DATAMARINE INTERNATIONAL, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
March 4, 1996
To the Stockholders:
A Special Meeting of the Stockholders (the "Meeting") of DATAMARINE
INTERNATIONAL, INC. (the "Corporation") will be held on Monday, March 4,
1996, at the 9:30 a.m. at the offices of Goodwin, Procter & Hoar, Exchange
Place, 26th Floor, Room 26A1, Boston, Massachusetts, for the following
purposes:
1. To elect one (1) Director to serve for a term of three years
and until his successor shall be elected and qualified.
2. To approve the 1995 Stock Option Plan for Non-Employee
Directors.
3. To approve the amendment of the Corporation's Articles of
Organization to permit meetings of stockholders of the Corporation
to be held anywhere in the United States.
4. To consider and act upon any other business which may properly
come before the Meeting.
The Board of Directors has fixed the close of business on January
12, 1996 as the record date for the Meeting. All stockholders of record
on that date are entitled to notice of and to vote at the Meeting. The
Meeting is being held in lieu of the 1996 Annual Meeting of the
Stockholders of Datamarine International, Inc.
In order that your stock may be represented at the Meeting in case
you are not personally present, please sign and date the enclosed proxy
and return it promptly in the accompanying addressed envelope.
By Order of the Board of Directors,
DAVID C. THOMPSON,
Secretary
Mountlake Terrace, Washington
February 6, 1996
DATAMARINE INTERNATIONAL, INC.
PROXY STATEMENT
This statement is furnished to stockholders of Datamarine
International, Inc. (the "Corporation") in connection with the
solicitation by the Board of Directors of proxies to be used at the
Special Meeting of Stockholders of the Corporation (the "Meeting") to be
held on March 4, 1996, at the time and place set forth in the Notice of
the Meeting, and at any adjournments or postponements thereof. The
principal executive offices of the Corporation are located at 2030 220th
S.W., Mountlake Terrace, Washington 98043, telephone number (206) 771-
2182. The approximate date on which this Proxy Statement and form of
proxy are first being sent to stockholders is on or about February 6,
1996.
If the enclosed proxy is properly executed and returned, it will be
voted in the manner directed by the stockholder. If no instructions are
specified, proxies will be voted (i) for the election of the Director
recommended by the Board of Directors, (ii) to approve the 1995 Stock
Option Plan for Non-Employee Directors, (iii) to approve the amendment of
the Corporation's Articles of Organization to permit meetings of
stockholders of the Corporation to be held anywhere in the United States,
and (iv) in accordance with the discretion of the named proxies on such
other business as may properly come before the Meeting. Any person giving
the enclosed form of proxy has the power to revoke it by voting in person
at the Meeting, or by giving written notice of revocation to the Secretary
of the Corporation at any time before the proxy is exercised.
The holders of a majority in interest of all common stock issued,
outstanding and entitled to vote are required to be present in person or
be represented by proxy at the Meeting in order to constitute a quorum for
the transaction of business. The election of the nominee for Director
will be decided by plurality vote. The affirmative vote of the holders of
at least a majority of the Corporation's common stock present in person or
by proxy and entitled to vote at the Meeting will be required to approve
the 1995 Stock Option Plan for Non-Employee Directors. The affirmative
vote of the holders of at least two-thirds of the Corporation's common
stock outstanding is required to approve the amendment of the
Corporation's Articles of Organization to permit meetings of stockholders
of the Corporation to be held anywhere in the United States. In the
election of directors, any action other than a vote for the nominee,
including broker non-votes, will have the effect of a vote withheld with
respect to that nominee. With respect to the proposal to approve the 1995
Stock Option Plan for Non-Employee Directors, a broker non-vote will have
no effect on the outcome of the matter other than to reduce the number of
"FOR" votes necessary to approve the matter, and abstention from voting
will have the practical effect of voting against the matter since it is
one less vote for approval. With respect to the proposal to approve the
amendment of the Corporation's Articles of Organization to permit meetings
of stockholders of the Corporation to be held anywhere in the United
States, a broker non-vote or abstention will have the same effect as a
vote against the proposal.
The Corporation will bear the costs of this solicitation. It is
expected that the solicitation will be made primarily by mail, but regular
employees or representatives of the Corporation (none of whom will receive
any extra compensation for their activities) may also solicit proxies by
telephone, telegraph and in person and arrange for brokerage houses and
their custodians, nominees and fiduciaries to send proxies and proxy
material to their principals at the expense of the Corporation.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on January 12,
1996, are entitled to vote at the Meeting. On that date the Corporation
had outstanding and entitled to vote 1,297,095 shares of common stock with
a par value of $.01 per share. Each outstanding share entitles the record
holder to one vote.
ELECTION OF DIRECTORS
Pursuant to the Articles of Organization of the Corporation, the
Board of Directors is divided into three classes, with each class as
nearly equal in number as possible. At each annual meeting, one of the
classes is elected for a term of three years. The Corporation presently
has a Board of Directors of five members. It is proposed that the nominee
listed below be elected to serve for a term of three years commencing on
the date of the Meeting and continuing until his successor is duly elected
and qualified or until he sooner dies, resigns or is removed.
The persons named in the accompanying proxy will vote, unless
authority is withheld, for the election of the nominee named below. If
the nominee should become unavailable for election, which is not
anticipated, the persons named in the accompanying proxy will vote for
such substitute as the Board of Directors may recommend.
Certain information as of January 12, 1996 regarding the nominee and
each Director is set forth below, including such individual's age and
principal occupation, a brief account of business experience during at
least the last five years, and other directorships held at other publicly-
held companies.
Nominated for a term ending in 1999:
<TABLE>
<CAPTION>
Year First
Served as Position with the Corporation or Principal
Name of Nominee Age Director Occupation During the Past Five Years
- ------------------------------------------------------------------------------------
<S> <C> <C> <S>
Dale N. Hatfield 57 1995 From January 1994, CEO and Sr. Consultant of
Hayfield Associates, Inc., telecommunications
consultants. From December 1986 to December
1993, President, Hatfield Associates, Inc.
From 1982, Adjunct Professor, University of
Colorado. Also a director of Pittencrieff
Communications, Inc.
Serving for a term ending in 1996:
<CAPTION>
Year First
Elected a Position with the Corporation or Principal
Name Age Director Occupation During the Past Five Years
- ------------------------------------------------------------------------------------
<S> <C> <C> <S>
Geoffrey W. Kreiger 45 1993 From June 1995, self-employed as a business
consultant. President of Datamarine Business
Unit from August, 1992 to May 1995. Vice
President of Finance of the Corporation and
Treasurer of the Corporation from December
1988 to May 1995.
Serving for a term ending in 1997:
<CAPTION>
Year First
Elected a Position with the Corporation or Principal
Name Age Director Occupation During the Past Five Years
- ------------------------------------------------------------------------------------
<S> <C> <C> <S>
Peter D. Brown 48 1991 President/CEO of the Corporation since
September, 1991. Chairman of the Board of
the Corporation since December, 1995. From
January, 1990, CEO of The South Beach Company,
a management company. From 1974 through 1990,
CEO of Heather Hill Sportswear Co., an apparel
company. Currently, Vice-President and Treasurer
of Gordon & Ferguson, a manufacturer of men's
and boys' outerwear. Also serves as a director
of Cherokee International.
Serving for a term ending in 1998:
<CAPTION>
Year First
Elected a Position with the Corporation or Principal
Name Age Director Occupation During the Past Five Years
- ------------------------------------------------------------------------------------
<S> <C> <C> <S>
David M. Brown 51 1988 Chairman of the Board of the Corporation from
August, 1990 to December, 1995. CEO of Penobscot
Management L.L.C., a construction and real estate
development company.
Serving for a term ending in 1998:
<CAPTION>
Year First
Elected a Position with the Corporation or Principal
Name Age Director Occupation During the Past Five Years
- ------------------------------------------------------------------------------------
<S> <C> <C> <S>
David C. Thompson 66 1987 Principal Financial and Accounting Officer of
the Corporation since June 1995. President/CEO
of SEA Inc. of Delaware, a wholly owned subsidiary
of the Corporation. From October 12, 1989 through
February, 1992, Chief Operating Officer, and from
June 30, 1990 through December 20, 1990, acting
Chief Executive Officer, of the Corporation.
Previously President/CEO of Stephens Engineering
Associates, Inc., which was acquired by the
Corporation in 1986.
</TABLE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During fiscal 1995 there were two meetings of the Board of Directors
of the Corporation. All of the Directors attended at least 75% of the
aggregate of (1) the total number of meetings of the Board and (2) the
total number of the meetings held by committees of the Board on which they
served. The Board of Directors does not have a nominating committee.
The Corporation has an Audit Committee which reviews with the
Corporation's independent auditors the scope of the audit for the year,
the results of the audit when completed and the independent auditors' fees
for services performed. The Audit Committee also recommends independent
auditors to the Board of Directors and reviews with management various
matters related to its internal accounting controls. The present members
of the Audit Committee are Peter D. Brown and David M. Brown. During
fiscal 1995 there were no meetings of the Audit Committee of the Board of
Directors
The Corporation has a Management Development Committee/Stock Option
Committee which administers the Corporation's 1991 Stock Option Plan. The
Management Development Committee/Stock Option Committee is responsible for
reviewing and approving all options granted under the Corporations 1991
Stock Option Plan, and administering, or supervising the administration
of, the Plan. The present members of the Management Development
Committee/Stock Option Committee are David M. Brown and Peter D. Brown.
The Management Development Committee/Stock Option Committee held one
meeting in fiscal 1995.
The Corporation also has a Strategic Planning & Acquisitions
Committee. The Strategic Planning & Acquisitions Committee has such
powers and authority as are consistent with the By-Laws of the Corporation
and as may be delegated to such Committee from time to time by the Board
of Directors. The members of the Strategic Planning & Acquisitions
Committee are David M. Brown, Peter D. Brown and David C. Thompson. The
Strategic Planning & Acquisitions Committee held no meetings in fiscal
1995.
Compensation of Directors
Each non-employee Director of the Corporation receives a fee of $500
per quarter plus $400 for each meeting of the Board of Directors he
attends. In addition, each non-employee Director who serves on a
committee of the Board receives $300 for each committee meeting he attends
(other than on the day of a Board meeting). Directors also receive
reimbursement for out-of-pocket expenses relating to attendance at Board
or committee meetings. Non-employee Directors will also receive stock
option grants to purchase 2,000 shares of the Corporation's common stock
as of the date of each of the annual meetings of the Board of Directors
for the years 1996 through 1999 under the Corporation's 1995 Stock Option
Plan for Non-Employee Directors. See "Approval of the 1995 Stock Option
Plan for Non-Employee Directors."
Peter D. Brown, Chairman of the Board, President and CEO of the
Corporation, and David M. Brown, a Director, are brothers.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table shows as of January 12, 1996, any person who was
known by the Corporation to be the beneficial owner of more than 5% of any
class of voting securities of the Corporation. For purposes of this proxy
statement, beneficial ownership is defined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 and means generally the power to
vote or dispose of the securities, regardless of any economic interest
therein.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- --------------------------------------------------------------------------------
<S> <S> <C> <C>
Common Stock Adam R. Brown 391,531(l) 30.0%
545 Cedar Lane
Teaneck, NJ 07666
David M. Brown
545 Cedar Lane
Teaneck, NJ 07666
Peter D. Brown
P.O. Box 2692
Palm Beach, FL 33480
Common Stock David C. Thompson 147,794(2) 11.1%
SEA, Inc. of Delaware
7030 220th Street, S.W.
Mountlake Terrace, WA 98043
Common Stock Geoffrey W. Kreiger 83,003(3) 6.4%
8000 Cheno Cortina Trail
Austin, TX 78749
Common Stock Steven T. Newby 74,000 5.7%
6116 Executive Blvd., Ste. 701
Rockville, MD 20852
<FN>
- --------------------
<F1> Adam R. Brown, David M. Brown and Peter D. Brown are brothers. Adam
R. Brown owns 2,500 shares. David M. Brown is the record owner of
81,003 shares and holds options for the purchase of 4,500 shares
which are currently exercisable. Peter D. Brown is the owner of
219,937 shares and holds options for the purchase of 4,500 shares
which are currently exercisable. He has sole voting and dispositive
power over 219,937 shares and shared voting and dispositive power
over 79,091 shares. Of such 79,091 shares, 21,050 shares are held
in trust for his minor child and 58,041 are held in trust for the
Corporation's Employee Investment Plan. Peter D. Brown serves as
one of the co-trustees of this trust. Adam R. Brown, David M. Brown
and Peter D. Brown each disclaims beneficial ownership of the
securities held directly or indirectly by his brothers.
<F2> Includes 34,632 shares purchasable under options presently
exercisable or exercisable within 60 days. Includes 58,041 shares
held in trust for the Corporation's Employee Investment Plan. Mr.
Thompson serves as one of the co-trustees of such trust.
<F3> Includes 58,041 shares held in trust for the Corporation's Employee
Investment Plan. Mr. Kreiger serves as one of the co-trustees of
such trust.
</TABLE>
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following information is furnished as of January 12, 1996, with
respect to common stock of the Corporation beneficially owned within the
meaning of Rule 13d-3 by the Directors of the Corporation, the nominee for
Director, and the executive officers named in the Summary Compensation
Table, and by all Directors and officers of the Corporation as a group.
Unless otherwise indicated, the individuals named held sole voting and
investment power over the shares listed below.
<TABLE>
<CAPTION>
Amount and Nature
Title of Beneficial Percent
Name of Class Ownership of Class
- ---------------------------------------------------------------------------
<S> <S> <C> <C>
David M. Brown Common Stock 391,531(l) 30.0%
Peter D. Brown Common Stock 391,531(l) 30.0%
David C. Thompson Common Stock 147,794(l) 11.1%
Geoffrey W. Kreiger Common Stock 83,003(l) 6.4%
Dale N. Hatfield Common Stock 0 0.0%
All Directors and officers
as a group (5 persons) Common Stock 506,246(2) 37.8%
<FN>
- --------------------
<F1> See "Principal Holders of Voting Securities" regarding shares held
by Messrs. David Brown, Peter Brown, Thompson and Kreiger. Also
included in this figure are 58,041 shares held in trust for the
Corporation's Employee Investment Plan. Messrs. Peter Brown,
Thompson and Kreiger serve as co-trustees of such trust.
<F2> Included in this figure are 43,632 shares purchasable by certain
officers and Directors under options presently exercisable or
exercisable within 60 days.
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned
by, or paid to the Corporation's Chief Executive officer and each of the
Corporation's executive officers (other than the Chief Executive Officer)
who served during the most recent fiscal year (the "Named Executive
Officers") for all services rendered in all capacities to the Corporation
and its subsidiaries for the Corporation's fiscal years ended September 30,
1995, October 1, 1994, and October 2, 1993.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
---------------------------------------- ------------
Other
Name and Annual Stock All Other
Principal Position(s) Year Salary Bonus Compensation(1) Options Compensation
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <S>
Peter D. Brown 1995 $ 0 -- -- 1,500 --
President/CEO of the 1994 $ 0 -- -- 1,500 --
Corporation 1993 $ 0 -- -- 1,500 --
Geoffrey W. Kreiger (3) 1995 $72,249 -- -- -- $25,483(3)
President of Datamarine 1994 $94,515 -- -- -- $ 2,836(2)
Business Unit; Vice 1993 $94,515 -- -- 7,984(4) $ 2,890(2)
President of Finance
and Treasurer of the
Corporation
David C. Thompson 1995 $92,657 -- -- 7,000 $ --
President/CEO of 1994 $89,169 -- -- -- $ 2,156(2)
SEA, Inc. of Delaware 1993 $96,600 -- -- 17,632(4) $ 2,899(2)
<FN>
- --------------------
<F1> Does not include personal benefits not directly related to
performance furnished directly or indirectly to Executive Officers.
The aggregate value of such compensation to any one Executive
Officer was not greater than the lesser of $50,000 or 10% of such
Executive Officer's total salary and bonus.
<F2> Represents amounts contributed by the Corporation under its 401(k) Plan.
<F3> Mr. Kreiger ceased employment as an officer of the Corporation in
May 1995, and continued to be compensated under a severance
arrangement through August 1995. "All Other Compensation" includes
$23,629 paid to Mr. Kreiger under the severance arrangement and
$1,854 contributed on behalf of Mr. Kreiger by the Corporation to
the Corporation's 401(k) Plan.
<F4> Includes as to Mr. Kreiger options for the purchase of 6,484 shares
which were granted in December 1992 following the surrender of
options for the purchase of 10,000 shares. Includes as to Mr.
Thompson options for the purchase of 12,632 shares which were
granted in December 1992 following the surrender of options for the
purchase of 20,000 shares.
</TABLE>
Option Grants in Last Fiscal Year
The following table provides information regarding the grants of
stock options to each of the Named Executive Officers during the fiscal
year ended September 30, 1995.
<TABLE>
<CAPTION>
Number of Percent of Total
Securities Options Granted Exercise or Market Price
Underlying Options to Employees in Base Price at Date of Expiration
Name Granted (#)(1) Fiscal Year ($/Sh) Grant Date
- -----------------------------------------------------------------------------------------------------
<S> <C> <S> <C> <C> <C>
Peter D. Brown 0 -- -- -- --
Geoffrey W. Kreiger 0 -- -- -- --
David C. Thompson 5000 17.9% $9.00 $9.00 4/18/2005
David C. Thompson 2000 7.1% $6.00 $9.00 4/18/2005
<FN>
- --------------------
<F1> The options vest at 25% per year over the first four anniversary dates of the grant.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year End Option Values
The following table provides information on option exercises by the
Named Executive Officers during the fiscal year ended September 30, 1995,
and the value of unexercised options held by the Named Executive Officers
at September 30, 1995.
<TABLE>
<CAPTION>
Number of Shares
Underlying Unexercised Value of Unexercised
Options at Options at
September 30, 1995 September 30, 1995(2)
Shares Acquired Value --------------------------- ---------------------------
On Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Peter D. Brown 0 0 3,000 0 $ 8,820 0
Geoffrey W. Kreiger 21,234 $113,807 0 0 0 0
David C. Thompson 0 0 34,632 5,000 $136,396 $12,000
<FN>
- --------------------
<F1> Computed based on the difference between the closing price of the
common stock on the day prior to exercise, and the exercise price.
<F2> Value of unexercised options represents the difference between the
exercise prices of the stock options and the closing price ($7.50
per share) of the Company's common stock in the over-the-counter
market on September 29, 1995, the last trading day of the Company's
fiscal year. Only in-the-money options are considered in the
calculation.
</TABLE>
APPROVAL OF 1995 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
There will be presented at the Meeting a proposal to approve the
Datamarine International, Inc. 1995 Stock Option Plan For Non-Employee
Directors adopted by the Board of Directors on December 12, 1995 (the
"1995 Directors Plan"). The 1995 Directors Plan is intended to attract
and retain the services of experienced and knowledgeable independent
Directors who are not employees of the Corporation for the benefit of the
Corporation and its stockholders and to provide additional incentive to
them to continue to work for the best interests of the Corporation and its
stockholders through continuing ownership of the Corporation's common
stock. The 1995 Directors Plan is the successor to the Corporation's 1992
Stock Option Plan for Non-Employee Directors (the "1992 Directors Plan"),
which was terminated by the Board of Directors on December 12, 1995.
The Board of Directors recommends stockholder approval of the 1995
Directors Plan. The following is a summary of the principal provisions of
the 1995 Directors Plan. A copy of the 1995 Directors Plan is attached to
this Proxy Statement as Exhibit A. Reference is made to Exhibit A for
more detailed information.
Summary of 1995 Directors Plan
The 1995 Directors Plan provides for the automatic, annual grant of
options to purchase 2,000 shares of the Corporation's common stock to each
non-employee Director of the Corporation then in office, including newly
elected non-employee Directors, immediately following each annual meeting
of the Board of Directors for the years 1996 through 1999. The
predecessor 1992 Directors Plan provided for automatic grants of options
to purchase 1,500 shares of the Corporation's common stock to non-employee
Directors in 1993 through 1995. The options will be non-qualified options
not intended to meet the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
Currently, four of the Corporation's Directors are non-employee
Directors and are eligible for participation in the 1995 Directors Plan.
No persons other than non-employee Directors are eligible for
participation in the 1995 Directors Plan. Subject to adjustment from time
to time as provided in the 1995 Directors Plan, a maximum of 48,000 shares
of the Corporation's common stock will be available for issuance under the
1995 Directors Plan. The exercise price for the options will be the fair
market value of the Corporation's common stock covered by the option at
the time the option is granted. The options are immediately exercisable
in full, provided that no option may be exercised prior to stockholder
approval of the 1995 Directors Plan. No option may be exercised after ten
years from the date on which it was granted.
Options granted under the 1995 Directors Plan are not assignable or
transferable by the optionee other than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order. The
exercise price of options must be paid in full upon exercise. Payment may
be made in cash or in shares of the Corporation's common stock already
owned for a period of six months by the person exercising such option, or
in some combination thereof.
In the event that an optionee ceases to be a Director of the
Corporation other than by reason of such optionee's death or disability,
the option granted to such optionee may be exercised by him or her only to
the extent that the right to exercise such option has accrued and is in
effect. Such option may be exercised at any time within seven months
after the date such optionee has ceased to be a Director of the
Corporation or prior to the date on which the option expires by its terms,
whichever is earlier. If termination as a Director was by the Corporation
for cause, the option will terminate immediately at the time the optionee
ceases to be a Director of the Corporation.
In the event of the death or disability of an optionee, the option
granted to such optionee may be exercised, to the extent the optionee was
entitled to do so on the date of his or her death or termination of
service as a Director by reason of disability, as the case may be, by (i)
the estate of such optionee, any person or persons who acquired the right
to exercise such option by bequest or inheritance or otherwise by reasons
of the death of such optionee or (ii) the optionee, as applicable. The
option may be exercised at any time within one year after the date of the
death or termination of service on account of disability of such optionee,
as applicable, or prior to the date on which the option expires by its
terms, whichever is earlier.
The 1995 Directors Plan provides that the number of shares issuable
thereunder shall be adjusted to prevent dilution in the event of any
reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, combination of shares or stock dividend.
The 1995 Directors Plan will terminate ten years from the date upon
which it is approved by the stockholders, but the Board of Directors may
at any time terminate, modify or amend the Plan, except that, to the
extent required for compliance with Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act"), no modification or amendment to
the provisions of the 1995 Directors Plan may be made more than once every
six months other than to comply with changes in the Code, the Employee
Retirement Income Security Act, or the rules thereunder, if the effect of
such amendment or modification would be to change (i) the requirements for
eligibility under the 1995 Directors Plan, (ii) the timing of the grants
of options to be granted under the 1995 Directors Plan or the exercise
price or vesting schedule thereof or (iii) the number of shares subject to
options to be granted under the 1995 Directors Plan. Any amendment to the
provisions of the 1995 Directors Plan that (a) materially increases the
number of shares that may be subject to options granted under the 1995
Directors Plan, (b) materially increases the benefits accruing to
participants under the 1995 Directors Plan, or (c) materially modifies the
requirement for eligibility to participate in the 1995 Directors Plan, to
the extent required for compliance with Rule 16b-3 under the Exchange Act,
will be subject to approval by the Corporation's stockholders.
Termination, modification or amendment of the 1995 Directors Plan will
not, without the consent of an optionee, affect such optionee's rights
under a previously granted option.
Federal Income Tax Consequences
The federal income tax consequences to the Corporation and to any
person granted an award of options under the 1995 Directors Plan under the
existing applicable provisions of the Code and the regulations thereunder
are substantially as follows.
Under present law and regulations, no income will be recognized by a
participant upon the grant of stock options. On the exercise of a non-
qualified stock option, the optionee will recognize taxable ordinary
income in an amount equal to the excess of the fair market value of the
shares acquired over the option price. Upon a later sale of those shares,
the optionee will have short-term or long-term capital gain or loss, as
the case may be, in an amount equal to the difference between the amount
realized on such sale and the tax basis of the shares sold. If payment of
the option price is made entirely in cash, the tax basis of the shares
will be equal to their fair market value on the exercise date (but not
less than the option price), and the shares' holding period will begin on
the day after the exercise date.
If the optionee uses already-owned shares to exercise an option in
whole or in part, the transaction will not be considered to be a taxable
disposition of the already-owned shares. The optionee's tax basis and
holding period of the already-owned shares will be carried over to the
equivalent number of shares received upon exercise. The tax basis of the
additional shares received upon exercise will be the fair market value of
the shares on the exercise date (but not less than the amount of cash, if
any, used in payment), and the holding period for such additional shares
will begin on the day after the exercise date.
In all the foregoing cases the Corporation will be entitled to a
deduction at the same time and in the same amount as the participant
recognizes ordinary income.
The closing trading price of the Corporation's common stock as
reported by the Nasdaq National Market System on December 29, 1995 was
$11.25.
The Board of Directors unanimously recommends a vote FOR approval of the
1995 Directors Plan.
AMENDMENT OF THE CORPORATION'S ARTICLES OF ORGANIZATION
REGARDING PLACE OF STOCKHOLDERS' MEETINGS
The Board of Directors has unanimously approved, subject to approval
by the stockholders at the Meeting, the amendment of the Corporation's
Articles of Organization to permit meetings of the Corporation's
stockholders to be held anywhere in the United States. Under
Massachusetts Business Corporation law, meetings of the Corporation's
stockholders must be held within the Commonwealth of Massachusetts unless
and to the extent that the Corporation's Articles of Organization permit
such meetings to be held elsewhere in the United States. As proposed, the
Corporation's Articles of Organization would be amended to provide, in
pertinent part, that "Meetings of the stockholders of the corporation may
be held anywhere in the United States."
The Board of Directors believes that the proposed amendment is
beneficial because it will provide the Corporation with the flexibility to
hold stockholders' meetings anywhere in the United States that is
convenient or desirable. In particular, the proposed amendment will
permit stockholders' meetings to be held at or near principal places of
business of the Corporation or its subsidiaries, even if they are located
outside of Massachusetts. Permitting stockholders' meetings to be held
outside the Corporation's state of incorporation is in keeping with the
modern trend under corporate law.
The Board of Directors unanimously recommends a vote FOR approval of the
amendment of the Corporation's Articles of Organization.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand, certified
public accountants, to act as independent public auditors to examine the
consolidated financial statements of the Corporation and its subsidiaries
for the fiscal year ending September 27, 1996. A representative of
Coopers & Lybrand is expected to be present at the Meeting and will have
the opportunity to make a statement if he or she so desires and to respond
to appropriate questions.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and Directors and persons owning more than 10% of
the outstanding common stock of the Corporation to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, Directors and greater than 10% holders of common
stock are required by SEC regulation to furnish the Corporation with
copies of all Section 16(a) forms they file.
Based solely on copies of such forms furnished as provided above, or
written representations that no Forms 5 were required, the Corporation
believes that during the period beginning October 4, 1992 through the date
hereof, all Section 16(a) filing requirements applicable to its officers,
Directors and owners of greater than 10% of its common stock were complied
with.
DEADLINES FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission,
any proposal submitted for inclusion in the Corporation's Proxy Statement
relating to the Annual Meeting of Stockholders to be held in 1997 must be
received at the Corporation's principal executive offices in Mountlake
Terrace on or before October 8, 1996. Receipt by the Corporation of any
such proposal from a qualified stockholder in a timely manner will not
ensure its inclusion in the proxy material because there are other
requirements in the proxy rules for such inclusion.
In addition to the Securities and Exchange Commission requirements
regarding stockholder proposals, the Corporation's By-Laws contain
provisions regarding matters to be brought before stockholder meetings.
If stockholder proposals, including proposals regarding the election of
Directors, are to be considered at the 1997 Annual Meeting, notice of
them, whether or not they are included in the Corporation's proxy
statement and form of proxy, must be given by personal delivery or by
United States mail, postage prepaid, to the Secretary of the Corporation
on or before January 2, 1997.
OTHER MATTERS
Management knows of no matters to be brought before the meeting
other than the election of a Director, the proposal to approve the 1995
Stock Option Plan for Non-Employee Directors, and the proposal to approve
the amendment of the Corporation's Articles of Organization to permit
meetings of stockholders of the Corporation to be held anywhere in the
United States. However, if any other matters properly come before the
Meeting, the persons named in the enclosed proxy will vote in accordance
with their best judgment.
The cost of this solicitation will be borne by the Corporation. It
is expected that the solicitation will be made primarily by mail, but
regular employees or representatives of the Corporation (none of whom will
receive any extra compensation for their activities) may also solicit
proxies by telephone, telegraph and in person and arrange for brokerage
houses and other custodians, nominees and fiduciaries to send proxies and
proxy material to their principals at the expense of the Corporation.
10-K REPORT
THE CORPORATION WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES
WITH A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE CORPORATION'S MOST RECENT FISCAL YEAR,
WITHOUT CHARGE, UPON RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH
REQUEST SHOULD BE DIRECTED TO CHIEF FINANCIAL OFFICER, DATAMARINE
INTERNATIONAL, INC., 2030 220TH S.W. MOUNTLAKE TERRACE, WASHINGTON 98043.
By Order of the Board of Directors
DAVID C. THOMPSON,
Secretary
Mountlake Terrace, Washington
February 6, 1996
Exhibit A
DATAMARINE INTERNATIONAL, INC.
1995 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
The purpose of this Datamarine International, Inc. 1995 Stock Option
Plan for Non-Employee Directors (the "Plan") is to attract and retain the
services of experienced and knowledgeable independent directors who are
not employees (sometimes referred to herein collectively as
"Participants") of Datamarine International, Inc. ("Datamarine") for the
benefit of Datamarine and its stockholders and to provide additional
incentive for such Participants to continue to work in the best interests
of Datamarine and its stockholders through continuing ownership of its
common stock.
2. SHARES SUBJECT TO THE PLAN
The total number of shares of common stock, par value $0.01 per
share ("Shares"), of Datamarine for which options may be granted under the
Plan shall not exceed 48,000 Shares in the aggregate, subject to
adjustment in accordance with Section 9 hereof.
3. ELIGIBILITY; GRANT OF OPTION
Each member of the Board of Directors (the "Board") of Datamarine
who is not otherwise an employee of Datamarine or any subsidiary and who
is then in office, including newly elected non-employee directors,
immediately following each annual meeting of the Board for the years 1996
through 1999, shall automatically be granted an option to acquire 2,000
Shares under the Plan immediately following each such annual meeting of
the Board. The date of grant for such options granted to non-employee
directors shall be the date of the annual meeting of the Board for the
years 1996 through 1999, as applicable, but such options shall be
effective as of such date of grant only if the Company's stockholders have
approved this Plan at Datamarine's Special Meeting of Stockholders in lieu
of the 1996 Annual Meeting of Stockholders in accordance with Section 13
hereof. The options shall be non-qualified options not intended to meet
the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
4. OPTION AGREEMENT
Each option granted under the Plan shall be evidenced by an option
agreement (the "Agreement") duly executed on behalf of Datamarine and by
the director to whom such option is granted, which Agreements shall (i)
comply with and be subject to the terms and conditions of the Plan and
(ii) provide that the optionee agrees to continue to serve as a director
of Datamarine during the term for which he was elected.
5. OPTION EXERCISE PRICE
Subject to the provisions of Section 9 hereof, the option exercise
price for an option granted under the Plan shall be the fair market value
of the Shares of the common stock of Datamarine covered by the option on
the date of grant of the option. For the purposes hereof and Section
6(b), if such Shares are then listed on any national securities exchange,
the fair market value of the common stock of Datamarine shall be the mean
between the high and low sales prices, if any, on the largest such
exchange on the date of the grant of the option or, if none, shall be
determined by taking a weighted average of the means between the highest
and lowest sales on the nearest date before and the nearest date after the
date of grant in accordance with Treasury Regulations Section 25.2512-2.
If the Shares are not then listed on any such exchange, the fair market
value of such Shares shall be the mean between the high and low sales
prices, if any, as reported in the National Association of Securities
Dealers Automated Quotation System ("Nasdaq") National Market System for
the date of the grant of the option, or, if none, shall be determined by
taking a weighted average of the means between the highest and lowest
sales on the nearest date before and the nearest date after the date of
grant in accordance with Treasury Regulations Section 25.2512-2. If the
shares are not then either listed on any such exchange or quoted in
Nasdaq, the fair market value shall be the mean between the average of the
"Bid" and the average of the "Ask" prices, if any, as reported in the
National Daily Quotation Service for the date of the grant of the option,
or, if none, shall be determined by taking a weighted average of the means
between the highest and lowest sales on the nearest date before and the
nearest date after the date of grant in accordance with Treasury
Regulations Section 25.2512-2.
6. TIME AND MANNER OF EXERCISE OF OPTION
(a) Options granted under the Plan shall, subject to the
provisions of Section 7, be exercisable immediately in full, provided that
no option shall be exercisable prior to approval of the Plan by the
stockholders of Datamarine in accordance with Section 13 hereof.
(b) To the extent that the right to exercise an option has accrued
and is in effect, the option may be exercised in full at one time or in
part from time to time by giving written notice, signed by the person or
persons exercising the option, to Datamarine, stating the number of Shares
with respect to which the option is being exercised, accompanied by
payment in full for such Shares, which payment may be in cash or in whole
or in part in Shares of the common stock of Datamarine already owned for a
period of at least six months by the person or persons exercising the
option, valued at fair market value, as determined under Section 5 hereof,
on the date of exercise; provided, however, that there shall be no such
exercise at any one time as to fewer than two hundred fifty (250) Shares
or all, of the remaining Shares then purchasable by the person or persons
exercising the option, if fewer than two hundred fifty (250) Shares. Upon
such exercise, delivery of a certificate for paid-up non-assessable Shares
shall be made at the principal Washington office of Datamarine to the
person or persons exercising the option at such time, during ordinary
business hours, not more than thirty (30) days from the date of receipt of
the notice by Datamarine, as shall be designated in such notice, or at
such time, place and manner as may be agreed upon by Datamarine and the
person or persons exercising the option.
7. TERMS OF OPTIONS
(a) Each option shall expire ten (10) years from the date of the
granting thereof, but shall be subject to earlier termination as herein
provided.
(b) In the event of the death of an optionee, the option granted
to such optionee may be exercised, to the extent the optionee was entitled
to do so on the date of such optionee's death, by the estate of such
optionee or by any person or persons who acquired the right to exercise
such option by bequest or inheritance or otherwise by reason of the death
of such optionee. Such option may be exercised at any time within one (1)
year after the date of death of such optionee, at which time the option
shall terminate, or prior to the date on which the option otherwise
expires by its terms, whichever is earlier.
(c) In the event that an optionee ceases to be a director of
Datamarine, the option granted to such optionee may be exercised by him,
but only to the extent that under Section 6 hereof the right to exercise
the option has accrued and is in effect. Such option may be exercised at
any time within seven (7) months after the date such optionee ceases to be
a director of Datamarine, at which time the option shall terminate, but in
any event prior to the date on which the option expires by its terms,
whichever is earlier, unless termination as a director (a) was by
Datamarine for cause, in which case the option shall terminate immediately
at the time the optionee ceases to be a director of Datamarine, (b) was
because the optionee has become disabled (within the meaning of Section
22(e)(3) of the Code), or (c) was by reason of the death of the optionee.
In the case of death, see Section 7(b) of the Plan. In the case of
disability, the option may be exercised, to the extent then exercisable
under Section 6 hereof, at any time within one (1) year after the date of
termination of the optionee's directorship with Datamarine, at which time
the option shall terminate, but in any event prior to the date on which
the option otherwise expires by its terms, whichever is earlier.
8. OPTIONS NOT TRANSFERABLE
The right of any optionee to exercise an option granted to him under
the Plan shall not be assignable or transferable by such optionee
otherwise than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations orders as defined by the Code
or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. Any option granted under the Plan shall be exercisable during
the lifetime of such optionee only by him. Any option granted under the
Plan shall be null and void and without effect upon the bankruptcy of the
optionee, or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other
disposition, attachment, trustee process or similar process, whether legal
or equitable, upon such option.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that the outstanding Shares of the common stock of
Datamarine are changed into or exchanged for a different number or kind of
shares or other securities of Datamarine or of another corporation by
reason of any reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares or dividends
payable in capital stock, appropriate adjustment shall be made in the
number and kind of shares as to which outstanding options, or portions
thereof then unexercised, shall be exercisable, to the end that the
proportionate interest of the optionee shall be maintained as before the
occurrence of such event, and such adjustment in outstanding options shall
be made without change in the total price applicable to the unexercised
portion of such options and with a corresponding adjustment in the option
price per share.
10. RESTRICTIONS ON ISSUE OF SHARES
Notwithstanding the provisions of Section 6 hereof, Datamarine may
delay the issuance of Shares covered by the exercise of any option and the
delivery of a certificate for such Shares until one of the following
conditions shall be satisfied:
(i) the Shares with respect to which an option has been
exercised are at the time of the issue of such Shares
effectively registered under applicable Federal and
state securities acts now in force or hereafter
amended; or
(ii) counsel for Datamarine shall have given an opinion,
which opinion shall not be unreasonably conditioned or
withheld, that such Shares are exempt from registration
under applicable Federal and state securities acts now
in force or hereafter amended.
It is intended that all exercises of options shall be effective.
Accordingly, Datamarine shall use its best efforts to bring about
compliance with the above conditions within a reasonable time, except that
Datamarine shall be under no obligation to cause a registration statement
or a post-effective amendment to any registration statement to be prepared
at its expense solely for the purpose of covering the issue of Shares in
respect of which any option may be exercised, except as otherwise agreed
to by Datamarine in writing.
11. RIGHTS OF HOLDER ON PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION
Unless the Shares to be issued upon exercise of an option granted
under the Plan have been effectively registered under the Securities Act
of 1933, as now in force or hereafter amended, Datamarine shall be under
no obligation to issue any Shares covered by any option unless the person
who exercises such option, in whole or in part, shall give a written
representation and undertaking to Datamarine which is satisfactory in form
and scope to counsel to Datamarine and upon which, in the opinion of such
counsel, Datamarine may reasonably rely, that he is acquiring the Shares
issued to him pursuant to such exercise of the option for his own account
as an investment and not with a view to, or for sale in connection with,
the distribution of any such Shares, and that he will make no transfer of
the same except in compliance with any rules and regulations in force at
the time of such transfer under the Securities Act of 1933, or any other
applicable law, and that if Shares are issued without such registration a
legend to this effect may be endorsed upon the securities so issued. In
the event that Datamarine shall, nevertheless, deem it necessary or
desirable to register under the Securities Act of 1933 or other applicable
statutes any Shares with respect to which an option shall have been
exercised, or to qualify any such Shares for exemption from the Securities
Act of 1933 or other applicable statutes, then Datamarine shall take such
action at its own expense and may require from each optionee such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for
such purpose and may require reasonable indemnity to Datamarine and its
officers and directors from such holder against all losses, claims,
damages and liabilities arising from such use of the information so
furnished and caused by any untrue statement of any material fact therein
or caused by the omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made.
12. LOANS PROHIBITED
Datamarine shall not, directly or indirectly, lend money to an
optionee or to any person or persons entitled to exercise an option by
reason of the death of an optionee for the purpose of assisting him or
them in the acquisition of Shares covered by an option granted under the
Plan.
13. APPROVAL OF STOCKHOLDERS
The Plan shall be subject to approval by the Company's stockholders
at the next annual meeting of the Company's stockholders, or the next
special meeting in lieu of annual meeting of the Company's stockholder's,
held after adoption of the Plan by the Board, and shall take effect
immediately as of its date of adoption upon such approval.
14. EXPENSES OF THE PLAN
All costs and expenses of the adoption and administration of the
Plan shall be borne by Datamarine, and none of such expenses shall be
charged to any optionee.
15. TERMINATION AND AMENDMENT OF PLAN
Unless sooner terminated as herein provided, the Plan shall
terminate ten (10) years from the date upon which the Plan was duly
approved by the stockholders. The Board may at any time terminate the
Plan or make such modification or amendment thereof as it deems advisable,
provided however that, except as provided in Section 9 hereof and to the
extent required to qualify the Plan under Rule 16b-3 ("Rule 16b-3")
promulgated under Section 16(b) of the Securities Exchange Act of 1934
(the "Exchange Act"), no modification or amendment to the provisions of
the Plan may be made more than once every six (6) months other than to
comport with changes in the Code, the Employee Retirement Income Security
Act, or the rules thereunder, if the effect of such amendment or
modification would be to change (i) the requirements for eligibility under
the Plan, (ii) the timing of the grants of options to be granted under the
Plan or the exercise price or vesting schedule thereof, or (iii) the
number of Shares subject to options to be granted under the Plan either in
the aggregate or to one director. Any amendment to the provisions of the
Plan which (i) materially increases the number of Shares which may be
subject to options granted under the Plan, (ii) materially increases the
benefits accruing to Participants under the Plan, or (iii) materially
modifies the requirement for eligibility to participate in the Plan,
shall, to the extent required to qualify the Plan under Rule 16b-3, be
subject to approval by the stockholders of Datamarine obtained in the
manner stated in Section 13 hereof. Termination or any modification or
amendment of the Plan shall not, without the consent of an optionee,
affect his rights under an option previously granted to him.
16. LIMITATION OF RIGHTS IN THE OPTION SHARES
An optionee shall not be deemed for any purpose to be a stockholder
of Datamarine with respect to any of the options except to the extent that
the option shall have been exercised with respect thereto and, in
addition, a certificate shall have been issued theretofore and delivered
to the optionee.
17. NOTICES
Any communication or notice required or permitted to be given under
the Plan shall be in writing, and mailed by registered or certified mail
or delivered by hand, if to Datamarine, to its principal place of
business, attention: President, and, if to an optionee, to the address as
appearing on the records of Datamarine.
18. COMPLIANCE WITH RULE 16b-3
It is the intention of Datamarine that the Plan comply in all
respects with Rule 16b-3 and that Participants remain disinterested
persons for purposes of administering other employee benefit plans of
Datamarine and having transactions under such other plans be exempt from
Section 16(b) of the Exchange Act. Therefore, if any Plan provision is
found not to be in compliance with Rule 16b-3 or if any Plan provisions
would disqualify Participants from remaining disinterested persons, those
provisions shall be deemed null and void, and in all events the Plan shall
be construed in favor of its meeting the requirements of Rule 16b-3.
DATAMARINE INTERNATIONAL, INC.
SPECIAL MEETING OF STOCKHOLDERS
March 4, 1996
The undersigned hereby appoints Peter D. Brown and David C.
Thompson, and each of them, with full power of substitution, proxies to
represent the undersigned at the Special Meeting of Stockholders of
DATAMARINE INTERNATIONAL, INC. to be held March 4, 1996 at 9:30 a.m. at
the offices of Goodwin, Procter & Hoar, Exchange Place, 26th Floor, Room
26A1, Boston, Massachusetts and at any adjournments or postponements
thereof, to vote in the name and place of the undersigned, with all powers
which the undersigned would possess if personally present, all of the
shares of DATAMARINE INTERNATIONAL, INC. standing in the name of the
undersigned upon such business as may properly come before the meeting.
PLEASE DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED AND RETURN IT
IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING
IN PERSON.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-------------
| SEE REVERSE |
| SIDE |
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[X] Please mark
votes as in
this example.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE BOARD
RECOMMENDS AN AFFIRMATIVE VOTE ON ALL PROPOSALS SPECIFIED. SHARES WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED
WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR AS SET FORTH IN THE PROXY
STATEMENT AND FOR PROPOSALS 2 AND 3.
1. Election of Director
Nominee: Dale N. Hatfield
FOR WITHHELD
[ ] [ ]
FOR AGAINST ABSTAIN
2. Approval of the 1995 Stock Option [ ] [ ] [ ]
Plan for Non-Employee Directors.
3. Approval of Amendment to Articles [ ] [ ] [ ]
of Organization Regarding Place of
Stockholders' Meetings.
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
[ ] MARK HERE FOR [ ] I PLAN TO ATTEND
ADDRESS CHANGE IN PERSON
AND NOTE AT LEFT
Please sign exactly as your name(s) appear(s) on the Proxy. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership
name by authorized person.
Signature: --------------------------------- Date ------------------
Signature: --------------------------------- Date ------------------
