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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 (FEE REQUIRED)
For the period ended December 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
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Commission File Number .
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Datametrics Corporation
26604 Agoura Road
Calabasas, California 91302-1954
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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, 1997 to be signed on its behalf
by the undersigned hereunto duly authorized.
Datametrics Corporation
Employee Qualified Stock Purchase Plan
DATE: March 26, 1998 By /s/ Daniel P. Ginns
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Daniel P. Ginns
Chief Executive Officer
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Audited Financial Statements
December 31, 1997
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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[LETTERHEAD OF BECKMAN KIRKLAND & WHITNEY]
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, 1997 and 1996, and the related statement of changes in
net assets available for benefits for the year ended December 31, 1997 and the
period ended from January 29, 1996 (inception) to December 31, 1996. These
financial statements are the responsibility of the Plan's management. Our
responsibility is the express an opinion on these financial statements based on
our audits.
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, 1997 and 1996, and the changes in its net assets available for
benefits for the year ended December 31, 1997 and the period from January 29,
1996 (inception) to December 31, 1996, in conformity with generally accepted
accounting principles.
/s/ Beckman Kirkland & Whitney
Woodland Hills, California
March 26, 1998
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Statement of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31,
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1997 1996
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<S> <C> <C>
ASSETS
Due from Company $ -0- $ 12
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Net assets available for benefits $ -0- $ 12
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</TABLE>
Statement of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
For the Period
Ended January 29,
For the Year Ended 1996 (Inception) to
December, 31 December 31,
1997 1996
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<S> <C> <C>
Additions to net assets attributed to:
Participant contributions $42,287 $188,123
Deductions from net assets attributed to:
Stock purchases 26,271 142,349
Participant withdrawals 16,028 45,762
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Total deductions 42,299 188,111
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Net increase in net assets available for benefits (12) 12
Net assets available for benefits:
Inception 12 -0-
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End of year $ -0- $ 12
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</TABLE>
See accompanying notes.
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements
December 31, 1997 and 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.
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements
December 31, 1997 and 1996 (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.
The offer period for all options granted expired as of December 31, 1997. The
Company has not approved any additional shares to be sold pursuant to options
granted.
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.
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements
December 31, 1997 and 1996 (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 1997
and 1996:
<TABLE>
<CAPTION>
SEMI-ANNUAL SHARES PURCHASE
PURCHASE DATE ISSUED PRICE
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<S> <C> <C>
June 30, 1996 24,711 $106,257
December 31, 1996 40,102 36,092
June 30, 1997 14,654 13,213
December 31, 1997 12,233 13,058
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Total 91,700 $168,620
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</TABLE>
Pursuant to plan provisions, there are no remaining shares of stock reserved by
the Company for future issuance.
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Datametrics Corporation
Employee Qualified Stock Purchase Plan
Notes to Financial Statements
December 31, 1997 and 1996 (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.
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EXHIBIT 23.1
[LETTERHEAD OF BECKMAN KIRKLAND & WHITNEY]
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-04815) pertaining to the Datametrics Corporation Employee Qualified
Stock Purchase Plan of our report dated March 26, 1998, 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, 1997.
/s/ Beckman Kirkland & Whitney
Woodland Hills, California
March 26, 1998
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