WARNING: THE XXXXX SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made this 5th day of June,
1997 between CHYRON CORPORATION, a New York corporation (the
"Company"), having its principal offices at 0 Xxx Xxxxx, Xxxxxxxx,
Xxx Xxxx 00000, and XXXXXX XXXXXX ("Xxxxxx") an individual residing
at 0000 Xxxxx Xxxxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS, the Company desires to employ Xxxxxx as its President and
Chief Executive Officer, and Xxxxxx desires to become the Company's
President and Chief Executive Officer, subject to and upon the terms
and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Nature of Employment; Term of Employment. The Company hereby
agrees to employ Xxxxxx and Xxxxxx agrees to serve the Company as
its President and Chief Executive Officer, upon the terms and
conditions contained herein, for a term commencing on the date
Xxxxxx is contractually free under his present employment agreement
and assumes his duties hereunder but in no event later than July 1,
1997 (the "Commencement Date") and continuing until the third
anniversary date of the Commencement Date (the "Initial Termination
Date"). This Agreement shall automatically renew for a one year
period (the "Renewal Term") thereafter, unless either party notifies
the other in writing on or before 90 days prior to the Initial
Termination Date that it desires not to renew this Agreement for the
Renewal Term. The period during which Xxxxxx is employed by the
Company pursuant to this Agreement (including the Renewal Term)
shall be referred to herein as the "Employment Term". In addition,
the Company agrees to have Xxxxxx appointed as a member of the Board
of Directors of the Company and each of its subsidiaries, and to
each of the key committees thereof, except for the Company's Audit
Committee and Compensation and Stock Option Committee (the
"Compensation Committee") and to re-nominate him as a Director of
each of such boards and committees each year for so long as he is
the Chief Executive Officer of the Company.
2. Duties and Powers as Employee
(a) During the Employment Term, Xxxxxx shall be employed by the
Company as President and Chief Executive Officer, which position is,
and shall remain at all times during the Employment Term, the senior
executive officer position of the Company. Xxxxxx shall devote
substantially his full working time to his duties as President and
Chief Executive Officer of the Company. In performance of his
duties, Xxxxxx shall report directly to and be subject to the
direction of the Board of Directors of the Company. As President
and Chief Executive Officer, Xxxxxx shall have all the
responsibilities, duties and authority as are generally associated
with the position of President and Chief Executive Officer of a
public company, including full executive power over, and
responsibility for, managing, directing, and supervising all aspects
of the business of the Company worldwide and for all merger,
acquisition, financing transactions, all shareholder relations and
communications and presiding over all meetings of the Board of
Directors and shareholders. The Chief Executive Officer shall also
be responsible for developing the business plan and objectives of
the Company and managing the execution of such plan.
(b) Xxxxxx shall be based and shall carry out his duties from
primarily a principal executive office of the Company located in
Melville, New York or another location that is within 35 miles of
Columbus Circle, New York City, New York. As President and Chief
Executive Officer, Xxxxxx will be responsible for managing the
business activities of the Company worldwide and accordingly, shall
travel in accordance with the reasonable needs of the business which
may require him to conduct business for the Company in various
locations including, without limitation, New York, London, Europe,
and such other locations as he deems necessary, desirable or
appropriate.
(c) The Chief Executive Officer may engage in charitable,
community and personal business and investment activities and may
serve as a member of the board of directors of other companies
(public or private), so long as such activities do not materially
interfere with the performance of his duties on behalf of the
Company, do not have a negative impact on the reputation of the
Company and such outside directorship for other public companies do
not exceed two.
3. Compensation.
(a) As compensation for his services hereunder, the Company shall
pay Xxxxxx, during the Employment Term, a salary (the "Base Salary")
payable in equal semi-monthly installments initially at the annual
rate of $400,000. Effective on each anniversary of the Commencement
Date during the Employment Term, Xxxxxx'x Base Salary shall be
increased to reflect increases in the Urban Consumer Price Index for
all Urban Consumers for the New York metropolitan area (or any
successor Consumer Price Index), based on data published by the
Bureau of Labor Statistics of the United States Department of Labor
for the period that corresponds with the preceding twelve month
period. In addition, Xxxxxx shall be eligible for such further
increases in the Base Salary as may be determined in the sole
discretion of the Compensation Committee.
(b) In addition to the Base Salary, and subject to the discretion
of the Compensation Committee, Xxxxxx shall receive, as incentive
compensation, an annual bonus (the "Incentive Bonus") based upon
achievement of objective targeted performance goals (the "Target
Goals") determined each year by the Compensation Committee in
consultation with Xxxxxx. In the event one hundred percent (100%)
of the Target Goals are achieved, the Incentive Bonus shall be an
amount equal to 50% of the Base Salary (the "Target Bonus"). The
Target Goals shall be divided into the following categories: (i)
objective fixed financial criteria (the "Fixed Criteria") which
shall account for two-thirds of the Target Bonus, and (ii)
subjective non-financial criteria (the "Subjective Criteria") which
shall account for one-third of the Target Bonus. In the event that
less than one hundred percent (100%) of the Target Goals are
achieved, then Xxxxxx shall receive as an Incentive Bonus an amount
equal to that percentage of the Fixed Criteria achieved multiplied
by two-thirds of the Target Bonus, and such additional amounts with
respect to the achievement of particular items included among the
Subjective Criteria as shall have been established by the
Compensation Committee in consultation with Xxxxxx each applicable
year. The Compensation Committee, in its sole discretion, may
increase the amounts payable to Xxxxxx as an Incentive Bonus upon
his exceeding the Target Goals. The Incentive Bonus shall be paid
to Xxxxxx within thirty (30) days after completion of the Company's
annual audit. For calendar year 1997 and any other year in which
Xxxxxx is employed for less than 12 months, the Target Goals shall
be determined and the Incentive Bonus shall be paid on a
proportional basis for that portion of the year in which Xxxxxx is
employed by the Company. Notwithstanding the foregoing, Xxxxxx
shall be entitled to receive a minimum of $50,000 (the "Guaranteed
Bonus") for calendar year 1997 and for each year thereafter as an
Incentive Bonus.
(c) The Company hereby grants Xxxxxx options (the "Options") to
purchase 500,000 shares of common stock of the Company, par value
$.01 per share (the "Common Stock"), with an exercise price equal to
the closing price for a share of Common Stock as reported on the New
York Stock Exchange ("NYSE") for the date of this Agreement. The
Options shall be treated as incentive stock options to the extent
permitted by law and the remainder shall be treated as non-incentive
stock options. The Options shall vest 1/3 upon the Commencement
Date, 1/3 on the 12 month anniversary of the Commencement Date and
the remaining 1/3 on the 24 month anniversary of the Commencement
Date. The Options shall have a term of seven (7) years from the
date of grant. The Options shall be subject to the terms of the
Company 1995 Stock Option Plan and shall be memorialized in a stock
option grant certificate to be issued by the Company.
(d) The Company also hereby grants Xxxxxx options ("Incentive
Options") to purchase 200,000 shares of Common Stock with an
exercise price equal to the closing price for a share of the Common
Stock as reported on the NYSE for the date of this Agreement. The
Incentive Options shall vest upon the sixth anniversary of the
Commencement Date, provided that Xxxxxx is employed by the Company
on such date, or on such earlier date as any of the following events
shall occur: (i) the Incentive Options shall vest as to 100,000
shares when the average closing price of a share of Common Stock as
reported by the NYSE for any consecutive 30 trading days during the
Employment Term is $7.50 or greater; (ii) the remaining Incentive
Options shall vest when the average closing price of a share of
Common Stock as reported by the NYSE for any consecutive 30 trading
days during the Employment Term is $10.00 or greater; or (iii) all
of the Incentive 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 (x) any extraordinary items
that may have increased or decreased such earnings per share, (y)
the effects of any recapitalization, mergers, acquisitions or stock
splits, and (z) any impact on earnings from the granting, vesting or
exercise of options to or by any party, for any four (4) consecutive
quarterly periods reported by the Company on its Form 10-Q (or Form
10-K if the period includes a fourth quarter) for such periods
during the Employment Term. the Incentive Options shall have a term
of seven (7) years from the date of grant. The Incentive Options
shall be subject to the terms of the Company's 1995 Stock Option
Plan and shall be memorialized in a stock option grant certificate
to be issued by the Company.
(e) Notwithstanding any provision of the Company's 1995 Stock
Option Plan to the contrary, any unvested portions of the Options
and Incentive Options shall become immediately and fully vested to
the extent provided in Section 9 and 10 below. The Company shall
maintain the effectiveness of a Registration Statement on Form S-8
with respect to the shares underlying the Options and Incentive
Options and shall facilitate a cashless exercise procedure with
respect to such options.
4. Expenses; Vacation; Insurance; Other Benefits.
(a) Xxxxxx shall be entitled to reimbursement for reasonable
travel and other out-of-pocket expenses reasonably incurred in the
performance of his duties hereunder, upon submission and approval of
written statements and bills in accordance with the then regular
procedures of the Company. The Company acknowledges that the duties
of President and Chief Executive Officer will necessitate Xxxxxx
traveling regularly between New York, London, Europe, the Pacific
Rim, and other areas where the Company conducts or intends to
conduct business, and will reimburse Xxxxxx for all costs and
expenses reasonably incurred in connection therewith, including
first class airfare.
(b) Xxxxxx shall entitled to four (4) weeks paid vacation time per
annum in accordance with the regular procedures of the Company
governing senior executive officers as determined from time to time
by the Company's Board of Directors.
(c) The Company acknowledges that Xxxxxx has a portable flexible
premium adjustable universal life insurance policy issued by
Metropolitan Life Insurance company with a $1,102,500 face amount
and that the premiums on which (currently $9,013) have been paid by
Xxxxxx'x prior employer. The Company will make the required premium
payments during the Employment Term on January 2 of each year during
the Employment Term as follows: an amount not to exceed $15,022 for
1998; an amount not to exceed $15,773 for 1999; an mount not to
exceed $16,561 for 2000; and an amount not to exceed $17,399 for
2001. The Company shall pay Xxxxxx a xxxxx-up payment necessary to
cover any federal tax liability he incurs in connection with the
payment of such premiums by the Company.
(d) So long as Xxxxxx is employed by the Company, the Company
shall lease an automobile with a retail purchase price not exceeding
$40,000 for Xxxxxx'x exclusive use. The Company shall pay for all
rental, maintenance, operating and insurance costs and taxes for
such automobile.
(e) Xxxxxx shall be entitled to participate in all employee
benefit plans, programs and arrangements of the Company now or
hereafter made available to senior executives of the Company
(including, without limitation, each retirement plan, supplemental
and excess retirement plans, annual and long-term incentive
compensation plans, stock option and purchase plans, group life
insurance, accident and death insurance, medical and dental
insurance, sick leave, pension plans, disability plans and fringe
benefit plans) on a basis which is no less favorable than is made
available to any other senior executives of the Company.
(f) The Company shall provide supplemental nonqualified payments
to Xxxxxx equal to the difference between (i) those pension benefits
which Xxxxxx would have received had he remained employed at Xxxxxx
Guaranty Trust Company ("Xxxxxx") until his normal retirement date
under the plan in effect on October 1, 1985 and (ii) the sum of
vested accrued benefits at the date of the termination of his
employment at Xxxxxx, The Bowery Savings Bank, CBS, Inc. and Tele-TV
Systems, respectively. These payments shall only be for the period
covered by the Employment Term or until the termination of Xxxxxx'x
employment. Such supplemental payments will be payable at the
normal retirement date at Xxxxxx in an annuity form or at Xxxxxx'x
election in a comparable lump sum amount at the termination of his
employment with the Company determined by a mutually acceptable
actuary or a lump sum payable to a trustee for Xxxxxx'x benefit
under an irrevocable "rabbi trust" arrangement. The actuary shall
use the same assumptions in calculating the lump sum as are required
under Section 417(e) of the Internal Revenue Code of 1986 at the
time of Xxxxxx'x termination of employment.
(g) The Company shall pay up to $15,000 for the fees and expenses
of Xxxxxx'x counsel incurred in connection with entering into this
Agreement.
(h) The Company shall enter into an indemnification agreement with
Xxxxxx in the form attached hereto and maintain, and Xxxxxx shall be
covered under, customary and appropriate directors and officers
insurance policies. Xxxxxx'x rights to such coverage and indemnity
shall survive and continue following any termination of employment
as to the period of his employment.
(i) Xxxxxx has requested insurance disability coverage providing
for disability payments of 70% of his Base Salary and has a
personal, portable policy issued by Xxxx Xxxxxx Life Insurance
Company providing for a portion of such payments. The Company will
provide for disability coverage during the Employment Term for 70%
of Base Salary and make a cash payment to Xxxxxx (including a gross-
up payment to cover any federal tax liability incurred by Xxxxxx
upon receiving such amounts) sufficient to pay premiums on Xxxxxx'x
Xxxx Xxxxxx policy and any other policy necessary to assure the 70%
level of payments.
5. Representations and Warranties of Employee. Xxxxxx represents
and warrants to the Company that (a) as of the Commencement Date,
Xxxxxx is under no contractual or other obligation which is
inconsistent with the execution of this Agreement, the performance
of his duties hereunder, or the other rights of the Company
hereunder, and (b) Xxxxxx is under no physical or mental disability
that would hinder his performance of duties under this Agreement.
6. Non-Competition.
(a) Xxxxxx agrees that he will not (i) during the period he is
employed by the Company engage in, or otherwise directly or
indirectly be employed by, or act as a consultant or lender to, or
be a director, officer, employee, owner, member or partner of, any
other business or organization that is or shall then be competing
wit the Company, and (ii) for a period of one (1) year after he
ceases to be employed by the Company directly compete with or be
engaged in the same business as the Company (collectively,
"Competing Business"), or be employed by, or act as consultant or
lender to, or be a director, officer, employee, owner, member or
partner of any business or organization which, at the time of such
cessation, is a Competing Business, except that in each case the
provisions of this Section 6 will not be deemed breached merely
because (x) Xxxxxx owns not more than five percent (5%) of the
outstanding common stock of a corporation, if, at the time of its
acquisition by Xxxxxx, such stock is listed on a national securities
exchange, is reported on NASDAQ, or is regularly traded in the over-
the-counter market by a member of a national securities exchange,
(y) Xxxxxx is passive investor in any fund in which he has no
investment discretion, or (z) Xxxxxx is a senior executive at a
company whose business lines include a Competing Business, provided
that Xxxxxx has broad management responsibilities of a senior
executive at such company over overall business operations and is
not employed to run the Competing Business, and further provided
that such Competing Business does not constitute more than 20% of
the revenues of such company. For example, Xxxxxx would not breach
this covenant not to compete by virtue of his being employed as a
senior executive of a company such as SONY Corporation or Xxxxxxxx
Corporation, or any affiliate of either, whose business and
operations include a Competing Business with revenues less than 20%
of the revenues of the business entity or division of his employer,
provided that he exercises broad management responsibilities over
all such businesses and operations of his employer and other
executives have primary responsibility for the management of any
such Competing Business.
(b) It is the intent of the parties to this Agreement that the
provisions of this Section 6 shall be enforced to the fullest extent
permissible under the laws and pubic policies applied in each
jurisdiction in which enforcement is sought. If any particular
provisions or portions of this Section 6 shall be adjudicated to be
invalid or unenforceable, such provisions or portions thereof shall
be deemed amended to the minimum extent necessary to render such
provision or portion valid and enforceable, such amendment to apply
only with respect to the operation of such provisions or portions in
the particular jurisdiction in which such adjudication is made.
(c) The parties acknowledge that damages and remedies at law for
any breach of this Section 6 will be inadequate and that the Company
shall be entitled to specific performance and other equitable
remedies (including injunction) and such other relief as a court or
tribunal may deem appropriate in addition to any other remedies the
Company may have.
7. Patents; Copyrights. Any interest in patents, patent
applications, inventions, copyrights, developments, and processes
("Such Inventions") which Xxxxxx now or hereafter during the period
he is employed by the Company may own or develop relating to the
fields in which the Company may then be engaged shall belong to the
Company; and forthwith upon request of the Company, Xxxxxx shall
execute all such assignments and other documents and take all such
other action as the Company may reasonably request in order to vest
in the Company all his right, title, and interest in and to Such
Inventions, free and clear of all liens, charges and encumbrances.
The Company will reimburse Xxxxxx for any reasonable fees and
expenses (including fee and expenses of counsel) incurred by Xxxxxx
in connection with executing such assignments and documents and
taking any such action at the request of the Company.
8. Confidential Information. All confidential information which
Xxxxxx may now possess or may obtain during the Employment Term
relating to the business of the Company shall not be published,
disclosed, or made accessible by him to any other person, firm, or
corporation during the Employment Term or any time thereafter
without the prior written consent of the Company; provided that the
foregoing shall not apply to information which is not unique to the
Company or which is generally known to the industry or the public,
other than as a result of Xxxxxx'x breach of this covenant, and
shall not preclude Xxxxxx from disclosing any such information to
the extent such disclosure is required by law, disclosure would in
the reasonable judgement of Xxxxxx be in the best interest of the
Company or is reasonably necessary in order to defend Xxxxxx or to
enforce Xxxxxx'x rights under this Agreement in connection with any
action or proceeding to which the Company or its affiliates is a
party. Xxxxxx shall return all tangible evidence of such
confidential information to the Company prior to or at the
termination of his employment.
9. Termination.
(a) If on or after the Commencement Date and prior to the end of
the first two (2) years of the Employment Term, Xxxxxx is terminated
by the Company without cause or Xxxxxx resigns for Good Reason, as
defined below, he shall be entitled to receive his (i) Base Salary
for a period of eighteen (18) months following the date of
termination and the monthly pro rata portion of the Guaranteed Bonus
from the last accrual date of the Guaranteed Bonus, or the
Commencement Date if the Guaranteed Bonus has not yet accrued,
through the end of the eighteen (18) month period; this amount shall
be paid in equal semi-monthly installments during the eighteen (18)
months following the date of termination; (ii) all Options that have
not vested as of the date of termination shall immediately vest as
of such date, and (iii) all Incentive Options shall vest if the
criteria for vesting set forth in Section 3(d) hereof is achieved at
any time during the 6 months following the date of termination;
provided, however, if such criteria for vesting is not met during
such time, then the Incentive Options which have not vested shall be
cancelled. If Xxxxxx is terminated without cause or Xxxxxx resigns
for Good Reason during the third year of the Employment Term or
during the Renewal Term, then Xxxxxx shall receive (i) his base
Salary for a period of (12) months from the date of termination and
the monthly pro rata portion of the Guaranteed Bonus from the last
accrual date of the Guaranteed Bonus through the end of the twelve
(12) month period; this amount shall be paid in equal semi-monthly
installments during the twelve (12) months following the date of
termination; (ii) all Options that have not vested as of the date of
termination shall immediately vest as of such date, and (iii) all
Incentive Options shall vest if the criteria for vesting set forth
in Section 3(d) hereof is achieved at any time during the 6 months
following the date of termination; provided, however, if such
criteria for vesting is not met during such time, then the Incentive
Options which have not vested shall be cancelled. In addition, in
either case, the Company shall also continue to maintain for Xxxxxx
all benefits provided under this Agreement for the remaining term of
the Agreement, and shall pay in a lump sum, within five (5) business
days following the date of termination (i) any accrued but unpaid
compensation to the date of termiantion, including any Incentive
Bonus amount accrued but unpaid in respect of any prior fiscal year,
and (ii) any previously incurred but unreimbursed business expenses
and other amounts due under Section 4 of this Agreement.
(b) Notwithstanding anything herein contained, if on or after the
date hereof and prior to the end of the Employment Term, Xxxxxx is
terminated "For Cause" (as defined below) then the Company shall
have the right to give notice of termination of Xxxxxx'x services
hereunder as of a date to be specified in such notice, and this
Agreement shall terminate on the date so specified. Termination
"For Cause" shall mean that Xxxxxx shall: (i) be convicted of a
felony crime, (ii) willfully commit any act or willfully omit to
take any action in bad faith and to the material detriment of the
Company, (iii) intentionally violate the federal securities laws and
such violation cannot be corrected and such action was not in the
advice of the Company's securities counsel, (iv) commit an act of
active and deliberate dishonesty or fraud against the Company, (v)
fail to follow a reasonable instruction of the Board of Directors
which results in a material detriment to the Company, or (vi)
willfully breach any material term of this Agreement and fail to
correct such breach within ten (10) days after receipt of written
notice thereof. In the event that this Agreement is terminated "For
Cause", then Xxxxxx shall be entitled to receive an amount, payable
in a lump sum within 5 business days following from the date of
termination, equal to the sum of (i) any accrued but unpaid
compensation to the date of termination, including any Incentive
Bonus amount accrued but unpaid with respect of any prior fiscal
year, (ii) a monthly pro rata portion of the Guaranteed Bonus from
the last accrual date of the Guaranteed Bonus, or the Commencement
Date if the Guaranteed Bonus has not yet accrued, through the date
of termination, and (iii) any previously incurred but unreimbursed
business expenses and other amounts due under Section 4 of this
Agreement through the date of termination. All Options and
Incentive Options which have not vested as of the date of
termination shall be cancelled.
(c) In the event that Xxxxxx shall be physically or mentally
incapacitated or disabled or otherwise unable fully to discharge his
duties hereunder for a period of six (6) consecutive months, then
this Agreement shall terminate upon thirty (30) days' written notice
to Xxxxxx, and no further compensation shall be payable to Xxxxxx,
except that Xxxxxx shall be entitled to receive an amount, payable
in a lump sum payment within five (5) business days following the
date of termination, equal to the sum of (i) any accrued but unpaid
compensation to the date of such termination, including any
Incentive Bonus amount accrued but unpaid in respect of any prior
fiscal year, (ii) a monthly pro rata portion of the Guaranteed Bonus
from the last accrual date of the Guaranteed Bonus, or the
Commencement Date if the Guaranteed Bonus has not yet accrued,
through the date of termination, and (iii) any previously incurred
but unreimbursed business expenses and other amounts due under
Section 4 of this Agreement through the date of termination. The
Options which have not vested by the date of termination shall vest
on a pro rata basis equal to 13,888 shares for each month elapsed
since the last vesting date of the Options through the date of
termination. The Incentive Options which have not vested as of the
date of termination shall vest if the criteria for vesting set forth
in Section 3(d) hereof is achieved at any time during the 30 days
following the dae of termination; if such criteria for vesting is
not met during such time period, then the Incentive Options which
have not vested shall be cancelled. Xxxxxx shall also be entitled
following such termination to receive payments provided under the
disability program and insurance policies required under Section
4(i) hereof.
(d) In the event that Xxxxxx shall die, then this Agreement shall
terminate on the date of Xxxxxx'x death, Xxxxxx'x estate shall be
entitled to receive hereunder an amount payable in a lump sum within
five (5) business days following the date of termination, equal to
the sum of (i) any accrued but unpaid compensation to the date of
termination, including any Incentive Bonus amount accrued but unpaid
in respect of any prior fiscal year, (ii) a monthly pro rata portion
of the Guaranteed Bonus from the last accrual date of the Guaranteed
Bonus, or the Commencement Date if the Guaranteed Bonus has not yet
accrued, through the date of termination, and (iii) any previously
incurred but unreimbursed business expenses and other amounts due
under Section 4 of this Agreement through the date of termination.
In addition, Xxxxxx'x estate shall receive the Base Salary for one
year following the date of termination, which shall be paid in equal
semi-monthly installments during the one year following the date of
termination. Xxxxxx'x family shall be entitled to continued
participation in the Company's group health plans on the same basis
made available to Xxxxxx'x family hereunder during his lifetime for
a period of one year from the date of termination. The Options
which have not vested by the date of termination shall vest on a pro
rata basis equal to 13,888 shares for each month elapsed since the
last vesting date of the Options through the date of termination.
The Incentive Options which have not vested as of the date of
termination shall vest if the criteria for vesting set forth in
Section 3(d) hereof is achieved at any time during the 30 days
following the date of termination; if such criteria for vesting is
not met during such time period, then the Incentive Options which
have not vested shall be cancelled.
(e) In the event Xxxxxx desires to resign voluntarily as President
and Chief Executive Officer, Xxxxxx covenants to provide the Company
with not less than 90 days' written notice of any such voluntary
resignation; and further Xxxxxx covenants to cooperate in good faith
fully in order to facilitate a smooth transfer of authority during
the period from notice of resignation to the date of termination.
In the event that this Agreement is terminated pursuant to this
Section 9(e), then Xxxxxx shall be entitled to receive an amount,
payable in a lump sum within five (5) business days following the
date of termination, equal to the sum of (i) any accrued but unpaid
compensation, including any Incentive Bonus amount accrued but
unpaid in respect of any prior fiscal year, to the date of
termination, (ii) a monthly pro rata portion of the Guaranteed Bonus
from the last accrual date of the Guaranteed Bonus, or the
Commencement Date if the Guaranteed Bonus has not yet accrued,
through the date of termination, and (ii) any previously incurred
but unreimbursed business expenses and other amounts due under
Section 4 of this Agreement through the date of termination. All
Options and Incentive Options that have not vested as of such date
shall be cancelled.
(f) If Xxxxxx'x employment with the Company shall terminate as a
result of the Company's election not to extend the Employment Term
as provided for Section 1 hereof or the Renewal Term expires without
the Company and Xxxxxx having entered into a new agreement for his
employment after the Renewal Term at least ninety (90) days prior to
the end of the Renewal Term, Xxxxxx shall be entitled to receive an
amount, payable in a lump sum within five (5) business days
following the date of termination, equal to the sum of (i) any
accrued but unpaid compensation to the date of termination,
including any Incentive Bonus amount accrued but unpaid in respect
of a prior fiscal year, (ii) any previously incurred but
unreimbursed business expenses and other amounts due under Section
4 of this Agreement though the date of termination and (iii) one
month's Base Salary for each year of service to the Company. In
addition, for a period following such termination date ending on the
earlier of the date of commencement of his employment by another
employer or one year from the end of the Employment Term, Xxxxxx
shall be entitled to continued life insurance, disability and group
health plan coverage, but not any supplemental pension benefits, on
the same basis made available hereunder during the Employment Term.
(g) For purposes of this Agreement, "Good Reason" shall mean any
material breach by the Company of its obligations hereunder which
are not cured within 10 days following the Company's receipt of
written notice from Xxxxxx detailing such breach. The parties agree
that a material breach shall include, but not be limited to, (i) any
reduction in Xxxxxx'x duties, authority, status, reporting
relationship or responsibilities (whether or not accompanied by a
change in title), (ii) any reduction in, or failure to pay, any
compensation or other benefit payable to or provided for Xxxxxx
hereunder, and (iii) any requirement that Xxxxxx'x principal place
of employment be other than at the Company's principal executive
offices in Melville, NY or if the Company's principal executive
offices are relocated more than 35 miles from Columbus Circle, New
York, New York.
(h) Xxxxxx shall not be required to mitigate amounts payable
pursuant to this Section 9 hereof by seeking other employment or
otherwise and the amounts payable to Xxxxxx hereunder in connection
with his termination of employment shall not be reduced by amounts
earned by, or paid to, Xxxxxx following his termination of
employment, except to the extent certain benefits terminate upon re-
employment as provided in Section 9(f) above.
10. Change-of-Control.
(a) In the event there is a Change-of-Control of the Company, as
defined below, all payments to be paid under this Agreement, both
those accrued and unpaid and those to accrue over the remainder of
the Employment Term, shall accelerate and become immediately due and
payable to Xxxxxx and all Options and Incentive Options that have
not vested shall immediately vest. "Change-of-Control" shall mean:
(i) any "person" as such term is used in Section 3(d) and 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") (other than
a current stockholder that owns 5% or more of the Company's
outstanding common stock or an affiliate of such 5% or greater
stockholder (collectively, the "Controlling Shareholders") and other
than the Company, any trustee, or other fiduciary holding securities
under any employee benefit plan of the Company) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the
Company's then outstanding securities, or the Controlling
Shareholders collectively increase their ownership from the current
level to more than 75% of the combined voting power of the Company's
then outstanding securities;
(ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation;
(iii) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of, or the Company sells or disposes of,
all or substantially all of the Company's assets;
(iv) the Company becomes a privately-held company without Xxxxxx'x
prior approval; or
(v) the securities of the Company are no longer regularly traded
on a national securities exchange, the Nasdaq National Market System
or the Nasdaq SmallCap Market as a result of any event or
circumstance over which Xxxxxx has no control or as to which Xxxxxx
has not given his prior approval.
(b) If any amount payable or other benefit receivable by Xxxxxx
hereunder or under any other agreement or arrangement with the
Company or its affiliates is deemed to constitute a "Parachute
Payment" (which, for this purpose, shall mean any payment deemed to
constitute a "Parachute Payment" as defined in section 280G of the
Internal Revenue Code of 1986 (the "Code"), alone or when added to
any other amount payable or paid to or other benefit receivable or
received by Xxxxxx which is deemed to constitute the Parachute
Payment, and would result in the imposition on Xxxxxx of an excise
tax under section 4999 of the Code or any successor statute or
regulation, then, in addition to any other benefits to which Xxxxxx
is entitled under this Agreement, Xxxxxx shall be paid by the
Company an amount (the "Gross-Up Amount") in cash equal to the sum
of the excise taxes (and any associated interest and penalties)
payable by Xxxxxx by reason of receiving the Parachute Payments plus
the amount necessary to put Xxxxxx in the same after-tax position s
if no such excise taxes, interest and penalties under section 280G
of the Code had been imposed with respect to the Parachute Payment.
Whether a payment or benefit results in the imposition of an excise
tax and the amount of any payment under this Section 10(b) shall be
determined by a nationally recognized certified public accounting
firm designated by the Company. All fees and expenses of such
accounting firm shall be paid by the Company. Payment of the Gross-
Up Amount shall be made when any such amount is required to be paid
to the Internal Revenue Service or other appropriate taxing
authority.
11. Survival. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall
survive Xxxxxx'x termination of employment, irrespective of any
investigation made by or on behalf of any party.
12. Modification. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements between them concerning
such subject matter, and may be modified only by a written
instrument duly executed by each party.
13. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be
mailed by certified mail, return receipt requested, or delivered
against receipt to the party to whom it is to be given at the
address of such party set forth in the preamble to this Agreement
(or to such other address as the party shall have finished in
writing in accordance with the provisions of this Section 13).
Notice to the estate of Xxxxxx shall be sufficient if addressed to
Xxxxxx as provided in this Section 13. Any notice or other
communications given by certified mail shall be deemed given at the
time of certification thereof, except for a notice changing a
party's address which shall be deemed given at the time of receipt
thereof.
14. Legal Fees. In the event a dispute arises between the Company
and Xxxxxx which is resolved either through arbitration or the
judicial process, then the court or the arbitration panel may award
to the winning party such party's reasonable attorneys' fees and
expenses incurred in connection with the dispute from the losing
party.
15. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to
be a waiver of any other breach of such provision of this Agreement.
The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered
a waive or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing.
16. Binding Effect. Xxxxxx'x rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, such
rights shall not be subject to encumbrance or the claims of Xxxxxx'x
creditors, and any attempt to do any of the foregoing shall be void.
The provisions of this Agreement shall be binding upon and inure to
the benefit of Xxxxxx and his heirs and personal representatives,
and shall be binding upon and inure to the benefits of the Company
and its successors and its assigns.
17. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
18. Counterparts; Governing Law. This Agreement may be executed
in any number of counterparts (and by facsimile), each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument. It shall be governed by,
and construed in accordance with, the laws of the State of New York,
without giving effect to the rules governing the conflicts of laws.
19. Disclosure. The Company shall provide Xxxxxx with a
reasonable opportunity to review any press release concerning his
joining the Company and the parties shall jointly decide when to
release such announcement, subject to advise of counsel.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
CHYRON CORPORATION
/s/ Xxxxxxx Wellesley-Xxxxxx
Name: Xxxxxxx Wellesley-Xxxxxx
Title: Chairman
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
