EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made as of March 2, 2005, by and between CHYRON CORPORATION, a New York corporation (the "Company"), having its principal offices at 0 Xxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, and XXXXXXX WELLESLEY-XXXXXX ("MWW") having an address at Hall Farm House, Little Massingham, Xxxx'x Xxxx, Norfolk, PE322JR, United Kingdom.
W I T N E S S E T H:
WHEREAS, the Company desires to continue to employ MWW as its Chief Executive Officer and President (collectively, the "CEO"), and MWW desires to continue to hold such positions, subject to and upon the terms and conditions contained herein; and
WHEREAS, the Company and MWW have previously entered into an Employment Agreement, dated January 30, 2004, which is expiring February 21, 2005 (the "2004 Agreement"), and the parties wish to enter into this Agreement as the successor employment agreement between the parties.
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 continue to employ MWW and MWW agrees to continue to serve the Company as its CEO, upon the terms and conditions contained herein, for a term commencing on March 1, 2005 (the "Commencement Date") and continuing until March 1, 2006 (the "Employment Term," which shall include, as applicable, all successive terms of employment under this Agreement).
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Unless either party gives notice of its intention not to renew the then current Employment Term prior to 120 days before the end of the Employment Term in effect at such time, the Employment Term shall be automatically extended for one-year periods.
2. Duties and Powers as Employee
(a) During the Employment Term, MWW shall be employed by the Company as CEO, which position is, and shall remain at all times during the Employment Term, the senior executive officer position of the Company. MWW shall devote his full working time to his duties as CEO. In performance of his duties, MWW shall report directly to and be subject to the direction of the Board of Directors of the Company or any Committee thereof. As CEO, MWW shall have all the responsibilities, duties and authority as are generally associated with the position of CEO 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. The CEO shall also be responsible for developing the business plan and objectives of the Company and managing the execution of such plan.
(b) As CEO, MWW shall travel in accordance with the reasonable needs of the business, which shall require him to conduct business for the Company primarily in Melville, New York and such other locations as he deems necessary.
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3. Compensation
(a) As compensation for his services hereunder, the Company shall pay MWW, during the Employment Term, a base salary (the "Base Salary") payable in equal monthly installments at the annual rate of 188,475 pounds sterling.
(b) In addition to the Base Salary, and subject to the sole discretion of the Compensation Committee of the Board of Directors, MWW may receive, as incentive compensation, an annual bonus (the "Incentive Bonus"). The Company shall pay the Incentive Bonus, if any, to MWW only after the issuance of the results of the annual audit of its books and records by its independent auditor, except that MWW can accelerate the payment of such bonus at anytime up to the amount of $40,000, in order to balance the payment of personal income taxes owed the United States and Great Britain by MWW.
4. Expenses; Vacation; Insurance; Other Benefits
(a) MWW shall be entitled to reimbursement for reasonable travel and other out-of-pocket expenses 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, and all current expenses reimbursed by the Company shall remain in effect for the Employment Term, including the current car allowance and the gross-up benefit, unless otherwise agreed to by the parties.
(b) MWW shall be entitled to twenty (20) days paid vacation time per annum or such other period as is 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.
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(c) MWW shall be entitled to participate in all employee benefit plans and programs of the Company now or hereafter made available to all senior executives of the Company as a group, to the extent eligible, (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 executive of the Company, except as otherwise provided herein. MWW shall participate in the Company's Executive Retention Program (the "Program"). In the event MWW receives severance under the Program, then such severance shall be in lieu of any severance obligations under this Agreement, except as provided herein.
(d) The Company shall pay for United States income tax advice and preparation of United States income tax forms for MWW up to $5,000 per year.
5. Representations and Warranties of Employee
MWW represents and warrants to the Company that (a) as of the Commencement Date, MWW 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) MWW is under no physical or mental disability that would hinder his performance of duties under this Agreement.
(6) Non-Competition
(a) MWW 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 to, or be a director, officer, employee, owner, member or partner of, any other business or organization that is or shall then be competing with the Business of the Company (as
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defined below), and (ii) for a period of one (1) year after he ceases to be employed by the Company, directly or indirectly, compete with or be engaged in the Business of the Company, or be employed by, or act as consultant to, or be a director, officer, employee, owner, member or partner of, any business or organization which, at the time of such cessation, competes with or is engaged in the Business as the Company, except that in each case the provisions of this Section 6 will not be deemed breached merely because MWW: (i) owns not more than five percent (5.0%) of the outstanding common stock of a corporation, if, at the time of its acquisition by MWW, 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; or (ii) MWW is a passive investor in any fund in which he has no investment discretion. This prohibition shall apply to the entire world in recognition of the fact that the Company operates on a multi-national basis. "Business of the Company" shall mean the design, manufacture, sale, re-sale, distribution or maintenance of character generators that are used by the broadcast and cable industries, and products similar to ChyTV.
(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 public 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 portion 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.
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(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. MWW also waives the posting of any bond in connection with the issuance of any injunctive relief.
(7) Patents; Copyrights
Any interest in patents, patent applications, inventions, copyrights, developments, and processes ("Such Inventions") which MWW 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, MWW 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 MWW for any reasonable fees and expenses (including fees and expenses of counsel) incurred by MWW 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 MWW 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, corporation or entity during the Employment Term or anytime 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,
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other than as a result of MWW's breach of this covenant, and shall not preclude MWW from disclosing any such information to the extent such disclosure is required by law, disclosure would, in the reasonable judgment of MWW, be in the best interest of the Company or is reasonably necessary in order to defend MWW or to enforce MWW's rights under this Agreement in connection with any action or proceeding to which the Company or its affiliates is a party. MWW shall return all tangible evidence of such confidential information to the Company prior to or at the termination of his employment.
9. Termination
(a) Notwithstanding anything herein contained, if on or after the date hereof and prior to the end of the Employment Term, MWW is terminated "For Cause" (as defined below) then the Company shall have the right to give notice of termination of MWW's 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 MWW 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) commit an act of active and deliberate fraud against the Company; or (iv) materially breach any term of this Agreement and fail to correct such breach within ten (10) days after written notice of the commission thereof. In the event that this Agreement is terminated "For Cause", then MWW shall be entitled to receive only his Base Salary at the rate provided in Section 3 to the date on which termination shall take effect and any Incentive Bonus accrued, but not yet paid, and any unreimbursed expenses.
(b) In the event that MWW shall be physically or mentally incapacitated or disabled or otherwise unable fully to discharge his duties hereunder for a period of one-hundred and twenty (120) consecutive days, then this Agreement shall terminate upon an
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additional thirty (30) days' written notice to MWW, and no further compensation shall be payable to MWW, except as may otherwise be provided under any disability insurance policy and that pro rata portion of the Base Salary not previously paid through the date of termination and any Incentive Bonus accrued, but not yet paid, and any unreimbursed expenses.
(c) In the event that MWW shall die, then this Agreement shall terminate on the date of MWW's death, and no further compensation shall be payable to MWW, except as may otherwise be provided under any insurance policy or similar instrument and that pro rata portion of the Base Salary not previously paid through the date of termination and any Incentive Bonus accrued but not yet paid and any unreimbursed expenses.
(d) If MWW's employment is terminated by the Company other than pursuant to subparagraphs 9(a), 9(b) or 9(c) hereof, MWW shall be entitled to receive from the Company: (i) the greater of (x) the Base Salary for the remainder of the Employment Term following the date of termination and (y) the amounts owed under Program; (ii) all unvested options shall immediately vest and have an exercise period equal to the remaining term of such options without regard to any shorter exercise period set forth in the relevant Stock Option Plan (the "SOP") as a result of termination, and this provision shall be in addition to any severance being received by MWW under the Program; (iii) all benefits to which MWW is entitled under this Agreement for the remaining term of this Agreement from the date of termination; (iv) any accrued, but unpaid Base Salary and/or Incentive Bonus; and (v) any previously incurred but unpaid business expenses and/or other amounts due under Paragraph 4 of this Agreement. All amounts payable in accordance with this subsection shall be made in accordance with Company policy as if MWW had not been terminated. The Company shall give written notice of termination to MWW which shall state the date the termination is to be effective.
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(e) If the Company does not extend this Agreement, then all the options held by MWW shall have an exercise period equal to the remaining term of such options without regard to any shorter exercise period set forth in the SOP.
(f) Nothing contained in this Paragraph 9 shall be deemed to limit any other right the Company may have to terminate MWW's employment hereunder upon any ground permitted by law.
10. Survival
The covenants, agreements, representations and warranties contained in or made pursuant to this Agreement shall survive MWW's termination of employment, irrespective of any investigation made by or on behalf of any party.
11. 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.
12. Notices
Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, by telecopier with electronic confirmation of delivery or by delivery to an internationally recognized carrier for overnight delivery to the party to whom it is to be given at the address of such party as set forth in the preamble to this Agreement (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 12). In the case of a notice to the Company, a copy of such notice (which copy shall not constitute notice) shall be delivered to Xxxxxx Xxxx & Priest LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn. Xxxxxx X. Xxxxxx, Esq. Any notice or other communication given by overnight delivery shall be deemed given at the time of delivery to the carrier, except for a notice changing a party's address which shall be deemed
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given at the time of receipt thereof. Any notice given by telecopier shall be deemed given at the time the notice or other communication is delivered with electronic confirmation of delivery.
13. 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 waiver 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.
14. Binding Effect
MWW's 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 MWW's 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 MWW and his heirs and personal representatives, and shall be binding upon and inure to the benefit of the Company and its successors and assigns.
15. 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.
16. 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.
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17. Prior Agreements
All prior agreements between the Company and MWW with respect to compensation and services are hereby terminated as of the Commencement Date, except that all prior agreements concerning the terms of options previously granted shall remain in full force and effect and shall not be affected by the fact that MWW has become an employee of the Company.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
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CHYRON CORPORATION |
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By |
/s/ Xxxxxxxxxxx Xxxxx |
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Name |
Xxxxxxxxxxx Xxxxx |
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Title |
Chairman |
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/s/ Xxxxxxx Wellesley-Xxxxxx |
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Name: |
Xxxxxxx Wellesley-Xxxxxx |
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