DATAMARINE INTERNATIONAL, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
April 2, 1998
To the Shareholders:
A Special Meeting in lieu of the Annual Meeting of the Shareholders
(the "Meeting") of DATAMARINE INTERNATIONAL, INC. (the "Company") will be
held on April 2, 1998, at 9:30 a.m. at the offices of Davis, Wright,
Tremaine, LLP, 26th Floor, 2600 Century Square, 1501 Fourth Avenue, Seattle,
Washington 98101, 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 consider and act upon any other business which may properly
come before the Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on February 24,
1998 as the record date for the Meeting. All Shareholders of record on that
date are entitled to notice of and to vote at the Meeting and any
adjournments or postponements thereof.
All shareholders are cordially invited to attend the meeting in
person. TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE
FILL IN, SIGN AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE, using
the return envelope which requires no postage if mailed in the United
States.
By Order of the Board of Directors,
DAVID C. THOMPSON,
Secretary
Mountlake Terrace, Washington
March 2, 1998
A copy of the Annual Report of Datamarine International, Inc. for the
year ended September 27, 1997 is enclosed herewith.
DATAMARINE INTERNATIONAL, INC.
PROXY STATEMENT
This statement is furnished to shareholders of Datamarine
International, Inc. (the "Company") in connection with the solicitation by
the Board of Directors of proxies to be used at the Special Meeting in lieu
of the Annual Meeting of shareholders of the Company (the "Meeting") to be
held on April 2, 1998, 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 Company are located at 7030 - 220th Street S.W.,
Mountlake Terrace, Washington, 98043, telephone (425) 771-2182. The
approximate date on which this Proxy Statement and form of proxy are first
being sent to shareholders is on or about March 6, 1998.
If the enclosed proxy is properly executed and returned, it will be
voted in the manner directed by the shareholder. If no instructions are
specified, proxies will be voted (i) for the election of the director
recommended by the Board of Directors and (ii) 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 Company 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. 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.
The Company 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 Company (none of whom will receive any extra
compensation for their activities) may also solicit proxies by telephone,
mail 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 Company.
RECORD DATE AND VOTING SECURITIES
Only shareholders of record at the close of business on February 24,
1998 are entitled to vote at the Meeting. On that date the Company had
outstanding and entitled to vote 1,329,912 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 Company, 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 Company presently has a Board of Directors
of three 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 February 24, 1998 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 directorships held at other publicly-held
companies.
<TABLE>
<CAPTION>
Nominated for a term ending in 2001:
Director Position with Company or Principal
Name Age Since Occupation During the Past Five Years
---- --- -------- -------------------------------------
<S> <C> <C> <S>
David C. Thompson 68 1987 President and CEO of the Company since
October 1997. Secretary and Treasurer of the
Company since March 1996. Principal Financial
and Accounting Officer of the Company from
1995 to October 1997. President and CEO of
SEA Inc., a wholly owned subsidiary of the
Company. Previously President and CEO of
Stephens Engineering Associates, Inc., which
was acquired by the Company in 1986.
<CAPTION>
Serving for a term ending in 2000:
Director Position with Company or Principal
Name Age Since Occupation During the Past Five Years
---- --- -------- -------------------------------------
<S> <C> <C> <S>
Peter D. Brown 50 1991 President and CEO of the Company from
September 1991 through October 1997.
Chairman of the Board of the Company since
December 1995. CEO of the South Beach
Company, a management company, since 1990.
Currently, Vice President and Treasurer of
Gordon & Ferguson, a manufacturer of men's and
boy's outerwear. From 1974 through 1990, CEO
of Heather Hill Sportswear Co., an apparel
company.
<CAPTION>
Serving for a term ending in 1999:
Director Position with Company or Principal
Name Age Since Occupation During the Past Five Years
---- --- -------- -------------------------------------
<S> <C> <C> <S>
Stephen W. Frankel 51 1997 Since 1996, self employed private investor. From
1988 through 1995, served in various capacities
including President, COO, Chairman and CEO
of RETIX, a manufacturer of networking
products.
</TABLE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During fiscal 1997 there were six meetings of the Board of Directors
of the Company. All 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 meeting held by committees of the Board on which they served. The Board
of Directors does not have a nominating committee.
The Company has an Audit Committee which reviews with the Company's
independent auditors the scope of the audit for the year, the results of the
audit when completed and the independent auditor's 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 Stephen W. Frankel. During fiscal 1997
there was one meeting of the Audit Committee.
The Company has a Management Development Committee/Stock Option
Committee which administers the Company's 1991 Stock Option Plan. The
Management Development Committee/Stock Option Committee is responsible for
reviewing and approving all options granted under the Company's 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 Stephen W. Frankel and Peter D. Brown. During fiscal
1997 there were no meetings of the Management Development Committee/Stock
Option Committee.
The Company has a Strategic Planning & Acquisition Committee. The
Strategic Planning & Acquisitions Committee has such powers and authority as
are consistent with the By-Laws of the Company 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 Peter D. Brown and
Stephen W. Frankel. During fiscal 1997 there were no meetings of the
Strategic Planning & Acquisitions Committee.
Compensation of Directors
Each non-employee director of the Company receives a fee of $500 per
quarter plus $400 for each meeting of the Board of Directors attended. In
addition, each non-employee director who serves on a committee of the Board
receives $300 for each committee meeting attended (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. Effective
March 1996, each non-employee director also receives an immediately
exercisable option to purchase 2,000 shares of the Company's common stock as
of the date of each of the annual meetings of the Board of Directors. Such
options have a per share exercise price equal to the fair market value of
the Company's common stock at the time the option is granted.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information regarding the beneficial
ownership (determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of the Company's common stock as of
February 24, 1998 (unless otherwise indicated) by (a) each person known by
the Company to beneficially own more than five percent of the outstanding
shares of common stock, (b) each director of the Company who beneficially
owns any shares,(c) each Named Officer (see "Executive Compensation"), and
(d) all directors and officers as a group:
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership(1) of Class
- -------------- ------------------- ----------------------- --------
<S> <S> <C> <C>
Common Stock Peter D. Brown 280,323(2) 20.9%
545 Cedar Lane
Teaneck NJ 07666
Common Stock David C. Thompson 148,675(3) 10.8%
SEA Inc.
7030 - 220th Street S.W.
Mountlake Terrace WA 98043
Common Stock Steven T. Newby 130,000(4) 9.8%
6116 Executive Blvd., Ste. 701
Rockville MD 20852
Common Stock Stephen W. Frankel 68,820(5) 5.2%
7030 - 220th Street S.W.
Mountlake Terrace WA 98043
Common Stock Jan Kallshian 2,180(6) *
7030 - 220th Street S.W.
Mountlake Terrace WA 98043
Common Stock All Directors and Executive Officers as 448,326 32.3%
a group (4 persons)
____________________
<F*> Less than 1%
<F1> Includes common shares which may be acquired upon exercise of options
to purchase shares from the Company exercisable on or within 60 days
of February 24, 1998.
<F2> Represents 169,937 shares held of record, 10,500 shares subject to
presently exercisable stock options, 21,050 shares held in trust for
Mr. Brown's minor child, 27,164 shares held by a Retirement Plan Trust
for Mr. Brown, and 51,672 shares held in trust for the Company's
Employee Investment Plan for which Mr. Brown serves as a co-trustee.
Mr. Brown disclaims beneficial ownership of the 27,164 shares held by
his Retirement Plan Trust.
<F3> Represents 55,121 shares held of record, 41,882 shares subject to
presently exercisable stock options, and 51,672 shares held in trust
for the Company's Employee Investment Plan for which Mr. Thompson
serves as a co-trustee.
<F4> Based upon the Schedule 13D filed with the SEC by the beneficial owner
on March 25, 1997 and subsequent communication with the beneficial
owner as of December 14, 1997.
<F5> Represents 64,300 shares held of record, 2,000 shares subject to
presently exercisable stock options and 2,520 shares subject to
presently exercisable common stock warrants.
<F6> Represents 500 shares held of record and 1,680 shares subject to
presently exercisable common stock warrants. Mr. Kallshian was named
Chief Financial Officer of the Company in October 1997.
</TABLE>
EXECUTIVE OFFICERS
The names of the executive officers of the Company, their positions
and offices with the Company, and their ages are set forth below.
<TABLE>
<CAPTION>
Name Age Office
<S> <C> <S>
David C. Thompson 68 President and Chief Executive Officer (since October 1997)
Peter D. Brown 50 Chairman of the Board (President and CEO to October 1997)
Jan Kallshian 43 Chief Financial Officer
</TABLE>
David C. Thompson was named President and CEO of the Company in
October 1997. Mr. Thompson has been Secretary and Treasurer of the Company
since March 1996, and served as the Company's Principal Financial and
Accounting Officer from 1995 to October 1997. Mr. Thompson is also
President and CEO of SEA Inc., a wholly owned subsidiary of the Company.
Mr. Thompson was previously President and CEO of Stephens Engineering
Associates, Inc., which was acquired by the Company in 1986.
Peter D. Brown served as President and CEO of the Company from
September 1991 through October 1997, and has served as Chairman of the Board
of the Company since December 1995.
Jan Kallshian was named Chief Financial Officer of the Company in
October 1997. Since April 1995 Mr. Kallshian has served as a consultant to
the Company which included performing the duties of the Chief Financial
Officer. Mr. Kallshian has over 15 years experience in the high technology
manufacturing industry and has held positions in finance and general
management. Mr. Kallshian is a CPA and was previously with the accounting
firm of Coopers & Lybrand.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by,
or paid to the Company's Chief Executive Officer and each of the Company'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 Company and its subsidiaries for
the Company's fiscal years ended September 27, 1997, September 28, 1996 and
September 30, 1995.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compen-
sation
Annual Compensation Awards
------------------------------------------ ---------
Other All
Annual Other
Compen- Compen-
Name and Principal sation Stock sation
Position(s) Year Salary($) Bonus($) ($)(1) Options(#) ($)
- ------------------ ---- --------- -------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Peter D. Brown 1997 $ - $ - $4,000(2) 2,000 $ -
President/CEO 1996 - - 4,300(2) 2,000 -
Chairman of the 1995 - - 2,800(2) 1,500 -
Board
David C. Thompson 1997 113,329 - - - 3,283(3)
President/CEO of 1996 102,935 - - - 828(3)
SEA, Inc. 1995 92,657 - - 7,000 -
____________________
<F1> In accordance with rules of the SEC the Company is not required to
report the value of personal benefits for any year unless the
aggregate dollar value exceeds the lesser of ten percent of the
executive officer's salary and bonus or $50,000.
<F2> Consists of directors fees.
<F3> Represents amounts contributed by the Company under its 401(k) Plan.
</TABLE>
Option Grants in Last Fiscal Year
The following table sets forth certain information regarding the
grants of stock options to each of the Named Executive Officers during the
fiscal year ended September 27, 1997.
<TABLE>
<CAPTION>
Number of Percent of Total
Securities Options Granted Exercise or Market Price
Underlying Options to Employees in Base Price at Date of Expiration
Name Granted (#) Fiscal Year ($/Sh) Grant Date
---- ------------------ ---------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Peter D. Brown 2,000(1) 13.5% $7.00 $7.00 2/4/2007
____________________
<F1> Options granted under the 1995 Stock Option Plan for Non-employee
Directors
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year
End Option Values
The following table sets forth information on option exercises by the
Named Executive Officers during the fiscal year ended September 27, 1997,
and the value of unexercised options held by the Named Executive Officers on
September 27, 1997.
<TABLE>
<CAPTION>
Number of Shares Underlying
Unexercised Options at Value of Unexercised Options at
September 27, 1997(#) September 27, 1997($)(1)
Shares Acquired Value ---------------------------- -------------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter D. Brown None None 8,500 - $ 1,215 $ -
David C. Thompson None None 40,132 4,500 43,856 310
____________________
<F1> Value of unexercised options represents the difference between the
exercise prices of the stock options and the closing price ($4.81 per
share) of the Company's common on September 25, 1997, the last trading
day of the Company's fiscal year. Only in-the-money options are
considered in the calculation.
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 1997, Mr. Thompson made a subordinated loan to the
Company in the amount of $344,697.
During fiscal 1997, Mr. Frankel made a subordinated short term loan to
the Company in the amount of $150,000.
During fiscal 1997, Mr. Kallshian and members of his family (as
defined by SEC rules) made subordinated short term loans to the Company in
the amount of $300,000.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P.,
certified public accountants, to act as independent auditors to examine the
consolidated financial statements of the Company and its subsidiaries for
the fiscal year ended October 3, 1998. A representative of Coopers &
Lybrand L.L.P. 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
Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's stock, to file initial reports of
ownership and reports of changes in ownership with the Securities and
Exchange Commission and the NASDAQ. Officers, directors and greater than
ten percent holders of common stock are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based upon a review of filings with the Securities and Exchange
Commission and written representations that no other reports were required,
the Company believes that all of the Company's directors and executive
officers complied during fiscal 1997 with the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934, with the exception of
one filing with respect to a charitable gift of 1,000 shares by Mr.
Thompson, which was made after the applicable deadline.
DEADLINES FOR SUBMISSION OF SHAREHOLDER
PROPOSALS
Under regulations adopted by the Securities and Exchange Commission,
any proposal submitted for inclusion in the Company's Proxy Statement
relating to the Annual Meeting of Shareholders to be held in 1999 must be
received at the Company's principal executive offices in Mountlake Terrace
on or before November 2, 1998. Receipt by the Company of any such proposal
from a qualified shareholder 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 shareholder proposals, the Company's By-Laws contain provisions
regarding matters to be brought before shareholder meetings. If shareholder
proposals, including proposals regarding the election of directors, are to
be considered at the 1999 Annual Meeting, notice of them, whether or not
they are included in the Company'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 Company on or before December 4, 1998.
OTHER MATTERS
Management knows of no matters to be brought before the meeting other than
the items referred to above. 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.
10-K REPORT
THE COMPANY 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 COMPANY'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., 7030 -
220TH STREET S.W., MOUNTLAKE TERRACE, WASHINGTON 98043.
By Order of the Board of Directors
DAVID C. THOMPSON,
Secretary
Mountlake Terrace, Washington
March 2, 1998
DETACH HERE
PROXY
DATAMARINE INTERNATIONAL, INC.
SPECIAL MEETING OF SHAREHOLDERS
April 2, 1998
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 in lieu of the Annual Meeting of
Shareholders of DATAMARINE INTERNATIONAL, INC. to be held April 2, 1998 at
9:30 a.m. at the offices of Davis Wright Tremaine L.L.P., 2600 Century Square,
1501 Fourth Avenue, Seattle, Washington 98101, 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.
_____________
| SEE REVERSE |
CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SIDE |
|_____________|
DETACH HERE
Please mark
[X] 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.
1. Election of Director
Nominee: David C. Thompson
FOR WITHHELD
[ ] [ ]
2. In their discretion, the proxies are
authorized to vote upon such other business
as may properly come before the meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE 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: _______
