<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
DATA TRANSLATION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
DATA TRANSLATION, INC.
----------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1997
----------------
To the Stockholders of Data Translation, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Data Translation, Inc. (the "Company") will be held at the
offices of the Company, 100 Locke Drive, Marlboro, Massachusetts 01752, on May
14, 1997 at 10:00 a.m., local time, for the following purposes:
1. To elect one Director of the Company to serve for a three-year term as
a Class I Director; and
2. To consider and vote upon such other business as may properly come
before the Annual Meeting and any adjournments or postponements thereof.
Only holders of record of the Company's common stock at the close of
business on April 4, 1997 are entitled to receive notice of and to vote at the
Annual Meeting and any adjournments or postponements thereof.
By Order of the Board of Directors
ELLEN W. HARPIN
Secretary
Marlboro, Massachusetts April 11, 1997
IMPORTANT
EVEN THOUGH YOU MAY PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE PROXY CARD IN THE ENCLOSED RETURN
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
ATTEND THE ANNUAL MEETING AND DESIRE TO WITHDRAW YOUR PROXY AND VOTE IN
PERSON, YOU MAY DO SO.
<PAGE>
DATA TRANSLATION, INC.
----------------
PROXY STATEMENT FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1997
----------------
VOTING, REVOCATION AND SOLICITATION OF PROXIES
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Data Translation, Inc. (the "Company")
for use at the Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held at the offices of the Company, 100 Locke Drive, Marlboro,
Massachusetts 01752, on May 14, 1997 at 10:00 a.m., local time, and any
adjournments or postponements thereof. This Proxy Statement and the
accompanying Notice of Meeting and Proxy Card are being first mailed on or
about April 11, 1997 to stockholders of record as of April 4, 1997. The Annual
Meeting has been called for the following purposes: (i) to elect one Director
of the Company to serve for a three-year term as a Class I Director and (ii)
to consider and vote upon such other business as may properly come before the
meeting and any adjournments or postponements thereof.
RECORD DATE; VOTING
The Board of Directors of the Company (referred to hereinafter as the "Board
of Directors" or the "Directors") has fixed the close of business on April 4,
1997 as the record date for determining stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournments or postponements thereof
(the "Record Date"). Only holders of record of common stock of the Company at
the close of business on the Record Date are entitled to notice of and to vote
at the Annual Meeting and any adjournments or postponements thereof. At the
close of business on March 21, 1997, there were 2,024,821 shares of the
Company's common stock, par value $.01 per share (the "Common Stock") issued
and outstanding. As of such date, there were approximately 223 holders of
record of the Company's Common Stock. Holders of the Company's Common Stock
outstanding as of the close of business on the Record Date will be entitled to
one vote for each share held of record upon each matter properly submitted to
the Annual Meeting or any adjournments or postponements thereof.
PROXIES
Holders of the Company's Common Stock are requested to complete, date, sign
and promptly return the accompanying proxy card in the enclosed envelope. The
proxy card must be signed and dated for it to be properly executed. If the
enclosed proxy card is properly executed and returned to the Company in time
to be voted at the Annual Meeting, the shares represented thereby will, unless
such proxy has previously been revoked, be voted in accordance with the
instructions marked thereon. Executed proxies with no instructions indicated
thereon will be voted "FOR" each of the proposals.
Any properly completed proxy card may be revoked at any time before it is
voted by giving written notice of such revocation to the Secretary of the
Company, at the address set forth above, or by signing and duly delivering a
proxy bearing a later date, or by attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting will not in and of itself constitute
revocation of a proxy.
In addition to the solicitation of proxies by mail, the Directors, officers
and regular employees of the Company may also solicit proxies personally or by
telephone or other means. None of such Directors, officers or employees will
receive any compensation for such solicitation activities. The Company will
bear the costs of preparing, printing and mailing the materials used in the
solicitation of proxies. The Company will also request brokerage firms,
nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of shares held of record by them and will provide
reimbursement for the cost of forwarding the materials in accordance with
customary changes.
<PAGE>
QUORUM AND STOCKHOLDER VOTE REQUIRED
The presence, in person or by proxy, of the holders of at least a majority
in interest of the total number of shares of the Common Stock of the Company
issued, outstanding and entitled to vote is necessary to constitute a quorum
at the Annual Meeting for the transaction of business. A quorum being present,
the affirmative vote of a plurality of the shares present and voting, in
person or by proxy, is necessary to elect a class of Directors of the Company
for a three-year term (Proposal One). Shares that reflect abstentions or
"broker non-votes" (i.e. shares represented at the Annual Meeting held by
brokers or nominees as to which instructions have not been received from the
beneficial owners or persons entitled to vote such shares and with respect to
which the broker or nominee does not have discretionary voting power to vote
such shares) will be counted for purposes of determining whether a quorum is
present for the transaction of business at the Annual Meeting. With respect to
the election of the Class I Director, abstentions and broker non-votes will
have no effect on the outcome of such election.
SPIN-OFF FROM MEDIA 100, INC.
The Company began operating as an independent publicly held company on
December 2, 1996 (the "Distribution Date") as a result of the distribution
(the "Distribution") of shares of the Common Stock of the Company to holders
of shares of common stock of Media 100, Inc. ("Media 100"). From September 13,
1996, the date of its incorporation, until the Distribution Date, the Company
was a wholly-owned subsidiary of Media 100. In connection with the
Distribution, Media 100 contributed to the Company substantially all of its
data acquisition and imaging, commercial products and networking distribution
businesses (the "Contributed Businesses"). See "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS."
PROPOSAL ONE
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of four members and
is divided into three classes, Class I with one Director, Class II with two
Directors and Class III with one Director. The term of office of one of the
classes expires in each year and the Directors' successors will be elected at
each annual meeting of stockholders for a term of three years and until their
successors are elected and qualified. Each of the nominee and incumbent
directors was elected to his or her initial term in 1996 in connection with
the Company's spin-off from Media 100.
At the Annual Meeting, one person will be elected as a Class I Director of
the Company to serve for a three-year term until the 2000 annual meeting of
stockholders and until her successor is elected and qualified. The Board of
Directors has nominated Ellen W. Harpin for re-election as a Class I Director
of the Company for a three-year term. Approval by the affirmative vote of a
plurality of the shares present and voting, in person or by proxy, at the
Annual Meeting is necessary to elect Ms. Harpin as a Director.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE ELECTION OF ELLEN W. HARPIN AS A DIRECTOR.
Unless authority to do so has been withheld or limited in the proxy, it is
the intention of the persons named in the proxy to vote the shares represented
by each properly executed proxy FOR the election of Ms. Harpin to serve as a
Class I Director of the Company. The Board of Directors believes that Ms.
Harpin will stand for election and will, if elected, serve as a Director.
However, if Ms. Harpin fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such other person as
the Board of Directors may nominate and recommend.
Information regarding the nominee for election as Director and incumbent
Directors, including principal employment and prior business experience, is
set forth below.
2
<PAGE>
NOMINEE FOR ELECTION AS DIRECTOR:
Ellen W. Harpin, 41, for a term expiring in 2000. Ms. Harpin has been a Vice
President of the Company since 1996. Prior to the Distribution, she served as
Vice President of Administration for Media 100 from July 1995 through
September 1996. She also served as Chief Financial Officer for Media 100 from
prior to 1992 to July 1995.
INCUMBENT DIRECTORS:
Dr. David Cyganski, 41, term expires in 1998. Dr. Cyganski has served in
faculty and administrative positions at Worcester Polytechnic Institute
("WPI") since prior to 1992. Since October 1992 Dr. Cyganski has been a
professor in the WPI Electrical and Computer Engineering Department.
D'Anne Hurd, 46, term expires in 1998. Since February 1997 Ms. Hurd has been
Vice President of Finance and General Counsel of SmartRoute Systems, Inc.
(traveler information provider). From August 1996 to February 1997, Ms. Hurd
was Vice President--Administration, Chief Financial Officer and General
Counsel of Archetype, Inc. (software development). From January 1995 to August
1996, she served as a business/legal consultant specializing in initial public
offerings and strategic alliances/joint ventures. From September 1993 until
December 1994, Ms. Hurd was Corporate Vice President, General Counsel and
Clerk and from June 1993 until September 1993 General Counsel of MediSense,
Inc., (medical products). From prior to 1992 to 1993 she was associated with
the law firm of Burns & Levinson.
Alfred A. Molinari, Jr., 55, term expires in 1999. Mr. Molinari has been the
Chief Executive Officer and Chairman of the Board of Directors of the Company
since 1996. Mr. Molinari is the founder of Media 100 and served as the Chief
Executive Officer of Media 100 from its inception in 1973 until the
Distribution. Mr. Molinari is a Director of Media 100 (PC based digital
video).
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held three meetings during fiscal year 1996. During
fiscal 1996, each of the Directors attended at least 75% of the total number
of meetings of the Board of Directors and of the committees of which he or she
was a member held while such person was a member of the Board of Directors.
Two of the Company's current Directors, Dr. David Cyganski and Ms. D'Anne Hurd
did not join the Board of Directors until December 2, 1996 following the
completion of the Distribution.
The Board of Directors has a Compensation Committee and an Audit Committee.
Neither of the committees held any formal meetings during the fiscal year
ended November 30, 1996. The Compensation Committee makes recommendations
concerning salaries and incentive compensation for employees of and
consultants to the Company and establishes and approves compensation
arrangements for the executive officer of the Company. The members of the
Compensation Committee are Ms. Hurd, Dr. Cyganski and Mr. Molinari. The Audit
Committee will review the results and scope of the financial audit and other
services provided by the Company's independent public accountants and make
recommendations to the Directors. The members of the Audit Committee are Ms.
Hurd and Dr. Cyganski.
BOARD OF DIRECTORS COMPENSATION
The Company compensates each Director who is not also an employee of the
Company $7,500 per year plus $500 per meeting for services as a Director. In
addition, each non-employee Director is eligible to receive options under the
Company's 1996 Stock Option Plan. Directors of the Company who are employees
of the Company are not paid any fees or additional compensation for service as
members of the Board of Directors or any of its committees.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 21, 1997 (except as otherwise
indicated) information with respect to the shares of Common Stock which are
beneficially owned by each person holding more than 5% of the outstanding
Common Stock, by each Director, by each executive officer of the Company named
in the Summary Compensation Table below and by all Directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY
NAME OF BENEFICIAL OWNER(1) OWNED(2) PERCENT(2)
- --------------------------- ------------ ----------
<S> <C> <C>
Dawson Samberg Capital Management, Inc.(3)............. 181,900 8.98%
Alfred A. Molinari, Jr.(4)............................. 260,898 12.82
Ellen W. Harpin(5)..................................... 8,764 *
Gary B. Godin(6)....................................... 675 *
Kim J. Gray(7)......................................... 2,393 *
William T. Hack(8)..................................... 700 *
D'Anne Hurd(9)......................................... 125 *
David Cyganski......................................... -- *
All executive officers and directors as a group (8 per-
sons in all)(10)...................................... 275,486 13.47
</TABLE>
- ---------------------
*Represents less than 1%.
(1) All addresses for beneficial owners are c/o the Company, 100 Locke Drive,
Marlboro, Massachusetts 01752 except for Dawson Samberg Capital
Management, Inc., 354 Pequot Ave., Southport, Connecticut 06490.
(2) The number and percent of the outstanding shares of Common Stock treat as
outstanding all shares issuable on exercise of options held by a
particular beneficial owner that are exercisable within 60 days of March
21, 1997 and are included in the first column.
(3) The information is based on a Schedule 13G filed by Dawson Samberg
Capital Management, Inc. with the Securities and Exchange Commission on
January 31, 1997.
(4) Includes 10,882 shares subject to stock options which are exercisable
within 60 days of March 21, 1997. Does not include 4,404 shares owned by
Mr. Molinari's wife as to which Mr. Molinari disclaims beneficial
ownership.
(5)Includes 3,950 shares subject to stock options which are exercisable
within 60 days of March 21, 1997.
(6)Includes 550 shares subject to stock options which are exercisable within
60 days of March 21, 1997.
(7)Includes 2,300 shares subject to stock options which are exercisable
within 60 days of March 21, 1997.
(8)Includes 700 shares subject to stock options which are exercisable within
60 days of March 21, 1997.
(9) Does not include 75 shares owned by Ms. Hurd's husband as to which Ms.
Hurd disclaims beneficial ownership.
(10)Includes 19,807 shares subject to stock options which are exercisable
within 60 days of March 21, 1997.
4
<PAGE>
EXECUTIVE COMPENSATION
HISTORICAL COMPENSATION
The following table provides certain summary information concerning the
compensation of the Chief Executive Officer of the Company and each of the
executive officers of the Company whose cash compensation exceeded $100,000
annually (the "Named Executive Officers") for the fiscal years ended November
30, 1996, 1995 and 1994. During the periods presented, the Company was either
a wholly-owned subsidiary of Media 100 or operated as a part of Media 100 and,
accordingly, the Named Executive Officers were compensated by Media 100 in
accordance with Media 100's plans and policies. Some of the information
included herein has been derived from information provided by Media 100.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------- ------------
NAME AND PRINCIPAL ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1)
- ------------------ ---- --------- -------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Alfred A. Molinari,
Jr. ................... 1996 $229,327 $56,250 60,000 $1,735
Chairman of the Board,
President and 1995 223,945 50,000 100,000 $1,256
Chief Executive Officer 1994 206,700 10,335 -- 422
Kim J. Gray(2).......... 1996 114,173 23,000 30,000 1,244
Vice President/General
Manager-- 1995 92,000 25,000 4,000 696
Data Acquisition and
Imaging Group 1994 -- -- -- --
Gary B. Godin(3)........ 1996 97,631 30,000 -- 656
Chief Financial Officer
and Treasurer 1995 -- -- -- --
1994 -- -- -- --
Ellen W. Harpin......... 1996 92,887 18,400 30,000 1,204
Vice President 1995(4) 93,195 25,000 4,000 364
1994 104,712 5,250 20,000 214
William T. Hack(5)...... 1996 89,358 18,000 10,000 1,024
Vice President of
Operations 1995 -- -- -- --
1994 -- -- -- --
</TABLE>
- ---------------------
(1) The amounts reported represent (i) the dollar value of premiums paid by
Media 100 on term life insurance for the benefit of the Named Executive
Officers and (ii) contributions by Media 100 to a defined contribution
plan with respect to the Named Executive Officers in 1996 and 1995.
(2) Ms. Gray was appointed an executive officer of Media 100 in 1995.
(3) Mr. Godin was appointed an executive officer of the Company in 1996 in
connection with the Distribution.
(4) Since January 1995, Ms. Harpin has been working a reduced time schedule.
(5) Mr. Hack was appointed an executive officer of the Company in 1996 in
connection with the Distribution.
5
<PAGE>
STOCK OPTIONS
The following table provides information concerning the grant of stock
options by Media 100 to the Named Executive Officers during the fiscal year
ended November 30, 1996. The Company did not grant any options during that
period.
MEDIA 100 OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
----------------------------------------------- ---------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(1) DATE ($) ($)
---- ------------- ------------ --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari,
Jr.(3)................. 60,000 10.89% $16.25 4/11/02 $ 331,596 $ 752,274
Kim J. Gray(3).......... 30,000 5.44 16.25 4/11/02 165,798 376,137
Gary B. Godin........... -- -- -- -- -- --
Ellen W. Harpin(3)...... 30,000 5.44 16.25 4/11/02 165,798 376,137
William T. Hack(3)...... 10,000 1.81 16.25 4/11/02 55,266 125,379
</TABLE>
- ---------------------
(1) In connection with the Distribution on December 2, 1996, each outstanding
option (an "Old Media Option") to purchase shares of Media 100 common
stock was adjusted by reducing the exercise price of such Old Media Option
and granting a new option for one quarter of the number of shares of such
Old Media Option to purchase Common Stock. The exercise prices of the
options listed were each reduced to $15.48.
(2) Amounts do not reflect the reduction in the exercise prices described in
footnote (1).
(3) Options are exercisable 20% per year over five years and expire six years
after grant.
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the Named
Executive Officers, concerning unexercised Media 100 options held as of the
end of the fiscal year. As of November 30, 1996 there were no outstanding
Company options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)(1)
------------------------- -------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari,
Jr. ................... -- -- 36,531 143,469 $106,000 $ 32,125
Kim J. Gray............. 800 $ 10,600 1,600 34,000 7,600 8,500
Gary B. Godin........... 3,400 52,075 1,800 3,200 11,125 11,600
Ellen W. Harpin......... 35,800 507,275 -- 51,200 -- 113,950
William T. Hack......... 800 20,200 -- 10,800 -- 7,300
</TABLE>
- ---------------------
(1) Market value of underlying securities at November 30, 1996 for Media 100,
minus the exercise price of "in-the-money" options. Amounts do not reflect
the exercise price reductions effected in connection with the
Distribution.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of the Distribution Date, Mr. Molinari, the Chief Executive Officer,
President and Chairman of the Board of Directors of the Company will be a
member of the Compensation Committee of the Board of Directors. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS" for a description of certain lease
payments by the Company in which Mr. Molinari has an interest.
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for reviewing the compensation of
officers and other members of the Company's Management. The Compensation
Committee of the Board of Directors of the Company consists of Dr. David
Cyganski, Ms. D'Anne Hurd and Mr. Alfred A. Molinari, Jr. As discussed
elsewhere in this Proxy Statement, from the date of the Company's
incorporation until December 2, 1996, the Company operated as a wholly-owned
subsidiary of Media 100. Accordingly, decisions regarding 1996 compensation of
Company executives were made by Media 100 and this report does not describe
the basis for that compensation or the relationship of the Company's
performance to such compensation. Instead, this report is intended to describe
the current intent of the Compensation Committee regarding policies concerning
executive compensation, which will be applicable in 1997.
Compensation Policies for Executive Officers. The Compensation Committee's
executive compensation philosophy is: (i) to set senior management
compensation to attract and retain senior executives who will contribute to
long-term success and growth of the Company; (ii) to pay the Company's senior
management equitably in relation to peer companies; (iii) to calculate total
compensation (i.e., the combined value of all cash and stock benefits) based
on a measure of overall performance; (iv) to reward the Company's senior
management for increased profitability and resulting shareholder value by
closely aligning the financial interest of senior management with those of
shareholders and (v) to integrate compensation incentives with the long-term
goals of the Company.
The pay program described above applies to the Company Chief Executive
Officer, as well as to other executive officers, and therefore reflects the
factors and criteria upon which the Chief Executive Officer's 1997
compensation is expected to be based.
The Compensation Committee believes that it is appropriate to reward
outstanding performance through a combination of cash bonuses and stock option
grants, and thereby provide a competitive compensation package that will
enable the Company to attract and retain the executives needed to achieve such
performance.
Stock Option Grants. Stock options are designed to attract and retain
executives who can make significant contributions to the Company's success,
reward executives for such significant contributions, and give executives a
long-term incentive to increase shareholder value. In determining whether to
grant stock options to executive officers, the Compensation Committee
evaluates each officer's performance by examining criteria similar those that
involved in determining base salary, and awards reflect individual performance
reviews. The Compensation Committee also may recommend that the Directors
grant stock options for executive retention purposes, taking into account,
among other things, general industry practice.
Federal Tax Regulations. As a result of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), the Company's deduction of
executive compensation may be limited to the extent that a "covered employee"
(i.e., the chief executive officer or one of the four highest compensated
officers who is employed on the last day of Company's taxable year and whose
compensation is reported in the summary compensation table in the Company's
proxy statement) receives compensation in excess of $1,000,000 in such taxable
year of the Company (other than performance-based compensation that otherwise
meets the requirements of Section 162(m) of the Code). The Company intends to
take appropriate action to comply with such regulations, if applicable, in the
future.
David Cyganski
D'Anne Hurd
Alfred A. Molinari, Jr.
SHAREHOLDER RETURN PERFORMANCE GRAPH
As discussed elsewhere in this Proxy Statement, from the date of the
Company's incorporation until December 2, 1996, the Company operated as a
wholly-owned subsidiary of Media 100. Accordingly, a line graph
7
<PAGE>
comparing the percentage change in the cumulative total shareholder return on
the Company's Common Stock with certain indices during the period beginning on
November 12, 1996, the date on which the Company's Common Stock became
registered under Section 12 of the Securities Exchange Act of 1934, as amended
and ending at the end of the Company's fiscal year on November 30, 1996 has
not been provided as during that period the Company's Common Stock was neither
publicly held nor traded.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases its domestic headquarters (the "facilities") from a
related party trust, Nason Hill Trust (the "Trust"), a nominee trust of which
Alfred A. Molinari, Jr., Chairman, Chief Executive Officer and President of
the Company, and his wife are the sole trustees and beneficiaries.
The facilities are leased from the Trust under operating leases expiring on
December 1, 1999. Pursuant to an amendment dated November 29, 1989, the annual
lease payments are equal to the sum of (i) $1,092,000 and (ii) any additional
interest costs payable by the Trust in such year under a note in favor of
Fleet National Bank due to the failure of the Company to maintain the
financial ratios required for the most favorable interest rate under such
note. In addition to such lease payments, the Company bears all of the tax,
insurance and other costs of operating the facilities and, under certain
circumstances, various costs and expenses associated with the series of
industrial revenue bonds, the proceeds of which were used in connection with
the facilities. Total rental expense included in the operations of the Company
under the lease for fiscal 1996 was $546,000.
The following is a summary of certain agreements between the Company and
Media 100 entered into in connection with the Distribution. Alfred A.
Molinari, Jr., Chairman, Chief Executive Officer and President of the Company,
is a director and former Chief Executive Officer of Media 100 and his son John
A. Molinari is President, Chief Executive Officer and a director of Media 100.
Distribution Agreement. The Company and Media 100 are parties to a
Distribution Agreement which provides for, among other things, the principal
corporate transactions required to effect the Distribution. The Distribution
Agreement provides for indemnification of the Company by Media 100, and of
Media 100 by the Company, in a manner designed, as between the two companies,
to place with the Company financial responsibility for the Contributed
Businesses, and to place with Media 100 financial responsibility for the
business retained by Media 100. The Distribution Agreement also provides for a
tax sharing arrangement between the Company and Media 100. Pursuant to such
agreement, Media 100 is solely responsible for any tax liabilities relating to
periods prior to the Distribution Date, and is entitled to any tax refunds
relating to such periods. After the Distribution Date, each of the Company and
Media 100 are responsible for tax liabilities relating to their respective
operations. The Distribution Agreement also provides for the sharing of
certain tax liabilities that may be associated with the Distribution.
Use and Occupancy Agreement. The Company and Media 100 are parties to a use
and occupancy agreement with respect to the use by Media 100 following the
Distribution of a portion of the Company's facility in Marlboro,
Massachusetts. Pursuant to such license agreement, which expires on April 30,
1997, Media 100 pays the Company a monthly license fee of $105,377.
Corporate Services Agreement. The Company and Media 100 are parties to a
Corporate Services Agreement pursuant to which the Company provides to Media
100 certain finance, administrative and manufacturing services. The amount
that Media 100 pays for such services is based upon the particular service.
Media 100 may terminate any service upon 30 days prior written notice to the
Company and the Company may terminate any service upon 30 days notice to Media
100 if it no longer provides such service to its own organization. The
agreement will terminate upon the earlier of the discontinuance or termination
of all services thereunder or December 31, 1997. In addition, the Company
provides certain engineering services to Media 100 on an as-needed basis.
Through January 31, 1997, the Company received $94,960 for services provided
to Media 100.
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Intellectual Property Agreement. The Company and Media 100 are parties to an
Intellectual Property Agreement which provides for royalty-free perpetual
cross-licenses to each of Media 100 and the Company from the other for all
technologies covered by existing patents and patent applications held by them
as of the Distribution. The agreement also provides that the parties will
cross-license to each other technologies under patents issued pursuant to
applications made in the two year period following the Distribution. The
cross- licenses provide for termination upon a change of control with respect
to patents issued pursuant to applications made after August 31, 1996,
although the licensee may continue to use such patents in products already
being shipped or which are substantially near completion of development.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own beneficially more than 10% of the
Company's Common Stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Based solely on its review of the
copies of such reports received by it, the Company believes that during the
fiscal year ended November 30, 1996 all filing requirements applicable to its
officers, directors and such 10% beneficial owners were complied with, except
that Forms 3 for each of Messrs. Molinari, Godin, Walsh, Hack and Mesdames
Gray and Harpin were inadvertently not filed on a timely basis.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1998 annual
meeting of stockholders must be received by the Company on or before December
10, 1997 in order to be considered for inclusion in the Company's proxy
statement. Such a proposal must also comply with the requirements at to form
and substance established by the Securities and Exchange Commission in order
to be included in the proxy statement and should be directed to: Secretary,
Data Translation, Inc., 100 Locke Drive, Marlboro, MA 01752.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has engaged Arthur Andersen LLP, to serve as the
Company's independent public accountants for the fiscal year ended November
30, 1997. A representative of Arthur Andersen LLP is expected to be present at
the Annual Meeting, will have an opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
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