management
The following table sets forth, as of March 13, 1998, 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
Beneficial Percent
Ownership of Total
Name of Beneficial Owner (2)(3) (2)(3)
Michael I. Wellesley-Wesley(14) 2,912,462 8.0%
Edward Grebow(15) 249,667 *
Roi Agneta(16) 35,530 *
Patricia Arundell-Lampe(16) 33,332 *
Roger Henderson(16)(17) 68,080 *
Alan J. Hirschfield(18) 216,097 *
Eugene M. Weber(18) 13,999 *
Donald P. Greenberg(19) 6,666 *
Charles M. Diker(20) 588,126 1.8%
Raymond W. Hartman 191,119 *
Wesley W. Lang(21) 8,306,097 25.5%
All directors and executive
officers as a group
(11 persons) 12,621,175 38.5%
* 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
32,605,706 shares of Common Stock, which were outstanding on March
13, 1998.
(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 13,
1998 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. 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.
(12)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.
(13)Includes 300,060 shares of Common Stock owned by Sepa, DSF and
Leubert over which it has voting control.
(14)Shares are directly owned by Paris Investment Limited, an entity
of which Michael I. Wellesley-Wesley is the sole beneficiary.
(15)Includes 166,667 shares that may be acquired upon the exercise
of presently exercisable options.
(16)Includes 33,332 shares that may be acquired upon the exercise of
presently exercisable options.
(17)Includes 1,158 shares owned by Mr. Henderson's wife to which,
Mr. Henderson disclaims beneficial ownership.
(18)Includes 9,999 shares that may be acquired upon the exercise of
presently exercisable options.
(19)Includes 6,666 shares that may be acquired upon the exercise of
presently exercisable options.
(20)Mr. Diker directly owns 450,127 shares of Common Stock and is
the manager of a fund which owns 40,000 shares of Common Stock,
Mr. Diker disclaims beneficial ownership of such shares. In
addition, Mr. Diker has voting control of 63,000 shares owned by
Sepa, DSF and Leubert. Also includes 34,999 shares that may be
acquired upon the exercisable options.
(21)Includes 9,999 shares that may be acquired upon the exercise of
presently exercisable options. 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
Mr. Wellesley-Wesley has a consulting agreement, dated August 1,
1997, with the Company, pursuant to which he provides services in
connection with potential strategic alliances, mergers and business
opportunities for the Company, primarily in Europe. He receives
$100,000 as compensation and health benefits and $500,000 in life
insurance. This agreement expires on July 31, 1998.
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 1999 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, 1998.
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
Representatives of Price Waterhouse LLP, which audited the Company's
1996 and 1997 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 1997, all filing
requirements applicable to its executive officers, directors, and
greater than ten percent (10%) beneficial owners were met except
that Mr. Greenberg was late in filing his Form 5.
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,
1997 through December 31, 1997, 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 Lane,
Chyron Corporation, 5 Hub Drive, Melville, New York 11747. Each
such request must set forth a good faith representation that, as of
March 26, 1998, 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 31, 1998
