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.
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(Name of Registrant as Specified In Its Charter)
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(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):
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<PAGE>
(4) Proposed maximum aggregate value of transaction:
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(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 1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 28, 1998
-------------------------
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 April
28, 1998 at 10:00 a.m., local time, for the following purposes:
1. To elect two Directors of the Company to serve for a three-year
term as Class II Directors; 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 March 18, 1998 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
March 30, 1998
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.
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PROXY STATEMENT FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 28, 1998
-------------------------
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 April 28, 1998 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
March 30, 1998 to stockholders of record as of March 18, 1998. The Annual
Meeting has been called for the following purposes: (i) to elect two Directors
of the Company to serve for a three-year term as Class II Directors 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
March 18, 1998 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 February 27, 1998, there were
2,076,067 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 228 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 charges.
<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 II Directors, 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, two persons will be elected as Class II Directors
of the Company to serve for a three-year term until the 2001 annual meeting of
stockholders and until their successors are elected and qualified. The Board of
Directors has nominated Dr. David Cyganski and D'Anne Hurd for re-election as
Class II Directors 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 Dr. Cyganski and Ms. Hurd
as Directors.
The Board of Directors recommends that stockholders vote for
the election of Dr. David Cyganski and D'Anne Hurd as Directors.
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 Dr. Cyganski and
Ms. Hurd to serve as Class II Directors of the Company. The Board of Directors
believes that Dr. Cyganski and Ms. Hurd will stand for election and will, if
elected, serve as Directors. However, if Dr. Cyganski and Ms. Hurd fail to stand
for election or are 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 nominees for election as Directors and
incumbent Directors, including principal employment and prior business
experience, is set forth below.
2
<PAGE>
Nominees for Election as Directors:
Dr. David Cyganski, 42, for a term expiring in 2001. 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, 47, for a term expiring in 2001. 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.
Incumbent Directors:
Ellen W. Harpin, 42, term expires 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.
Alfred A. Molinari, Jr., 56, 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.
Board of Directors and its Committees
The Board of Directors held four meetings during the fiscal year ended
November 30, 1997. During fiscal 1997, 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.
The Board of Directors has a Compensation Committee and an Audit
Committee. 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. During the fiscal year ended November 30, 1997, the
Compensation Committee met on three occasions and acted by written consent on
three occasions. 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. During the fiscal year ended November
30, 1997, the Audit Committee met on one occasion.
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 February 27, 1998 (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>
TCW Group, Inc.(3)................................................... 184,550 8.89%
Alfred A. Molinari, Jr.(4)........................................... 305,530 14.72
Ellen W. Harpin(5)................................................... 11,714 *
Gary B. Godin(6)..................................................... 1,825 *
Kevin Sullivan(7).................................................... 1,037 *
Bruce E. Walsh(8).................................................... 3,355 *
D'Anne Hurd(9)....................................................... 625 *
David Cyganski(10)................................................... 500 *
All executive officers and directors as a group (7 persons in all)(11) 324,586 15.63
</TABLE>
- ---------------
* Represents less than 1%.
(1) All addresses for beneficial owners are c/o the Company, 100 Locke
Drive, Marlboro, Massachusetts 01752 except as follows: TCW Group,
Inc., 865 South Figueroa Street, Los Angeles, California 90017.
(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
February 27, 1998 and are included in the first column.
(3) The information is based on a Schedule 13G filed by TCW Group, Inc.
with the Securities and Exchange Commission (the "Commission") on
February 12, 1998.
(4) Includes 45,514 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
(5) Includes 6,900 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
(6) Includes 1,700 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
(7) Includes 500 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
(8) Includes 2,725 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
(9) Includes 500 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
(10) Includes 500 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
(11) Includes 58,339 shares subject to stock options which are exercisable
within 60 days of February 27, 1998.
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 $100,000
annually (the "Named Executive Officers") for the fiscal years ended November
30, 1997, 1996 and 1995. During the fiscal years ended November 30, 1996 and
1995, the Company was either a wholly-owned subsidiary of Media 100 or operated
as a part of Media 100 and, accordingly, the Named Executive Officers were
compensated by Media 100 in accordance with Media 100's plans and policies. Some
of the information included herein has been derived from information provided by
Media 100.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------------------- ---------- All Other
Name and Principal Position Year Salary($) Bonus($) Options(#) Compensation($)(1)
- --------------------------- ---- --------- -------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Alfred A. Molinari, Jr....................... 1997 $225,000 $ -- 100,000 $1,803
Chairman of the Board, President and 1996 229,327 56,250 60,000 1,735
Chief Executive Officer 1995 223,945 50,000 100,000 1,256
Gary B. Godin(2)............................. 1997 120,208 -- 5,000 1,466
Chief Financial Officer and Treasurer 1996 97,631 30,000 __ 656
1995 __ __ __ __
Kevin J. Sullivan(3)......................... 1997 116,865 -- 5,000 716
Vice President of Engineering--Data 1996 __ __ __ __
Acquisition and Imaging Group 1995 __ __ __ __
Kim J. Gray(4)............................... 1997 115,000 -- 2,000 452
Vice President/General Manager-- 1996 114,173 23,000 30,000 1,244
Data Acquisition and Imaging Group 1995 92,000 25,000 4,000 696
Bruce E. Walsh(5)............................ 1997 113,504 -- 3,000 1,219
Vice President of Engineering--Commercial 1996 98,864 5,640 -- 1,034
Products Group 1995 -- -- -- --
</TABLE>
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(1) The amounts reported represent (i) the dollar value of premiums paid on
term life insurance for the benefit of the Named Executive Officers and
(ii) contributions to a defined contribution plan with respect to the
Named Executive Officers. 1996 and 1995 reflect amounts paid or
contributed by Media 100.
(2) Mr. Godin was appointed an executive officer of the Company in 1996 in
connection with the Distribution.
(3) Mr. Sullivan was appointed an executive officer of the Company in 1997.
(4) Ms. Gray resigned and left the Company in December 1997.
(5) Mr. Walsh 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 the Company to the Named Executive Officers during the fiscal year
ended November 30, 1997.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants Potential Realized Value
------------------------------------------------ at Assumed Annual Rates
Number of % of Total of Stock Price Appreciation
Securities Options Exercise for Option Term
Underlying Granted to or Base ----------------------------
Options Employees in Price Expiration 5% 10%
Name Granted(#) Fiscal Year ($/Sh) Date ($) ($)
- ---- ----------- ------------- -------- ------------ ----- ----
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari, Jr........... 1,250(1) 0.50% $0.87 1/16/97 $2,975 $2,975
3,750(1) 1.49 1.42 10/09/98 7,472 8,081
7,652(1) 3.04 4.11 6/28/00 -- 1,651
17,345(1) 6.90 3.74 6/28/01 3,649 17,663
15,000(1) 5.97 4.65 4/11/02 -- 8,762
100,000(2) 39.77 3.30 4/14/02 52,884 153,153
Gary B. Godin.................... 150(1) 0.06 0.65 11/15/97 390 390
600(1) 0.24 1.29 10/09/99 1,376 1,586
500(1) 0.20 3.15 2/28/01 400 804
5,000(3) 1.99 3.00 4/14/03 5,101 11,573
Kevin J. Sullivan................ 2,500(3) 1.54 3.00 4/14/03 2,551 5,787
2,500(3) 1.54 4.00 6/17/03 3,401 7,716
Kim J. Gray...................... 400(1) 0.16 0.65 5/07/98 1,105 1,170
1,000(1) 0.40 3.15 2/28/01 800 1,608
7,500(1) 2.98 4.65 4/11/02 -- 4,381
2,000(3) 0.80 3.00 4/14/03 2,041 4,629
Bruce E. Walsh................... 375(1) 0.15 0.52 9/02/98 1,085 1,146
500(1) 0.20 1.08 4/08/99 1,252 1,426
1,000(1) 0.40 3.15 2/28/01 800 1,608
1,625(1) 0.65 4.50 8/28/01 -- 420
3,000(3) 1.19 3.00 4/14/03 3,061 6,944
- ------------------------
</TABLE>
(1) In connection with the Company's spin-off from Media 100, effective
December 2, 1996 the Company's Board of Directors adopted the Company's
Replacement Stock Option Plan (the "Replacement Plan"). The Replacement
Plan provided for the issuance of options to purchase shares of the
Company's Common Stock (the "Replacement Options") to holders of options
to purchase shares of Media 100 common stock that were granted under
Media 100 stock option plans and which were outstanding on the
Distribution Date (the "Media 100 Options"), as part of an adjustment to
the Media 100 Options. The number of Replacement Options granted equals
the number of Media 100 Options divided by four and rounded down to the
nearest whole share. The exercise price of Replacement Options equals
the exercise price of Media 100 Options multiplied by .285714 and
rounded up to the nearest full cent.
(2) Options are exercisable 25% per year over 4 years and expire five years
after grant. The exercise price is 110% of the fair market value of the
Common Stock on the date of grant.
(3) Options are exercisable 20% per year over five years and expire six
years after grant.
6
<PAGE>
Option Exercises and Holdings
The following table provides information, with respect to the Named
Executive Officers, concerning unexercised Company options held as of the end of
the fiscal year.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Shares Options at FY-End (#) Options at FY-End ($)(1)
Acquired on Value -------------------------- --------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari, Jr........ -- -- 17,514 126,233 $7,097 $1,250
Gary B. Godin................. -- -- 600 5,500 842 2,016
Kevin J. Sullivan............. -- -- -- 5,000 -- 781
Kim J. Gray................... 800 $1,680 1,500 8,600 -- 723
Bruce E. Walsh................ -- -- 1,825 4,675 2,005 1,258
</TABLE>
- ----------------------
(1) Market value of underlying securities at November 30, 1997, minus the
exercise price of "in-the-money" options.
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 was a member of
the Compensation Committee of the Board of Directors. See "CERTAIN RELATIONSHIPS
AND TRANSACTIONS" for a description of certain lease payments by the Company in
which Mr. Molinari has an interest.
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.
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 1998 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 to those that are
involved in determining base salary, and awards reflect individual performance
reviews. The Compensation Committee
7
<PAGE>
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
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the NASDAQ Composite Index and the CRSP Index for
NASDAQ Electronic Component Stocks for four fiscal quarters commencing December
16, 1996 and ending November 28, 1997.
[TABULAR REPRESENTATION OF LINE CHART]
<TABLE>
<CAPTION>
Dec-96 Feb-97 May-97 Aug-97 Nov-97
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CRSP INDEX FOR NASDAQ ELEC. COMPONENT STOCKS $100.00 $100.37 $107.62 $132.01 $111.05
- --------------------------------------------------------------------------------------------------------------
NASDAQ COMPOSITE INDEX $100.00 $ 83.39 $ 89.50 $101.82 $102.74
- --------------------------------------------------------------------------------------------------------------
DATA TRANSLATION, INC. $100.00 $111.54 $115.38 $125.00 $101.92
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The above graph compares the performance of the Company with that of
the NASDAQ Composite Index and the CRSP Index for NASDAQ Electronic Component
Stocks, which is an industry index prepared by the Center of Research --
Securities Prices at the University of Chicago.
The comparison of total return of investment (change in year-end stock
price plus reinvested dividends) for each of the periods assumes that $100 was
invested at the close of the market on December 16, 1996 in each of Data
Translation, Inc., the NASDAQ Composite Index and the CRSP Index for NASDAQ
Electronic Component Stocks with investment weighted on the basis of market
capitalization.
8
<PAGE>
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, 2009. Pursuant to an amendment dated May 13, 1997, the
annual lease payments are equal to the sum of (i) $1,092,000 through November
30, 1999, $1,300,000 commencing December 1, 1999 and ending November 30, 2002,
and adjusted thereafter by the applicable CPI increase as of December 1, 2002,
for the period commencing December 1, 2002, and again December 1, 2005, for that
period commencing December 1, 2005, and (ii) any additional interest costs
payable by the Trust in such year under a note in favor of State Street Bank and
Trust Company 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, net of
sublease income, included in the operations of the Company under the lease for
fiscal 1997 was $359,000.
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,
was 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 were 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 expired on April 30, 1997, Media 100
paid the Company a monthly license fee of $105,377.
Corporate Services Agreement. The Company and Media 100 were parties to
a Corporate Services Agreement pursuant to which the Company provided to Media
100 certain finance, administrative and manufacturing services. The amount that
Media 100 paid for such services was 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. Substantially all of
the corporate services provided by this agreement terminated in November 1997.
Fees collected under this agreement in fiscal 1997 totaled approximately
$362,000.
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.
9
<PAGE>
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, 1997 all filing requirements
applicable to its officers, directors and such 10% beneficial owners were
complied with, except that a Form 4 for Ms. Gray reporting two transactions has
not been filed.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1999
annual meeting of stockholders must be received by the Company on or before
November 30, 1998 in order to be considered for inclusion in the Company's proxy
statement. Such a proposal must also comply with the requirements as 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,
1998. 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.
10
<PAGE>
PROXY
DATA TRANSLATION, INC.
Proxy for 1998 Annual Meeting of Stockholders to be
Held on Tuesday, April 28, 1998 at 10:00 a.m.
This proxy is solicited by the Board of Directors
The undersigned hereby constitutes and appoints Ellen W. Harpin and
Gary B. Godin, and each of them, as proxies of the undersigned (the "Proxies"),
with full power to appoint his or her substitute, and authorizes each of them to
represent and to vote all shares of common stock of Data Translation, Inc. (the
"Company") held by the undersigned at the close of business on March 18, 1998 at
the 1998 Annual Meeting of Stockholders to be held at the offices of the
Company, 100 Locke Drive, Marlboro, Massachusetts, on April 28, 1998 at 10:00
a.m., local time, and at any adjournments or postponements thereof.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
Detach card below, sign, date and mail in postage paid envelope provided.
DATA TRANSLATION, INC.
100 Locke Drive, Marlboro, Massachusetts 01752
DETACH HERE
[X] Please mark votes
as in this example
1. Proposal to elect Dr. David Cyganski and D'Anne Hurd as Class II
Directors of the Company to serve for a three-year term until the 2001
annual meeting of stockholders and until their successors are duly
elected and qualified.
FOR WITHHELD
[ ] [ ]
MARK HERE FOR ADDRESS
CHANGE AND NOTE BELOW [ ]
[ ]
---------------------------------
For both nominees except the nominee
named above
When properly executed this proxy will be voted in the manner directed hereon by
the undersigned stockholder(s). If no direction is given, this proxy will be
voted FOR the election of the nominees listed in proposal 1 and in their
discretion, the Proxies are each authorized to vote upon such other business as
may properly come before the Annual Meeting and any adjournments or
postponements thereof. A stockholder wishing to vote in accordance with the
Board of Directors' recommendations need only sign and date this proxy and
return it in the stamped envelope provided.
The undersigned stockholder(s) hereby acknowledge(s) receipt of a copy of the
accompanying Notice of 1998 Annual Meeting of Stockholders, the Proxy Statement
with respect thereto and the Company's 1997 annual report to stockholders and
hereby revoke(s) any proxy or proxies heretofore given. This proxy may be
revoked at any time before it is exercised.
Please sign name exactly as shown on stock certificate. Where there is more than
one holder, each should sign. When signing as an attorney, administrator,
executor, guardian or trustee, please add your title as such. If executed by a
corporation, the proxy should be signed by a duly authorized person, stating
such person's title or authority. If a partnership, please sign in partnership
name by authorized person.
Signature:_________________ Date:________ Signature:_______________ Date:______
