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Exhibit 10.1
Execution Copy
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is by and between CHYRONHEGO
CORPORATION, a New York corporation (the “Company”), having its principal
offices at 5 Hub Drive, Melville, New York 11747, and JOHAN APEL (“Executive”)
having an address at Karlbergsvägen 46A, SE-113 37 Stockholm, Sweden.
WITNESSETH:
 
WHEREAS, the Company desires to employ the Executive and the Executive desires
to become so employed by the Company on the terms and conditions hereinafter set
forth;
 
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.
 
(a) The Company hereby agrees to employ the Executive and the Executive agrees
to be employed with the Company as its President and Chief Operating Officer
(“COO”), upon the terms and conditions contained herein, for a term commencing
effective as of May 23, 2013 (the “Commencement Date”) and continuing until the
third year anniversary of the Commencement Date, unless terminated earlier
pursuant to Section 9 (the “Employment Term”).
 
(b) If the Company offers to renew the Employment Term on the same or better
terms as contained in this Agreement (the “Renewal Offer”), and the Executive
does not accept such Renewal Offer, Executive’s employment will continue for a
period of three (3) months following the end of the Employment Term (the “Notice
Period”).  During the Notice Period, Executive will no longer hold any officer
position with the Company, but will be required to report to the Company’s
offices and continue to perform duties for the Company, and shall also cooperate
with the Company to transition his duties and to perform other such duties as
the Company may from time to time request.  Executive’s employment with the
Company will
 
 
 
 
 

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terminate effective as of the last day of the Notice Period and, thereafter, the
Company will have no further obligation to the Executive under this Agreement.
 
(c) If the Company (i) does not provide a Renewal Offer, or (ii) offers to renew
the Employment Term on terms that are less favorable than the terms of this
Agreement, and the Executive does not accept such offer, Executive’s employment
will continue for a period of twelve (12) months following the end of the
Employment Term (the “Transition Period”).  At its election, the Board of
Directors or a committee thereof may require that the Executive no longer serve
as an officer of the Company during all or any part of the Transition
Period.  Executive will be required to report to the Company’s offices and
continue to perform duties of employment as determined by the Board of
Directors, and shall also cooperate with the Company to transition his duties
and to perform other such duties as the Company may from time to time request,
during the Transition Period.  Executive’s employment with the Company will
terminate effective as of the last day of the Transition Period and, thereafter,
the Company will have no further obligation to the Executive under this
Agreement.
 
(d) Notwithstanding anything to the contrary in sub-sections (c) or (d) above,
the Company may require that Executive remain at home and/or not undertake any
or all of his duties or responsibilities during the Notice Period or Transition
Period, as applicable.
 
2. Duties and Powers as Employee.
 
(a) During the Employment Term, Executive shall be employed by the Company as
its President and COO.   Executive shall devote substantially his full working
time to his duties as President and COO.  In performance of his duties,
Executive shall report directly to and be subject to the direction of the Chief
Executive Officer.  Executive shall have all the responsibilities, duties and
authority as are generally associated with the position of President and COO of
a public company.  If the Executive becomes the Chief Executive Officer (the
 
 
 
 
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CEO”) of the Company, the Executive will have such duties commensurate 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.  As CEO, Executive will report to the Board of Directors
of the Company or any Committee thereof.
 
(b) Executive 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 reasonably
necessary.  Business Class accommodations shall be permissible for any travel of
three (3) hours or longer.
 
(c) It shall not be a violation of this Agreement for Executive to (A) serve on
any civic or charitable boards or committees consistent with the Company’s
conflicts of interest policies and corporate governance guidelines in effect
from time to time, (B) serve as a director on any other for-profit corporation,
provided that the Compensation Committee of the Board of Directors approves such
appointment or election prior to Executive accepting such directorship, (C)
deliver lectures and fulfill speaking engagements, or (D) manage his personal
investments, so long as such activities do not materially interfere with the
performance of Executive’s responsibilities as an executive officer of the
Company.  It is expressly understood and agreed that to the extent that any such
activities have been conducted by Executive and disclosed to the Company in
writing prior to the Commencement Date, the continued conduct of such activities
subsequent to the Commencement Date shall not thereafter be deemed to interfere
with the performance of Executive’s responsibilities to the Company; provided,
however, that the failure to disclose any such existing activities shall not
create a presumption that such activities are in
 
 
 
 
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violation of this Agreement; and provided further, notwithstanding anything to
the contrary in any written non-competition or similar provision between
Executive and the Company, no activity so disclosed in writing by Executive
shall be violative thereof.
 
3. Compensation.
 
(a) During the Employment Term, as compensation for his services hereunder, the
Company shall pay Executive a base salary (the “Base Salary”) at the annual rate
of $325,000.  The Base Salary shall accrue day to day and be payable in equal
installments bi-weekly, less required withholdings.  If the Executive is
promoted to the position of CEO during the Employment Term, Executive’s Base
Salary will be increased to $482,850.
 
(b) In addition to the Base Salary, Executive will be eligible to participate in
performance compensation and similar incentive plans and programs as may be
adopted from time to time by the Company, subject to the terms of such plans or
programs.
 
(c) As soon as practicable following the Commencement Date, the Company shall
pay to the Executive a one-time sign-on bonus in an amount equal to $50,000, to
compensate the Executive fully for all of the relocation and moving expenses he
incurs in relocating to the United States.
 
4. Expenses; Vacation; Insurance; Other Benefits.
 
(a) Executive 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 policies and procedures of the Company for submission of
expenses.  During the Employment Term, the Company shall also pay Executive an
additional $18,000 a year (without need for written submission and approval of
bills or statements) to defray regular commutation costs.  This amount will be
payable in equal installments bi-weekly and is subject to withholding and
 
 
 
 
 
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other appropriate payroll taxes.  This amount may be used for, among other
things, the cost of an automobile lease and all related costs; no other payments
will be made for regular commutation costs.
 
(b) Executive 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.
 
(c) During the Employment Term, Executive 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, deferral savings plans, group life insurance, accident
and death insurance, medical and dental insurance, sick leave, 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.
 
(d) For each calendar year during the Employment Term, the Company shall pay for
United States income tax advice and preparation of United States income tax
forms for Executive up to $5,000 per year.
 
(e) Executive shall be covered by the Company’s directors’ and officers’
liability insurance policy, and errors and omissions coverage, if any, to the
extent such coverage is generally provided by the Company to its directors and
officers and to the fullest extent permitted by such insurance
policies.  Nothing herein is or shall be deemed to be a representation by the
Company that it provides, or a promise by the Company to obtain, maintain or
continue any liability insurance coverage whatsoever for its executives.
 
 
 
 
 
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5. Representations and Warranties of Employee.
 
(a) Executive represents and warrants to the Company that Executive is under no
contractual or other obligation which would prevent him from becoming employed
by the Company or that would interfere with the performance of his duties
hereunder.
 
6. Non-Competition.
 
(a) Executive 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 (as defined below), and (ii) for the one year period
following the termination of his employment, directly or indirectly, compete
with or be engaged in the Business, 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, except that in each case the provisions of this Section
6 will not be deemed breached merely because Executive:  (A) owns not more than
five percent (5%) of the outstanding common stock of a corporation, if, at the
time of its acquisition by Executive, 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 (B)
Executive 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” shall
mean (w) the design, manufacture, sale, re-sale, distribution or maintenance of
character generators (software or hardware or a combination thereof) that are
used by the broadcast and cable industries, (x) online graphics creation and
work flow solutions or any other product or solution similar to those products
or solutions marketed or distributed by the Axis Graphics
 
 
 
 
 
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division, (y) products or solutions similar to ChyTV, and/or (z) any other
products or solutions acquired or developed by the Company while Executive is
employed by the Company.  Notwithstanding the foregoing, this restrictive
covenant shall not be applicable if Executive is terminated without Cause or he
resigns for Good Reason (as such terms are defined below).
 
(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.
 
(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.  Executive 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 Executive 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, Executive shall execute all such
assignments and other documents and take all such other action
 
 
 
 
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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 Executive for any
reasonable fees and expenses (including fees and expenses of counsel) incurred
by Executive 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 Executive may now possess or may obtain
during his employment with the Company 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 generally known to the
industry or the public, other than as a result of Executive’s breach of this
covenant, and shall not preclude Executive from disclosing any such information
to the extent such disclosure (i) is required by law; (ii) is necessary for the
performance of his duties hereunder; or (iii) would, in the reasonable judgment
of Executive, be in the best interest of the Company or is reasonably necessary
in order to defend Executive or to enforce Executive’s rights under this
Agreement in connection with any action or proceeding to which the Company or
its affiliates is a party.  Executive shall return all such confidential
information, in whatever form, electronic or otherwise, to the Company prior to
or at the termination of his employment or at any time upon the Company’s
demand.
 
9. Termination.
 
(a) The Company may terminate the Executive’s employment and the Employment Term
for Cause (as defined below) effective as of the date set forth in written
notice to Executive.  As used herein, “Cause” means Executive:  (i) is convicted
of a felony
 
 
 
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crime; (ii) willfully commits any act or willfully omits to take any action in
bad faith and to the material detriment of the Company; (iii) commits an act of
active and deliberate fraud against the Company; or (iv) materially breaches any
term of this Agreement and fails to correct such breach within ten (10) days
after written notice of the commission thereof.  In the event that the
Employment Term is terminated for Cause, then Executive 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, any commutation payment accrued, but not
yet paid, and any unreimbursed expenses (the “Accrued
Obligations”).  Thereafter, the Company shall have no further obligation to
Executive under this Agreement.
 
(b) In the event that Executive 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 during the Employment
Term as determined by the Company, then the Company may terminate the
Executive’s employment upon thirty (30) days’ written notice to Executive
(unless Executive is able to resume his duties during such notice period), and
no further compensation shall be payable to Executive, except:  (i) as may
otherwise be provided under any disability insurance policy, and (ii) the
Accrued Obligations.
 
(c) In the event that Executive shall die during the Employment Term, then
Executive’s employment shall terminate on the date of Executive’s death, and no
further compensation shall be payable to Executive, except: (i) as may otherwise
be provided under any insurance policy or similar instrument, and (ii) the
Accrued Obligations.
 
(d) Executive may terminate his employment and the Employment Term without Good
Reason upon thirty (30) days prior written notice to the Company.  If the
 
 
 
 
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Executive terminates his employment without Good Reason, the Company will pay
him the Accrued Obligations and thereafter shall have no further obligation to
the Executive.
 
(e) The Company may terminate the Executive’s employment during the Employment
Term without Cause. The Company shall give written notice of termination to
Executive which shall state the date the termination is to be effective.  If the
Company terminates the Executive without Cause during the Employment Term, the
Executive shall be entitled to (i) continued payment of his Base Salary pursuant
to the Company’s payroll schedule for a period of twelve (12) months (the
“Severance Payment”) following the date of termination; and (ii) an amount (the
“Severance Benefits”), grossed up for federal state and local taxes, in lieu of
participation in the Company’s life, long-term disability and health insurance
plans for a period of twelve (12) months as set forth in Section 9(i) and (iii)
the Accrued Obligations. The Severance Benefits shall be paid in a lump sum
within twenty (20) business days from the date of termination, provided,
however, that if such period begins in one taxable year of Executive and ends in
another, the Severance Benefits will be paid in the second taxable year.  All
payments made pursuant to this Section 9(e) shall not be subject to mitigation
or any right of set-off.
 
(f) The Executive may terminate his employment and the Employment Term for Good
Reason.  As used herein, “Good Reason” means (i) a reduction in Executive’s Base
Salary, or (ii) the assignment to Executive of any duties inconsistent in any
material respect with Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities which result
in a material diminution in such position, authority, duties or
responsibilities.  Executive must provide notice to the Company of the existence
of any of the conditions described in clauses (i) or (ii) above within a period
of ninety (90) days of the initial
 
 
 
 
 
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existence of such condition and the Company shall have a period of thirty (30)
days following receipt of such notice during which it may remedy such
condition.  In the event of Executive’s failure to deliver timely notice as set
forth herein or in the event of the Company’s timely remedy of any condition
described in clauses (i) or (ii) above, Executive’s resignation will not be
deemed a resignation with Good Reason.  If the Executive resigns for Good
Reason, then Executive shall be entitled to receive from the Company the
Severance Payment and the Severance Benefits described in Section 9(e) pursuant
to the terms therein.
 
(g) If any of the payments or benefits to be provided to Executive pursuant to
Section 9 of this Agreement constitute “nonqualified deferred compensation”
subject to 409A of the U.S. Tax Code (the “Code”) payable in connection with a
“separation of service” under Section 409A(2)(a)(i) of the Code, the following
interpretations apply to Section 9:  (i) any termination of Executive’s
employment triggering payment of benefits under Section 9 must constitute a
“separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas.
Reg. §1.409A-1(h) before distribution of such benefits can commence.  To the
extent that the termination of Executive’s employment does not constitute a
separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg.
§ 1.409A-1(h) (as the result of further services that are reasonably anticipated
to be provided by Executive to the Company at the time Executive’s employment
terminates under Section 9), any benefits payable under Section 9 that
constitute non-qualified deferred compensation under Section 409A of the Code
shall be delayed until after the date of a subsequent event constituting a
separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg.
§1.409A-1(h).  For purposes of clarification, this Section 9(g) shall not cause
any forfeiture of benefits on Executive’s part, but shall only act as a delay
until such time as a “separation from service” occurs; (ii) if Executive is a
“specified
 
 
 
 
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employee” (as that term is used in Section 409A of the Code and regulations and
other guidance issued thereunder) on the date his separation from service
becomes effective, any benefits payable under Section 9 that constitute
non-qualified deferred compensation under Section 409A of the Code shall be
delayed until the earlier of (A) business day following the six-month
anniversary of the date his separation from service becomes effective, and (B)
the date of his death, but only to the extent necessary to avoid such penalties
under Section 409A of the Code.  On the earlier of (A) the business day
following the six-month anniversary of the date his separation from service
becomes effective, and (B) Executive’s death, the Company shall pay Executive in
a lump sum the aggregate value of the non-qualified deferred compensation that
the Company otherwise would have paid Executive prior to that date under Section
9 of this Agreement; (iii) it is intended that each installment of the payments
and benefits provided under Section 9 of this Agreement shall be treated as a
separate “payment” for purposes of Section 409A of the Code; and (iv) neither
the Company nor Executive shall have the right to accelerate or defer the
delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A of the Code.
 
(h) Notwithstanding anything to the contrary in this Agreement, any payment or
benefit under this Agreement or otherwise that is exempt from Section 409A of
the Code pursuant to Treas. Reg. § 1.409A-1(b)(9)(v)(A) or (C) (relating to
certain reimbursements and in-kind benefits) shall be paid or provided to
Executive only to the extent that the expenses are not incurred, or the benefits
are not provided, beyond the last day of the second calendar year following the
calendar year in which Executive’s separation of service occurs; and provided
further that such expenses are reimbursed no later than the last day of the
third calendar year following the calendar year in which Executive’s separation
from service occurs.  To the extent
 
 
 
 
 
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any indemnification payment, expense reimbursement, or the provision of any
in-kind benefit is determined to be subject to Section 409A (and not exempt
pursuant to the prior sentence or otherwise), the amount of any such
indemnification payment or expense eligible for reimbursement, or the provision
of any in-kind benefit, in one calendar year shall not affect the
indemnification payment, provision of in-kind benefits or expenses eligible for
reimbursement in any other calendar year (except for any life-time or other
aggregate limitation applicable to medical expenses), in no event shall any
indemnification payment or expenses be reimbursed after the last day of the
calendar year following the calendar year in which Executive incurred such
indemnification payment or expenses, and in no event shall any right to
indemnification payment or reimbursement or the provision of any in-kind benefit
be subject to liquidation or exchange for another benefit.
 
(i) Recognizing that such amount is subject to income and other taxes, the
Severance Benefits payment shall include an amount equal to the amount of
federal, state, and local income taxes incurred as a result of the Severance
Benefits payment or any additional tax gross up payment on such payment.  The
Severance Benefits payment shall be equal to the sum of the Health Care Payment,
the Life Insurance Payment and the Disability Insurance Payment, all as
described in Sections 9(j) through 9(l) below, plus the foregoing tax gross up.
 
(j) The “Health Care Payment” is an amount equal to the monthly premium amount
charged by the Company for COBRA continuation coverage under the health care
option in which Executive is enrolled at the time of Executive’s termination,
times twelve (12).  To receive coverage under the Company’s health insurance
plans, Executive must elect to receive COBRA coverage and remit the appropriate
payment to the Company as per the policy of the Company.
 
 
 
 
 
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(k) The Company’s group term life insurance policy provides $500,000 of
coverage, and upon termination, offers Executive the opportunity to convert to
Whole Life (subject to acceptance by the insurer).  The “Life Insurance Payment”
is an amount equal twelve (12) times the monthly premium for one of the
following, as Executive elects:  (i) a Whole Life conversion policy through the
Company’s group life insurer (subject to acceptance by the insurer); (ii) an
existing life insurance policy or policies that Executive may currently have in
place; or (iii) a new term life insurance policy.  The Company will pay only
that pro-rated portion of the premium that represents coverage equal to
Executive’s coverage under the group life insurance plan as of the date of this
Agreement, that is, $500,000.
 
(l) The Company’s long-term disability insurance plan provides coverage of 60%
of monthly earnings (but not more than $10,000, which amount may be reduced by
deductible sources of income and disability earnings) after a 26 week
elimination (waiting) period, and the insurer offers a portable policy after
termination.  The “Disability Insurance Payment” is an amount equal to twelve
(12) times the monthly premium for one of the following, as Executive
elects:  (i) a portable long-term disability policy through the Company’s
insurer (subject to acceptance by the insurer), (ii) an existing long-term
disability insurance policy or policies that Executive may currently have in
place, or (iii) a new personal long-term disability insurance policy obtained
through other than the Company’s insurance policy.  The Company will pay only
that pro-rated portion of the premium that represents coverage equal to
Executive’s coverage under the group long-term disability insurance plan as of
the date of this Agreement.
 
10. Termination in Connection with a Change in Control.
 
(a) In the event the Executive’s employment with the Company is terminated by
the Company without Cause or if the Executive resigns for Good Reason during the
Change in Control Period, in addition to the Severance Payment and Severance
Benefits payable under
 
 
 
 
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Section 9, (A) the Company will pay to the Executive an additional payment (the
“Bonus Payment”), equal to the greater of (x) the bonus paid to the Executive
for the full fiscal year immediately prior to the effective date of the Change
in Control, and (y) the bonus that Executive has accrued for the fiscal year in
which the Change in Control occurred, with such amount being annualized, and (B)
Executive’s unvested Equity Awards will vest as of the date of termination.  The
Bonus will be paid in a lump-sum amount within twenty (20) days following the
effective date of Executive’s termination of employment.
 
(b) For purposes of the Bonus Payment, “Change in Control” means (i) the
acquisition, directly or indirectly, by any individual, entity or group, or a
Person (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”)) of ownership of 50% or
more of either (a) the then outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (b) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”); (ii)
individuals who, as the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, as a member of
the Incumbent Board, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of
 
 
 
 
 
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a Person other than the Board; (iii) approval by the stockholders of the Company
of a reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (x) more than 50% of,
respectively, the then outstanding shares of common stock of the Company
resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such reorganization, merger
or consolidation of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, and (y) at least a majority of the
members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent Board at
the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; (iv) approval by the stockholders of
the Company of a complete liquidation or dissolution of the Company; or (v)
approval by the stockholders of the Company of the sale or other disposition of
all or substantially all of the assets of the Company.
 
(c) “Change in Control Period” means the period that begins 30 days before the
date the Company enters into a definitive agreement that results in the Change
in Control and ends on the date that is 18 months after the effective date of
the Change in Control.
 
 
 
 
 
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(d) “Equity Awards” means any award issued to the Executive pursuant to the
Chyron Corporation 2008 Long-Term Incentive Plan, as it may be amended from time
to time (the “Plan”).
 
(e)  For purposes of the vesting of the Equity Awards, “Change in Control” shall
have the meaning ascribed to such term in the Plan.
 
11. Golden Parachute Excise Tax.
 
(a) Limitation or Additional Payment.  In the event that any portion of the
payments and benefits provided to Executive under this Agreement and any other
payments and benefits under any other agreement with or plan of the Company (in
the aggregate, “Total Payments”) would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code (the “Excise Tax”), then sub-section
(a)(i) or (a)(ii) below shall apply:
 
(i) In the event that the Total Payments (without regard to this Section 11) are
less than or equal to 115% of the maximum amount that could be paid to Executive
without becoming subject to the Excise Tax, then notwithstanding anything in
this Agreement to the contrary the amount payable to Executive under Sections 9
or 10 shall be reduced such that the value of the aggregate Total Payments that
Executive is entitled to receive shall be one dollar ($1) less than such maximum
amount.
 
(ii) In the event that the Total Payments (without regard to this Section 11)
are greater than 115% of the maximum amount that could be paid to Executive
without becoming subject to the Excise Tax, then Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount that will
place Executive in substantially the same after-tax economic position that
Executive would have enjoyed if the Excise Tax had not applied to the Total
Payments.
 
 
 
 
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(b) Determination by Accounting Firm.  Subject to the provisions of Section
11(c) below, all determinations required to be made under this Section 11,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Company’s independent auditors or such other
certified public accounting firm reasonably acceptable to Executive as may be
designated by the Company (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and Executive.  Any Gross-Up
Payment, as determined pursuant to this Section 11, shall be paid by the Company
to Executive as soon as practicable following the date on which Executive
provides the Company evidence of payment of the taxes covered by the Gross-Up
Payment, but no later than the end of the taxable year following the end of
Executive’s taxable year in which Executive remits such taxes.  Any
determination by the Accounting Firm shall be binding upon the Company and
Executive.  As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder.  In the event that the Company
exhausts its remedies pursuant to Section 11(c) and Executive is thereafter
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for Executive’s
benefit.
 
(c) Company’s Right to Contest Excise Tax.  Executive agrees to notify the
Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the Gross-Up
Payment.  Such notification shall be given
 
 
 
 
 
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as soon as practicable but no later than ten (10) business days after Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be
paid.  Executive shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due).  If the Company notifies Executive in
writing prior to the expiration of such period that it desires to contest such
claim, Executive agrees to:
 
(i) give the Company any information reasonably requested by the Company
relating to such claim,
 
(ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company;
 
(iii) cooperate with the Company in good faith in order to effectively contest
such claim, and
 
(iv) permit the Company to participate in any proceedings relating to such
claim.
 
Without limitation on the foregoing provisions of this Section 11(c), the
Company shall control all proceedings taken in connection with such contest and,
at its sole option, may pursue or forego any and all administrative appeals,
proceedings, hearing and conferences with the taxing authority in respect of
such claim.  The Company may, at its sole option, either direct Executive to pay
the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any
 
 
 
 
 
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administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs Executive to pay such claim and sue for a refund, the Company
shall reimburse the amount of such payment to Executive, on an after-tax and
interest-free basis (the “Reimbursement”).  The Company’s control of the contest
related to the claim shall be limited to the issues related to the Gross-Up
Payment and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or other taxing
authority.  If the Company does not timely notify Executive in writing of its
desire to contest the claim, the Company shall pay Executive an additional
Gross-Up Payment in respect of the excess parachute payments that are the
subject of the claim, and Executive agrees to pay the amount of the Excise Tax
that is the subject of the claim to the applicable taxing authority in
accordance with applicable law.
 
(d) Repayment to the Company.  If, after Executive’s receipt of a Reimbursement
pursuant to Section 11(c), Executive becomes entitled to receive any refund with
respect to the claim to which the Reimbursement relates, Executive shall
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto).  If, after
Executive receipt of a Reimbursement pursuant to Section 11(c), a determination
is made that Executive is not entitled to any refund with respect to such claim
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
determination, then the Reimbursement shall be forgiven and shall not be
required to be repaid and the amount of such reimbursement shall offset the
amount of the additional Gross-Up Payment then required to be paid to Executive.
 
 
 
 
 
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(e) Further Assurances.  The Company shall indemnify Executive and hold
Executive harmless, on an after-tax basis, from any costs, expenses, penalties,
fines, interest or other liabilities (“Losses”) incurred by Executive with
respect to the exercise by the Company of any of its rights under Section 11(c),
including, without limitation, any Losses related to the Company’s decision to
contest a claim or any imputed income to Executive resulting from any Advance or
action taken on Executive’s behalf by the Company pursuant to Section
11(c).  The Company shall pay all legal fees and expenses incurred under Section
11(c) and shall promptly reimburse Executive for the reasonable expenses
Executive may incur in connection with any actions taken by the Company or
required to be taken by Executive under Section 11(c).  The Company also shall
pay all of the fees and expenses of the Accounting Firm.
 
12. Survival.
 
The covenants, agreements, representations and warranties set forth in Sections
5, 6, 7 and 8 of this Agreement shall survive the termination or expiration of
the Employment Term and Executive’s employment, irrespective of any
investigation made by or on behalf of any party.
 
13. Modification.
 
This Agreement sets forth the entire understanding of the parties with respect
to the subject matter hereof, supersede all existing agreements between them
concerning such subject matter and may be modified only by a written instrument
duly executed by each party.
 
14. Notices.
 
Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall be delivered in person, by telecopy 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
 
 
 
 
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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
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.  Chrysler Center, 666 Third
Avenue, New York, New York 10017, Attn:  Daniel L. DeWolf, 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 given at the time of receipt thereof Any notice given by
telecopy shall be deemed given at the time the notice or other communication is
delivered with electronic confirmation of delivery.
 
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 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.
 
16. Binding Effect.
 
Executive’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 Executive’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 Executive and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company and its successors and assigns.
 
 
 
 
 
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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.
[signature page follows]
 

 
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
 

 

 
CHYRONHEGO CORPORATION
 
By:
/s/ Roger L. Ogden
   
Name: Roger L. Ogden
   
Title: Chairman of the Board of Directors
         
JOHAN APEL
   
/s/ Johan Apel

 
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