WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
THE AGREEMENT (the "Agreement"), made as of this 17th day of September 1997,
between CHYRON CORPORATION, a New York corporation (the "Company" or
"Chyron") having its principal offices at 5 Hub Drive, Melville, New York
11747, and ISAAC HERSLY ("Hersly"), an individual residing at 9 Lafayette
Drive, New City, New York 10956.
WITNESSETH:
WHEREAS, Hersly and Chyron are party to an employment agreement made as of
September 17, 1996 (the "Employment Agreement") by which, among other
things, Hersly was employed as President of Chyron for a term ending June
30, 1998 at an annual salary of $200,000;
WHEREAS, Hersly and Chyron wish to sever that employment relationship and
said Employment Agreement and this Agreement shall supersede that Employment
Agreement, any other employment arrangement or agreement between the
parties.
WHEREAS, Hersly was appointed to the Board of Directors on March 14, 1996
and was elected by Chyron's Shareholders on May 20, 1996.
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. Resignation: Hersly resigns from his present position at Chyron and
all its subsidiaries and affiliates effective September 26, 1997, and
further resigns as a member of the Board of Directors of Chyron and all its
subsidiaries and affiliates also effective September 26, 1997. Hersly shall
execute a formal letter of resignation in the form attached hereto as
Exhibit A.
2. Continued Employment as "Senior Advisor": For the period September
26, 1997 through January 10, 1998, Hersly will be employed in the position
of "Senior Advisor" to Chyron. This is an exempt position with no salary
or benefits except as set forth herein, provided, however, that Hersly will
be reimbursed for all approved out of pocket expenditures. As "Senior
Advisor", Hersly will not accrue any vacation or sick leave. As "Senior
Advisor", Hersly will render such services as reasonably are requested of
him by the Chief Executive Officer of Chyron, Edward Grebow, and shall
report to Mr. Grebow. Hersly will undertake such assignments as Grebow
shall give to him which Hersly shall perform on a mutually agreeable basis.
Hersly will not continue as an employee of Chyron on an at-will basis, or
on any other basis after January 10, 1998, except upon a further written
agreement subscribed to by both Hersly and Chyron pursuant to paragraph 15
hereof. In the event that Hersly accepts or undertakes regular full time
employment or work then his position as a "Senior Advisor" shall terminate
effective with the earlier of either his commencement of such other
employment or work on upon an effective date of a notice of resignation by
Hersly as "Senior Advisor".
3. Compensation: In Consideration for (i) this Severance Agreement
inclusive of the agreement not to compete and any other surviving
obligations hereunder; (ii) in lieu of any surviving obligations of Chyron
under the Employment Agreement and any surviving obligations of Hersly
thereunder; and (iii) for his services as "Senior Advisor", Chyron shall pay
to Hersly, and Hersly agrees to accept the aggregate sum of $225,000 which
amounts will be paid in 26 bi-weekly installments beginning October 15,
1997. Hersly, at his option, may make a one time election to have up to
four bi-weekly payments paid in advance as a lump sum. If Hersly exercises
this one time election, then payments will be suspended during the period
of the paid advance. Hersly will give at least one week's notice of such
election. Except as set forth hereinbelow, Hersly shall be entitled to no
other cash payments for any reason whatsoever or based upon any claim
whatsoever. Hersly, or in the event of his death, his estate shall receive
the $225,000 regardless of whether he resigns as "Senior Advisor" prior to
January 10, 1998 or takes other employment, provided, however, that Hersly
is not in breach of any of his other obligations hereunder. If there is a
change of control" of Chyron, then payment of any outstanding portion of the
$225,000 due hereunder shall be accelerated and be paid within 30 days of
the effective date of the change of "control". For purposes of this
paragraph, a change of "control" means either (i) a change or beneficial
ownership of at least 50% of the common stock of Chyron; (i) a replacement
of at least 75% of the Chyron Board of Directors; or (iii)a change of the
CEO of Chyron.
4. Benefits: Hersly will continue to receive medical, dental, and
disability benefits in accordance with the standard policies of Chyron for
the shorter of September 25, 1998 or until Hersly has commenced other
regular full time employment ("Benefit Period"). Chyron shall continue the
existing life insurance policy on Hersly's life through the Benefit Period.
At the option of Hersly, Chyron shall transfer to him the term life
insurance policy which presently is in existence without adjustment for any
unexpired term. Chyron shall make payment of premiums on insurance and
other benefit plans on behalf of Hersly which comes due during such Benefit
Period, provided, however, that Hersly is only entitled to pension benefits
and to participate in the Chyron pension plan through the last date of his
employment with Chyron, (i.e., no later than January 10, 1998 as provided
in Paragraph 2 hereinabove).
5. Office and Secretarial Assistance: Chyron will furnish to Hersly a
closed office, if available, and secretarial assistance through January 31,
1998. Hersly shall be allowed to retain, and Chyron will transfer title to
Hersly of (i) the telecopy machine presently located in Hersly's residence;
(ii) the laster printer presently located in Hersly's office; and (iii) a
fully operational IBM compatible desk top computer. Hersly shall return to
Chyron the laptop computer that has been made available to him.
6. Reference: Chyron will give Hersly a positive reference. Hersly
expressly releases Chyron and waives any and all possible claims whether at
law or at equity against Chyron, regarding or arising from any reference
that is given pertaining to Hersly, except for any claim of defamation
arising subsequent to the execution hereof. Any reference will be
consistent with the announcement dated September 23, 1997, from Edward
Grebow to Chyron employees, a copy of which is attached hereto as Exhibit
B.
7. Stock Options: The incentive stock options and non-incentive stock
options that are to vest on July 25, 1998 are accelerated and shall vest
effective September 26, 1997. The one year period for exercise shall
commence on the earlier of January 10, 1998, as the last date of Hersly's
employment as a "Senior Advisor," or upon Hersly's earlier resignation from
Chyron. The provisions in paragraph 3(h) of the Employment Agreement
between Hersly and Chyron shall continue in full force and effect, are
incorporated herein by reference, and shall apply only to those options
which were granted as non-incentive stock options.
8. Representations and Warranties: Hersly represents and warrants to the
Company that: (a) Hersly is under no contractual or other restriction or
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) Hersly is under no physical or mental disability that
would hinder his performance of duties under this Agreement.
9. Non-Competition: (i) Hersly agrees that he will note: (a) during the
period from the date of this Agreement through March 31, 1998, 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 worldwide that is or shall then be
competing, directly or indirectly, with Chyron, (b) during the period April
1, 1998 though December 31, 1998, 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 a direct competitor of
Chyron. For purposes of this covenant, director competitors include:
Collage Leitch
Tektronix BTS - Philips
SONY* Louth Automation
Pinnacle Quantel
(ii) It is the intent of the parties to this Agreement that the provisions
of this paragraph 9 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
paragraph 9 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.
(iii) The parties acknowledge that damages and remedies at law for any
breach of this paragraph 9 and for following paragraphs 10, 11, and 12, will
be adequate 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.
*Hersly may become employed by SONY as long as he does not, directly or
indirectly, work or consult with the Broadcast or Professional systems
operations, or any related operation or other SONY operation, whether
organized as a subsidiary division, unit, group, or otherwise, that in any
way competes, directly or indirectly with Chyron and only upon the further
condition that Hersly (1) not divulge or utilize any Chyron confidential
information and (2) first obtains approval from Chyron to take such
employment, which approval shall not unreasonably be withheld.
(iv) The provisions of this paragraph 9 will not be deemed breached merely
because Hersly owns not more than five percent (5.0%) of the outstanding
common stock of a corporation, if, at the time of its acquisition by Hersly,
such stock is listed on a national securities exchange, is reported on
NASDAQ, or is regularly traded in over-the-counter market by a member of a
national securities exchange.
(v) In the event that Chyron defaults in making the payments owned under
this Agreement of $225,000 as provided for in Paragraph 3 hereinabove, which
default is not cured upon 45 days written notice, then the non-compete
obligations of Hersly in this Paragraph 9 shall become ineffective and not
enforceable by Chyron. This is in addition to all other remedies that
Hersly might have by reason of such uncured default by Chyron. Nothing,
however, shall relieve Hersly of his obligations under Paragraph 11, 12, and
13 regarding "Confidential Information", "Non-Solicitation" and "Release",
respectively.
10. Patents: Copyrights: Any interest in patents, patent applications,
inventions, copyrights, developments, and processes ("Such Inventions")
which Hersly now or hereafter during the period he is or has been employed
by the Company may own or develop relating to the fields in which the
Company was or is then engaged shall belong to the Company; and forthwith
upon request of the Company, Hersly 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.
11. Confidential and Company Information: All confidential information
which Hersly may now possess, or may obtain or create prior to the end of
the period he is employed by the Company, relating to the business of the
Company or of any employee , customer, or supplier of the Company shall not
be published, knowingly disclosed, or knowingly made accessible by him to
any other person, firm, or corporation during his continued employment or
any time thereafter without the prior written consent of the Company.
Hersly shall return all books, records, papers, reports, materials, and
information of Chyron, whether or not confidential, no matter how recorded
or stored, including computer files, disks, and data storage of every
description to the Company prior to or at the termination of his employment.
12. Non-Solicitation: Hersly shall not during the term of his continued
employment hereunder and thereafter through December 31, 1998 solicit,
directly or indirectly any then employee of Chyron, including its wholly and
partly owned subsidiaries, for employment on either a full-time, part-time
or consulting basis and shall refrain from discussing other employment
opportunities with any then Chyron employee which may benefit Hersly or his
then employer.
13. Confidentiality of this Agreement: Hersly agrees to keep this
Agreement and the substance hereof strictly confidential and not to divulge
it to any other person (other than his immediate family and his counsel) or
entity, unless Chyron makes the Agreement public or if disclosure is
required by reason of judicial process.
14. Release by Hersly: HERSLY, who has had at least 21 days to review and
consider this Agreement and who in connection herewith has consulted with
counsel of his choice, for and in consideration of the payment made by
CHYRON as set forth herein and other good and valuable consideration, hereby
releases and forever discharges, and by this instrument does release and
forever discharge CHYRON, its directors, officers , employees, and each of
its divisions, affiliates and subsidiaries, and each of their respective
present an former directors, officers, employees, trustees, agents,
attorneys, insurers, parent corporations, subsidiaries, divisions, related
and affiliated companies and entities, shareholders, representatives,
predecessors, successors and assigns; (hereinafter collectively referred to
as the 'RELEASED PARTIES") against all liabilities, claims, causes of
action, charges, complaints, controversies , grievances, obligations, costs,
losses, damages, injuries, attorneys' fees, and other legal responsibilities
(collective referred to as "claims:) of any form whatsoever, including but
not limited to any claims in law, equity, contract, tort or any claims
arising under the Employment Agreement, the ADEA, Title VII, the Civil
Rights Act, the CRA of 1991, the ADA, the FMLA, the FLSA, the NYHRL, the
NYCHRL and/or any and all other federal, state or local statutes, laws,
rules and regulations pertaining to employment, as well as any and all
claims under state contract or common law or tort law whether known,
unknown, unforeseen, unanticipated, unsuspected or latent which he, his
heirs, executors, administrators, successors and assigns ever had, now have
or hereafter can, shall or may have for upon or by reason of any matter,
cause or thing whatsoever from the beginning of the world to the date of the
execution of this Agreement. Hersly further releases and waives any and all
claims that might arise under this Agreement except for claims arising from
breaches or defaults of Chyron under Paragraph 3, 4, and 7 ("Compensation",
"Benefits", and "Stock Options" respectively).
15. Survival: The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive Hersly's
termination of employment, irrespective of any investigation made by or on
behalf of any party.
16. Release by Chyron: CHYRON, for the mutual covenants herein and other
good and valuable consideration hereby releases and forever discharges
Hersly from any and all liabilities, claims, causes of action, charges,
complaints, controversies, grievances, obligations, costs, losses, damages,
injuries, attorneys' fees, and other legal responsibilities (collectively
"claims") of any form whatsoever, including but not limited to any claims
in law, equity, contract, tort from the beginning of the world to the date
of this Agreement provided that such claims are now known to either the
current Chairman of the Board (Michael Wellesley-Wesley) CEO (Grebow) or CFO
(Lampe) of Chyron, and to the extent not known, all claims except for claims
arising from discrimination, harassment, dishonesty or other wrongful
conduct, intentional or otherwise, by Hersly, whether or not such claims are
formally asserted against Chyron by a third party on account of any conduct
by Hersly.
17. Modifications: 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.
18. Notices: Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be delivered in person or
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 furnished in writing in accordance with the provisions of
this Section 14). In the case of a notice to the Company, a copy of such
notice (which copy shall not constitute notice) shall be delivered to Camhy
Karlinsky & Stein LLP, 1740 Broadway, 16th Floor, New York, New York 10019-
4315, Attn: Daniel I. DeWolf, Esq. Notice to the estate of Hersly shall be
sufficient if addressed to Hersly as provided in this Section 14. Any
notice or other communication given by certified mail shall be deemed given
at the time of certification thereof, except for a notice changing a party's
address which be deemed given at the time of receipt thereof.
19. 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 or of any breach of any other 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 of any other term of this Agreement. Any waiver must
be in writing.
20. Binding Effects: Hersly'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 Hersly's creditors, and any
attempt to do any of the foregoing shall be void. Subject to the foregoing,
the provisions of this Agreement shall be binding upon and inure to the
benefit of Hersly and his heirs and personal representatives, and shall be
binding upon and inure to the benefit of the company and its successors and
its assigns. If Hersly shall die, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to Hersly's devisee, legatee or other designee, or, if there be
no such designee, to Hersly's estate.
21. Arbitration: Any controversy or claim arising out of or relating to
this Agreement or the breach thereof, shall be settled by arbitration in the
City of New York in accordance with the laws of the State of New York by
three arbitrators, one of whom shall be appointed by the Company, one by
Hersly and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment
of a third arbitrator, then the third arbitrator shall be appointed by the
Chief Judge of the United States Court of Appeals for the Second Circuit.
The arbitration shall be conducted in accordance with the rules of the
American Arbitration Association, except with respect to the selection of
arbitrators which shall be as provided in this Section 17. Judgement upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Nothing in this paragraph shall impair or impede the
rights of Chyron to seek injunctive relief for violation of paragraphs 9,
10, 11, or 12 and Chyron expressly reserves and does not waive such right
to seek judicial redress for such purpose.
22. This Severance Agreement supersedes the Employment Agreement and that
Agreement is of no further force or effect except as set forth hereinabove.
23. 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.
24. Counterparts: Governing Laws: This Agreement may be executed in any
number of counterparts, 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 given effect to the rules governing the conflicts of laws.
IN WITNESS WHEREOF, the parties have duly executed this Severance Agreement
as of the date first written above, except for all the release provisions
which are executed this 30th day of October 1997.
CHYRON CORPORATION
By: /s/ Edward Grebow
Edward Grebow
Chief Executive Officer
/s/ Isaac Hersly
Isaac Hersly