10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2003

Commission File Number 1-9014

Chyron Corporation

(Exact name of registrant as specified in its charter)

New York	11-2117385
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
5 Hub Drive, Melville, New York	11747
(Address of principal executive offices)	(Zip Code)
(631) 845-2000
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes No X

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.

Common Stock $.01 Par Value - 39,633,988 as of May 9, 2003

This document consists of 22 pages

CHYRON CORPORATION

INDEX

PART I	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2003 (unaudited)
	and December 31, 2002	3
	Consolidated Statements of Operations (unaudited) for the Three
	Months ended March 31, 2003 and 2002	4
	Consolidated Statements of Cash Flows (unaudited) for the Three
	Months ended March 31, 2003 and 2002	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	18
Item 4.	Controls and Procedures	18
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 6.	Exhibits and Reports on Form 8-K	19

CHYRON CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

	Unaudited
	March 31,	December 31,
ASSETS	2003	2002
Current assets:
Cash and cash equivalents	$1,705	$1,217
Restricted cash	1,000	1,000
Accounts receivable, net	7,209	6,827
Inventories, net	8,110	8,668
Marketable security	84	76
Prepaid expenses and other current assets	836	636
Total current assets	18,944	18,424
Property and equipment, net	4,065	4,420
Intangible assets, net	164	253
Pension asset	3,888	3,888
Other assets	1,016	1,002
TOTAL ASSETS	$28,077	$27,987
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$7,883	$8,166
Current portion of long-term debt	4,878	5,141
Convertible senior notes	2,565	2,486
Capital lease obligations	88	92
Total current liabilities	15,414	15,885
Long-term debt	1,033	1,086
Convertible debentures	9,864	9,572
Capital lease obligations	107	128
Pension liability	2,200	2,222
Other liabilities	1,474	1,457
Total liabilities	30,092	30,350
Commitments and contingencies
Shareholders' deficit:
Preferred stock, par value without designation
Authorized - 1,000,000 shares, issued - none
Common stock, par value $.01
Authorized - 150,000,000 shares
Issued and outstanding - 39,606,033 at March 31, 2003 and
39,563,691 at December 31, 2002	396	396
Additional paid-in capital	71,464	71,453
Accumulated deficit	(73,528)	(73,613)
Accumulated other comprehensive loss	(347)	(599)
Total shareholders' deficit	(2,015)	(2,363)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$28,077	$27,987

See Notes to Consolidated Financial Statements

CHYRON CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(In thousands, except per share amounts)

(Unaudited)

	2003	2002
Net sales	$10,904	$10,068
Cost of products sold	4,685	4,530
Gross profit	6,219	5,538
Operating expenses:
Selling, general and administrative	4,248	4,615
Research and development	1,060	1,054
Total operating expenses	5,308	5,669
Operating income (loss)	911	(131)
Interest expense	543	568
Interest income	(2)	(3)
Other expense, net	285	124
Net income (loss)	$   85	$(820)
Earnings (loss) per common share:
Basic	$0.00	$(0.02)
Diluted	$0.00	$(0.02)
Weighted average shares outstanding:
Basic	39,577	39,564
Diluted	39,582	39,564
Comprehensive income (loss):
Net income (loss)	$   85	$(820)
Other comprehensive income:
Foreign currency translation gain	31	64
Unrealized gain on securities available for sale	10	40
Total comprehensive income (loss)	$ 126	$(716)

See Notes to Consolidated Financial Statements

CHYRON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(In thousands)
(Unaudited)

	2003	2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$  85	$(820)
Adjustments to reconcile net income (loss) provided by
(used in) operating activities:
Depreciation and amortization	465	650
Non-cash settlement of interest liability	356	339
Impairment of marketable security	211
Amortization of debt issue costs	90	105
Other	120	21
Changes in operating assets and liabilities:
Accounts receivable	(433)	1,261
Inventories	443	(422)
Prepaid expenses and other assets	(311)	(516)
Accounts payable and accrued expenses	(144)	(1,281)
Other liabilities		105
Net cash provided by (used in) operating activities	882	(558)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment	(67)	(12)
Net cash used in investing activities	(67)	(12)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of term loan	(475)
Borrowings (payments) on revolving credit agreements, net	180	(1,904)
Payments of capital lease obligations	(21)	(28)
Net cash used in financing activities	(316)	(1,932)
Effect of foreign currency rate fluctuations on cash and
cash equivalents	(11)	(2)
Change in cash and cash equivalents	488	(2,504)
Cash and cash equivalents at beginning of period	1,217	4,342
Cash and cash equivalents at end of period	$ 1,705	$ 1,838

See Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

General

In the opinion of management of Chyron Corporation (the "Company"), the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of the Company as of March 31, 2003 and the consolidated results of its operations and its cash flows for the periods ended March 31, 2003 and 2002. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. In addition, management is required to make estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Also, during interim periods, certain costs and expenses are allocated among periods based on an estimate of time expired, benefit received, or other activity associated with the periods. Accordingly, actual results could diff er from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. The December 31, 2002 figures included herein were derived from such audited consolidated financial statements. Certain reclassifications have been made to the 2002 financial statements to conform to the 2003 method of presentation.

Nature of Business

We provide signal distribution, automation and graphics products to the broadcast industry for use in digital television. Currently, our customers are facing capital budget constraints because of a slowdown in the U.S. and European economies, and there are few signs of growth in our traditional markets. In addition, we have sustained losses from operations in each of the six years ended December 31, 2002. During 2001, we implemented two restructuring plans to reduce staff and curtail certain operating and discretionary expenses. We planned that these actions would reduce operating costs by $11 million. The combined savings in 2002 selling, general & administrative ("SG&A") and research and development ("R&D") expenses were $11.5 million as compared to 2001.

We continue to approach 2003 with caution, adopting a modest outlook for growth, and sizing the business accordingly. We do not currently intend to effect another restructuring as we did in 2001 unless a leveling off of 2003 sales to 2002 levels, or a downturn in sales, necessitates it. We have configured our business with a level of costs that allows flexibility to further reduce costs if economic conditions deteriorate. We believe we have sized our core businesses to a level that will not significantly reduce our cash resources while continuing to invest in our new products. We operate in a rapidly changing environment and must remain responsive to changes as they occur. In the event that revenues are significantly below 2003 forecasted revenues we believe we have the ability to (i) reduce or delay discretionary expenditures, including capital purchases, and further reduce headcount, according to our contingency plan and (ii) refinance or sell (outright sale or sale-leaseback) our Pr o-Bel division headquarters building in the U.K., so that we will have sufficient cash resources through December 31, 2003. However, there can be no assurance that we will be able to adjust our costs or refinance or sell our U.K. building in sufficient time to respond to revenue shortfalls or obtain waivers and/or amendments from our U.S. bank should defaults occur.

In preparing contingency plans for a lower level of 2003 sales than we are currently forecasting, we have re-examined our cost structure, and prepared a contingent restructuring plan that recommends, in the event it is necessary, to reduce spending in staffing, travel, trade shows, advertising, professional fees and equipment, among other items. This plan would affect both the Graphics and the Signal Distribution and Automation divisions of our business. However, there can be no assurance we would be able to execute the plans in adequate time to provide an immediate or short-term benefit.

Our borrowing facility with our U.S. bank requires that for 2003 we achieve certain quarterly financial covenants with respect to our U.S. operations: a designated minimum EBITDA; maintain in a pledged account at our U.S. bank a minimum cash balance of $1 million at all times; achieve a set fixed charge ratio, and upon repayment on December 31, 2003 of the senior subordinated convertible notes plus accrued interest, maintain a minimum undrawn availability of $0.25 million at all times under our revolving line of credit. While we met the financial covenants for all quarters of 2002 and the first quarter of 2003, our operating results in the past have caused us to violate the financial covenants in place at the time for which we either obtained waivers or amended our bank agreements. We cannot be certain we will achieve these covenants for the remainder of 2003, although we believe that unless quarterly EBITDA for the U.S. business falls short of plan by more than 15% in any future qua rter, we will likely achieve the covenants. There is no assurance we will not be in violation of bank covenants in the future because of fluctuations or deterioration in our operating results. At that point there is no assurance we will be able to obtain waivers or amend our bank agreements. If not, we would be in violation of our financial covenants and the bank would have the right to demand full payment of all amounts owed them. We would then be required to settle the outstanding obligation. At March 31, 2003, we owed the U.S. bank $3.3 million, consisting of $2.4 million under our revolving credit line and $0.9 million under our outstanding term loan. Based on our agreed repayment schedule with the U.S. bank, we are repaying the term loan in varying monthly amounts until paid in full in September 2003.

Our expectation is that we would not have the financial resources to meet the bank obligation in one single payment. We would, therefore, expect to agree to a payment plan to pay off the bank debt over a specific period of time. We cannot provide any assurance that the bank would accept any plan. Furthermore, we cannot provide any assurance that the sources of capital to pay off the bank would materialize in a timely manner and to the extent we had planned for.

In specific terms, the contemplated sources of capital to meet our bank obligation are listed below:

• Make additional reductions in staff and overhead as per our contingent restructuring plan to save $0.8 million in cash outlays assuming implementation in June 2003. Such savings would be reduced by approximately $0.15 million for each month of delay.

• Refinance the mortgage on our Pro-Bel office building in Reading, U.K.: Refinance of the existing mortgage could generate proceeds of up to $1 million. However, there can be no assurance we will be able to refinance the mortgage on our building and if we do, that we will be able to generate the desired proceeds.
• If we do not refinance our mortgage on our Pro-Bel office building in Reading, U.K., as described above, we would consider the sale or sale-leaseback of such building: Net of and assuming no refinance of the existing mortgage, a sale or sale-leaseback could generate proceeds of between $2.0 million to $2.6 million. However, there can be no assurance we will be able to sell or arrange a sale-leaseback of our building for these amounts.
• Cash on the balance sheet: There may be no cash on the balance sheet at the time of covenant violation.
• Third party financial support: Sufficient additional financial support from third parties, which may include directors and principal shareholders, may not materialize as it has in the past.

While our 2003 plan, if executed, envisions that we will have sufficient cash to meet our plan obligations and operate the business beyond December 31, 2003, there can be no assurances we will be able to achieve our plan.

We are currently exploring opportunities with third parties regarding potential benefits that might result from a sale of part of our business. These discussions are preliminary and there can be no assurance or determination of the outcome of such discussions.

2. MARKETABLE SECURITY

During the quarter ended March 31, 2003 we evaluated our investment in equity securities of vizrt Ltd. (symbol VIZ - traded on Neuer market and Frankfurt stock exchange). Due to trading values that were below our cost for a period of time, we determined that the decline in market value was other than temporary and wrote this security down to its current fair value. Accordingly, an impairment loss of $0.2 million, which is included in other expense, was charged to earnings.

3. INTANGIBLE ASSETS

In 2000, we purchased a 20% interest in Video Technics, Inc., which develops software for the Chyron Aprisa Clip/Stillstore systems. The investment is accounted for under the equity method of accounting.

The excess of the aggregate purchase price over the fair market value of net assets acquired, of approximately $1.1 million, has been ascribed to an exclusive sales and marketing agreement and is being amortized over three years pursuant to Statement of Financial Accounting Standards No. 142 "Goodwill and Intangible Assets." Amortization of this intangible approximated $0.09 million in the three months ended March 31, 2003 and 2002. As of March 31, 2003 and December 31, 2002 the gross asset balance was $1.1 million and the accumulated amortization was $0.9 million and $0.8 million, respectively. Amortization for the year ended December 31, 2003 will be $0.25 million.

4. INVENTORIES

Inventory is comprised of the following (in thousands):

	March 31,	December 31,
	2003	2002
Finished goods	$4,062	$4,306
Work-in-progress	837	615
Raw material	3,211	3,747
	$8,110	$8,668

5. EQUITY BASED COMPENSATION

We account for our stock compensation plans in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and its related interpretations, which requires that compensation cost be recognized on the date of grant for stock options issued based on the difference, if any, between the fair market value of our stock and the exercise price. Under this intrinsic value method prescribed under APB 25 there was no compensation expense recognized for the three months ended March 31, 2003 and 2002. We have adopted the disclosure requirements of SFAS 123, "Accounting for Stock-Based Compensation," which allows entities to continue to apply the provisions of APB 25 for transactions with employees and provides pro-forma earnings disclosures for employee stock grants as if the fair value based method of accounting in SFAS No. 123 had been applied to these stock grants. The following table illustrates the effect on net income (lo ss) and earnings (loss) per share if the fair value method had been applied (in thousands except per share amounts):

	Three Months Ended
	March 31,
	2003	2002
Net income (loss)	$  85	$(820)
Total stock-based compensation income (expense)
determined under fair value based method,
net of related tax effects	40	(151)
Pro forma net income (loss)	$125	$(971)
Earnings (loss) per share:
Basic - as reported	$0.00	$(0.02)
Basic - pro forma	0.00	(0.02)
Diluted - as reported	0.00	(0.02)
Diluted - pro forma	0.00	(0.02)

6. SEGMENT INFORMATION

Chyron's businesses are organized, managed and internally reported as two segments. The segments, which are based on differences in products and technologies, are Graphics Products and Signal Distribution and Automation. The accounting policies of the segments are the same as those described in the "Summary of Significant Accounting Policies" included in our Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2002. We are an integrated organization characterized by interdivisional cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the financial information shown below.

	Three Months Ended
	March 31,
	(In thousands)
	2003	2002
Net sales
Graphics	$5,299	$4,817
Signal Distribution & Automation	5,605	5,251
Operating income (loss)
Graphics	600	8
Signal Distribution & Automation	311	(139)
Depreciation and amortization
Graphics	173	359
Signal Distribution & Automation	292	291
Geographic sales
United States	6,297	5,309
United Kingdom	2,746	3,306
Other	1,861	1,453

7. RECENT ACCOUNTING PRONOUNCEMENTS

In July 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred as opposed to at the date an entity commits to an exit plan. We have adopted SFAS 146 as of January 1, 2003, for any exit or disposal activities after that date, which did not have a material impact on the Company's Consolidated Financial Statements.

In December 2002, the FASB issued FIN 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This interpretation expands the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. As of January 1, 2003, we have adopted the provisions of FIN 45, which did not have a material impact on the Company's Consolidated Financial Statements.

In December 2002, the Financial Accounting Standards Board issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure - an amendment of FASB Statement No. 123." The Company is choosing to continue with its current practice of applying the recognition and measurement principles of APB No. 25, "Accounting for Stock Issued to Employees." The Company has adopted the disclosure requirements of SFAS No. 148.

In January 2003, the FASB issued FIN 46, "Consolidation of Variable Interest Entities - an interpretation of ARB No. 51," which addresses consolidation of variable interest entities. FIN 46 expands the criteria for consideration in determining whether a variable interest entity should be consolidated by a business entity, and requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. This interpretation applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 is not expected to have a material effect on the Company's Cons olidated Financial Statements.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

From time to time, including in this Quarterly Report on Form 10-Q, we may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, changes in the industry, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. In order to comply with the terms of the safe harbor, we note that a variety of factors could cause our actual results to differ from the anticipated results or other expectations expressed in our forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of our business include, without limitation, the following: product concentration in a mature market, dependence on the emerging digital market and the industry's transition to DTV and HDTV, consumer acceptance of DTV and HDTV, resistance within the broadcast or cable industry to implement DTV and HDTV technology, use and improvement of the Internet, new technologies that could render certain Chyron products to be obsolete, a highly competitive environment, competitors with significantly greater financial resources, new product introductions by competitors, seasonality, fluctuations in quarterly operating results, ability to maintain adequate levels of working capital, viability of the OTC Bulletin Board as a trading platform, expansion into new markets, and our ability to successfully implement our strategic alliance strategy. Additional factors affecting future results, and which are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2002, include:

• We cannot assure you that we will maintain profitability because we have a history of losses.
• Our future operating results are likely to fluctuate and therefore may fail to meet expectations, which could cause our stock price to decline.
• If we fail to successfully develop, introduce and sell new products, we may be unable to compete effectively in the future.
• If we are unable to keep up with rapid change in our industry, our business will not grow.
• We expend substantial resources in developing and selling our products, and we may be unable to generate significant revenue as a result of these efforts.
• Our customers may cancel or change their product plans after we have expended substantial time and resources in the design of their products.
• If the digital video market does not grow, we will be unable to increase our revenues.
• We will be unable to compete effectively if we fail to anticipate product opportunities based upon emerging technologies and standards and fail to develop products that incorporate these technologies and standards.
• We may not successfully develop strategic relationships that may be important to our business.
• We operate in a highly competitive environment and industry and we may lack resources needed to capture increased market share.
• We may encounter periods of industry-wide surface mount components shortage, resulting in pricing pressure and a risk that we could be unable to fulfill our customers' requirements.
• We depend upon one supplier for the software license of our Aprisa product.
• We depend on a limited number of suppliers of surface mount components.
• If we fail to adequately forecast demand for our products, we may incur product shortages or excess product.
• Problems in manufacturing our products, especially our new products, may increase the costs of our manufacturing process.
• We may be unable to grow our business if the markets in which we sell our products do not grow.
• Our business will suffer if our systems fail or become unavailable.
• In order to become consistently profitable, we will need to offset the general pattern of declines and fluctuations in the prices of our products.
• We depend upon third party dealers to market and sell our products and they may discontinue sale of our products, fail to give our products priority or be unable to successfully market, sell and support our products.
• Problems associated with international business operations could subject us to risks from financial, operational and political situations, and affect our ability to manufacture and sell our products.
• We may be unable to accurately predict quarterly results which could adversely affect the trading price of our stock.
• We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain key personnel.
• We may not be able to protect our proprietary technology and may be sued for infringing on the rights of others.
• Our future operating results may fluctuate or deteriorate and we would be in violation of restrictive bank covenants.
• We may not be able to successfully implement our contingency plan upon a decline in revenues.
• We are uncertain of our ability to obtain additional financing or refinance existing obligations for our future needs, and liquidity issues have and may continue to increase our cost of capital.
• The TV broadcast industry has historically expected substantial marketing expenses.
• We sell hardware and software service agreements to our customers that may become onerous because of product problems or the age of our products.
• Our warranties on products may prove insufficient and could cause us unexpected costs.
• If a new law or regulation is created pertaining to the telecommunications and television industries it could cause our customers to suffer and impede our ability to increase profits.
• Our principal stockholders have significant voting power and may vote for actions that may not be in the best interests of our stockholders.
• We have not issued dividends on our common stock for over thirteen years and do not anticipate doing so in the foreseeable future.
• The price of our common stock may be volatile.
• An increase in the number of shares of our common stock outstanding could reduce the price of our common stock.
• We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate your ability to sell your shares for a premium in a change of control transaction.
• It may be difficult to sell your shares and the value of your investment may be reduced because our common stock has experienced low trading volumes on the OTC Bulletin Board and currently lacks public market research analyst coverage.

Results of Operations

This discussion should be read in conjunction with the Consolidated Financial Statements including the Notes thereto.

Comparison of the Three Months Ended March 31, 2003 and 2002

Consolidated revenues for the quarter ended March 31, 2003 were $10.9 million, an increase of $0.8 million, or 8% from the $10.1 million reported for the first quarter of 2002.

First quarter 2003 revenues from the Graphics division were $5.3 million as compared to $4.8 million for the first quarter of 2002, which represented an increase of 10%. This increase is primarily due to an increase in sales of Duet products of $0.7 million, offset by a $0.2 million decrease in sales of legacy iNFiNiT! products. The increase in Duet products is primarily attributable to a greater level of customer confidence and acceptance in the U.S. market in addition to a wider product range. The Duet product was initially launched with only a sophisticated high-end unit, but now we also provide for a range of low cost packages running on PC based platforms to fully integrated systems.

First quarter 2003 revenues from the Signal Distribution and Automation division were $5.6 million as compared to $5.3 million for the first quarter of 2002, which represented an increase of 6%. This increase results primarily from increased sales of automation equipment.

Gross margins for the first quarter of 2003 increased to 57% from 55% in the comparable quarter in 2002. Margins in the Graphics division of approximately 57% in 2003 were comparable to 2002 margins. Contributing to this consistency are material costs that have remained consistent due to the ability to leverage off the numerous products within the range and strict containment of overhead costs. Margins in the Signal Distribution and Automation division also approximated 57%. This represented a slight increase over 2002 margins, driven primarily by the greater proportion of revenue from automation, which carries higher gross margins.

Selling, general and administrative (SG&A) expenses decreased by $0.3 million, to $4.3 million in the quarter ended March 31, 2003, compared to $4.6 million in the first quarter of 2002. The major components of the decrease are reductions in sales and marketing expenses (primarily travel, commissions and marketing salaries) of $0.2 million, $0.1 million in facility costs, and the balance attributable to reductions in costs of employee benefits and other administrative expenses.

Research and development (R&D) costs of $1.1 million in the first quarter of 2003 were consistent with 2002 expenditures of $1.1 million. This level of expenditure is consistent with our budgeted spending plans for 2003 and we believe is at a level that will not significantly drain our cash resources and will enable us to continue to invest in our next generation products.

Overall interest expense of $0.54 million in the three months ended March 31, 2003 was relatively consistent with expense levels in 2002 of $0.57 million. Reductions in interest expense result from lower interest rates, as well as lower average outstanding balances on our U.S. and U.K. credit facilities, in 2003 than 2002. This was offset slightly by increased interest expense attributable to our debentures since we are not settling that liability in cash, but rather accruing interest through the issuance of additional debentures. Interest income in each year is nominal as cash on hand is used primarily for operations and not invested in any long-term arrangements.

The components of other expense, net are as follows (in thousands):

	Three Months Ended
	March 31,
	2003	2002
Impairment of marketable security	$211
Foreign exchange transaction loss	74	$103
Other		21
	$285	$124

During the quarter ended March 31, 2003 we evaluated our investment in equity securities of vizrt Ltd., that was trading below our cost for a period of time, and determined that the decline in the market value was other than temporary. Accordingly, the security was written down to its current fair value and a loss of $0.2 million was charged to earnings.

Liquidity and Capital Resources

During the first quarter of 2003, net cash of $0.9 million was provided by operations as compared to a use of cash of $0.6 million in the first quarter of 2002. The generation of cash from operations results primarily from net income of $0.08 million, increased by non-cash expenses totaling $1.2 million and offset by net changes in operating assets and liabilities of $0.4 million. In the first quarter of 2002, the net loss of $0.8 million, when adjusted for non-cash items totaling $1.1 million, resulted in positive cash flow of $0.3 million that was offset by a net use of $0.9 million from changes in operating assets and liabilities, primarily the reduction of accounts payable and accrued expenses.

At March 31, 2003, we had cash on hand, including restricted cash, of $2.7 million and working capital of $3.5 million. Due to the requirement of our U.S. bank to maintain a minimum cash balance of $1 million, such amount has been classified as restricted cash. The availability under the U.S. revolving line of credit was $0.5 million and under the U.K. overdraft facility was $0.1 million (collectively the "revolving lines of credit") at March 31, 2003.

We provide signal distribution and graphics products to the broadcast industry for use in digital television. Currently, our customers are facing capital budget constraints because of a slowdown in the U.S. and European economies, and there are few signs of growth in our traditional markets. In addition, we have sustained losses from operations in each of the six years ended December 31, 2002. During 2001 we implemented two restructuring plans to reduce staff and curtail certain operating and discretionary expenses. We planned that these actions would reduce operating costs by $11 million. The combined savings in 2002 SG&A and R&D expenses were $11.5 million as compared to 2001.

We continue to approach 2003 with caution, adopting a modest outlook for growth, and sizing the business accordingly. We do not currently intend to effect another restructuring as we did in 2001 unless a leveling off of 2003 sales to 2002 levels, or a downturn in sales, necessitates it. We operate in a rapidly changing environment and must remain responsive to changes as they occur. In the event that revenues are significantly below 2003 forecasted revenues we believe we have the ability to (i) reduce or delay discretionary expenditures, including capital purchases, and further reduce headcount, according to our contingency plan and (ii) refinance or sell (outright sale or sale-leaseback) our Pro-Bel division headquarters building in the U.K., so that we will have sufficient cash resources through December 31, 2003. However, there can be no assurance that we will be able to adjust our costs or refinance or sell our U.K. building in sufficient time to respond to revenue shortfalls or ob tain waivers and/or amendments from our U.S. bank should defaults occur.

In preparing contingency plans for a lower level of 2003 sales than we are currently forecasting, we have re-examined our cost structure, and prepared a contingent restructuring plan that recommends, in the event it is necessary, to reduce spending in staffing, travel, trade shows, advertising, professional fees and equipment, among other items. This plan would affect both the Graphics and the Signal Distribution and Automation divisions of our business. However, there can be no assurance we would be able to execute the plans in adequate time to provide a significant immediate or short-term benefit and if implemented, could have an adverse effect on our ability to conduct business.

Our borrowing facility with our U.S. bank requires that for 2003 we achieve certain quarterly financial covenants with respect to our U.S. operations: a designated minimum EBITDA; maintain in a pledged account at our U.S. bank a minimum cash balance of $1 million at all times; achieve a set fixed charge ratio, and upon repayment on December 31, 2003 of the senior subordinated convertible notes plus accrued interest, maintain a minimum undrawn availability of $0.25 million at all times under our revolving line of credit. While we met the financial covenants for all quarters of 2002 and the first quarter of 2003, our operating results in the past have caused us to violate the financial covenants in place at the time for which we either obtained waivers or amended our bank agreements. We cannot be certain we will achieve our covenants for the remainder of 2003, although we believe that unless quarterly EBITDA for the U.S. business falls short of plan by more than 15% in any future quart er, we will likely achieve the covenants. There is no assurance we will not be in violation of bank covenants in the future because of fluctuations or deterioration in our operating results. At that point there is no assurance we will be able to obtain waivers or amend our bank agreements. If not, we would be in violation of our financial covenants and the bank would have the right to demand full payment of all amounts owed them. We would then be required to settle the outstanding obligation. At March 31, 2003, we owed the U.S. bank $3.3 million, consisting of $2.4 million under our revolving credit line and $0.9 million under our outstanding term loan. Based on our agreed repayment schedule with the U.S. bank, we are repaying the term loan in varying monthly amounts until paid in full in September 2003.

Our expectation is that we would not have the financial resources to meet the bank obligation in a single payment. We would, therefore, expect to agree to a payment plan to pay off the outstanding bank balances over a specific period of time. We cannot provide any assurance that the bank would accept any plan. Furthermore, we cannot provide any assurance that the sources of capital to pay off the bank would materialize in a timely manner and to the extent we had planned for.

In specific terms, the contemplated sources of capital to meet our bank obligation are listed below:

• Make additional reductions in staff and discretionary expenses as per our contingent restructuring plan to save $0.8 million in cash outlays assuming implementation in June 2003. Such savings would be reduced by approximately $0.15 million for each month of delay. A further restructuring may not be possible without impairing the business.

• Refinance the mortgage on our Pro-Bel office building in Reading, U.K.: Refinance of the existing mortgage could generate proceeds of up to $1 million. However, there can be no assurance we will be able to refinance the mortgage on our building and if we do, that we will be able to generate the desired proceeds.
• If we do not refinance our mortgage on our Pro-Bel office building in Reading, U.K., as described above, we would consider the sale or sale-leaseback of such building: Net of and assuming no refinance of the existing mortgage, a sale or sale-leaseback could generate proceeds of between $2.0 million to $2.6 million. However, there can be no assurance we will be able to sell or arrange a sale-leaseback of our building for these amounts.
• Cash on the balance sheet: There may be no cash on the balance sheet at the time of covenant violation.
• Third party financial support: Sufficient additional financial support from third parties, which may include directors and principal shareholders, may not materialize as it has in the past.

While our 2003 plan, if executed, envisions that we will have sufficient cash to meet our 2003 debt obligations and operate the business beyond December 31, 2003, there can be no assurances we will be able to achieve our plan.

We are currently exploring opportunities with third parties regarding potential benefits that might result from a sale of part of our business. These discussions are preliminary and there can be no assurance or determination of the outcome of such discussions.

Recent Accounting Pronouncements

In July 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred as opposed to at the date an entity commits to an exit plan. We have adopted SFAS 146 as of January 1, 2003, for any exit or disposal activities after that date, which did not have a material impact on the Company's Consolidated Financial Statements.

In December 2002, the FASB issued FIN 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This interpretation expands the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. As of January 1, 2003, we have adopted the provisions of FIN 45 which did not have a material impact on the Company's Consolidated Financial Statements.

In December 2002, the Financial Accounting Standards Board issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure - an amendment of FASB Statement No. 123." The Company is choosing to continue with its current practice of applying the recognition and measurement principles of APB No. 25, "Accounting for Stock Issued to Employees." The Company has adopted the disclosure requirements of SFAS No. 148.

In January 2003, the FASB issued FIN 46, "Consolidation of Variable Interest Entities - an interpretation of ARB No. 51," which addresses consolidation of variable interest entities. FIN 46 expands the criteria for consideration in determining whether a variable interest entity should be consolidated by a business entity, and requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. This interpretation applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 is not expected to have a material effect on the Company's Cons olidated Financial Statements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT

MARKET RISK

We are exposed to foreign currency and exchange risk in the normal course of business related to investments in our foreign subsidiaries and sales to foreign customers. For the three months ended March 31, 2003 and 2002, sales to foreign customers were 42% and 47% of total sales, respectively. Substantially all sales generated outside of the U.S. are denominated in British Pounds Sterling, Euros and U.S. Dollars. The net impact of foreign exchange transactions was a loss of $0.1 million and a loss of $0.1 million for the quarter ended March 31, 2003, and 2002, respectively. We record translation gain or loss as a separate component of other comprehensive income or loss.

Additionally, we are exposed to interest rate risk with respect to certain of our short-term and long-term debt that carries a variable interest rate. Rates that affect the variable interest on this debt include the Prime Rate and LIBOR. We have evaluated the foreign currency exchange risk and interest rate risk and believe that our exposure to these risks are not material to our near-term financial position, earnings, or cash flows.

Item 4. CONTROLS AND PROCEDURES

Our disclosure controls and procedures are designed to ensure that material information relating to the Company are made known to our Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and others in the Company involved in the preparation of this quarterly report, by others within the Company. Our CEO and CFO have reviewed our disclosure controls and procedures within 90 days prior to the filing of this quarterly report and have concluded that they are effective. There were no significant changes in our internal controls or other factors that could significantly affect our internal controls subsequent to the last date they were reviewed by our CEO and CFO.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company from time to time is involved in routine legal matters incidental to its business. In the opinion of management, the ultimate resolution of such matters will not have a material adverse effect on the Company's financial position, results of operations or liquidity.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

Exhibit No.	Description of Exhibit
10.1	Indemnification Agreement between Chyron Corporation and Joan Y. McCabe, dated April 10, 2003.
10.2	Severance Agreement between Chyron Corporation and Jerry Kieliszak, dated May 2, 2003.
99.	Certification of Chief Executive Officer and Chief Financial Officer (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350)

(b) Reports on Form 8-K:

A Form 8-K was filed on January 17, 2003 pertaining to changes in senior management. The Company named Michael Wellesley-Wesley as its President and Chief Executive Officer.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHYRON CORPORATION
	(Registrant)
May 14, 2003	/s/ Michael Wellesley-Wesley
(Date)	Michael Wellesley-Wesley
	President and
	Chief Executive Officer
May 14, 2003	/s/ Jerry Kieliszak
(Date)	Jerry Kieliszak
	Chief Financial Officer and
	Senior Vice President

CERTIFICATIONS

CERTIFICATION BY
CHIEF EXECUTIVE OFFICER
UNDER EXCHANGE ACT RULES 13a-14 OR 15d-14

I, Michael Wellesley-Wesley, Chief Executive Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chyron Corporation (the "registrant") for the quarterly period ended March 31, 2003 (the "quarterly report");

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors:

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003

/s/ Michael Wellesley-Wesley

    Michael Wellesley-Wesley

    President and

    Chief Executive Officer

CERTIFICATION BY
CHIEF FINANCIAL OFFICER
UNDER EXCHANGE ACT RULES 13a-14 OR 15d-14

I, Jerry Kieliszak, Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chyron Corporation (the "registrant") for the quarterly period ended March 31, 2003 (the "quarterly report");

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors:

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003

/s/ Jerry Kieliszak

    Jerry Kieliszak

    Senior Vice President and

    Chief Financial Officer

EX-10.1

INDEMNIFICATION AGREEMENT

CHYRON CORPORATION (NEW YORK)

AGREEMENT, effective as of January 6, 2003 between Chyron Corporation, a New York corporation (the "Company"), and Joan Y. McCabe (the "Indemnitee").

WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available; and

WHEREAS, Indemnitee is a director or officer of the Company; and

WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of public companies in today's environment; and

WHEREAS, the By-Laws of the Company provide indemnity protection in the Indemnitee;

WHEREAS, this Agreement satisfies the provisions of Section 721 of the New York Business Corporation Law ("BCL"); and

WHEREAS, in recognition of the fact that the Indemnitee continues to serve as a director or officer of the Company in part in reliance on the aforesaid By-Laws and Indemnitee's need for substantial protection against personal liability in order to enhance Indemnitee's continued service to the Company in an effective manner, and in part to provide Indemnitee with specific contractual assurance that the protection promised by such By-Laws will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of such By-Laws or any change in the composition of the Company's Board of Directors or any acquisition transaction relating to the Company), and due to the potential inadequacy of the Company's directors' and officers' liability insurance coverage, the Company wishes to provide in this Agreement for the indemnification of, and the advancing of expenses to, Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set fo rth in this Agreement, and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the Company's directors' and officers' liability insurance policies;

NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Certain Definitions.

(a) Approved Law Firm: shall mean any law firm (i) located in New York City and (ii) rated "av" by Martindale-Hubbell Law Directory.

(b) Board of Directors: shall mean the Board of Directors of the Company.

(c) Change in Control: shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than any stockholder (and/or affiliate of such stockholder) on the date of this Agreement or a trustee or other fiduciary holding securities under an employee benefit plan of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly of securities of the Company representing 15 percent or more of the total voting power represented by the Company's then outstanding Voting Securities (such person being hereinafter referred to as an "Acquiring Person"), or (ii) during any 24-consecutive-month period, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomina tion for election by the Company's shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the shareholders 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 entry) at least 80 percent of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition b y the Company of all or substantially all the Company's assets.

(d) Claim: shall mean any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other.

(e) Expenses: shall include attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any Claim relating to any Indemnifiable Event, together with interest, computed at the Company's average cost of funds for short-term borrowings, accrued from the date of incurrence of such expense to the date Indemnitee receives reimbursement therefor.

(f) Indemnifiable Event: shall mean any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another corporation of any type or kind, domestic or foreign, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of anything done or not done by Indemnitee in such capacity. Without limitation of any indemnification provided hereunder, an Indemnitee serving (i) another corporation, partnership, joint venture or trust of which 10 percent or more of the voting power or residual economic interest is held, directly or indirectly, by the Company, or (ii) any employee benefit plan of the Company or any entity referred to in clause (i), in any capacity shall be deemed to be doing so at the request of the Company.

(g) Reviewing Party: shall be (i) the Board of Directors acting by quorum consisting of directors who are not parties to the particular Claim with respect to which Indemnitee is seeing indemnification, or (ii), if such a quorum is not obtainable or, even if obtainable, if a quorum of disinterested directors so directs, (A) the Board of Directors upon the opinion in writing of independent legal counsel that indemnification is proper in the circumstances because the applicable standard of conduct set forth in Section 2 of this Agreement and in Section 721 of the BCL has been met by the Indemnitee or (B) the shareholders upon a finding that the Indemnitee has met the applicable standard of conduct referred to in clause (ii)(A) of this definition.

(h) Voting Securities: shall mean any securities of the Company which vote generally in the election of directors.

2. Basic Indemnification Arrangement. If Indemnitee was, is or becomes at any time a party to, or witness or other participant in, or is threatened to be made a party to, or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest extent permitted by law as soon as practicable but in any event no later than 30 days after written demand is presented to the Company, against any and all Expenses, judgments, fines (including excise taxes assessed on an Indemnitee with respect to an employee benefit plan), penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with, or in respect of, such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim. If so requested by Indemnitee, the Company shall advance (within two business days of such request) any and all Expenses to Indemnitee (an "Expen se Advance"). Notwithstanding anything in this Agreement to the contrary, (i) Indemnitee shall not be entitled to indemnification pursuant to this Agreement if a judgment or other final adjudication adverse to the Indemnitee establishes that Indemnitee's acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, or that Indemnitee personally gained in fact a financial profit or other advantage to which Indemnitee was not legally entitled and (ii) prior to a Change in Control Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim initiated by Indemnitee against the Company or any director or officer of the Company unless the Company has joined in or consented to the initiation of such Claim.

3. Payment. Notwithstanding the provisions of Section 2, the obligations of the Company under Section 2 (which shall in no event be deemed to preclude any right to indemnification to which Indemnitee may be entitled under Section 723(a) of the BCL) shall be subject to the condition that the Reviewing Party shall have authorized such indemnification in the specific case by having determined that Indemnitee is permitted to be indemnified under the applicable standard of conduct set forth in Section 2 and applicable law. The Company shall promptly call a meeting of the Board of Directors with respect to a Claim and agrees to use its best efforts to facilitate a prompt determination by the Reviewing Party with respect to the Claim. Indemnitee shall be afforded the opportunity to make submissions to the Reviewing Party with respect to the Claim. The obligation of the Company to make an Expense Advance pursuant to Section 2 shall be subject to the condition that, if, when and to the ex tent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under Section 2 and applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees and undertakes to the full extent required by paragraph (a) of Section 725 of the BCL to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). If there has been no determination by the Reviewing Party or if the Reviewing Party deter mines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in the State of New York having subject matter jurisdiction thereof and in which venue is proper seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee.

4. Change in Control. If there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Board of Directors who were directors immediately prior to such Change in Control) then (i) all determinations by the Company pursuant to the first sentence of Section 3 hereof and Section 723(b) of the BCL shall be made pursuant to subparagraph (1) or (2)(A) of such Section 723(b) and (ii) with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or By-law of the Company now or hereinafter in effect relating to Claims for Indemnifiable Events (including, but not limited to, any opinion to be rendered pursuant to subparagraph (2)(A) of Section 723(b) of the BCL) the Company (including the Board of Directors) shall seek legal advice from (and only from) special, independent counsel selected by Indemnitee and approved by the Com pany (which approval shall not be unreasonably withheld), and who has not otherwise performed services for the Company (or any subsidiary of the Company) or the Acquiring Person (or any affiliate or associate of such Acquiring Person) within the last five years (other than in connection with such matters) or Indemnitee. Unless Indemnitee has theretofore selected counsel pursuant to this Section 4 and such counsel has been approved by the Company, any Approved Law Firm shall be deemed to satisfy the requirements set forth above. Such counsel, among other things, shall render its written opinion to the Company, the Board of Directors and Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the special, independent counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. As used in this Section 4, the terms "affiliate" and "associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement.

5. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee against any and all expenses (including attorneys' fees) and, if requested by Indemnitee, shall (within two business days of such request) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any claim asserted or action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or By-law of the Company now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors' and officers' liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expenses payment or insurance recovery, as the case may be.

6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but now, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified, to the extent permitted by law, against all Expenses incurred in connection with such Indemnifiable Event. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall, to the extent permitted by law, be on the Company to establish that Indemnitee is not so entitled.

7. No Presumption. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, whether civil or criminal, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

8. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the By-laws of the Company, the BCL or otherwise. To the extent that a change in the BCL (whether by statue or judicial decision) permits greater indemnification by agreement than would be afforded currently under the By-laws of the Company and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.

9. Liability Insurance. To the extent the Company maintains an insurance policy or policies providing directors' and officers' liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any director or officer of the Company.

10. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

11. Amendments, Etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

12. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

13. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.

14. Specific Performance. The parties recognize that if any provision of this Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, the Indemnitee shall be entitled, if Indemnitee so elects, to institute proceedings, either at law or in equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue.

15. Binding Effect, Etc. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs, and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer or director of the Company or of any other enterprise at the Company's request.

16. Severability. The provisions of this Agreement shall be severable if any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.

17. Governing Law. This Agreement shall be governed by, and be construed and enforced in accordance with, the laws of the State of New York applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws.

Executed this 10^th day of April 2003.

	CHYRON CORPORATION
By:	/s/ Robert S. Matlin
	Name: Robert S. Matlin, Esq.
	Title: Secretary
	/s/ Joan Y. McCabe
	Name: Joan Y. McCabe

INDEMNIFICATION-JMcC.doc

EX-10.2

May 2, 2003

Mr. Jerry Kieliszak
3461 Homestead Avenue
Wantagh, New York 11793

Re: Terms of Severance

This shall confirm your agreement (the "Agreement") with Chyron Corporation (the "Company") with respect to severance to be paid to you in the event you are terminated without Cause (as defined below).

In the event you are terminated without Cause from your employment by the Company then you shall: (i) be paid 12 months of severance (the "Severance Payment") based on your annual base salary at the time of termination, and (ii) receive health benefits, for which the Company will pay your COBRA premiums, for the 12-month period following termination (collectively with the Severance Payment, shall be referred to as the "Severance"). The Severance Payment shall be paid in the same manner as the annual salary had been paid at the time of termination and shall be subject to mitigation by you subsequent to the period stated in the Company's Severance Plan for U.S. Employees. Cause shall mean: (i) habitual drug or alcohol use, (ii) conviction of, or a plea of guilty or nolo contendrere to, any crime; (iii) misconduct which is injurious to the business reputation of, or economically detrimental to, the Company; (iv) a material breach of any written or otherwise known policy or standard of conduct of the Company; or (v) willful failure or refusal to perform your duties or to follow a reasonable instruction of the CEO or the Board of Directors.

The Executive Retention Program Grant Letter, dated September 23, 2002 (the "Grant Letter") is amended so that the severance provided therein is replaced with the Severance described above. The Grant Letter is further amended by replacing the severance payable upon your resignation from a Successor Company for Good Reason with the Severance described above. All other terms of your employment, including the Executive Retention Program and any bonuses to be paid thereunder, shall remain in full force and effect.

In addition, the 50,000 options previously granted to you in December 2002 shall be designated as a "Loyalty Option Grant" and be subject to the special terms under the Executive Retention Program that applies to such grants.

Mr. Jerry Kieliszak

May 2, 2003

Page 2

This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of the conflicts of laws of such state. This Agreement may be executed through the use of separate signature pages or in any number of counterparts (and by facsimile signature) and each of such counterparts shall, for all purposes, constitute one agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart.

If this Agreement accurately reflects your understanding, please date and execute this Agreement below and return a copy to me.

CHYRON CORPORATION
By:	/s/ Michael Wellesley-Wesley
	Name: Michael Wellesley-Wesley
	Title: Chief Executive Officer
	and President

AGREED TO AND ACCEPTED THIS 2nd DAY OF MAY 2003
By:	/s/ Jerry Kieliszak
	Name: Jerry Kieliszak
	Title: Chief Financial Officer
	and Sr. Vice President

MWW:mpr

EX-99

Exhibit 99

Chyron Corporation
Certification of
Chief Executive Officer and Chief Financial Officer

(Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350)

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, and accompanies the quarterly report on Form 10-Q (the "Form 10-Q") for the quarter ended March 31, 2003 of Chyron Corporation (the "Issuer").

We, Michael Wellesley-Wesley, Chief Executive Officer, and Jerry Kieliszak, Chief Financial Officer, of Issuer, each individually, certify that:

(i) the Form 10-Q fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Dated: May 14, 2003

/s/ Michael Wellesley-Wesley

Michael Wellesley-Wesley

President and

Chief Executive Officer

/s/ Jerry Kieliszak

Jerry Kieliszak

Senior Vice President and

Chief Financial Officer