<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 (S) 240.14a-11(c) or (S) 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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DATA TRANSLATION, INC.
----------------
Notice of 2000 Annual Meeting of Stockholders
To Be Held On April 6, 2000
----------------
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 6, 2000 at 9:30 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 ratify the action of the Board of Directors in amending the 1996
Stock Option Plan to increase the number of shares of common stock
authorized for issuance thereunder from 500,000 to 1,500,000; and
3.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 February 22, 2000 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 10, 2000
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 2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 6, 2000
----------------
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 6, 2000 at 9:30 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 10, 2000 to stockholders of record as of February 22, 2000. 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;
(ii) to ratify the action of the Board of Directors in amending the 1996 Stock
Option Plan; and (iii) 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 (the "Board of Directors" or the
"Directors") has fixed the close of business on February 22, 2000 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 the Record Date, 2,207,159 shares of the Company's common stock,
par value $.01 per share (the "Common Stock"), were outstanding. As of such
date, there were approximately 300 holders of record of Common Stock. Holders
of 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 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
<PAGE>
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.
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 Common Stock 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 Director of the Company for a three-year term (Proposal
No. 1), and the affirmative vote of the holders of a majority of the shares
present and voting, in person or by proxy, is necessary to approve the
amendment to the 1996 Stock Option Plan (Proposal No. 2). A "broker non-vote"
occurs when a nominee holding shares for a beneficial owner votes on one
proposal, but does not vote on another proposal because the nominee does not
have discretionary voting power and has not received instructions from the
beneficial owner. Shares that reflect abstentions or broker non-votes 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.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of February 29, 2000 information with
respect to the shares of Common Stock that are beneficially owned by each
person holding more than 5% of the outstanding Common Stock, by (i) each
director or nominee for director of the Company, (ii) executive officer of the
Company named in the Summary Compensation Table set forth under the caption
"Executive Compensation" below, (iii) all directors and executive officers as
a group and (iv) each person known to the Company to be the beneficial owner
of more than 5% of the issued and outstanding Common Stock. As of February 29,
2000, 2,207,159 shares of Common Stock were outstanding.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
of Beneficial Outstanding
Ownership of Shares of Common
Name of Beneficial Owner** Common Stock(1) Stock Owned(1)
-------------------------- ----------------- ----------------
<S> <C> <C>
Alfred A. Molinari, Jr.(2).................. 421,876 19.1%
Ellen W. Harpin(3).......................... 3,000 *
D'Anne Hurd(4).............................. 3,291 *
David Cyganski(5)........................... 3,166 *
Annette C. Crossen(6)....................... 4,594 *
Jeffrey M. Cronin(7)........................ 6,173 *
Michael A. DiPoto(8)........................ 4,998 *
Clifford G. Wilson(9)....................... 3,333 *
All executive officers and directors as a
group (8 persons).......................... 450,431 20.4%
</TABLE>
- ---------------------
* Represents less than 1%.
** Addresses are only given for beneficial owners of more than 5% of the
outstanding shares of Common Stock.
(1) Beneficial ownership is calculated in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options held by that person
that are currently exercisable or become exercisable within 60 days
following February 29, 2000 are deemed outstanding. However, such shares
are not deemed outstanding for the purpose of computing the percentage
ownership of any other person. The persons and entities named in the
table have sole voting and sole investment power with respect to all
shares beneficially owned, subject to community property laws where
applicable.
(2) Includes 66,860 shares subject to stock options that are exercisable
within 60 days of February 29, 2000. Mr. Molinari's address is c/o the
Company, 100 Locke Drive, Marlboro, Massachusetts 01752.
(3) Includes 3,000 shares subject to stock options that are exercisable
within 60 days of February 29, 2000.
(4) Includes 3,166 shares subject to stock options that are exercisable
within 60 days of February 29, 2000.
(5) Includes 3,166 shares subject to stock options that are exercisable
within 60 days of February 29, 2000.
(6) Includes 4,164 shares subject to stock options that are exercisable
within 60 days of February 29, 2000.
(7) Includes 4,407 shares subject to stock options that are exercisable
within 60 days of February 29, 2000.
(8) Includes 4,998 shares subject to stock options that are exercisable
within 60 days of February 29, 2000.
(9) Includes 3,333 shares subject to stock options that are exercisable
within 60 days of February 29, 2000.
3
<PAGE>
PROPOSAL NO. 1
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors 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.
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 2003 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 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 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.
Nominee for Election as Director:
Ellen W. Harpin, 44, for a term expiring in 2003. Ms. Harpin has been the
Secretary and a Director of the Company since 1997. She previously served at
the Company as Vice President, Administration from October 1998 to May 1999
and as Vice President, Sales from October 1997 to October 1998. She served as
Vice President of Administration for Media 100, Inc. ("Media 100") from July
1995 to September 1996, prior to the Company's spin-off from Media 100 (the
"Spin-off"). Ms. Harpin was employed by Media 100 from March 1983 until
November 1996 and during her tenure there also served as Chief Financial
Officer, Treasurer, Vice President, Manufacturing and Director of Sales.
Incumbent Directors:
Dr. David Cyganski, 46, term expires 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, 49, term expires in 2001. Ms. Hurd is currently Chief Financial
Officer and General Counsel of NaviNet, Inc. From February 1996 to May 1999,
Ms. Hurd was Chief Financial Officer and General Counsel of SmartRoute
Systems, Inc. She previously served as a business/legal consultant,
specializing in initial public offerings and strategic alliances/joint
ventures.
Alfred A. Molinari, Jr., 58, term expires in 2002. 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 Spin-off.
4
<PAGE>
Board of Directors and its Committees
The Board of Directors held six meetings during the fiscal year ended
November 30, 1999. During fiscal 1999, each of the Directors attended 100% 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,
but no nominating 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, 1999, the Compensation Committee acted by
written consent on one occasion. The Audit Committee reviews the results and
scope of the financial audit and other services provided by the Company's
independent public accountants and makes recommendations to the Directors. The
members of the Audit Committee are Ms. Hurd and Dr. Cyganski. During the
fiscal year ended November 30, 1999, the Audit Committee did not meet.
Board of Directors Compensation
The Company compensates each Director who is not also an employee of the
Company $7,500 per year, plus $500 per meeting for services as a Director. In
addition, each non-employee Director is eligible to receive options under the
Company's 1996 Stock Option Plan. Directors of the Company who are employees
of the Company are not paid any fees or additional compensation for service as
members of the Board of Directors or any of its committees.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides certain summary information concerning the
compensation of the Company's Chief Executive Officer and each of its other
four most highly compensated officers (the "Named Executive Officers") for
1997, 1998 and 1999.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------- ------------ All Other
Name and Principal Position Year Salary($) Bonus($) Options(#) Compensation($)(1)
- --------------------------- ---- --------- -------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Alfred A. Molinari, Jr. . 1999 $225,000 $30,650 100,000 $1,803
Chairman of the Board,
President and 1998 $232,800 $ -- -- $1,896
Chief Executive Officer 1997 $225,000 $56,250 60,000 $1,803
Annette C. Crossen....... 1999 $114,008 $ 4,230 18,750 $ 914
Vice President, Sales 1998 $ 55,111 $ -- 1,250 $ 442
1997 $ 6,672 $ -- -- $ 53
Jeffrey M. Cronin........ 1999 $ 94,500 $13,820 16,650 $ 757
Vice President, Opera-
tions 1998 $ 87,153 $ -- 1,750 $ 698
1997 $ 78,270 $ -- 1,600 $ 627
Michael A. DiPoto(2)..... 1999 $ 77,274 $13,171 20,000 $ 619
Chief Financial Officer,
Vice President, Finance
and Treasurer
Clifford G. Wilson(3).... 1999 $ 62,981 $15,813 20,000 $ 505
Vice President,
Engineering
</TABLE>
- ---------------------
(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) Company contributions to a defined contribution plan with respect to
the Named Executive Officers.
(2) Mr. DiPoto joined the Company in March 1999.
(3) Mr. Wilson joined the Company in June 1999.
6
<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, 1999.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
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% 610%
Name Granted(#) Fiscal Year ($/Sh) Date ($) ($)
- ---- ---------- ------------ -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari,
Jr. ................... 100,000 25.21% $1.50 12/16/04 32,326 69,615
Annette C. Crossen...... 2,500 0.63% $1.50 12/16/04 808 1,740
16,250 4.10% $4.88 8/31/05 17,072 36,765
Jeffrey C. Cronin....... 5,000 1.26% $1.50 12/16/04 1,616 3,481
11,650 2.94% $4.88 8/31/05 12,239 26,358
Michael A. DiPoto....... 10,000 2.52% $4.00 3/22/05 8,620 18,564
10,000 2.52% $4.88 8/31/05 10,517 22,648
Clifford G. Wilson...... 20,000 5.04% $3.25 6/28/05 14,008 30,167
</TABLE>
Option Exercises and Holdings
The following table provides information, with respect to the Named
Executive Officers, concerning unexercised Company options held as of the end
of the fiscal year.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Value of unexercised
Number of Unexercised In-The-Money
Shares Options at FY-End(#) Options at FY-End ($)(1)
Acquired on Value ------------------------- ---------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercise Unexercisable
---- ------------ ------------ ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari, Jr.. -- -- 47,194 92,803 $ 162,465 $ 448,945
Annette C. Crossen...... -- -- 832 19,168 $ 4,082 $ 43,027
Jeffrey C. Cronin....... 100 $611 2,807 17,193 $ 12,072 $ 47,221
Michael A. DiPoto....... -- -- 1,666 18,334 $ 4,373 $ 39,377
Clifford G. Wilson...... -- -- -- 20,000 -- $ 67,500
</TABLE>
- ---------------------
(1) Market value of underlying securities at November 30, 1999, minus the
exercise price of "in-the-money" options.
Compensation Committee Interlocks and Insider Participation
During the last completed fiscal year, 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 consists of Dr. Cyganski, Ms. Hurd and Mr.
Molinari.
7
<PAGE>
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 Chief Executive Officer and
other executive officers, and therefore reflects the criteria upon which the
Chief Executive Officer's 2000 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 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.
Compensation Committee
David Cyganski
D'Anne Hurd
Alfred A. Molinari, Jr.
8
<PAGE>
Shareholder Return Performance Graph
Set forth below is a graph comparing the performance of the Company's Common
Stock against the cumulative total return of the NASDAQ Composite Index and the
CRSP Index for NASDAQ Electronic Component Stocks since December 1996. The CRSP
Index for NASDAQ Electronic Component Stocks is an industry index prepared by
the Center of Research in Security Prices at the University of Chicago.
The stock performance on the graph below is not necessarily indicative of
future stock price performance.
[PERFORMANCE GRAPH APPEARS HERE]
Data Translation, Inc. Nasdaq CRSP Index
---------------------- ------ ----------
12/96 100 100 100
12/97 51.55 122.52 104.83
12/98 46.88 172.80 162.04
2/99 37.50 180.18 162.86
5/99 73.43 194.33 165.62
8/99 121.88 216.44 243.19
11/99 165.63 257.56 275.77
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 31, 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.
9
<PAGE>
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO 1996 STOCK OPTION PLAN
On February 1, 1999, the Board of Directors increased the authorized number
of shares of Common Stock reserved for issuance under the Company's 1996 Stock
Option Plan (the "Plan") from 500,000 to 1,500,000. The Company, through the
granting of incentive and nonstatutory stock options, provides incentives to
key employees and other persons who provide services to the Company by
enabling them to acquire or increase their proprietary interest in the
Company.
Summary Description of the 1996 Stock Option Plan
The Plan is administered by the Board of Directors or a committee thereof.
Subject to the terms of the Plan, the Board has complete authority to
designate persons to receive awards, to grant the awards, to determine the
form of the awards and to fix all terms of any awards granted. Incentive stock
options, which are intended to meet the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), may be granted only to
officers and other employees of the Company and must have an exercise price of
not less than 100% of the fair market value of the Company's Common Stock on
the date of grant (110% for incentive stock options granted to any 10%
stockholder of the Company). The aggregate exercise price of the shares of
Common Stock as to which an incentive stock option becomes exercisable in any
year may not exceed $100,000. The term of an incentive stock option may not
exceed ten years (five years in the case of an incentive stock option granted
to any 10% stockholder of the Company). Nonstatutory stock options may be
granted on such terms (date of grant, vesting, number of shares and exercise
price) as the Board may determine, subject to the terms of the Plan. The Plan
may be discontinued or amended by the Board at any time, subject to any
required regulatory approval. The stockholders of the Company must approve any
amendment if such approval is required to comply with any applicable tax or
regulatory requirement.
Federal Income Tax Consequences to the Company and the Participants
Nonstatutory options. There are no federal income tax consequences to the
Company or the participants upon grant of nonstatutory options. Upon the
exercise of such an award (or other realization event, such as the lapse of a
forfeiture restriction), (i) the participant will recognize ordinary income in
an amount equal to the amount by which the fair market value of the Common
Stock acquired upon the exercise of such award exceeds the exercise price, if
any, and (ii) the Company will receive a corresponding deduction. A sale of
Common Stock so acquired will give rise to a capital gain equal to the
difference between the fair market value of the Common Stock on the exercise
and sale dates.
Incentive stock options. Except as noted below, there are no federal income
tax consequences to the Company or the participant upon grant or exercise of
an incentive stock option. If the participant holds shares of Common Stock
purchased pursuant to the exercise of an incentive stock option for at least
two years after the date the option was granted and at least one year after
the exercise of the option, the subsequent sale of Common Stock will give rise
to a long-term capital gain or loss to the participant and no deduction will
be available to the Company. If the participant sells the shares of Common
Stock within two years after the date an incentive stock option is granted or
within one year after the exercise of an option, the participant will
recognize ordinary income in an amount equal to the difference between the
fair market value at the exercise date and the option exercise price, and the
Company will be entitled to an equivalent deduction. Some participants may
have to pay alternative minimum tax upon exercise of an incentive stock
option.
Although the foregoing summarizes the essential features of the Plan, it is
qualified in its entirety by reference to the full text of the Plan as
amended, which is attached as Exhibit 1 to this Proxy Statement.
10
<PAGE>
NEW PLAN BENEFITS
1996 Stock Option Plan
The following table sets forth as of February 22, 2000 the number of options
to purchase Common Stock under the1996 Stock Option Plan since the Plan was
adopted by the Company, by each of (i) the officers listed in the Executive
Compensation Summary Compensation Table, (ii) each of the nominees for
election as a director, (iii) all directors of the Company who are not
executive officers of the Company as a group, (iv) all present executive
officers of the Company as a group, and (v) all employees of the Company,
including all other current officers, as a group:
<TABLE>
<CAPTION>
Dollar Number
Name and Position Value($)(1) of Units
----------------- ----------- --------
<S> <C> <C>
Alfred A. Molinari, Jr., Chairman and CEO(2).............. $ 612,500 100,000
Ellen W. Harpin, Director and Vice President3)............ $ 78,750 18,000
D'Anne Hurd, Director(4).................................. $ 25,000 5,000
David Cyganski, Director(5)............................... $ 25,000 5,000
Annette C. Crossen, Vice President, Sales(6).............. $ 67,109 20,000
Jeffrey M. Cronin, Vice President, Operations(7).......... $ 74,108 18,900
Michael A. DiPoto, CFO, Vice President, Finance and
Treasurer(8)............................................. $ 63,750 20,000
Clifford G. Wilson, Vice President, Engineering(9)........ $ 87,500 20,000
All directors who are not executive officers of the
Company as a group....................................... $ 128,750 28,000
All present executive officers of the Company as a group.. $ 904,966 178,900
All employees of the Company, including all current
officers, who are not executive officers, as a group..... $1,221,072 293,012
</TABLE>
- ---------------------
(1) Market value of underlying securities at February 10, 2000, minus the
exercise price of "in-the-money" options.
(2) 100,000 shares granted December 16, 1998 at an exercise price of $1.50
per share.
(3) 18,000 shares granted June 28, 1999 at an exercise price of $3.25 per
share.
(4) 2,500 shares granted January 14, 1997 at an exercise price of $3.75 per
share. 2,500 shares granted April 28, 1998 at an exercise price of $1.50
per share.
(5) 2,500 shares granted January 14, 1997 at an exercise price of $3.75 per
share. 2,500 shares granted April 28, 1998 at an exercise price of $1.50
per share.
(6) 1,250 shares granted June 30, 1998 at an exercise price of $1.94 per
share. 2,500 shares granted December 16, 1998 at an exercise price of
$1.50 per share. 16,250 shares granted August 31, 1999 at an exercise
price of $4.88 per share.
(7) 500 shares granted April 14, 1997 at an exercise price of $3.00 per
share. 1,750 shares granted December 17, 1997 at an exercise price of
$2.41 per share. 5,000 shares granted December 16, 1998 at an exercise
price of $1.50 per share. 11,650 shares granted August 31, 1999 at an
exercise price of $4.88 per share.
(8) 10,000 shares granted March 22, 1999 at an exercise price of $4.00 per
share. 10,000 shares granted August 31, 1999 at an exercise price of
$4.88 per share.
(9) 20,000 shares granted June 28, 1999 at an exercise price of $3.25 per
share.
The Board of Directors recommends that stockholders vote "for"
Proposal No. 2.
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases its domestic headquarters in Marlboro, Massachusetts (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) $1,300,000 through 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 year 1999 was $254,000.
The following is a summary of certain agreements between the Company and
Media 100 entered into in connection with the Spin-off. Alfred A. Molinari 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 that provides for, among other things, the principal
corporate transactions required to effect the Spin-off. 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 data acquisition
and imaging, commercial products and networking distribution 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,
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 Spin-
off.
Intellectual Property Agreement. The Company and Media 100 are parties to an
Intellectual Property Agreement that 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 Spin-off. 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 Spin-off. 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
executive officers and directors and persons who beneficially own (directly or
indirectly) more than 10% of Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and Nasdaq.
Officers, directors and greater than 10% stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on its review of the copies of
such reports received by it, all Section 16(a) filing requirements applicable
to its executive officers, directors and greater-than-10% stockholders during
the fiscal year ended November 30, 1999 were satisfied, with the exception
12
<PAGE>
of six reports: Clifford G. Wilson did not file a Form 3 (Initial Statement of
Beneficial Ownership of Securities) upon becoming an executive officer in June
1999; Ellen W. Harpin did not file a Form 4 (Statement of Changes of
Beneficial Ownership of Securities) for a June 1999 transaction; Annette C.
Crossen filed neither a Form 3 upon becoming an executive officer in July 1999
nor a Form 4 for an August 1999 transaction; and Jeffrey C. Cronin filed
neither a Form 3 upon becoming an executive officer in February 1999 nor a
Form 4 for an August 1999 transaction.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 2001 annual
meeting of stockholders must be received by the Company on or before November
1, 2000 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, 2000. 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 BUSINESS
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.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1999, which includes financial statements, has been filed with the SEC.
Copies of the Annual Report on Form 10-K may be obtained by stockholders of
the Company without charge upon written request to the Secretary of the
Company at the address set forth below.
BY ORDER OF THE BOARD OF DIRECTORS
ELLEN W. HARPIN
Secretary
Data Translation, Inc.
100 Locke Drive
Marlboro, Massachusetts 01752
March 10, 2000
13
<PAGE>
Exhibit 1
DATA TRANSLATION, INC.
1996 STOCK OPTION PLAN
1. Purpose
This 1996 Stock Option Plan (the "Plan") is intended as a performance
incentive for officers, employees, consultants, directors and other key
persons of Data Translation, Inc. (the "Company") and its Subsidiaries (as
hereinafter defined) to enable the persons to whom options are granted (the
"Optionees") to acquire or increase a proprietary interest in the success of
the Company. The Company intends that this purpose will be effected by the
granting of incentive stock options ("Incentive Options") as defined in
Section 422 of the Internal Revenue Code of 1986, as amended the "Code"), and
nonqualified stock option ("Nonqualified Options"). The term "Subsidiaries"
means any corporations in which stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock is owned directly
or indirectly by the Company.
2. Options to be Granted; Administration of the Plan
a) Options granted under the Plan may be either Incentive Options or
Nonqualified Options, and shall be designated as such at the time of grant.
To the extent that any option intended to be an Incentive Option shall fail
to qualify as an Incentive Option under the Code, such option shall be
deemed to be a Nonqualified Option. Each option granted hereunder shall be
embodied in a written agreement, as described in Section 5 hereof, that is
signed by the Optionee and an authorized officer of the Company.
b) The Plan shall be administered either by the Board of Directors of the
Company (the "Board of Directors") or by a committee (the "Option
Committee") of not fewer than two directors of the Company appointed by the
Board of Directors (in either case, the "Administrator"). None of the
members of the Option Committee shall be an officer or other full-tine
employee of the Company. It is the intention of the Company that each
member of the Option Committee shall be a "Non-Employee Director" as that
term is defined and interpreted pursuant to Rule 16b-3(b)(3)(i) or any
successor rule thereto promulgated under the Securities Exchange Act of
1934, as amended (the "Act"). Subject to the foregoing requirements of
Section 2(b), the Compensation Committee of the board of Directors may
serve as the Option Committee. Action by the Option Committee shall require
the affirmative vote of a majority of all its members.
c) Subject to the terms and conditions of the Plan, the Administrator shall
have the power:
i) To determine from time to time the options to be granted to eligible
persons under the Plan and to prescribe the terms and provisions (which
need not be identical) of options (including, without limitation, the
number of shares subject to each such option, the effect upon such
options of any change in control of the Company and any vesting
provisions with respect to such options) granted under the Plan to such
persons.
ii) To construe and interpret the Plan and grants thereunder and to
establish, amend, and revoke rules and regulations for administration
of the Plan (including to correct any defect or supply any omission, or
reconcile any inconsistency in the Plan, in any option agreement, or in
any related agreements, in the manner and to be extent the
Administrator shall deem necessary or expedient to make the Plan fully
effective);
iii) To amend from time to time, as the Administrator may determine is
in the best interests of the Company, the terms of any outstanding
options, including without limitation, to modify the vesting schedule,
exercise price or expiration date thereof in a manner not inconsistent
with the terms of the Plan; and
iv) Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the
Company with respect to the Plan.
<PAGE>
All decisions and determinations by the Administrator in the exercise of
these powers shall be final and binding upon the Company and the Optionees.
d) Delegation of Authority to Grant Options. The Administrator, in its
discretion, may delegate to the Chief Executive Officer of the Company or
any Subsidiary all or part of the Administrator's authority and duties with
respect to Options, including the granting thereof, to individuals who are
not subject the reporting and other provisions of Section 16 of the Act.
The Administrator may revoke or amend the terms of a delegation at any
time, but such action shall not invalidate any prior actions of the
Administrator's delegate or delegates tat were consistent with the terms of
the Plan.
3. Stock Subject to the Options
The stock granted under the Plan, or subject to the options granted under
the Plan, shall be shares of the Company's authorized but unissued Common
Stock, par value $.01 per share (the "Common Stock"), which may either be
authorized by unissued shares or treasury shares or shares previously reserved
for issuance upon exercise of options under the Plan, and allocable to one or
more options (or portions of options) which have expired or been canceled or
terminated (other than by exercise). The total number of shares that may be
issued under the Plan shall not exceed an aggregate of 500,000 shares of
Common Stock. Such number of shares shall be subject to adjustment as provided
in Section 7 hereof.
4. Eligibility
a) Incentive Options may be granted only to officers and other employees of
the Company or any Subsidiary that is a "subsidiary corporation" within the
meaning of Section 424 (f) of the Code, including members of the Board of
Directors who are also employees of the Company or any such Subsidiary.
Nonqualified Options may be granted to officers, other employees and
directors of the Company or any Subsidiary, and to consultants and other
key persons who provide services to the Company or any Subsidiary
(regardless of whether they are also employees).
b) No person shall be eligible to receive any Incentive Option under the
Plan if, at the date of grant, such person owns or is considered to own (by
reason of the attribution rules of Section 424 (d) of the Code) stock
representing in excess of ten percent of the voting power of all
outstanding capital stock of the Company (or of any "parent corporation" or
"subsidiary corporation" within the meaning of Section 424 (e) or (f) of
the Code, respectively), unless not withstanding anything in this Plan to
the contrary (i) the purchase price for Common Stock subject to such option
is at least 110% of the fair market value of such Common Stock at the time
of the grant and (ii) the option by its terms is not exercisable more than
five years form the date of grant thereof.
c) Notwithstanding any other provision of the Plan, the aggregate fair
market value (determined as of the time of the option is granted) of the
Common Stock with respect to which Incentive Options are exercisable for
the first time by any individual during any calendar year (under all plans
of the Company and its parent and subsidiary corporations, within the
meaning of Sections 424 (e) and (f) of the Code) shall not exceed $100,000.
Any option granted under the Plan in excess of the foregoing limitations
shall be deemed to be a Nonqualified Option.
5. Terms of the Option Agreements
Subject to the terms and conditions of the Plan, each option agreement shall
contain such provisions as the Administrator shall form time to time deem
appropriate. Option agreements need not be identical, but each option
agreement by appropriate language shall include the substance of all of the
following provisions:
a) Expiration: Termination of Employment. Each option shall expire no later
than the date specified in the option agreement, which date in the case of
any Incentive Option shall not be later than the tenth anniversary of the
date on which the option was granted. Each option may be subject to earlier
termination, as specified
2
<PAGE>
in the option agreement, if the Optionee's employment or other business
relationship with the Company and its Subsidiaries shall terminate before
such expiration date.
b) Exercise. Each option shall be exercisable in such installments (which
need not be equal) and at such times as may be designated in the option
agreement. To the extent not exercised, installments shall accumulate and
be exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the option expires.
c) Purchase Price. The purchase price per share of Common Stock subject to
each option shall be the price specified in the option agreement; provided,
however, that the purchase price per share of Common Stock subject to each
Incentive Option shall be not less than the fair market value of the Common
Stock on the date such Incentive Option is granted. For the purposes of the
Plan, the fair market value of the Common Stock shall be determined in good
faith by the Administrator; provided, however, that (i) if the Common Stock
is admitted to trading on a national securities exchange or the NASDAQ
National Market on the date the option is granted, the fair market value
shall not be less than the closing price reported for the Common Stock on
such exchange or system for such date or, if no sales were reported for
such date, for the last date preceding such date for which a sale was
reported, or (ii) if clause (i) does not apply but the Common Stock is
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System Small-Cap Market (NASDAQ) on the date the option
is granted, the fair market value shall not be less than the average of the
highest bid and lowest asked prices reported for the Common Stock on NASDAQ
for such date or, if no bid and asked prices were reported for such date,
for the last date preceding such date for which such prices were reported.
d) Rights of Optionees. No Optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any option unless and
until (i) the option shall have been exercised pursuant to the terms
thereof, (ii) all requirements under applicable law and regulations shall
have been complied with to the satisfaction of the Company, (iii) the
Company shall have issued and delivered the shares to the Optionee, and
(iv) the Optionee's name shall have been entered as a stockholder of record
on the books of the Company. Thereupon, the Optionee shall have full
voting, dividend and other ownership rights with respect to such shares of
Common Stock.
e) Transfer. No option granted hereunder shall be transferable by the
Optionee other than by will or by the laws of descent and distribution, and
such option may be exercised during the Optionee's lifetime only by the
Optionee, or his other guardian or legal representative. Notwithstanding
the foregoing, the terms of a Nonqualified Option may provide that the
Optionee may transfer such option, without consideration for the transfer,
to members of his immediate family, to trusts for the benefit of such
family members, to partnerships in which such family members are the only
partners, or to charitable organizations, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and
conditions of the Plan and the applicable option agreement.
f) Minimum Shares Exercisable. Option agreements may set forth a minimum
number of shares with respect to which an option may be exercised at any
one time.
6. Method of Exercise; Payment of Purchase Price
a) Any option granted under the Plan may be exercised by the Optionee in
whole or in part by delivering to the Company on any business day a written
notice specifying the number of shares of Common Stock the Optionee then
desires to purchase (the "Notice").
b) Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be made either: (i) in cash, or by certified or
bank check or other payment acceptable to the Company, equal to the option
exercise price for the number of shares specified in the Notice (the "Total
Option Price"); (ii) if authorized by the applicable option agreement and
if permitted by law, by delivery or shares of Common Stock that the
optionee may freely transfer having a fair market value, determined by
reference to the provisions of Section 5(c) hereof, equal to or less than
the Total Option Price, plus cash in an amount equal
3
<PAGE>
to the excess, if any, of the Total Option Price over the fair market value
of such shares of Common Stock; or (iii) by the Optionee delivering the
Notice to the Company together with irrevocable instructions to a broker to
promptly deliver the Total Option price to the Company in cash or by other
method of payment acceptable to the Company; provided, however, that the
Optionee and the broker shall comply with such procedures and enter into
such agreements of indemnity or other agreements as the Company shall
prescribe as a condition of payment under this clause (iii).
c) The delivery of certificates representing shares of Common Stock to be
purchased pursuant to the exercise of an option will be contingent upon the
Company's receipt of the Total Option Price and of any written
representations from the Optionee required by the Administrator, and the
fulfillment of any other requirements contained in the option agreement of
applicable provisions of law (including payment of any amount required to
be withheld by the Company pursuant to applicable law).
7. Adjustment Upon Changes in Capitalization
a) If the shares of the Company's Common Stock as a whole are increased,
decreased, changed into or exchanged for a different number of kind of
shares or securities of the Company, whether through reorganization,
recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or
the like, an appropriate and proportionate adjustment shall be made in the
number ad kind of shares subject to the Plan, and in the number, kind, and
per share exercise price of shares subject to unexercised options or
portions thereof granted prior to any such change. In the event of any such
adjustment in an outstanding option, the Optionee thereafter shall have the
right to purchase the number of shares under such option at the per share
price, as so adjusted, which the Optionee could purchase at the total
purchase price applicable to the option immediately prior to such
adjustment.
b) Adjustments under this Section 7 shall be determined by the
Administrator and such determinations shall be conclusive. The
Administrator shall have the discretion and power in any such even to
determine and to make effective provision for acceleration of the time or
times at which any option or portion thereof shall become exercisable. No
fractional shares of Common Stock shall be issued under the Plan on account
of any adjustment specified above.
8. Effect of Certain Transactions
In the case of the dissolution or liquidation of the Company or a change of
Control (as hereinafter defined), the Plan and the options issued hereunder
shall terminate upon the effectiveness of any such transaction or event,
unless provision is made in connection with such transaction for the
assumption of outstanding options by, or the substitution for such option of
new options of, the successor entity or parent thereof, with appropriate
adjustment as to the number and kind of shares and the per share exercise
prices, as provided in Section 7. In the event of such termination, all
outstanding options shall be exercisable in full for at least fifteen days
prior to the date of such termination whether or not otherwise exercisable
during such period.
"Change of Control" shall mean the occurrence of any one of the following
events:
a) any "person," as such term is used in Sections 13(d) and 14(d) of the
Act (other than the Company, any Subsidiary, or any trustee, fiduciary or
other person or entity holding securities under any employee benefit plan
or trust of the Company or any Subsidiary), together with all "affiliates"
and "associates" (as such terms are defined in Rule 12b-2 under the Act) of
such person, shall become the "beneficial owner" (as such term is defined
in Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing 50 percent or more or either (i) the combined voting
power of the Company's then outstanding securities having the right to vote
in an election o the Board of Directors ("Voting Securities") or (ii) the
then outstanding shares of Common Stock of the Company (in either such case
other than as a result of an acquisition of securities directly from the
Company); or
4
<PAGE>
b) Incumbent Directors, as hereinafter defined, cease for any reason,
including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority
of the Board of Directors; or
c) the stockholders of the Company shall approve (i) any consolidation or
merger of the Company or any Subsidiary where the shareholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate 80percent or more of the voting shares
of the corporation issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if any), (ii) any sale,
lease, exchange or other transfer ( in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all
or substantially all of the assets of the Company or (iii) any plan or
proposal for the liquidation or dissolution of the Company.
Not withstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (a) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Common Stock or other Voting Securities outstanding, increase (x)
the proportionate number of shares of Common Stock beneficially owned by any
person to 50 percent or more of the combined voting power of all then
outstanding voting Securities; provided, however, that if any person referred
to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional shares of Common Stock or other Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (a).
"Incumbent Directors" means the members of the Board of Directors on the
effective date of the Plan (the "Original Directors") and each person who
thereafter becomes a director whose appointment, election or nomination for
election is approved by a vote of at least a majority of those Original
Directors and directors whose appointment, election or nomination have been so
approved who are then serving as directors.
9. Tax Withholding
a) Payment by Optionee. Each Optionee shall, no later than the date as of
which the value of any option granted hereunder or of any Common Stock
issued upon the exercise of such option first becomes includable in the
gross income of the Optionee for federal income tax purposes (the "Tax
Date"), pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of any federal, state, or local taxes of
any kind required by law to be withheld with respect to such income. In the
event that an Optionee has not made the arrangements described in this
Section 9(a) and has not made an election under Section 9(b) on or before
the Tax Date, the Company is hereby authorized to withhold the amount of
any federal, state or local taxes of any kind required by law with respect
to such income from any payment otherwise due to the Optionee.
b) Payment in Shares. Subject to approval by the Administrator, an Optionee
may elect to have such tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of Common
Stock to be issued pursuant to an option exercise a number of shares with
an aggregate fair market value (determined by the Administrator in
accordance with Section 5(c) as of the date the withholding is effected)
that would satisfy the withholding amount due.
10. Amendment of the Plan
The Board of Directors may discontinue the Plan or amend the Plan at any
time, and from time to time, subject to any required regulatory approval,
provided that any such amendment is also approved by the stockholders of the
Company if required by the Code to ensure that Incentive Options granted under
the Plan are qualified under Section 422 of the Code. Except as otherwise
provided, an amendment shall be binding upon options previously granted under
the Plan unless the amendment adversely affects the rights of an Optionee, in
which even the consent of the Optionee shall be required with respect to any
portion of such amendment having such effect.
5
<PAGE>
11. Nonexclusivity of the Plan
Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall
be construed as creating an limitations on the power of the Board of Directors
to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock or stock option otherwise
than under the Plan, and such arrangements may be either applicable generally
or only in specific cases. Neither the Plan nor any option granted hereunder
shall be deemed to confer upon any employee any right to continued employment
with the Company.
12. Government and Other Regulations; Governing Law
a) The obligation of the Company to sell and deliver shares of Common Stock
with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal
and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Administrator.
b) The Plan shall be governed by Delaware law, except to the extent that
such law is preempted by federal law.
13. Effective Date of the Plan; Stockholder Approval
The Plan shall become effective upon the date that it is approved by the
Board of Directors of the Company; provided, however, that the Plan shall be
subject to the approval of the Company's stockholders in accordance with
applicable laws and regulations within twelve months after such effective
date.
6
<PAGE>
PROXY
DATA TRANSLATION, INC.
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD THURSDAY, APRIL 6, 2000
AT 9:30 A.M.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Ellen W. Harpin and Alfred
A. Molinari, Jr., 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 February 22, 2000, at the 2000 Annual Meeting of Stockholders to be
held at the offices of the Company, 100 Locke Drive, Marlboro, Massachusetts, on
April 6, 2000 at 9:30 a.m., local time, and at any adjournments or postponements
thereof.
PLEASE ACT PROMPTLY: SIGN, DATE & MAIL PROXY CARD TODAY
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
DATA TRANSLATION, INC.
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
Detach card below, sign, date and mail in postage paid envelope provided.
DATA TRANSLATION, INC.
100 Locke Drive, Marlboro, MA 01752
DETACH HERE ---------------------------------------------
[X] Please mark votes as in this example.
1. Proposal to elect Ellen W. Harpin as a Class I Director of the Company to
serve for a three-year term until the 2003 annual meeting of stockholders and
until her successor is duly elected and qualified.
FOR [ ]
WITHHELD [ ]
2. Proposal to ratify the amendment to the 1996 Stock Option Plan to increase
the number of authorized shares.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
MARK HERE FOR ADDRESS CHANGE AND [ ] NOTE BELOW
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 both Proposal No. 1
and Proposal No. 2 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 above
undersigned stockholder(s) hereby acknowledge(s) receipt of a copy of the
accompanying Notice of 2000 Annual Meeting of Stockholders, the Proxy Statement
with respect thereto and the Company's 1999
<PAGE>
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
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Date
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