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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
For the period ended December 31, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from _________ to ___________
Commission File Number _____
Datametrics Corporation
Employee Qualified Stock Purchase Plan
Datametrics Corporation
21135 Erwin Street
Woodland Hills, California 91367
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INTRODUCTION
Datametrics Corporation, a Delaware corporation, has established the Datametrics
Corporation Employee Qualified Stock Purchase Plan (the Plan). The Plan is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Internal Revenue Code of 1986, as amended.
REQUIRED INFORMATION
Financial statements and exhibits
(a) Financial statements:
These documents are listed in the Index to Financial Statements.
(b) Exhibits:
Consent of Independent Auditors
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
Datametrics Corporation as Plan Administrator has duly caused this Annual Report
on Form 11-K for the period ended December 31, 1996 to be signed on its behalf
by the undersigned hereunto duly authorized.
Datametrics Corporation
Employee Qualified Stock Purchase Plan
DATE: March 26, 1997 By /s/ Adrien A. Maught Jr.
-------------- -----------------------------------
Adrien A. Maught Jr.
President, Chief Operating Officer
and Chief Financial Officer
/s/ Kenneth S. Polak
-----------------------------------
Kenneth Polak
Assistant Vice President, Finance
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Audited Financial Statements
Datametrics Corporation
Employee Qualified Stock Purchase Plan
January 29, 1996 (Inception) to December 31, 1996
with Report of Independent Auditors
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Audited Financial Statements
January 19, 1996 (Inception) to December 31, 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors............................................. 1
Audited Financial Statements:
Statements of Net Assets Available for Benefits............................ 2
Statements of Changes in Net Assets Available for Benefits................. 2
Notes to Financial Statements.............................................. 3
</TABLE>
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Report of Independent Auditors
Plan Administrator
Datametrics Corporation Employee Qualified Stock Purchase Plan
We have audited the accompanying statement of net assets available for benefits
of the Datametrics Corporation Employee Qualified Stock Purchase Plan (the Plan)
as of December 31, 1996, and the related statement of changes in net assets
available for benefits from January 29, 1996 (inception) to December 31, 1996.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1996, and the changes in its net assets available for benefits from
January 29, 1996 (inception) to December 31, 1996, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
Woodland Hills, California
March 26, 1997
1
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Statement of Net Assets Available for Benefits
December 31, 1996
<TABLE>
<S> <C>
ASSETS
Due from company $ 12
--------
Net assets available for benefits $ 12
========
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Statement of Changes in Net Assets Available for Benefits
January 29, 1996 (Inception) to December 31, 1996
<TABLE>
<S> <C>
Additions to net assets attributed to:
Participant contributions $188,123
Deductions from net assets attributed to:
Stock purchases 142,349
Participant withdrawals 45,762
--------
Total deductions 188,111
Net increase in net assets available for benefits 12
Net assets available for benefits:
Inception -
--------
End of year $ 12
========
</TABLE>
See accompanying notes.
2
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements
December 31, 1996
1. PLAN DESCRIPTION
Datametrics Corporation (the Company) established the Datametrics Corporation
Employee Qualified Stock Purchase Plan (the Plan) effective on January 29, 1996.
The Plan is a qualified employee stock purchase plan which allows employees of
the Company to purchase shares of the Company's Common Stock, $0.01 Par Value,
at a discount from the market price at times specified by the Plan document. The
Plan is not subject to the requirements of the Employee Retirement Income
Security Act.
Employees of the Company are eligible to participate in the Plan if they have
been employed with the Company for more than 30 days and work on average more
than 20 hours per week during the plan year. Under plan provisions, entry dates
are limited to January 29, 1996, and the first business days of July 1996,
January 1997 and July 1997, and represent the first day of a semi-annual period
of participation on which each eligible employee is granted an option to
purchase stock.
Eligible employees may defer from 1% to 10% of basic compensation on a before-
tax basis. These payroll deductions are recorded as an increase to the
participant's account. Participant contributions are deposited in the Company's
corporate bank accounts and may be used for general corporate purposes.
Each participating employee's option will be automatically exercised in semi-
annual installments on the last day of each semi-annual period of participation
during which the eligible employee is participating in the Plan. The number of
shares of common stock subject to each option shall be equal to the quotient of
the total payroll deductions made by the employee during the semi-annual period
of participation divided by the option price, excluding fractional shares of
common stock.
The per share exercise price of each option is an amount equal to the lesser of
85% of the fair market value of the Company's stock on the entry date, or 85% of
the fair value of Company's stock on the last day of the semi-annual period of
participation (i.e., stock purchase date). The maximum number of shares of
common stock subject to each option shall not exceed 10,000 shares per
individual. Total shares issuable under the plan are limited to 200,000.
3
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements (continued)
1. PLAN DESCRIPTION (CONTINUED)
Upon exercise of the option, the Company will as soon as practicable thereafter
issue to the employee his or her shares of stock purchased. Such stock shall
initially be held in a brokerage account established by the employee at such
brokerage firm designated by the Company and authorized by the participant.
Distributions from the Plan are made when a participant retires, dies (in which
case, payment shall be made to his or her beneficiary or, if none, his or her
legal representatives), or otherwise terminates employment with the Company.
Also, participants may withdraw from the Plan upon giving written instructions
to the Plan Administrator at the Company. As soon as practicable after cessation
of participation, all funds previously credited to an employee's account under
the Plan will be paid to such employee in cash in one lump sum payment, without
payment of any interest thereon.
Although the Company expects to continue the Plan until December 31, 1997 or, if
earlier, until all shares of the Company's common stock reserved for issuance
under the Plan have so been issued, the Company's board of directors may
terminate the Plan at any time with respect to any shares not then subject to
options under the Plan and may modify the Plan from time to time.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis of
accounting.
ESTIMATES USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and the accompanying
notes. Actual results could differ from those estimates and such differences may
be material to the financial statements.
4
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PARTICIPANT CONTRIBUTIONS
Contributions are recorded when the Company makes payroll deductions from, or
reduces the compensation of Plan participants.
STOCK PURCHASES
Stock purchases are recorded on the last day of a semi-annual period of
participation after the price and number of shares purchased have been
determined for each participant.
PARTICIPANT WITHDRAWALS
Participant withdrawals and payments made to terminated participants are
recorded on the date distributions are made.
3. STOCK PURCHASES
The following table summarizes the stock issued to plan participants during
1996:
<TABLE>
<CAPTION>
SEMI-ANNUAL SHARES PURCHASE
PURCHASE DATE ISSUED PRICE
------------- ------ ---------
<S> <C> <C>
June 30 24,711 $106,257
December 31 40,102 36,092
------ --------
Total 64,813 $142,349
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</TABLE>
Pursuant to plan provisions, there are 135,187 remaining shares of stock
reserved by the Company for future issuance through December 31, 1997.
5
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan is an employee stock purchase plan as defined in section 423 of the
Internal Revenue Code of 1986, as amended (the Code). So long as the Plan meets
the Code requirements of an employee stock purchase plan, employees will not
recognize income when options are exercised, but will recognize such income at
the later disposition of the stock. The Plan is not required to and does not
maintain a determination letter from the Internal Revenue Service.
5. ADMINISTRATIVE EXPENSES
Certain administrative functions are performed by officers or employees of the
Company. No officers or employees receive compensation from the Plan. All
expenses associated with establishment, operation and administration of the Plan
are borne by the Company.
6
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EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No.E333-04815) pertaining to the Datametrics Corporation Employee
Qualified Stock Purchase Plan of our report dated March 26, 1997, with respect
to the financial statements of the Datametrics Corporation Employee Qualified
Stock Purchase Plan included in this Annual Report (Form 11-K) for the period
ended December 31, 1996.
/s/ Ernst & Young LLP
Woodland Hills, California
March 26, 1997
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