UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM 8-K
CURRENT REPORT,
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): February 3, 2005
CHYRON CORPORATION
(Exact Name of Registrant as Specified in its Charter)
New York | 1-9014 | 11-2117385 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
5 Hub Drive | |
Melville, New York | 11747 |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant's telephone number, including area code: (631) 845-2000
________________
ITEM 8.01 OTHER EVENTS
Pursuant to authorization received from the Board of Directors of Chyron Corporation (the "Company"), on February 3, 2005 the Company accelerated the vesting of certain outstanding unvested stock options with an exercise price of greater than $0.47 per share. These options were originally scheduled to vest in equal increments at the end of each of the first, second and third years following their grant date. The Company will amend the relevant stock option agreements to reflect this change. Options representing the right to purchase a total of 100,000 shares that were previously granted to outside Directors of the Board of Directors, and that would otherwise qualify for this acceleration, were excluded from the acceleration of vesting.
The Company accelerated these options in advance of the effective date of, and in anticipation of the detrimental earnings effect of, Statement of Financial Accounting Standards No. 123 (revised 2004) "Share-Based Payment" ("SFAS 123R"), which was issued in December 2004. SFAS 123R will require that beginning July 1, 2005, the Company record as compensation expense in its statement of operations the value of employee stock options. Until the Company commences accounting for stock options under SFAS 123R in the third quarter of 2005, it will continue its practice of accounting for stock options in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and its related interpretations, and following SFAS 123, "Accounting for Stock-Based Compensation", which allows the Company to disclose in the footnotes to its financial statements the stock-based employee compensa tion expense and pro-forma net income and pro-forma net income per share amounts that would have resulted were the stock option compensation expense recorded in the Company's statement of operations. The Company's decision to accelerate the vesting of the options was due to its desire to avoid recording compensation expense for these options in its statement of operations in future years when these options were originally scheduled to vest. The financial effect of this acceleration is to reduce compensation expense in the Company's pre-tax earnings by $145,000 in 2005, $289,000 in 2006 and $150,000 in 2007. As a result of the acceleration of vesting, options to purchase 1,503,939 shares of the Company's common stock became immediately exercisable. The following table summarizes the accelerated stock options:
Exercise | | Number of Option Shares Accelerated from |
Price | | Original Vesting in |
| | 2005 | | 2006 | | 2007 | | Total |
$0.67 | | 0 | | 400,611 | | 400,611 | | 801,222 |
$0.62 | | 73,333 | | 73,333 | | 73,334 | | 220,000 |
$0.51 | | 0 | | 1,500 | | 1,500 | | 3,000 |
$0.48 | | 159,905 | | 159,906 | | 159,906 | | 479,717 |
| | 233,238 | | 635,350 | | 635,351 | | 1,503,939 |
Of the above accelerated stock options, officers of the Company held options to purchase 360,001 shares, as follows:
Officer Name | | Exercise | | Number of Option Shares Accelerated from |
& Title | | Price | | Original Vesting in |
| | | | 2005 | | 2006 | | 2007 | | Total |
| | | | | | | | | | |
Michael Wellesley-Wesley | | $0.67 | | 0 | | 78,333 | | 78,334 | | 156,667 |
President & CEO | | | | | | | | | | |
| | | | | | | | | | |
Jerry Kieliszak | | $0.67 | | 0 | | 33,333 | | 33,334 | | 66,667 |
SVP & CFO | | | | | | | | | | |
| | | | | | | | | | |
Richard Hajdu | | $0.67 | | 0 | | 43,333 | | 43,334 | | 86,667 |
VP, Sales & Marketing | | | | | | | | | | |
| | | | | | | | | | |
Kevin Prince | | $0.48 | | 16,666 | | 16,667 | | 16,667 | | 50,000 |
SVP, Operations | | | | | | | | | | |
| | | | 16,666 | | 171,666 | | 171,669 | | 360,001 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
CHYRON CORPORATION
| | By: | /s/ Jerry Kieliszak |
| | Name: | Jerry Kieliszak |
| | Title: | Senior Vice President and |
| | | Chief Financial Officer |
Date: February 8, 2005
