<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential - For Use of the Commission Only
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DATA TRANSLATION, INC.
- --------------------------------------------------------------------------------
(Name of Each Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
- --------------------------------------------------------------------------------
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
- --------------------------------------------------------------------------------
[ X ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
DATA TRANSLATION, INC.
March 8, 1996
Dear Shareholder:
You are cordially invited to attend our Annual Meeting of Shareholders on
Wednesday, April 10, 1996 at 10:00 a.m., at the offices of the Company, 100
Locke Drive, Marlboro, Massachusetts 01752. Your Board of Directors and
management look forward to welcoming the shareholders who are able to attend.
In addition to the election of directors to be acted upon at the Annual
Meeting, the Company is asking for your approval of the following proposals:
. An increase of 1,000,000 shares under the 1992 Key Employee Incentive
Plan for a total of 2,000,000 shares reserved under such plan in order to
continue to encourage and retain key employees who will contribute to the
Company's growth, together with other amendments to such plan;
. An increase in the authorized Common Stock from 10,000,000 to 25,000,000
shares to give the Company flexibility for stock splits, option grants or
possible future financings and other investment opportunities;
. The transfer of the Company's digital media and other assets to a newly
organized subsidiary in order to provide a corporate structure that can
more effectively capitalize on opportunities for growth on its Media
100(R) product; and
. The reincorporation of the Company in Delaware to take advantage of the
more highly developed statutory and case law available in Delaware.
Your board of directors unanimously recommends that you vote FOR all of
these proposals.
Whether or not you are able to attend the meeting, it is important that your
shares be represented, no matter how many shares you own. We therefore urge
you to mark, sign, date and mail your proxy promptly in the envelope provided.
On behalf of the Board of Directors, thank you for your cooperation and
continued support.
Alfred A. Molinari, Jr.
Chairman and Chief Executive Officer
<PAGE>
DATA TRANSLATION, INC.
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 10, 1996
----------------
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of Data
Translation, Inc., a Massachusetts corporation ("Data Translation" or the
"Company"), will be held at the offices of the Company, 100 Locke Drive,
Marlboro, Massachusetts 01752 on Wednesday, April 10, 1996 at 10:00 a.m. for
the following purposes:
1. To fix the number of directors at four and to elect four directors.
2. To increase by 1,000,000 the number of shares of the Company's common
stock, $.01 par value per share (the "Common Stock") available for issuance
under the Company's Key Employee Incentive Plan (1992) for a total of
2,000,000 shares available under such plan, to set the maximum number of
shares for which options may be granted thereunder in any year to any
participant at 250,000 and to limit participation therein to key employees.
3. To approve an amendment to the Articles of Organization of the Company
to increase the Company's authorized Common Stock, from 10,000,000 to
25,000,000 shares.
4. To approve the transfer of the Company's digital media and other
assets related to the Media 100 business unit to a new subsidiary of the
Company to be organized in Delaware, which transfer, although only of such
assets, may be deemed to be all or substantially all of the Company's
assets pursuant to Section 75 of the Massachusetts General Laws, Chapter
156B.
5. To approve the reincorporation of the Company from The Commonwealth of
Massachusetts to the State of Delaware pursuant to a statutory merger of
the Company into another subsidiary to be incorporated in Delaware and
wholly owned by the Company ("New DTI"), by approving the Agreement and
Plan of Merger between the Company and New DTI. The New DTI Certificate of
Incorporation includes the increases in the authorized common stock in the
amount proposed in item 3 above.
6. To transact any and all other business that may properly come before
the meeting.
All shareholders of record at the close of business on February 27, 1996 are
entitled to notice of and to vote at this meeting.
All shareholders of record on February 27, 1996 who (i) notify the Company
before the taking of the votes with respect to items 4 or 5 and (ii) do not
vote their shares in favor of such actions, may have the right to demand in
writing from the Company within 20 days after the date of mailing to them of
notice in writing that the corporate action has become effective, payment for
their shares and an appraisal of the value thereof. New DTI and any such
shareholder shall in such case have the rights and duties and shall follow the
procedure set forth in Sections 88 to 98, inclusive, of Chapter 156B of the
General Laws of Massachusetts set forth in Exhibit E.
Shareholders are requested to sign and date the enclosed proxy and return it
in the enclosed envelope. The envelope requires no postage if mailed in the
United States. Data Translation's 1995 Annual Report and Annual Report on Form
10-K are enclosed herewith, which together constitute the annual report to
stockholders.
By order of the Board of Directors
R. Bradford Malt, Clerk
March 8, 1996
<PAGE>
DATA TRANSLATION, INC.
PROXY STATEMENT
MARCH 8, 1996
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Data Translation, Inc., a Massachusetts
corporation ("Data Translation" or the "Company"), for the Annual Meeting of
Shareholders of Data Translation to be held at 10:00 a.m. on Wednesday, April
10, 1996 at the offices of the Company, 100 Locke Drive, Marlboro,
Massachusetts 01752, and any adjournments thereof, for the purposes set forth
in the notice of the meeting. Data Translation was incorporated in 1973, and
its principal executive offices are located at 100 Locke Drive, Marlboro,
Massachusetts 01752. This Proxy Statement is first being distributed to
shareholders on or about March 8, 1996 accompanied by the 1995 Annual Report
and Annual Report on Form 10-K which together shall constitute the annual
report to stockholders.
Unless otherwise indicated, all information contained in this Proxy
Statement gives effect to a two-for-one stock split in the form of a stock
dividend of one share of Common Stock for each share outstanding for holders
of record on July 17, 1995, effective on July 31, 1995.
VOTING RIGHTS AND OUTSTANDING SHARES
As of February 27, 1996, Data Translation had outstanding 7,863,795 shares
of Common Stock. Each share of Common Stock entitles the holder of record
thereof at the close of business on February 27, 1996 to one vote on the
matters to be voted upon at the meeting.
The expenses of preparing, printing and assembling the materials used in the
solicitation of proxies will be borne by Data Translation. In addition to the
solicitation of proxies by use of the mails, Data Translation may utilize the
services of some of its officers and employees (who will receive no
compensation therefor in addition to their regular salaries) and the firm of
D.F. King & Co., Inc. (who will receive a fee of $10,000) to solicit proxies
personally and by mail, telephone and telegraph from brokerage houses and
other shareholders.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted. If the shareholder specifies in the proxy
how the shares are to be voted, they will be voted as specified. If the
shareholder does not specify how the shares are to be voted, they will be
voted (i) to fix the number of directors at four and to elect the four
nominees listed under "Election of Directors," or the nominees for which
approval has not been withheld, (ii) to approve the increase by 1,000,000 the
number of shares of Common Stock available for issuance under the Key Employee
Incentive Plan (1992) for a total of 2,000,000 shares available under such
plan and the amendments to limit the maximum number of shares for which
options may be granted thereunder in any year to any participant to 250,000
and the participation in such plan to key employees, (iii) to approve the
amendment of the Company's Articles of Organization to increase the authorized
shares of the Company's Common Stock from 10,000,000 to 25,000,000, (iv) to
approve the transfer of the Company's digital media and related assets to a
newly organized subsidiary, and (v) to approve the reincorporation of the
Company in Delaware. Should any person so named be unable or unwilling to
serve as director, the persons indicated in the form of proxy for the annual
meeting intend to vote for such other person as the Board of Directors may
recommend. Any shareholder has the right to revoke his or her proxy at any
time before it is voted by attending the meeting and voting in person or
filing with the Clerk of the Company a written instrument revoking the proxy
or delivering another newly executed proxy bearing a later date.
At the date hereof, management of Data Translation has no knowledge of any
business other than that described in the notice for the Annual Meeting which
will be presented for consideration at such meeting. If any other business
should come before such meeting, the persons appointed by the enclosed form of
proxy shall have discretionary authority to vote all such proxies as they
shall decide.
<PAGE>
QUORUM, REQUIRED VOTES AND METHOD OF TABULATION
Consistent with state law and under the Company's by-laws, a majority of the
shares entitled to be cast on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Votes cast by
proxy or in person at the Annual Meeting will be counted by persons appointed
by the Company to act as election inspectors for the meeting. The four
nominees for election as directors at the Annual Meeting who receive the
greatest number of votes properly cast for the election of directors shall be
elected directors. Approval of the amendment to the Key Employee Incentive
Plan (1992) requires the affirmative vote of a majority of the shares present,
in person or by proxy and entitled to vote. The affirmative vote of a majority
of the capital stock outstanding and entitled to vote is required to approve
the amendments to the Company's Articles of Organization to increase the
authorized Common Stock. The affirmative vote of two-thirds of the shares of
the Company's Common Stock outstanding and entitled to vote is required to
approve the transfer of the assets to a newly organized subsidiary and the
reincorporation of the Company in Delaware.
The election inspectors will count the total number of votes cast "for"
approval of proposals, other than the election of directors, for purposes of
determining whether sufficient affirmative votes have been cast. The election
inspectors will count shares represented by proxies that withhold authority to
vote for a nominee for election as a director or that reflect abstentions and
"broker non-votes" (i.e., shares represented at the meeting held by brokers or
nominees as to which (i) instructions have not been received from the
beneficial owners or persons entitled to vote and (ii) the broker or nominee
does not have the discretionary voting power on a particular matter) as shares
that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. For purposes of items 3, 4 and 5,
abstentions and broker non-votes have the effect of a vote cast against such
proposals, but neither abstentions nor broker non-votes have any effect on the
outcome of voting on items 1 and 2.
1. ELECTION OF DIRECTORS
At the Annual Meeting, it is intended that the Company's Board of Directors
be elected until the next Annual Meeting and until their successors shall have
been duly elected and qualified. All nominees are currently directors of the
Company:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH DATA TRANSLATION
---- --- ------------------------------
<S> <C> <C>
Alfred A. Molinari, Jr........... 54 Chairman and Chief Executive Officer
R. Bradford Malt................. 41 Director and Clerk
John A. Molinari................. 33 Vice President/General Manager--Multimedia
Group and Director
Paul J. Severino................. 49 Director
</TABLE>
Mr. A. Molinari is the founder of the Company, and has been Chief Executive
Officer and a director since its inception in 1973 and is a director of its
subsidiaries. He was appointed Chairman of the Company in June 1995.
Mr. Malt is the Clerk of the Company and has been a director since March
1982. Mr. Malt is a partner of Ropes & Gray, which is general counsel to the
Company and also serves as a director of Data Translation Networking Limited
and Data Translation Limited.
Mr. J. Molinari was elected a director in June 1995 and appointed Vice
President/ General Manager-- Multimedia Group in November 1990. Prior to that,
he had been Vice President--Marketing and Sales since January 1989. He has
been employed by the Company since August 1984 in other sales and marketing
positions. He is the son of Alfred A. Molinari, Jr.
Mr. Severino has been a director of the Company since April 1985. He is
currently Chairman of Bay Networks, Inc., a supplier of internetworking
communication products. Since June 1992, he has been a director of MTDC
(Massachusetts Telecommunications Development Corporation).
2
<PAGE>
BOARD OF DIRECTORS
During the fiscal year ended November 30, 1995, the Data Translation Board
of Directors held six meetings and acted by written consent on five additional
occasions.
There are two committees of the Board of Directors: an Audit Committee and
an Executive Compensation and Stock Option Committee (the "Compensation
Committee"). There is no Nominating Committee.
The Audit Committee reviews with management and the Company's independent
public accountants the Company's financial statements, the accounting
principles applied in their preparation, the scope of the audit, any comments
made by the public accountants upon the financial condition of the Company and
its accounting controls and procedures, and such other matters as the
Committee deems appropriate. Messrs. Malt and Severino are the members of the
Audit Committee. During the fiscal year ended November 30, 1995, the Audit
Committee met on one occasion.
The Compensation Committee reviews salary policies and compensation of
officers and other members of management and approves compensation plans. The
Compensation Committee also administers the Company's stock option and
purchase plans. Messrs. Malt and Severino are the members of the Compensation
Committee. During the fiscal year ended November 30, 1995, the Compensation
Committee met on three occasions and acted by written consent on 11 occasions.
See "Executive Compensation--Compensation Committee Report on Executive
Compensation."
James M. Dow, founder and chairman of Microcom, Inc., was elected a director
of the Company in June 1995 and joined the Compensation and Audit Committees
in December 1995. Mr. Dow resigned from these committees on March 1, 1996 in
connection with his decision not to stand for reelection.
The Company compensates each director who is not also an employee of the
Company $7,500 per year plus $500 per meeting for services as a director.
Prior to June 1995, such non-employee directors were paid $2,000 per year for
such services. In addition, each non-employee director has been granted
options to purchase the Company's Common Stock under the Key Employee
Incentive Plan (1992) and in the case of Messrs. Malt and Severino, also under
the Key Employee Incentive Plan (1982).
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of January 31, 1996 (except as
noted below) by (i) each person (or group of affiliated persons) known by the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock, (ii) each of the Company's directors, (iii) the Chief Executive Officer
and each of the executive officers whose cash compensation exceeded $100,000
annually (the "Named Executive Officers"), and (iv) all executive officers and
directors as a group. Except as otherwise indicated in the footnotes to this
table, the Company believes that the person named in this table has sole
voting and investment power with respect to all the shares of Common Stock
indicated.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY
OWNED(1) PERCENT(1)
------------ ----------
<S> <C> <C>
DIRECTORS AND NAMED EXECUTIVE OFFICERS
Alfred A. Molinari, Jr. (2)........................... 1,037,068 13.19%
100 Locke Drive
Marlboro, Massachusetts 01752
Paul J. Severino (3).................................. 92,340 1.17
8 Federal Street
Billerica, Massachusetts 01821
R. Bradford Malt (3).................................. 34,600 *
One International Place
Boston, Massachusetts 02110
Peter J. Rice......................................... -- --
100 Locke Drive
Marlboro, Massachusetts 01752
Ellen W. Harpin (4)................................... 31,756 *
100 Locke Drive
Marlboro, Massachusetts 01752
John A. Molinari (5).................................. 135,612 1.72
100 Locke Drive
Marlboro, Massachusetts 01752
Paul Klinkby-Silver (6)............................... 9,800 *
Data Translation Networking Ltd.
The Mulberry Business Park, Wokingham,
Berkshire, England RG11 2QJ
All executive officers and directors as a group (9
persons in all)....................................... 1,355,910 17.25
ADDITIONAL 5% SHAREHOLDERS
West Highland Capital, Inc. (7)....................... 757,700 9.64
300 Drake's Landing Road, Suite 290
Greenbrae, California 94904
Twentieth Century Companies, Inc. (8)................. 554,000 7.05
4500 Main Street, P.O. Box 418210
Kansas City, MO 64141-9210
OppenheimerFunds, Inc.(9)............................. 515,000 6.55
Two World Trade Center, Suite 3400
New York, New York 10048
</TABLE>
- ---------------------
* Represents less than 1%.
4
<PAGE>
(1) The number and percent of the outstanding shares of Common Stock treat as
outstanding all shares issuable on exercise of options held by a
particular beneficial owner that are included in the first column.
(2) Includes 10,000 shares subject to options exercisable on or before March
31, 1996. Does not include 28,458 shares owned by Mr. A. Molinari's wife,
16,656 shares owned by her as a guardian for their children or 16,700
shares owned by their children, as to all of which Mr. Molinari disclaims
beneficial ownership.
(3) Includes 32,000 shares subject to options exercisable on or before March
31, 1996.
(4) Includes 30,800 shares subject to options exercisable on or before March
31, 1996.
(5) Includes 5,000 shares exercisable on or before March 31, 1996.
(6) Includes 9,800 shares subject to options exercisable on or before March
31, 1996.
(7) West Highland Capital, Inc. and its affiliates collectively hold 757,700
shares of the Company's Common Stock (the "West Highland Shares") as of
November 15, 1995. According to a Schedule 13D filed with the Commission
on November 27, 1995, (i) West Highland Capital, Inc. beneficially owns
all 757,700 of the West Highland Shares, (ii) Lang H. Gerhard beneficially
owns 644,675 of the West Highland Shares, (iii) West Highland Partners,
L.P. beneficially owns 530,830 of the West Highland Shares and (iv)
Buttonwood Partners L.P. beneficially owns 113,845 of the West Highland
Shares.
(8) Twentieth Century Companies, Inc. ("TCC") and its affiliates collectively
hold 554,000 shares of the Company's Common Stock (the "TCC Shares") as of
December 31, 1995. According to a Schedule 13G filed on February 9, 1996,
Investors Research Corporation ("IRC"), a registered investment advisor
and a wholly owned subsidiary of TCC, manages various investment companies
and manages the assets of institutional investor accounts. Based on the
Schedule 13G, Twentieth Century Investors, Inc., a registered investment
company managed by IRC, has sole voting and dispositive power over 500,000
of the TCC Shares, and each of TCC, IRC and James E. Stowers, Jr. has sole
voting and dispositive power over all 554,000 of the TCC Shares.
(9) According to a Schedule 13G filed with the Commission on February 9, 1996,
OppenheimerFunds, Inc., a registered investment advisor ("OFI")
beneficially owns 515,000 shares of the Company's Common Stock (the "OFI
Shares") as of December 31, 1995. OFI is the investment advisor to various
investment companies and has been delegated the power to dispose of
certain of the OFI Shares held by such investment companies. In addition,
OFI's affiliate Oppenheimer Discovery Fund beneficially owns 350,000 of
the OFI Shares and has sole voting power and shared dispositive power over
such shares.
5
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company as of January 31, 1996 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Alfred A. Molinari, Jr.......... 54 Chairman and Chief Executive Officer
Peter J. Rice................... 43 Vice President--Finance and Chief Financial
Officer
Ellen W. Harpin................. 39 Vice President--Administration
John A. Molinari................ 33 Vice President/General Manager--Multimedia
Group and Director
Mark L. Basler.................. 34 Vice President--Strategic Marketing
Paul Klinkby-Silver............. 36 Vice President/General Manager--Data
Translation Networking Limited
Kim Gray........................ 35 Vice President/General Manager--Data
Acquisition and Imaging Group
</TABLE>
Mr. A. Molinari has been Chief Executive Officer and a director of the
Company since its inception in 1973. See "Election of Directors."
Mr. Rice was appointed Vice President--Finance, Treasurer and Chief
Financial Officer in July 1995. Prior to joining the Company, he was Vice
President, Corporate Controller and Chief Accounting Officer for M/A-Com Inc.,
a New York Stock Exchange listed company.
Ms. Harpin was appointed Vice President--Administration in July 1995. She
has been employed by the Company since March 1983 and has served as Vice
President--Finance and Administration and Treasurer, Vice President--
Manufacturing and Director of Sales.
Mr. J. Molinari assumed his current position as Vice President/General
Manager--Multimedia Group in November 1990. See "Election of Directors."
Mr. Basler was appointed Vice President-Strategic Marketing in January 1996.
Prior to that, he served as Vice President/General Manager--Data Acquisition
and Imaging Group beginning July 1995 and General Manager--Data Acquisition
and Imaging Group beginning March 1994. From 1985 until his employment with
the Company, he served in several engineering and marketing management
positions for the Semiconductor Group of Analog Devices, Inc.
Mr. Klinkby-Silver was appointed Vice President/General Manager of Data
Translation Networking Limited in July 1995. Prior to that, he served as
General Manager of the United Kingdom Networking Group since November 1991.
From 1989 to 1991 he was a director and co-owner of a systems integration
company, Solv, PLC, which was in the business of reselling IBM RS6000 systems.
Ms. Gray was appointed Vice President/General Manager--Data Acquisition and
Imaging in January 1996. Prior to that, she served as Vice President--
Operations beginning July 1995. She has been with the Company since 1979 and
during her tenure has held various positions in materials, production and
manufacturing service, most recently as director of operations.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries to or on
behalf of the Named Executive Officers for the fiscal years ended November 30,
1995, 1994 and 1993:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
NAME AND PRINCIPAL ---------------------------- -------------- ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#)(1) COMPENSATION ($)(2)
------------------ ---- ---------- --------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
CURRENT OFFICERS
Alfred A. Molinari, Jr.. 1995 $223,945 $50,000 100,000 $1,256
Chairman and Chief
Executive Officer 1994 206,700 10,335 -- 422
1993 206,700 -- 20,000 3,138
Peter J. Rice(3)........ 1995 58,462 20,000 30,000 25
Vice President--Finance, 1994 -- -- -- --
Treasurer and Chief
Financial Officer 1993 -- -- -- --
Ellen W. Harpin......... 1995(4) 93,195 25,000 4,000 364
Vice President--
Administration 1994 104,712 5,250 20,000 214
1993 100,000 -- 5,000 1,559
John A. Molinari........ 1995 138,442 27,475 -- 233
Vice President/General
Manager-- 1994 112,500 12,007 100,000 230
Multimedia Group
Director 1993 100,000 -- 27,000 117
Paul Klinkby-Silver(5).. 1995 144,379 -- 4,000 32,354
Vice President/General
Manager-- 1994 120,427 69,752 20,000 9,062
Data Translation
Networking Limited 1993 102,942 58,176 -- 11,553
</TABLE>
- ---------------------
(1) The Company has not issued stock appreciation rights or grant restricted
stock awards. In addition, the Company does not maintain a "long-term
incentive plan," as that term is defined in applicable rules.
(2) The amounts for fiscal 1995 include (i) the dollar value of premiums paid
by the Company on term life insurance for the benefit of the Named
Executive Officers and (ii) retirement plan contributions with respect to
Mr. A. Molinari, Ms. Harpin and Mr. Klinkby-Silver.
(3) Mr. Rice commenced his employment with the Company on July 31, 1995, and
his salary included a signing bonus.
(4) Beginning in January 1995, Ms. Harpin has been working on a reduced time
schedule.
(5) Dollar amounts are based on the blended exchange rate for the respective
year.
7
<PAGE>
STOCK OPTIONS
The following table provides information concerning the grant of stock
options under the Key Employee Incentive Plan (1992) to the Named Executive
Officers:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR POTENTIAL
REALIZED VALUE
INDIVIDUAL GRANTS AT ASSUMED
------------------------------------------------ ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE EXPIRATION ----------------
NAME GRANTED (#) FISCAL YEAR PRICE($/SH) DATE 5% ($) 10% ($)
---- ----------- ------------ ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari, Jr.. 30,616(1) 9.06% $14.365 6/28/00 $70,613 $204,279
69,384(2) 20.53 13.063 6/28/01 308,204 699,252
Peter J. Rice........... 30,000(3) 8.88 15.50 7/31/01 158,145 358,776
Ellen W. Harpin......... 4,000(3) 1.18 11.00 2/28/01 14,964 33,949
John A. Molinari........ -- -- -- -- -- --
Paul Klinkby-Silver..... 4,000(4) 1.18 11.00 2/28/05 27,671 70,125
</TABLE>
- ---------------------
(1) These incentive options become exercisable over four years, 25% on each
anniversary of the date of grant and expire five years after grant. The
exercise price is 110% of the fair market value of the Common Stock on the
date of grant.
(2) These non-incentive options become exercisable over five years, 20% on
each anniversary of the date of grant and expire six years after grant.
(3) These incentive options become exercisable over five years, 20% on each
anniversary of the grant, and expire six years after grant.
(4) These incentive options become exercisable three years after grant and
expire ten years after grant.
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the Named
Executive Officers, concerning the unexercised options held as of the end of
the fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END (#) AT FY-END ($)(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Molinari, Jr.. 32,000 $374,295 10,000 110,000 $155,125 $ 749,373
Peter J. Rice........... -- -- -- 30,000 -- 120,000
Ellen W. Harpin......... 30,666 333,493 30,000 27,000 497,000 362,250
John A. Molinari........ 61,500 488,913 5,000 88,500 82,375 1,155,675
Paul Klinkby-Silver..... -- -- 9,000 20,000 150,750 242,500
</TABLE>
- ---------------------
(1) Market value of underlying securities at November 30, 1995, minus the
exercise price of "in-the-money" options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Malt, who is a director and Clerk of the Company, and serves on the
Compensation Committee is a partner of Ropes & Gray, which is general counsel
to the Company.
8
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the Nasdaq Composite Index and the CRSP Index
for NASDAQ Electronic Component Stocks for the period of five fiscal years
commencing December 1, 1990 and ending November 30, 1995.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
CRSP INDEX FOR NASDAQ ELEC.
COMPONENT STOCKS............ $100.00 $126.59 $198.59 $304.69 $342.72 $ 632.53
NASDAQ COMPOSITE INDEX....... $100.00 $149.29 $188.03 $217.73 $218.15 $ 310.74
DATA TRANSLATION, INC........ $100.00 $175.72 $203.83 $191.69 $479.23 $1,246.01
</TABLE>
- ---------------------
The above graph compares the performance of the Company with that of the
NASDAQ Composite Index and the CRSP Index for NASDAQ Electronic Component
Stocks, which is an industry index prepared by the Center of Research--
Securities Prices at the University of Chicago. These indices weigh investment
on the basis of market capitalization.
The comparison of total return of investment (change in year-end stock price
plus reinvested dividends) for each of the periods assumes that $100 was
invested at the close of the market on November 30, 1990 in each of the CRSP
Index for NASDAQ Electronic Component Stocks, the NASDAQ Composite Index and
Data Translation.
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for reviewing the compensation of
officers and other members of the Company's management. The Committee also
grants stock options under the Key Employee Incentive Plan (1992) and
administers the Key Employee Incentive Plan (1982) and the 1986 Employee Stock
Purchase Plan. Messrs. Malt and Severino serve on the Compensation Committee.
For fiscal 1995 as well as fiscal 1994, the Chief Executive Officer with
input from the other executive officers made individual recommendations to the
Compensation Committee based on his judgment of individual performance and the
executive's contributions to the growth and profitability of the Company. The
Committee then reviewed and approved the compensation of the Chief Executive
Officer and other executive officers based on these recommendations and taking
into account opportunities that exist generally at other companies for
positions with comparable responsibilities. The Committee also considered the
need to attract, motivate and retain talented executives who are critical to
the Company's long-term success when making its compensation decisions. The
Committee believes such compensation should be at or above median levels
generally for comparable positions at other companies.
Based on the Company's performance in fiscal 1995, the Compensation
Committee approved management's recommendation of bonuses to the executive
officers, except for the general manager of the networking distribution group
whose group did not meet targeted goals, in the amount of approximately 20% to
34% of their fiscal 1995 salary, with 22% of salary as bonus to the Chief
Executive Officer. The bonuses were granted pursuant to the fiscal 1995 Profit
Sharing Plan adopted in the past fiscal year under which 16.4% of net income
(other than income attributable to the networking distribution business) was
set aside for bonus awards to executive officers and other employees if
revenue and operating income targets were met. The Committee also approved
increases in the salaries of the executive officers. These increases were
based on merit and a need to adjust individual salaries to reflect increased
responsibilities to manage the Company's growth. In the three years of the
Company's losses prior to fiscal 1994, the Company generally did not award
bonuses to the then executive officers and did not increase the Chief
Executive Officer's salary. The bonus awards for fiscal 1994, when the Company
returned to profitability, represented approximately 5% of each executive's
base salary, again with a larger award to the general manager of the
networking distribution group.
For fiscal 1996, the Committee has approved an Executive Bonus Plan which
ties the Chief Executive Officer's and other executives' compensation more
directly to the achievement of revenue and operating income targets for the
Company's business units. If business units perform at 100% of the targets,
depending upon the executive, full bonus compensation would represent between
40% and 100% of his or her base salary. Starting when 75% of targets are met,
bonuses are paid at 25% of the full bonus amount, with the maximum bonus paid
at 150% of the full bonus amount if targets are exceeded by 50% or more. The
Committee has not approved increases in 1996 salary levels for the executive
officers except for one individual promoted to an executive officer position
in fiscal 1995 whose salary was increased to bring her into the appropriate
salary range for her level and responsibilities.
The Compensation Committee awards stock options to the Chief Executive
Officer and the other executive officers as well as other key employees of the
Company in order to provide an incentive to build stockholder value and to
align the executive's interests more closely with stockholders' interests. In
granting stock options, the Compensation Committee considers the individual's
performance and continuing contribution to the Company and, in the case of
subsequent grants, also the existing level of stock ownership and stock
options. The Committee is in the process of reviewing guidelines for option
grants in fiscal 1996.
In fiscal 1995, the Committee continued its practice of granting stock
options to the executive officers with an exercise price of not less than fair
market value of the stock on the date of grant. The options generally become
exercisable over five years and expire six years from the date of grant,
except (i) in the case of persons owning, directly or indirectly through
application of the attribution rules of the Internal Revenue Code of 1986 (the
"Code"), more than 10% of the stock of the Company whose incentive options
vest over four years and
10
<PAGE>
expire after five years and (ii) in the case of United Kingdom employees,
whose options become exercisable on the third anniversary of the date of grant
and expire after ten years.
Section 162(m) of the Code, enacted in 1993, generally disallows a tax
deduction to public companies for compensation over $1,000,000 paid to the
company's chief executive officer and four other highest paid executive
officers. Qualifying performance-based compensation will not be subject to the
deduction limit if certain requirements are satisfied. The Board of Directors
has approved and is requesting shareholder approval of amendments to the Key
Employee Incentive Plan (1992) under which the maximum number of shares for
which options could be granted to any participant in any year would be limited
to 250,000 and the participation in such plan would be limited to key
employees. The purpose of these proposed amendments is to exempt options under
such plan from the Section 162(m) limitation if an additional "outside
director" (as such term is defined in the Code) is added to the Committee. See
Item 2, "--Federal Tax Effects (1992 Plan)."
EXECUTIVE COMPENSATION AND STOCK
OPTION COMMITTEE
R. Bradford Malt
Paul J. Severino
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases its domestic headquarters (the "facilities"), from Nason
Hill Trust (the "Trust"), a nominee trust of which Mr. A. Molinari, Chairman
and Chief Executive Officer of the Company, and his wife are the sole trustees
and beneficiaries.
The Company's facilities are leased from the Trust under operating leases
expiring on December 1, 1999. Pursuant to an amendment dated November 29,
1989, the annual lease payments are equal to the sum of (i) $1,092,000 and
(ii) any additional interest costs payable by the Trust in such year under a
note in favor of Shawmut Worcester County Bank, N.A. due to the failure of the
Company to maintain the financial ratios required for the most favorable
interest rate under such note. In addition to such lease payments, the Company
bears all of the tax, insurance and other costs of operating the facilities
and, under certain circumstances, various costs and expenses associated with
the series of industrial revenue bonds, the proceeds of which were used in
connection with the facilities. Total rental expense charged to operations
under the leases as then in effect was $1,092,000 for each of the fiscal years
1993, 1994 and 1995.
Mr. Malt, who has been a director of the Company since March 1982, is a
partner of Ropes & Gray, which is general counsel to the Company. John A.
Molinari, a director and Vice President/General Manager-- Multimedia Group, is
the son of Alfred A. Molinari, Jr. See "Executive Compensation." Sean
Sullivan, who is employed by the Company and earned $79,914 during fiscal year
1995, is the son-in-law of Alfred A. Molinari.
2. PROPOSAL TO APPROVE THE INCREASE BY 1,000,000 SHARES FOR A TOTAL OF
2,000,000, SHARES AVAILABLE FOR ISSUANCE UNDER THE COMPANY'S
KEY EMPLOYEE INCENTIVE PLAN (1992) (THE "1992 PLAN") AND THE AMENDMENTS
TO LIMIT THE MAXIMUM NUMBER OF SHARES FOR WHICH OPTIONS
MAY BE GRANTED IN ANY YEAR TO ANY PARTICIPANT TO 250,000
AND PARTICIPATION UNDER SUCH PLAN TO KEY EMPLOYEES
The Board of Directors has approved an increase of 1,000,000 shares in the
number of shares of Common Stock available for issuance under the 1992 Plan
and is recommending this increase to shareholders for their approval. If
approved by the shareholders, the number of shares currently available for
grant under the 1992 Plan would be increased from 1,000,000 to 2,000,000
shares. The Board of Directors has also approved
11
<PAGE>
amendments to the 1992 Plan to establish a limit of 250,000 on the number of
shares which may be granted to any participant in any year and to limit
participation in such plan to key employees, each such amendment adopted to
comply with Section 162(m) of the Code. See "Federal Tax Effects (1992 Plan)"
discussed below. This discussion is qualified in its entirety by reference to
the 1992 Plan, as amended, a copy of which is attached hereto as Exhibit A.
APPROVAL BY SHAREHOLDERS OF THE PROPOSED INCREASE IN THE NUMBER OF SHARES
ISSUABLE UNDER THE 1992 PLAN, THE PROPOSED LIMIT TO THE NUMBER OF SHARES WHICH
MAY BE GRANTED UNDER THE 1992 PLAN AND THE PROPOSED LIMIT TO PARTICIPATION IN
THE 1992 PLAN TO KEY EMPLOYEES WILL CONSTITUTE APPROVAL OF THE AMENDMENT TO
THE 1992 PLAN. A COPY OF THE 1992 PLAN, AS AMENDED IS SET FORTH AS EXHIBIT A
TO THIS PROXY STATEMENT.
Reasons for the Proposed Increase. The Company maintains two employee stock
option plans, the 1992 Plan adopted in 1992 and the other adopted in 1982.
As of January 31, 1996, 1,028,740 options to purchase shares of Common Stock
were outstanding under the Company's stock option plans, 927,118 shares have
been issued pursuant to the exercise of options, options to purchase 1,907,872
shares of Common Stock have lapsed, and before giving effect to the proposed
increase recommended for approval at this Meeting, options to purchase 19,720
shares of Common Stock were reserved and available for future grant under such
stock option plans.
The Board of Directors believes that the shares currently available for
grant under the Company's 1992 Plan are not sufficient for the Company's stock
option program. The Company's stock option program is the principal incentive
tool used to motivate key employees to create long-term value for
shareholders. Providing key employees with an opportunity to participate in an
increase in stock value not only encourages equity ownership by management,
but also more closely aligns management interests with the interests of all
shareholders.
Reasons for the Proposed Limits. The proposed amendments to the 1992 Plan
which would limit to 250,000 the maximum number of shares for which options
could be granted to any participant in any year and which would limit
participation to key employees are intended to exempt options under such plan
from compensation limitations under Section 162(m) of the Code. See "Federal
Tax Effects (1992 Plan)" discussed below.
It is not currently determinable how the Company's officers and directors
will benefit from the amendments to the 1992 Plan. As described below, the
Compensation Committee determines the terms and provisions of awards granted
under the 1992 Plan.
Administration of 1992 Plan. Pursuant to the terms of the 1992 Plan, the
1992 Plan is administered by the Board of Directors or the Compensation
Committee or another committee to which the Board of Directors may delegate
part or all of such administration (the "Committee"). The Committee is
responsible for the day-to-day administration of the 1992 Plan, including the
selection of participants in the 1992 Plan, determination of the terms and
provisions of awards granted under the 1992 Plan (subject to certain
limitations set forth in the 1992 Plan) and interpretation of the provisions
of the 1992 Plan and resolution of disputes thereunder, which determinations
shall be conclusive.
The 1992 Plan provides for the grant of incentive stock options, non-
incentive stock options and stock appreciation rights to advisers, consultants
and key employees of the Company or any of its participating subsidiaries and,
pursuant to the formula described below, non-incentive stock options to non-
employee directors of the Company. Subject to selection by the Committee,
advisors, consultants and each key employee of the Company or its
participating subsidiaries is eligible to participate in the 1992 Plan. As of
January 31, 1996, there are approximately 347 employees eligible to
participate in the 1992 Plan.
12
<PAGE>
The exercise price of all options granted under the 1992 Plan (other than
options granted to non-employee directors) is determined by the Compensation
Committee and in the case of incentive options may not be less than 100% (110%
in the case of incentive stock options granted to persons owning or treated as
owning more than 10% of the total combined voting power of all classes of the
Company's stock) of the fair market value of the Common Stock on the date of
grant. Unless otherwise specified by the Committee, each option vests as to
20% of the shares of the first anniversary of the date of grant and an
additional 20% on each anniversary thereafter, which vesting schedule may be
accelerated in certain circumstances. No option may be exercised later than 10
years (five years in the case of incentive options granted to any 10%
beneficial owners) after the date of grant. The last sale price for the
Company's Common Stock on the Nasdaq Stock Market on January 31, 1996 was
$13.25 per share.
Stock appreciation rights ("SARs") may be granted to advisers, consultants
and employees in tandem or independent of options. SARs will entitle
recipients to receive upon exercise, with respect to each share of common
stock to which the SAR relates, payment in cash or shares of Common Stock (as
determined by the Board of Directors) equal to the difference between the fair
market value of the Common Stock on the date the SAR is exercised, as may be
adjusted by the Committee, and the fair market value on the date the SAR was
granted. The Committee may adjust the fair market value of the Common Stock on
the date of exercise to account for dividends on the Common Stock, and in such
limited circumstances as it may specify following a change in control of the
Company, by reference to a specified value for the Common Stock during the
period immediately preceding the change in control, as the Committee
determines.
The rights of a 1992 Plan participant in an award granted under the 1992
Plan are exercisable during his lifetime only by him and may not be sold,
pledged, assigned, or otherwise transferred. Nothing in the 1992 Plan is to be
construed so as to give a participant the right to be retained in the service
of the Company. In the event of the death of a participant, all options held
by the participant may be exercised by the participant's executor or
administrator for a period of one year (or as extended by the Committee)
following the participant's death for all or any of the shares which the
participant was entitled to purchase immediately prior to his death.
In the event of the termination of a participant's (other than a non-
employee director's) employment or service with the Company for any reason
other than death, all awards held by the participant shall immediately
terminate unless the Committee determines that such awards as were exercisable
immediately prior to termination shall remain exercisable for a period of time
after termination. Employment shall not be considered terminated in the case
of any bona fide leave of absence approved by the Board of Directors for
purposes of the 1992 Plan so long as reemployment is guaranteed by statute or
contract or in the case of a transfer of employment between the Company and
one of its subsidiaries or between subsidiaries or between the Company and a
corporation issuing or assuming an option in a merger, reorganization,
acquisition or other transaction to which Section 424(a) of the Code applies.
The 1992 Plan currently provides for the grant of non-incentive options
covering 20,000 shares of the Company's Common Stock to each non-employee
director of the Company serving on April 8, 1992 and for the grant of non-
incentive options covering 20,000 shares of Common Stock to each non-employee
director initially elected to the Board of Directors after April 8, 1992 on
the date such director is elected. All such options shall be exercisable with
respect to 20% of the shares on the first anniversary of the date of grant and
an additional 20% on each subsequent anniversary and shall expire not later
than 10 years from the date of grant. All unexpired options granted to a non-
employee director that are exercisable on the date such director ceases to be
a director for any reason other than death shall remain exercisable for a
period of six months following such termination, but shall terminate
immediately if the director was removed for cause or resigned under
circumstances which in the opinion of the Board of Directors casts such
discredit on the Company or him so as to justify termination of his options.
In the event there is a change in the outstanding stock of the Company due
to a stock dividend, stock split, combination of shares, recapitalization,
merger or other capital change, the aggregate number of shares available under
the 1992 Plan and under the outstanding options, the option price, and other
relevant provisions, will be
13
<PAGE>
appropriately adjusted. In the event of a consolidation or merger in which the
Company is not the surviving corporation or which results in the acquisition
of all the Company's outstanding stock by a single entity, or in the event of
the sale of substantially all of the Company's assets, all outstanding awards
shall terminate (including the options to non-employee directors to the extent
the Committee determines it may do so in accordance with applicable
requirements of Rule 16b-3 of the Securities Exchange Act of 1934), provided
that the Board of Directors shall either make all such outstanding awards
exercisable immediately prior to consummation of such merger, consolidation or
sale of assets or arrange to have the surviving or acquiring entity grant
replacement awards having equivalent terms and provisions.
The Committee has the power to amend the 1992 Plan or amend any outstanding
award for the purpose of satisfying the requirements of Section 422 of the
Code or of any changes in applicable laws or regulations, to comply with any
applicable laws and requirements of foreign jurisdictions or for any other
lawful purpose as long as such amendment will not adversely affect the rights
of any participant (without his consent) under any awards previously granted.
The Committee, however, may not amend the formula for options granted to non-
employee directors more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder. The 1992 Plan provides for additional
indemnification by the Company of members of the Board against liabilities
arising in respect of actions taken by the Board in administering the 1992
Plan.
Federal Tax Effects (1992 Plan). The following description summarizes
certain U.S. federal income tax consequences associated with stock options
under the 1992 Plan. It does not purport to describe all federal tax
consequences, or state, local or non-U.S. tax consequences, associated with
1992 Plan participation. Nor does it purport to describe the tax consequences
associated with participation in the 1992 Plan by employees of the Company's
foreign subsidiaries.
The grant of an option does not produce taxable income to the participant or
a deduction for the Company. Upon the exercise of a nonstatutory option, the
participant will realize ordinary income (subject to withholding where the
option was awarded in connection with employment) equal to the excess of the
fair market value of the shares acquired upon exercise over the exercise
price. The Company will be entitled to a corresponding deduction if it
satisfies applicable tax reporting requirements with respect to such income.
The Company will not be entitled to a deduction with respect to any gain or
loss recognized upon a subsequent disposition of the shares.
The exercise of an incentive stock option does not produce ordinary taxable
income to the participant, nor is the Company entitled to a deduction upon
exercise. However, exercise of an incentive stock option results in additional
alternative minimum taxable income ("AMTI") equal to the excess of the fair
market value of the shares acquired upon exercise over the exercise price.
This increase in AMTI may result in an alternative minimum tax liability for
the participant.
If shares acquired upon exercise of an incentive stock option are not
disposed of within two years from the date of grant of the incentive stock
option nor within one year after exercise, any gain or loss recognized upon a
subsequent sale or exchange of the shares will be a long-term capital gain or
loss. The Company will not be entitled to a deduction in this case. However, a
participant who disposes of such shares within either the one-year or two-year
periods (a "disqualifying disposition") will realize ordinary income in the
year of the disqualifying disposition (and the Company will be entitled to a
deduction) equal in general to the excess of the fair market value of the
shares at time of exercise over the exercise price. Any additional gain upon
disposition of the shares will be taxed as short- or long-term capital gain
for which the Company will not be entitled to a deduction. Where the
disqualifying disposition is an arm's-length sale or exchange for less than
the fair market value of the shares at time of exercise, the participant's
ordinary income and the Company's deduction will be limited to the gain, if
any, on the sale or exchange.
For purposes of applying the foregoing rules, an incentive stock option will
be treated as a nonstatutory option to the extent that it, together with other
incentive stock options granted to the participant after 1986 under any plan
of the Company or its subsidiaries, first becomes exercisable in any calendar
year for stock having a
14
<PAGE>
fair market value (determined as of the time of grant of the option) in excess
of $100,000. Also, an incentive stock option will be treated as a nonstatutory
option if it is exercised more than three months following termination of
employment (with exceptions in the case of termination by reason of death of
disability).
In limited circumstances, awards that are made or that become exercisable in
connection with a change in control of the Company could result in a loss of
deduction to the Company and a 20% additional tax in the hands of the award
recipient. Also, Section 162(m) of the Code imposes a $1,000,000 limit on the
deduction the Company may claim for remuneration to its top five officers in
any year. There are a number of exceptions to this limitation, including an
exception for certain performance-based compensation. Stock options qualify
for the exception, to the extent granted by a board committee composed
exclusively of two or more "outside directors" (as defined), under a
shareholder-approved plan that limits the number of options that can be
granted to any eligible employee in a specified period, and must be granted
with an exercise price not less than the fair market value of the stock on the
date of grant. Under the transition rules, the "outside director" and option
limit rules did not apply to options granted under the 1992 Plan as in effect
prior to the amendments submitted for shareholder approval at this Annual
Meeting, but will apply to the 1992 Plan, as amended. The Compensation
Committee currently has only one "outside director" due to the vacancy left by
Mr. Dow, and therefore stock options granted would not qualify for the
performance-based compensation exemption under Section 162(m) until another
"outside director" joins such committee. In other respects, stock options
awarded under the 1992 Plan are intended to qualify for the exception.
An affirmative vote of a majority of the shares present, in person or by
proxy, and entitled to vote at the Annual Meeting, is required to approve the
amendment to the Key Employee Incentive Plan (1992). The Board of Directors
recommends a vote FOR Proposal 2.
3. PROPOSAL TO INCREASE THE COMPANY'S
AUTHORIZED COMMON STOCK
In the event that the reincorporation in Delaware in accordance with
Proposal 5 is not approved by the shareholders, the Board of Directors has
determined that it is advisable to increase the Company's authorized voting
Common Stock from 10,000,000 shares to 25,000,000 shares and has voted to
recommend that the shareholders adopt an amendment to the Company's Articles
of Organization effecting the proposed increase. In the event that the
shareholders approve the reincorporation of the Company in Delaware, the
authorized common stock of the Company after the reincorporation will be
25,000,000 shares in accordance with the Certificate of Incorporation.
APPROVAL BY SHAREHOLDERS OF THE PROPOSED INCREASE IN AUTHORIZED COMMON STOCK
WILL CONSTITUTE APPROVAL OF THE AMENDMENT TO THE COMPANY'S ARTICLES OF
ORGANIZATION.
As of January 31, 1996, 9,092,276 shares of Common Stock were issued and
outstanding or reserved for issuance, leaving 907,724 shares available for
future issuance.
The Board of Directors believes it to be in the best interests of the
Company to authorize additional shares of Common Stock in order to provide
flexibility for corporate action in the future. In addition, management
believes that the availability of additional authorized shares for issuance
from time to time in the Board's discretion in connection with possible future
financings, investment opportunities, acquisitions of other companies, stock
splits, dividends or option grants or for other corporate purposes is
desirable in order to avoid repeated separate amendments to the Company's
Articles of Organization and the delay and expenses incurred in holding
meetings of the shareholders to approve such amendments. There are at present
no specific understandings, arrangements or agreements with respect to any
transactions that would require the Company to issue any new shares of its
Common Stock, other than proposed stock option grants to employees.
15
<PAGE>
No further authorization by vote of the shareholders will be solicited for
the issuance of the additional shares of Common Stock proposed to be
authorized, except as might be required by law, regulatory authorities or
rules of the Nasdaq Stock Market or any stock exchange on which the Company's
shares may then be listed. The shareholders or the Company do not have any
preemptive right to purchase or subscribe for any part of any new or
additional issuance of the Company's securities. Future issuances of Common
Stock by the Company may be dilutive to its shareholders.
The affirmative vote of a majority of the Common Stock outstanding and
entitled to vote as of the record date is required to approve the amendment to
the Company's Articles of Organization. The Board of Directors considers this
amendment to be advisable and in the best interests of the Company and its
shareholders and recommends that you vote FOR approval of the amendment. If
not otherwise specified, proxies will be voted FOR approval of this amendment.
4. TRANSFER OF ASSETS TO MEDIA 100
The Board of Directors has approved and, for the reasons described below,
recommends that the Company's shareholders approve the transfer of the
Company's digital media and other assets related to the Media 100 product
group to a subsidiary to be newly organized in Delaware, which transfer,
although only of such assets, may constitute a transfer of all or
substantially all of the Company's assets under Section 75 of the
Massachusetts General Laws, Chapter 156B.
The Company plans in the next several months to transfer the assets of its
digital media business, to the new subsidiary (as the actual name has not yet
been selected, such subsidiary to be hereafter referred to in this proxy
statement as "Media 100"). While Media 100 will operate under a separate board
of directors, it will be supported by administrative, financial and
manufacturing resources of the Company. The Company currently is investigating
various alternatives to increase the value of the Company to shareholders,
including the possibility of Media 100 selling common stock (the "Media 100
Stock") to the public. There can be no assurance that any such alternative,
including an offering, will be consummated.
Under certain circumstances, no further authorization by vote of the
shareholders would be solicited for sales of the Media 100 Stock. The Company
would seek shareholder approval for any such sale as mandated by applicable
state law, which may require such approval depending on the financial
situation of the Company as it develops in the future and other circumstances.
As a result, depending on the facts and circumstances of a proposed sale of
Media 100 Stock at such time, the Company may or may not need to seek
additional shareholder approval.
PRINCIPAL REASONS FOR CREATION OF MEDIA 100
The Company's primary objective is to maximize the competitive and strategic
advantages of its products to its customers as well as the long term
shareholder value for its shareholders. For the Company's overall strategy to
succeed, it must provide a corporate structure that maximizes the chances of
success of each of its product lines. The Company believes that Media 100 as
an independent subsidiary with its own management team, although it may
initially share directors and officers with the Company, can more effectively
capitalize on opportunities for growth of its Media 100 product, supported by
the administrative, financial and manufacturing resources provided by the
Company.
The Company also believes that, based on comparable multiples, the value of
its digital media group and Media 100 product line may be maximized by
offering investors an investment alternative in the Media 100 product itself.
Any offering would dilute the ownership position of the Company, and therefore
its stockholders in the digital media group. However, the Board believes this
strategy can create greater value for shareholders in the longer term than in
keeping the digital media group combined for valuation purposes with the data
acquisition and imaging and the networking distribution groups. In addition,
possible sales of the Media 100 Stock will provide Media 100 (and to the
extent the Company sells the Media 100 Stock, the Company) with additional
capital to improve its opportunities for expansion and growth.
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CHARACTER AND LOCATION OF PROPERTY
The assets of Media 100 will include the digital media business's accounts
receivable, prepaid expenses, fixed assets and inventory as well as equipment
for manufacturing, research and development services, and administrative
services used in the digital media business. Such assets would be transferred
subject to related liabilities.
All or substantially all of the Media 100 assets are located at the
Company's principal executive offices in Marlborough, Massachusetts.
The table below contains financial information regarding digital media, data
acquisition and imaging and networking distribution as well as net sales data
which is also provided in the Company's 1995 Annual Report. The identifiable
assets for digital media represent the accounts receivable, prepaid expenses,
fixed assets and inventory to be transferred to Media 100. In addition, the
Media 100 assets will include a portion of shared assets consisting of
manufacturing equipment, research and development services, and administrative
services to be used in the digital media business. The actual value of the
assets at the time of transfer will vary from the historical information.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NOVEMBER 30,
-------------------------------------
1993 1994 1995
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Net sales:
Digital media........................ $ 1,118,000 $12,415,000 $30,278,000
Data acquisition and imaging......... 23,733,000 22,440,000 21,826,000
Networking distribution.............. 10,850,000 15,382,000 20,348,000
----------- ----------- -----------
Total net sales.................... $35,701,000 $50,237,000 $72,452,000
Net sales as a percentage of total net
assets:
Digital media........................ 3.1% 24.7% 41.8%
Data acquisition and imaging......... 66.5 44.7 30.1
Networking distribution.............. 30.4 30.6 28.1
----------- ----------- -----------
100.0% 100.0% 100.0%
Income (loss) from operations(1):
Digital media........................ $(4,658,000) $(2,098,000) $ 1,662,000
Data acquisition and imaging......... 289,000 2,088,000 3,073,000
Networking distribution.............. 160,000 482,000 143,000
Total income (loss) from operations(1). $(4,209,000) $ 405,000 $ 4,198,000
<CAPTION>
AS OF NOVEMBER 30,
-------------------------------------
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Identifiable assets(2):
Digital media........................ $ 1,107,421 $ 3,230,704 $ 9,368,829
Data acquisition and imaging......... 2,807,854 2,742,672 4,660,400
Networking distribution.............. 1,055,584 3,572,830 8,858,011
Total assets(2)........................ $16,161,000 $19,199,000 $60,984,000
</TABLE>
- ---------------------
(1) Income (loss) from operations for digital media, data acquisition and
imaging and networking distribution do not necessarily equal total income
(loss) from operations due to income (loss) arising principally from
operations relating to new business activities.
(2) The identifiable assets for each of digital media, data acquisition and
imaging and networking distribution represent assets specifically related
to each product group. The remaining assets are the Company's shared
corporate assets and are included in the total assets.
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DISSENTERS' RIGHTS OF APPRAISAL
Under Massachusetts law, shareholders of Massachusetts corporations have the
right to dissent from the approval of a transfer of all or substantially all
of the assets of a corporation, and receive cash equal to the appraised value
of their shares. See "Rights of Appraisal" for a more detailed description of
those rights.
REQUIRED APPROVAL
Under Section 75 of the Massachusetts General laws, Chapter 156B, the
affirmative vote of two-thirds of the outstanding shares of the Company's
Common Stock is required to approve the sale, lease or exchange of all or
substantially all the assets of the Company. The proposed transfer of the
assets to Media 100, although the assets will only represent the digital media
and related assets of the Company, may be deemed a sale, lease or exchange
under Section 75. The Company is therefore seeking your approval.
The Board of Directors considers the transfer to be advisable and in the
best interests of the Company and its shareholders and recommends that you
vote FOR approval of the asset transfer. If not otherwise specified, proxies
will be voted FOR approval of the transfer of assets.
5. PROPOSAL TO REINCORPORATE IN DELAWARE
GENERAL
The Board of Directors has approved and, for the reasons described below,
recommends that the Company's shareholders approve the reincorporation of the
Company in Delaware from Massachusetts, its present state of organization, by
approving the proposed Agreement and Plan of Merger (the "Merger Agreement"),
a copy of which is attached hereto as Exhibit B, and the other related
agreements and actions further described below (the "Reincorporation
Proposal"). SHAREHOLDERS ARE URGED TO READ CAREFULLY THE FOLLOWING SECTIONS OF
THIS PROXY STATEMENT, INCLUDING THE RELATED EXHIBITS, BEFORE VOTING ON THE
REINCORPORATION PROPOSAL.
Under the Merger Agreement, the Company will be merged into a wholly owned
subsidiary, Data Translation, Inc. ("New DTI"), to be incorporated in
Delaware. The Certificate of Merger provides that the name of the surviving
corporation will be Data Translation, Inc. Upon completion of the merger, each
outstanding share of the Company's Common Stock, par value $.01 per share,
will automatically be converted into one share of New DTI Common Stock, par
value $.01 per share ("New DTI Common Stock"). Each certificate representing
issued and outstanding shares of the Company's Common Stock (other than shares
of the Company's Common Stock in respect of which dissenters' rights shall
have been properly exercised) will continue to represent the same number of
shares of Common Stock of New DTI. Delivery of stock certificates issued by
the Company prior to the merger will constitute "good delivery" of shares in
transactions subsequent to the merger. When presently outstanding certificates
are presented for transfer after the merger, new certificates for stock of New
DTI will be issued. New certificates will also be issued upon the request of
any shareholder, subject to normal requirements as to proper endorsement,
signature, guarantee, if required, and payment of applicable taxes. IT WILL
NOT BE NECESSARY FOR SHAREHOLDERS OF THE COMPANY TO EXCHANGE THEIR EXISTING
STOCK CERTIFICATES FOR STOCK CERTIFICATES OF NEW DTI. New DTI's Common Stock
will continue to be quoted on The Nasdaq Stock Market without interruption
under the same symbol (DATX) as the shares of the Company's Common Stock are
presently quoted.
All obligations under all employee benefit plans of the Company will also be
assumed by New DTI, including, without limitation, (i) obligations under the
Company's 1992 Plan and Key Employee Incentive Plan (1982), and (ii)
obligations under the Company's 1986 Employee Stock Purchase Plan.
Under Massachusetts law, the affirmative vote of two-thirds of the
outstanding shares of the Company's Common Stock is required for approval of
the Merger Agreement and the other terms of the Reincorporation Proposal. See
"--Vote Required for the Reincorporation." No other approval is required for
the Reincorporation
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Proposal. If approved by the shareholders at the upcoming Annual Meeting, it
is anticipated that the Reincorporation Proposal will become effective at the
earliest practicable date (the "Effective Date"); however, pursuant to the
Merger Agreement, the merger may be delayed or abandoned or the Merger
Agreement may be amended prior to the Effective Date, if the Board of
Directors deems it inadvisable to proceed as contemplated herein, except that
the principal terms may not be amended without shareholder approval.
This discussion is qualified in its entirety by reference to the Merger
Agreement, the Certificate of Incorporation of New DTI (the "Certificate of
Incorporation") and the by-laws of New DTI (the "By-laws"), draft copies of
which are attached hereto as Exhibits B, C and D, respectively.
In the Certificate of Incorporation, New DTI will have 25,000,000 shares of
Common Stock and 1,000,000 shares of Preferred Stock authorized, while the
Company currently has 10,000,000 shares of Common Stock and 1,000,000 shares
of Preferred Stock authorized. A vote in favor of the merger also constitutes
an approval of this increase in authorized common stock.
APPROVAL BY SHAREHOLDERS OF THE PROPOSED REINCORPORATION WILL CONSTITUTE
APPROVAL OF THE MERGER AGREEMENT, THE CERTIFICATE OF INCORPORATION AND THE BY-
LAWS, DRAFT COPIES OF WHICH ARE SET FORTH AS EXHIBITS B, C AND D,
RESPECTIVELY, TO THIS PROXY STATEMENT.
PRINCIPAL REASONS FOR THE REINCORPORATION
The reincorporation will allow the Company to take advantage of the highly
developed body of statutory and case law available in Delaware. By contrast,
the Massachusetts corporation laws are divided into several different chapters
adopted at different times with overlapping and sometimes confusing
provisions. While attempts have been and may in the future be made to reform
these provisions, there is no assurance that such laws will be successfully
reformed. For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has long been
a leader in adopting, construing and implementing comprehensive, modern and
flexible corporate laws responsive to the legal and business needs of
corporations organized under its laws. Many major American corporations have
initially chosen Delaware for their state of incorporation or have
subsequently reincorporated in Delaware in a manner similar to that proposed.
Both the legislature and courts in Delaware have demonstrated an ability and a
willingness to act quickly and effectively to meet changing business needs.
Its court system has been responsive to requests for interpretation and
clarification of corporate laws and of issues involving the rights and
obligations of directors, officers and shareholders. Moreover, the Delaware
courts have rendered a substantial number of decisions interpreting and
explaining Delaware law, thereby providing greater predictability with respect
to corporate legal affairs.
While both Delaware and Massachusetts corporations may include a provision
in their charter documents which reduces or limits the liability of directors
in certain circumstances, Delaware case law is more developed than
Massachusetts case law on this issue and therefore more useful in providing
guidance in this regard. The Company believes that these provisions should
enable it to continue to attract and retain qualified directors. It should be
noted that currently, Delaware law does NOT permit a Delaware corporation to
limit or eliminate the liability of its directors for breach of the directors'
duty of loyalty to the corporation or its stockholders, intentional
misconduct, knowing violation of law, bad faith, any transaction from which
the director derives an improper personal benefit, or unlawful payment of
dividends, stock redemptions or stock repurchases.
The Company also intends to incorporate a new subsidiary to hold the digital
media and other assets related to the digital media business, Media 100, in
Delaware for the same reasons discussed above.
NO CHANGE OF NAME, BOARD MEMBERS, BUSINESS MANAGEMENT, LOCATION OF PRINCIPAL
OFFICES OR EMPLOYEE PLANS
The Reincorporation Proposal will effect a change in the legal domicile of
the Company and other changes of a legal nature, the material aspects of which
are described in this Proxy Statement. The number of outstanding
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<PAGE>
shares will remain unchanged. Reincorporation will NOT result in any
significant change in the Company's name, business, management, fiscal year,
location of principal executive offices, telephone number, net worth, assets
or liabilities. All employee benefit plans of the Company will be continued by
New DTI, and all shares of Common Stock outstanding and options and warrants
to purchase shares of Common Stock will automatically be converted into, or
become exercisable for the same number of shares of, New DTI Common Stock at
the same exercise prices per share and otherwise upon the same terms and
subject to the same conditions as in effect prior to the reincorporation.
Moreover, as noted above, after the merger, the shares of New DTI Common Stock
will be traded without interruption on The Nasdaq Stock Market under the same
symbol (DATX). After completion of the merger, New DTI will have the same
number of outstanding shares of Common Stock as the Company currently has.
POSSIBLE DISADVANTAGES
Despite the belief of the Board of Directors that the Reincorporation
Proposal is in the best interests of the Company and its shareholders, there
are certain differences in the substantive rights and protections afforded to
shareholders under Delaware and Massachusetts law. For a comparison of
shareholders' rights and powers of management under Delaware and Massachusetts
law, see "-Significant Differences between Corporate Laws of Massachusetts and
Delaware" below. The proposed Reincorporation may also have anti-takeover
implications which are discussed below.
SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF MASSACHUSETTS AND
DELAWARE AND RIGHTS OF SHAREHOLDERS
Pursuant to the Merger Agreement, upon consummation of the merger, the
Company will be governed by Delaware law and by the New DTI Certificate of
Incorporation and By-laws. The corporation laws of Massachusetts and Delaware
differ in many respects. The principal differences which could materially
affect the rights of shareholders are summarized below. This summary does not
purport to be a complete statement of the changes in the rights of
shareholders which may occur as a result of the Reincorporation or a complete
enumeration of the differences between the corporations laws of Massachusetts
and Delaware.
Indemnification and Limitation of Liability
Delaware law generally permits indemnification of officers, directors,
employees and agents of a Delaware corporation against expenses (including
attorneys' fees) incurred in connection with a derivative action and against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlements incurred in connection with a third party action, provided there
is a determination by a majority vote of disinterested directors or
independent legal counsel or the shareholders that the person seeking
indemnification acted in good faith and in a manner reasonably believed to be
in, or not opposed to, the best interests of the corporation (and, with
respect to any third party criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful). Without court approval, however,
no indemnification may be made in respect of any derivative action in which
such person is adjudged liable to the corporation.
Massachusetts law similarly permits indemnification of expenses in a
derivative or third party action, except that no indemnification shall be
provided for any person with respect to any matter as to which he shall have
been adjudicated not to have acted in good faith in the reasonable belief that
his action was in the best interests of the corporation or, to the extent that
such matter relates to service with respect to any employee benefit plan, in
the best interests of the participants or beneficiaries of such benefit plan.
Delaware law requires indemnification when the individual being indemnified
has successfully defended the action on the merits or otherwise. Massachusetts
law merely permits indemnification to the extent authorized in the
corporation's articles of organization or its by-laws or as set forth in a
shareholders' vote.
Expenses incurred by an officer or director in defending an action may be
paid in advance under Delaware and Massachusetts law if such director or
officer undertakes to repay such amounts should it be determined ultimately
that he is not entitled to indemnification. Delaware law also permits the
advancement of expenses to
20
<PAGE>
employees and agents of the corporation without such an undertaking to repay
such amounts. In addition, both Delaware and Massachusetts law permit a
corporation to purchase indemnity insurance for the benefit of its officers,
directors, employees and agents whether or not the corporation would have the
power to indemnify against the liability covered by the policy.
Both Delaware and Massachusetts corporations may include in their corporate
charters a provision eliminating or limiting the liability of a director in
certain circumstances to the corporation or its shareholders for monetary
damages for a breach of certain fiduciary duties as a director notwithstanding
any provision of law imposing such liability. Both the Company's Articles of
Organization and the Certificate of Incorporation of New DTI include such
provisions.
The Securities and Exchange Commission has expressed its position that the
indemnification of directors, officers and controlling persons against
liabilities arising under the Securities Act of 1933, as amended (the "Act"),
is against public policy as expressed in the Act and is, therefore,
unenforceable.
The indemnification and limitation of liability provisions of Massachusetts
law, and not Delaware law, will apply to actions of the Company's directors,
officers, employees and agents taken prior to its merger into New DTI.
Inspection Rights
Inspection rights under Delaware law are more extensive than under
Massachusetts law. Under Delaware law, shareholders, upon the demonstration of
a proper purpose, have the right to inspect a corporation's stock ledger,
shareholder lists and other books and records. Under Massachusetts law, a
corporation's shareholder have a right to inspect only the corporation's
charter, by-laws, records of all meetings of incorporators and shareholders
and transfer records. The Company's Articles of Organization provide that a
shareholder may not examine the books, accounts or other writings of the
Company if the directors determine that such examinations would be adverse to
the Company.
Annual Meeting of Shareholders
Under Massachusetts law, the notice of the annual meeting must contain the
purpose of the meeting, while the purpose of the annual meeting need not be
included in the notice of the annual meeting under Delaware law. The by-laws
of the Company require that the notice of the annual meeting be given at least
seven days before the meeting, while New DTI's Certificate and By-laws require
that such notice be given at least ten days before the annual meeting.
Special Meetings of Shareholders
Generally, a special meeting of shareholders of a Massachusetts corporation
may be called by the holders of shares entitled to cast not less than 10% of
the votes at the meeting. Shareholders of Delaware corporation do not have a
right to call special meetings unless it is conferred in the corporation's
certificate of incorporation or by-laws. New DTI's By-laws do not permit
shareholders to call a special meeting.
Action By Consent of Shareholders
Under Massachusetts law, any action to be taken by shareholders may be taken
without a meeting only if all shareholders entitled to vote on the matter
consent to the action in writing, and a corporation may not provide otherwise
in its charter documents or by-laws. Under Delaware law, unless the
certificate of incorporation provides otherwise, any action to be taken by the
shareholders may be taken without a meeting, without prior notice and without
a vote, if the shareholders having the number of votes that would be necessary
to take such action at a meeting at which all of the shareholders were present
and voted consent to the action in writing. New DTI's Certificate of
Incorporation requires that any action by shareholders be taken at an annual
or special meeting of shareholders.
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Proxies
Massachusetts law permits the authorization by a shareholder to vote by
proxy to be valid for no more than six months. Delaware law permits a proxy to
be valid for up to three years unless the proxy provides for a longer period.
Approval of Business Combinations and Asset Sales: State Law
Generally, under Massachusetts law, the affirmative vote of two-thirds of
the shares of each class of stock outstanding and entitled to vote or which
would be adversely affected by a merger or asset sale are necessary to approve
a merger or a sale of all or substantially all of the corporation's assets
such as the proposals submitted for approval in this proxy statement to
transfer the digital media and other assets related to the digital media
business to Media 100 and to merge and reincorporate the Company in Delaware.
Under Delaware law, the affirmative vote of only a majority of the shares of
stock outstanding and entitled to vote are necessary to approve a merger or
asset sale. Recent amendments to Delaware law permit a company to merge with a
direct or indirect wholly owned subsidiary without shareholder approval under
certain circumstances so as to cause the Company to become a holding company.
Approval of Business Combinations: Charter Provisions
The Company's Articles of Organization require the affirmative vote of 75%
of the Company's voting Common Stock for certain business combinations with
certain related parties who hold at least 15% of the Company's Common Stock.
The Certificate of Incorporation of New DTI also requires approval of 75% of
the voting common stock to approve certain combinations with certain related
parties who hold at least 15% of the Company's Common Stock. Under the New DTI
Certificate of Incorporation, however, Alfred A. Molinari, Jr. is not
considered a related party despite his ownership of over 15% of the Company's
Common Stock. New DTI's Certificate of Incorporation also permits the Board of
Directors, in evaluating an exchange offer or tender offer to consider the
interests of the stockholders, the effects upon employees, suppliers and
customers, the long-term effect on the Company's stock price and whether the
proposed transaction will violate federal or state law.
Anti-Takeover Legislation
Under Section 203 of the Delaware General Corporation Law, certain "business
combinations" with "interested stockholders" of Delaware corporations are
subject to a three year moratorium unless specified conditions are met.
Section 203 does not presently apply to New DTI because the Certificate of
Incorporation of New DTI contains a provision expressly electing not to be
governed by such Section.
Massachusetts law contains an analogous anti-takeover law which is set forth
in Chapter 110F of the General Laws of Massachusetts. The Massachusetts anti-
takeover law does not presently apply to the Company because the Company's by-
laws contain a provision expressly electing not to be governed by such
Section.
Dissenters' Rights
Under Massachusetts law, dissenting shareholders who follow prescribed
statutory procedures are entitled to dissenters' rights in connection with any
merger or sale of substantially all the assets of a corporation and in
connection with certain mergers, reclassifications and other transactions
which may adversely affect the rights or preferences of shareholders. Delaware
law provides similar rights in the case of a merger or consolidation of a
corporation except that such rights are not provided as to shares of a
corporation listed on a national securities exchange or held of record by more
than 2,000 shareholders where such shareholders are required to accept in such
a merger only (i) shares of the surviving or resulting corporation, (ii)
shares of a corporation listed on a national securities exchange or held of
record by more than 2,000 holders, (iii) cash in lieu of fraction shares, or
(iv) any combination thereof. Delaware law does not provide dissenters' rights
in connection with sales of substantially all of the assets of a corporation,
reclassifications of stock or other amendments to the certificate of
incorporation which adversely affect a class of stock; provided, however, that
a corporation may provide in its
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<PAGE>
certificate of incorporation that appraisal rights shall be available as a
result of an amendment to its certificate of incorporation, a merger or a sale
of all or substantially all of its assets. The New DTI Certificate of
Incorporation, however, does not provide for the appraisal rights described in
the preceding sentence.
Classified Board
Massachusetts law requires, unless a corporation chooses otherwise, and
Delaware law permits, but does not require, a board of directors to be divided
into classes with each class having a term of office longer than one year.
Massachusetts law limits the term of directors on a classified board to five
(5) years. The Company's Board of Directors voted to opt out of the
Massachusetts staggered board legislation. Therefore, neither the Company nor
New DTI has or will have upon consummation of the merger, a classified board
of directors. Under current law, future changes in the classification of New
DTI's Board of Directors would require shareholder approval.
Removal of Directors
Under Delaware law, a director serving on a board which is not classified
may be removed with or without cause by a majority of the outstanding shares
entitled to vote at an election of directors. In the case of a Delaware
corporation whose board is classified, shareholders may effect such removal
only for cause unless the certificate of incorporation otherwise provides. As
New DTI does not have a classified board of directors, its directors may be
removed with or without cause as described above. Under Massachusetts law, any
director or the entire board of directors may be removed, except as otherwise
provided in the articles of organization or by-laws, with or without cause, by
the holders of a majority of the shares entitled to vote at an election of
directors, except that directors of a class elected by a particular class of
shareholders may be removed only by the vote of a majority of the shares of
the particular class of shareholders entitled to vote for the election of such
directors. In addition, the Company's by-laws permit all such removals and the
removal of a director with cause by a vote of the majority of the directors
then in office.
Change in Number of Directors
Under Massachusetts law, the number of directors is determined in the manner
provided in the corporation's by-laws. The board of directors may be enlarged
by the shareholders or, if authorized by the by-laws, by vote of a majority of
directors. The Company's by-laws fix the number of directors at not less than
three nor more than seven, which number can be increased by the shareholders
or the directors.
Under Delaware law, the number of directors shall be fixed by or in the
manner provided in the by-laws unless the number of directors is fixed in the
corporation's certificate of incorporation. The By-laws of New DTI require
that the Company have one or more directors, the number of which shall be
determined from time to time by the directors.
Interested Director Transactions
Delaware law provides that no transaction between a corporation and a
director or officer or any entity in which any of them have an interest, is
void or voidable solely for this reason, solely because the director or
officer is present at or participates in the meeting of the board or committee
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose if (i) after full disclosure the
transaction is approved by the disinterested directors, which may be less than
a quorum, or the shareholders or (ii) the transaction is fair to the
corporation at the time it is approved. Massachusetts law only expressly
provides that directors who vote for and officers who knowingly participate in
loans to officers or directors are jointly and severally liable to the
corporation for any part of the loan which is not repaid, unless (i) a
majority of the directors who are not direct or indirect recipients of such
loans, or (ii) the holders of a majority of the shares entitled to vote for
such directors, have approved or ratified the loan as one which in the
judgment of such directors or shareholders, as the case may be, may reasonably
be expected to benefit the corporation. The Company's Articles of
Organization, however, permit interested transactions so long as a procedure
similar to that required by Delaware law is followed.
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<PAGE>
Filling Vacancies on the Board of Directors
Under Massachusetts law, unless the articles of organization provide
otherwise, any vacancy in the board of directors, however occurring, including
a vacancy resulting from enlargement of the board and any vacancy in any other
office, may be filled in the manner prescribed in the by-laws, or, in the
absence of any such provision in the by-laws, by the directors.
Under Delaware law, vacancies and newly created directorships may be filled
by a majority of directors then in office, unless otherwise provided in the
corporation's certificate of incorporation or by-laws, provided that if, at
the time of filling any vacancy or newly created directorship, the directors
then in office constitute less than a majority of the entire board as
constituted immediately prior to any increase, the Delaware Court of Chancery
may, upon application of any shareholder or shareholders holding at least 10%
of the total number of shares at the time outstanding having the right to vote
for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships or to replace the directors chosen by
the directors then in office.
Payment of Dividends
There are not restrictions on authorized dividend payments under
Massachusetts law. Delaware law permits the payment of dividends out of paid-
in and earned surplus or out of net profits for the current and preceding
fiscal year.
ANTI-TAKEOVER IMPLICATIONS
Reincorporation is not being proposed in order to prevent such a change in
control, nor is it in response to any present attempt known to the Board of
Directors to acquire control of the Company, obtain representation on the
Board of Directors or take significant action which affects the Company.
The Delaware General Corporation Law contains at least one difference from
the Massachusetts Business Corporation Law which may be deemed to have anti-
takeover implications. Unless otherwise provided, the right of shareholders
controlling at least 10% of the voting shares to call a special meeting of
shareholders under Massachusetts law is not available under Delaware law. The
Company's by-laws, however, do not permit such a call of a special meeting.
As discussed further above (See "Anti-takeover Legislation"), both Delaware
and Massachusetts law contain certain provisions generally restricting
"business combinations" with an "interested stockholder" for periods of three
years following the date on which a person becomes an interested stockholder.
Currently, the Company is not subject to the Massachusetts statute which
imposes such restrictions, and New DTI would not be subject to Section 203 of
the Delaware General Corporation Law.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
No gain or loss will be recognized for Federal income tax purposes by
holders of the Company's capital stock as a result of the merger. Each
shareholder's tax basis in the New DTI Common Stock received from the merger
will equal his tax basis in his shares of the Company's capital stock
immediately prior to the Effective Date of the merger. The holding period of
the New DTI Common Stock for federal income tax purposes will include the
period during which the shareholder held the corresponding capital stock of
the Company, provided that such capital stock was held as a capital asset.
ALTHOUGH IT IS NOT ANTICIPATED THAT STATE, LOCAL OR FOREIGN INCOME TAX
CONSEQUENCES WILL VARY FROM THE FEDERAL INCOME TAX CONSEQUENCES DESCRIBED ABOVE,
SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE EFFECT OF THE
REINCORPORATION PROPOSAL ON THEM UNDER STATE, LOCAL OR FOREIGN INCOME TAX LAWS.
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The Company will not recognize gain or loss for federal income tax purposes
as a result of the merger. New DTI will succeed, without adjustment, to the
federal income tax attributes of the Company.
DISSENTERS' RIGHTS OF APPRAISAL
Under Massachusetts law, shareholders of Massachusetts corporations have the
right to dissent from corporate reorganizations, including a merger, and
receive cash equal to the appraised value of their shares. See "Rights of
Appraisal" for a more detailed description of those rights.
VOTE REQUIRED FOR THE REINCORPORATION
Approval of the Reincorporation Proposal, which includes approval of the
Merger Agreement, the Certificate of Incorporation and the By-laws, will
require the affirmative vote of two-thirds of the outstanding shares of the
Company's capital stock entitled to vote. The Board of Directors considers the
reincorporation to be advisable and in the best interests of the shareholders
and recommends that you vote FOR approval of the Merger Agreement. Unless
marked to the contrary, proxies received will be voted "for" approval of the
Reincorporation Proposal.
RIGHTS OF APPRAISAL
The following summary of the rights of dissenting shareholders is qualified
in its entirety by reference to the provisions of Sections 86 through 98,
inclusive, of Chapter 156B of the General Laws of Massachusetts, a copy of
which is attached hereto as Exhibit E.
Any shareholder (1) who files with the Company before the taking of the vote
on the approval of the transfer of assets to Media 100 or the Reincorporation
Proposal (each, "a Proposal") written objection to the proposed action stating
that he intends to demand payment for his shares if the action is taken, and
(2) whose shares are not voted in favor of such action, has or may have the
right to demand in writing from New DTI within 20 days after the date of
mailing to him of notice in writing that the corporate action has become
effective, payment for his shares and an appraisal of the value thereof. New
DTI and any such shareholder shall in such case have the rights and duties and
shall follow the procedure set forth in Sections 88 to 98, inclusive, of
Chapter 156B of the General Laws of Massachusetts.
A shareholder intending to exercise his dissenter's right to receive payment
for his shares must file with the Company written objection to a Proposal
before the taking of the vote by the shareholders on such Proposal and must
not vote in favor of the Proposal at the Annual Meeting. A shareholder's
failure to vote against a Proposal will not constitute a waiver of his
appraisal rights with respect to such Proposal, provided that such shareholder
does not vote in favor of such Proposal; and provided, further, that a vote
against the Proposal without the filing of a written objection with the
Company as described above will not be deemed to satisfy notice requirements
under Massachusetts law with respect to appraisal rights. The written
objection must state that he intends to demand payment for his shares if the
Proposal is consummated. Within 10 days after the reincorporation or the
transfer of assets, as the case may be, becomes effective, New DTI will give
written notice of the effectiveness by registered or certified mail to each
shareholder who filed a written objection and who did not vote in favor of
such Proposal. Within 20 days after the mailing of that notice, any
shareholder to whom New DTI was required to give that notice may make written
demand for payment for his shares from New DTI and New DTI will be required to
pay to him the fair market value of his shares within 30 days after the
expiration of the 20-day period.
If during the 30-day period New DTI and the dissenting shareholder do not
agree as to the fair value of the shares, New DTI or the shareholder may,
within four months after the end of the 30-day period, have the fair value of
stock of all dissenting shareholders determined by judicial proceedings by
filing a bill in equity in the Superior Court in Middlesex County,
Massachusetts. For the purposes of the Superior Court's determination, the
value of the shares of the Company would be determined as of the date
preceding the date of the vote of the shareholders approving the Proposal and
would be exclusive of any element of value arising from the expectation or
accomplishment of the reincorporation or transfer of assets as the case may
be. Upon making written demand for payment, the dissenting shareholder will
not thereafter be entitled to notices of meetings of shareholders, to
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vote, or to dividends unless (i) no suit is filed within four months to
determine the value of the stock, (ii) any suit is dismissed as to that
shareholder, or (iii) the shareholder, with the written approval of New DTI,
withdraws his objection in writing.
The enforcement by an objecting shareholder of his appraisal rights as set
forth in Sections 85 through 98, inclusive, of Chapter 156B of the
Massachusetts General Laws shall be an exclusive remedy except for the right
of any such objecting shareholder to bring or maintain an appropriate
proceeding to obtain relief on the ground that the merger will be or is
illegal or fraudulent as to such objecting shareholder.
The provisions of Sections 85 through 98 of Chapter 156B of the
Massachusetts General Laws are technical in nature and are complex. Any
shareholder desiring to exercise his appraisal rights should consult legal
counsel for assistance since the failure to comply strictly with the
provisions may nullify such appraisal rights.
FINANCIAL INFORMATION
The audited financial statements and related financial and business
information of the Company for its fiscal years ended November 30, 1995, 1994
and 1993 are contained in the enclosed Annual Report to Shareholders.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who beneficially own more than 10% of the
Company's Common Stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc. Based solely on its review of the copies of such
reports received by it, and written representations from certain reporting
persons that no Forms 5 were required for those persons, the Company believes
that during the fiscal year ended November 30, 1995 all filing requirements
applicable to its officers, directors and such 10% beneficial owners were
complied with, except that Mr. Basler did not report on his Form 5 for fiscal
year 1994 a gift of four shares of Common Stock of the Company but did report
the gift on a Form 5 filed for fiscal year 1995 and Mr. J. Molinari did not
report the sale by his wife of 4,000 shares of Common Stock on a Form 4 but
did report such sale on his Form 5 filed for the fiscal year ended November
30, 1995.
ADJOURNMENT OF MEETING
In the event that sufficient votes in favor of the election of the nominees
for director (the "Nominees") or any other matter presented hereunder, are not
received by April 10, 1996, the persons named as proxies may propose one or
more adjournments of the meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of the
shares cast on the question in person or by proxy at the session of the
meeting to be adjourned. The persons named as proxies will vote in favor of
such adjournment those proxies which they are entitled to vote in favor of the
Nominees and all other such matters. They will vote against any such
adjournment those proxies withholding authority to vote on any Nominee and
voting against or abstaining with respect to all other such matters. The
Company will pay the costs of any additional solicitation and of any adjourned
meetings.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1997 Annual Meeting of
Shareholders must be received at Data Translation's principal executive
offices not later than November 16, 1996.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed Arthur Andersen LLP, who have served as the
Company's auditors since 1980, to examine the financial statements of the
Company for fiscal 1996. The Company expects that representatives of Arthur
Andersen LLP will be present at the Annual Meeting and available to respond to
appropriate questions, and such representatives will be given the opportunity
to make a statement if they desire to do so.
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EXHIBIT A
DATA TRANSLATION, INC.
KEY EMPLOYEE INCENTIVE PLAN (1992)
1. Plan; Purpose; General. The purpose of this Key Employee Incentive Plan
(1992) (the "Plan") is to advance the interests of Data Translation, Inc. (the
"Company") by enhancing the ability of the Company and its subsidiaries to
attract and retain selected advisers, consultants, key employees and
directors, by creating for such persons incentives and rewards for their
contributions to the success of the Company, and by encouraging such persons
to become owners of shares of the Company's Common Stock, par value $0.01 per
share (the "common stock" or "stock"). Options granted pursuant to the Plan
may be incentive stock options as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") (such options being referred to
herein as "incentive options") or non-incentive options. The proceeds received
from the sale of stock pursuant to the Plan shall be used for general
corporate purposes. Except as otherwise expressly provided with respect to an
option grant, no option granted pursuant to the Plan shall be an incentive
option.
2. Effective Date of Plan. This Plan will become effective upon approval by
at least a majority of the votes cast at the next duly called Annual Meeting
of Stockholders of the Company at which a quorum representing a majority of
the voting power of all outstanding voting stock of the Company is, either in
person or by proxy, present and voting thereon or at any adjournment thereof.
Grants of awards under the Plan may be made prior to that date (but after
Board adoption of the Plan), subject to approval of the Plan by such
shareholders.
3. Administration of the Plan. The Plan will be administered by the Board of
Directors (the "Board") of the Company. The Board will have authority, to take
all action necessary or appropriate thereunder, to interpret its provisions,
and to decide all questions and resolve all disputes which may arise in
connection therewith. Such determinations of the Board shall be conclusive and
shall bind all parties.
The Board may, in its discretion, delegate some or all of its powers with
respect to the Plan to an Executive Compensation and Stock Option Committee or
any other committee (the "Committee"), in which event all references to the
Board hereunder, except the references in Section 11 hereof, shall be deemed
to refer to the Committee. The Committee, if one is appointed, shall consist
of not fewer than two members, and each member of the Committee shall be, at
the time of his appointment and at any time he exercises discretion in
administering the Plan, a "disinterested person" as that term is defined in
Rule 16b-3 adopted pursuant to the Securities Exchange Act of 1934, as
amended. A majority of the members of any such Committee shall constitute a
quorum, and all determinations of the Committee shall be made by a majority of
its members. Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing signed by a majority
of the Committee members.
4. Eligibility. The "Participants" in the Plan will be such key employees,
including part-time employees, advisers, consultants and directors whether or
not they are employees, of the Company or of any of its present or future
subsidiaries (as defined in Section 10) as may be selected from time to time
by the Board in its discretion. However, members of the Committee, if one is
appointed, will not be eligible except to the extent provided in Section 13
hereof. If a Committee is not appointed, directors who are not employees of
the Company or one of its subsidiaries shall not be eligible except to the
extent provided in Section 13 hereof.
No incentive option shall be granted to a Participant who is not an
"employee" as defined in the provisions of the Code or regulations thereunder
applicable to incentive options. No incentive option shall be granted to a
Participant who at the time of grant owns, directly or indirectly through
application or the attribution rules of Section 424(d) of the Code, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of its subsidiaries (a "Ten-Percent Shareholder")
unless (i) the option price at the time it is granted is at least 110% of the
fair market value of the stock subject to the option, and (ii) the period of
the option does not exceed five years from the date of grant.
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5. Grant of Awards. Subject to the express provisions of the Plan, the Board
shall have the sole authority and discretion (a) to determine which
Participants will be granted awards; (b) to grant awards consisting of options
or stock appreciation rights ("SARs"), or both to Participants; (c) to
determine whether the options granted to any Participants shall be incentive
options or non-incentive options; (d) to determine the time or times when
awards will be granted and the number of shares of common stock to be subject
to each award; (e) to determine the option price of the shares subject to each
option in accordance with Section 6(a) hereof and the value of the shares
subject to each SAR on the exercise date of such SAR in accordance with
Section 6(d) hereof, and the method of payment of such price; (f) to determine
the time or times when each award becomes exercisable and the duration of the
exercise period; (g) to impose additional conditions or restrictions on any
award, such conditions or restrictions, if any, to be set forth on the award
form or other instrument evidencing the award; (h) to prescribe the form or
forms of any instruments evidencing any awards granted under the Plan and of
any other instruments required under the Plan and to make changes in such
forms from time to time; (i) to determine the price, vesting schedule and
other attributes of awards granted to Participants working abroad; and (j) to
adopt, amend and rescind rules and regulations for the administration of the
Plan and the awards and for its own acts and proceedings. Subject to Section
12 hereof, the Board shall also have the authority, in its sole discretion,
both generally and in particular instances, to waive compliance by a
Participant with any obligation to be performed by him under an award, to
waive any condition or provision of an award, and to amend or cancel any award
(and if an award is cancelled, to grant a new award on such terms as the Board
shall specify) except that the Board may not take any action with respect to
an outstanding award that would adversely affect the rights of the Participant
under such award without such Participant's consent. Nothing in the preceding
sentence shall be construed as limiting the power of the Board to make
adjustments required by Section 8(c) hereof.
No award shall be granted on or after February 20, 2002 but awards
previously granted may extend beyond that date.
6. Terms and Conditions of Awards.
a. Exercise Price of Options. The purchase price per share for shares
issuable upon exercise of options shall be determined by the Board but in
the case of incentive options, shall not be less than 100% (110% in the
case of an incentive option granted to a Ten-Percent Shareholder) of the
fair market value of the stock on the date of grant; nor shall the option
price be less, in the case of an original issue of authorized stock, than
par value per share. For this purpose, "fair market value" will be
determined as set forth in Section 10 hereof.
b. Period of Options. An option shall be exercisable during such period
or periods as the Board may specify. The latest date on which an option may
be exercised (the "Final Exercise Date") shall be the date which is ten
years (five years, in the case of an incentive option granted to a Ten-
Percent Shareholder) from the date the option was granted or such earlier
date as may be specified by the Board at the time the option is granted.
c. Exercise of Options.
(i) Unless the Board at the time of grant or at any other time
otherwise specifies in the case of a particular option or options, each
option shall first become exercisable with respect to one-fifth of the
shares covered by it upon the completion of one year from the date of
the grant of the option (the "Initial Exercise Date"), and with respect
to an additional one-fifth each succeeding year until the option
becomes exercisable with respect to all of the shares covered by it.
(ii)In the case of options intended to be incentive options, any
award forms or other instruments evidencing such options shall contain
such provisions relating to exercise and other matters as are required
of incentive options under the applicable provisions of the Code and
Treasury Regulations, as from time to time in effect.
(iii) A person electing to exercise part or all of his options shall
give written notice to the Company, as specified by the Board, of his
election and of the number of shares he has elected to purchase, such
notice to be accompanied by the instrument evidencing such option and
any other
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documents required by the Board, and shall at the time of such exercise
tender the purchase price of the shares he has elected to purchase. If
the notice of election to exercise is given by the executor or
administrator of a deceased Participant, or by the person or persons to
whom the option has been transferred by the Participant's will or the
applicable laws of descent and distribution, the Company will be under
no obligation to deliver shares pursuant to such exercise unless and
until the Company is satisfied that the person or persons giving such
notice is or are entitled to exercise the option.
(iv) In the case of an option that is not an incentive option, the
Board shall have the right to require that the Participant exercising
the option remit to the Company an amount sufficient to satisfy any
federal, state, or local withholding tax requirements (or make other
arrangements satisfactory to the Company with regard to such taxes)
prior to the delivery of any common stock pursuant to the exercise of
the option. If permitted by the Board, either at the time of the grant
of the option or the time of exercise, the Participant may elect, at
such time and in such manner as the Board may prescribe, to satisfy
such withholding obligation by (i) delivering to the Company common
stock owned by such individual having a fair market value equal to such
withholding obligation, or (ii) requesting that the Company withhold
from the shares of common stock to be delivered upon exercise of the
option a number of shares of common stock having a fair market value
equal to such withholding obligation.
In the case of an incentive option, if at the time the option is
exercised the Board determines that under applicable law and
regulations the Company could be liable for the withholding of any
federal, state or local tax with respect to a disposition of the common
stock received upon exercise, the Board may require as a condition of
exercise that the Participant exercising the option agree (i) to inform
the Company promptly of any disposition (within the meaning of Section
424(c) of the Code and the regulations thereunder) of common stock
received upon exercise, and (ii) to give such security as the Board
deems adequate to meet the potential liability of the Company for the
withholding of tax, and to augment such security from time to time in
any amount reasonably deemed necessary by the Board to preserve the
adequacy of such security.
d. Stock Appreciation Rights. The Board in its discretion may grant SARs
either in tandem with or independent of options awarded under the Plan.
Except as hereinafter provided, each SAR will entitle the Participant to
receive upon exercise, with respect to each share of common stock to which
the SAR relates, the excess of (i) the share's value on the date of
exercise, over (ii) the share's fair market value on the date it was
granted. For purposes of clause (i), "value" shall mean fair market value;
provided, that the Board may adjust such value to take into account
dividends on the stock and may also grant SARs that provide, in such
limited circumstances following a change in control of the Company (as
determined by the Board) as the Board may specify, that "value" for
purposes of clause (i) is to be determined by reference to a specified
value (which may include an average of values) for the common stock during
a period immediately preceding the change in control, all as determined by
the Board. The amount payable to a Participant upon exercise of an SAR
shall be paid either in cash or in shares of common stock, as the Board
determines. Each SAR shall be exercisable during such period or periods and
on such terms as the Board may specify. No SAR shall be exercisable after
the date which is ten years from the date of grant.
e. Payment for and Delivery of Shares. Shares which are subject to
options shall be issued only upon receipt by the Company of full payment of
the purchase price for the shares as to which the award is exercised. The
purchase price shall be payable by the option holder to the Company either
(i) in cash or by check, bank draft or money order payable to the order of
the Company; or (ii) if so permitted by the Board (which in the case of an
incentive option, shall specify such method of payment at the time of
grant), (A) through the delivery of shares of common stock (duly owned by
the option holder and for which the option holder has good title free and
clear of any liens and encumbrances and which, in the case of common stock
acquired from the Company, shall have been held for at least six months)
having a fair market value on the last business day preceding the date of
exercise equal to the purchase price or (B) by delivery of a promissory
note of the option holder to the Company, such note to be payable on such
terms as are specified by the Board or (C) by delivery of an unconditional
and irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price; or (iii) by a combination of
the
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permissible forms of payment as provided in (i) and (ii) above; provided,
that if the common stock delivered upon exercise of the option is an
original issue of authorized common stock, at least so much of the exercise
price as represents the par value of such common stock shall be paid other
than with a personal check or promissory note of the person exercising the
option.
The Company shall not be obligated to deliver any shares unless and
until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulations have been complied with, nor, if the outstanding
common stock is at the time listed on any securities exchange, unless and
until the shares to be delivered have been listed (or authorized to be
added to the list upon official notice of issuance) upon such exchange, nor
unless or until all other legal matters in connection with the issuance and
delivery of shares have been approved by the Company's counsel. Without
limiting the generality of the foregoing, the Company may require from the
person exercising an option such investment representation or such
agreement, if any, as counsel for the Company may consider necessary in
order to comply with the Securities Act of 1933, as amended, and may
require that such person agree that any sale of the shares will be made
only on a national securities exchange or in such other manner as is
permitted by the Board and that he will notify the Company before he makes
any disposition of the shares whether by sale, gift or otherwise.
A Participant shall have the rights of a shareholder only as to shares
actually acquired by him under the Plan.
f. Nontransferability of Awards. No award may be sold, assigned or
otherwise transferred or disposed of in any manner whatsoever other than by
will or by the laws of descent and distribution, and during the
Participant's lifetime the award may be exercised only by him.
g. Forfeiture of Awards upon Termination of Employment. If a
Participant's (other than a non-employee director's) employment or service
with the Company and its subsidiaries terminates for any reason other than
death, all awards held by the Participant shall terminate unless the Board
determines, in its sole discretion, that such awards as were exercisable
immediately prior to termination shall continue to be exercisable for a
period of time after termination (but in no event beyond the Final Exercise
Date). If the Board determines that a post-termination exercise period for
exercisable awards is appropriate, such awards shall terminate and be
forfeited after completion of such period to the extent not previously
exercised, expired or terminated. For purposes of this Section 6(g),
employment shall not be considered terminated (i) in the case of sick leave
or other bona fide leave of absence approved for purposes of the Plan by
the Board, so long as the Participant's right to reemployment is guaranteed
either by statute or by contract, or (ii) in the case of a transfer of
employment between the Company and a subsidiary or between subsidiaries, or
to the employment of a corporation (or a parent or subsidiary corporation
of such corporation) issuing or assuming an option in a transaction to
which Section 424(a) of the Code applies.
h. Death. If a Participant dies at a time when he is entitled to exercise
an option, then at the time or times within one year after his death (or
such further period as the Board may allow) such option may be exercised,
as to all or any of the shares which the Participant was entitled to
purchase immediately prior to his death, by his executor or administrator
or the person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, and except as so exercised
such option will expire at the end of such period. In no event, however,
may any option be exercised after the Final Exercise Date.
i. Confidentiality Agreement. Each Employee shall execute, prior to or
contemporaneously with the grant of any option to such Participant
hereunder, the Company's then standard form of agreement relating to
confidentiality, inventions and the like.
7. Replacement Awards. The Company may grant awards under the Plan on terms
differing from those provided in Section 6, where such awards are granted in
substitution for awards held by employees of another corporation who
concurrently become employees of the Company or a subsidiary as the result of
a merger or consolidation of that corporation with the Company or a
subsidiary, or the acquisition by the Company or a subsidiary of property or
stock of that corporation. The Board may direct that the substitute awards be
granted
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on such terms and conditions as the Board considers appropriate in the
circumstances. Such awards will be in addition to those which may be granted
under the Plan and will not be counted as granted under the Plan.
8. Shares Subject to Plan.
a. Number of Shares and Stock to be Delivered. Shares delivered pursuant
to this Plan shall in the discretion of the Board be authorized but
unissued shares of common stock or previously issued stock acquired by the
Company. Subject to adjustment as described below and exclusive of the
shares that are subject to the options provided for in Section 13, the
aggregate number of shares which may be delivered under this Plan shall not
exceed 2,000,000 shares of common stock of the Company.
b. Limitations on Grants to Individuals. Subject to adjustment as
described below and exclusive of the shares that are subject to the options
provided for in Section 13, the aggregate number of shares which may be
delivered under this Plan to any individual in any calendar year shall not
exceed 250,000 shares of common stock of the Company.
c. Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization, merger in which the Company is the
surviving corporation or other change in the Company's capital stock, the
number and kind of shares of stock or securities of the Company to be
subject to the Plan and to options then outstanding or to be granted
thereunder, the maximum number of shares or securities which may be
delivered under the Plan, the option price and other relevant provisions
shall be appropriately adjusted by the Board, whose determination shall be
binding on all persons. In the event of a consolidation or merger in which
the Company is not the surviving corporation or which results in the
acquisition of substantially all the Company's outstanding stock by a
single person or entity, or in the event of the sale or transfer of
substantially all the Company's assets, all outstanding awards shall
thereupon terminate, provided that at least twenty days prior to the
effective date of any such merger, consolidation or sale of assets, the
Board shall either (i) make all outstanding awards exercisable immediately
prior to consummation of such merger, consolidation or sale of assets, or
(ii) if there is a surviving or acquiring corporation, arrange to have that
corporation or an affiliate of that corporation grant to the Participant's
replacement awards having equivalent terms and conditions as determined by
the Board including, in the case of incentive options, terms and conditions
that satisfy the requirements of Section 424(a) of the Code.
The Board may also adjust the number of shares subject to outstanding
awards granted under Sections 5 or 6 hereof, the exercise price of
outstanding options and the terms of outstanding options to take into
consideration material changes in accounting practices or principles,
consolidations or mergers (except those described in the immediately
preceding paragraph), acquisitions or dispositions of stock or property or
any other event if it is determined by the Board that such adjustment is
appropriate to avoid distortion in the operation of the Plan.
Notwithstanding the foregoing, this Section 8(c) shall not apply to
options granted under Section 13 hereof unless the Board shall determine
that such application shall not cause the provisions of Section 13 hereof
to fail to satisfy the applicable requirements of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended.
9. Employment Rights. Neither the adoption of the Plan nor the grant of
awards shall confer upon any Participant any right to continued employment
with the Company or a subsidiary or affect in any way the right of the Company
to terminate the employment of a Participant at any time. Except as
specifically provided by the Board, in its sole discretion, in any particular
case, the loss of existing or potential profit in awards granted under this
Plan shall not constitute an element of damages in the event of termination of
the relationship of a Participant even if the termination is in violation of
an obligation of the Company to the Participant by contract or otherwise.
10. Definitions.
a. For purposes of the Plan a subsidiary is any corporation (i) in which
the Company owns, directly or indirectly, stock possessing 50% or more of
the total combined voting power of all classes of stock or (ii) over which
the Company has effective operating control; provided, however, that no
corporation shall be
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deemed a subsidiary for the purpose of any provisions applicable to
incentive options, and no incentive options shall be granted to employees
of such corporation, unless in each case, such corporation shall constitute
a subsidiary as defined in clause (i) above.
b. The fair market value of the common stock shall be determined in
accordance with the applicable provisions of the Code or regulations issued
thereunder, or in the absence of any such provisions or regulations, shall
be deemed to be the last sale price at which such common stock is traded on
the date in question as reported in the Wall Street Journal; or, if the
Wall Street Journal is not published at the date in question or does not
list the common stock, then in such other appropriate newspaper of general
circulation as the Board may prescribe; or, if there is no sale of the
common stock on the date in question or the last price at which the common
stock traded is not listed, then the mean between the bid and asked price
at the close of the market on such day.
11. Indemnification of Board. In addition to and without affecting such
other rights of indemnification as they may have as members of the Board or
otherwise, each member of the Board shall be indemnified by the Company to the
extent legally possible against reasonable expenses, including attorneys'
fees, actually and reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
he may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any option granted thereunder, and against all
judgments, fines and amounts paid by him in settlement thereof; provided that
such payment of amounts so indemnified is first approved by a majority of the
members of the Board who are not parties to such action, suit or proceeding,
or by independent legal counsel selected by the Company, in either case on the
basis of a determination that such member acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company; and except that no indemnification shall be made in relation to
matters as to which it shall be adjudged in such action, suit or proceeding
that such Board member is liable for negligence or misconduct in his duties;
and provided, further that the Board member shall in writing offer the Company
the opportunity, at its own expense, to handle and defend the same.
12. Amendments. The Board may at any time discontinue granting awards under
the Plan. The Board may at any time or times amend the Plan or amend any
outstanding award or awards for the purpose of satisfying the requirements of
Section 422 of the Code or of any changes in applicable laws or regulations,
to comply with any applicable laws and requirements of foreign jurisdictions
or for any other purpose that may at the time be permitted by law, provided
that no such amendment will adversely affect the rights of any Participant
(without his consent) under any award theretofore granted. In addition, the
Board shall not amend the provisions of the Plan insofar as they relate to
awards granted under Section 13 hereof more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
13. Non-Employee Directors. Notwithstanding anything to the contrary
contained elsewhere herein:
a. Eligible Directors and Grant. Each director who is not a full-time
employee of the Company or any of its subsidiaries and is a director on
April 8, 1992 shall be automatically granted on such date non-incentive
stock options covering 10,000 shares of common stock and each non-employee
director who is initially elected after April 8, 1992 and prior to February
20, 2002 shall be granted on the date of such election non-incentive stock
options covering 10,000 shares of common stock, all such options to be
exercisable with respect to one-fifth of the covered shares one year from
the date of grant and with respect to an additional one-fifth each
succeeding year.
b. Terms of Options. The Final Exercise Date of options granted pursuant
to Section 13(a) hereof shall be 10 years from the date of grant. If a
director's service with the Company terminates for any reason other than
death, in lieu of the provisions of Section 6(g) hereof, all options held
by the director that are exercisable on the date of termination shall
continue to be exercisable for a period of six months, but shall terminate
immediately if the director was removed for cause or resigned under
circumstances which in the opinion of the Board of Directors casts such
discredit on the Company or him as to justify termination of
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his options. After completion of said six-month period, such options shall
terminate to the extent not previously exercised, expired or terminated.
All options held by a director that are not exercisable on the date such
director's service with the Company terminates shall immediately terminate.
The purchase price for shares of common stock issuable upon the exercise of
options granted pursuant to Section 13(a) hereof shall be the fair market
value of the common stock at the close of business on the date the option
is granted, determined in accordance with Section 10(b) hereof; provided,
however, that in no event shall the exercise price be less than par value
per share.
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DATA TRANSLATION INC.
KEY EMPLOYEE INCENTIVE PLAN (1992)
UK ADDENDUM
1. DEFINITIONS
For UK purposes, the following terms in this Addendum have the meanings set
forth below.
a. Date of Grant--The date on which an Option is granted.
b. Fair Market Value--The market value of a share of the Company's Common
Stock determined in accordance with the provisions of the Taxation of
Chargeable Gains Act of 1992 and agreed for the purposes of the Plan with the
Inland Revenue Shares Valuation Division.
c. Full Time Director--A director who works for at least twenty five hours
per week for Data Translation Limited excluding meal breaks.
d. Incentive Stock Option--An Option granted to a Participant which meets
the conditions of Section 422 of the US Internal Revenue Code. This section is
set out in full at Appendix II of the UK Addendum.
e. Key Employees--Employees, including officers or directors, who, in the
opinion of the Board, can make significant contributions to Data Translation
limited, as defined in Section 4 of the US Plan.
f. Material Interest--In respect of a person's shareholding in the Company,
shares beneficially owned or owned indirectly by the person and his associates
which enable the person, together with his associates, to control (as defined
in Section 416 ICTA 1988) more than 10% of the Company's stock.
g. Option--an option to purchase shares of Common Stock granted under the
Plan, as specified in Section 6 and 8 of the US Plan.
h. Option Price--The price paid by a Participant upon exercise of an Option
under the Plan.
i. Participant--Any Full Time Director or any Qualifying Employee.
j. Plan--The US Plan including this Addendum.
k. Qualifying Employee--An employee who is contractually bound to work for
at least twenty hours a week for the Company or any of its subsidiaries,
excluding meal breaks.
l. Relevant Emoluments--The emoluments of the employment (by virtue of which
a person is an eligible Participant) such as are liable to be paid for the
year of assessment when the Option is granted or, if higher, for the previous
year of assessment. Those emoluments are those that are liable to paid to the
Participant by the Company under the deduction of tax pursuant to Section 203
ICTA 1988 (Pay-As-You-Earn) after deducting from the amounts including by
virtue of Chapter II of Part V ICTA 1988. If the eligible Participant has no
relevant emoluments for the preceding year of assessment, the Relevant
Emoluments shall be the amount of the Relevant Emoluments for the period of
twelve months beginning with the first day during the year of assessment when
the Options are granted in respect of which there are Relevant Emoluments.
m. The Company--Data Translation Inc.
n. US Plan--The Company's Key Employee Incentive Plan (1992) as from time to
time in effect.
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2. PREAMBLE
a. This Addendum constitutes rules and regulations adopted by the Board of
Directors of Data Translation Inc. pursuant to Section 5 (j) of the US Plan.
b. This Addendum adapts the terms of the US Plan by imposing additional
conditions on Options granted to UK employees in order to render the Plan
capable of approval as an Approved Share Option Scheme under Section 185 and
Schedule 9 ICTA 1988.
c. The adapted Plan is for the benefit of UK employees of Data Translation
Limited.
d. This Addendum is an addendum to the US Plan and should be read in
conjunction with the US Plan. This Addendum is subject to the terms and
conditions of the US Plan; provided, however, that such terms and conditions
are limited to the extent that they differ from, or conflict with, the terms
set out in this Addendum.
3. ELIGIBILITY OF EMPLOYEES
The conditions set out in Section 4 of the US Plan should be taken to be
limited as follows for US purposes:
a. All Participants must be Full Time Directors or Qualifying Employees of
Data Translation Limited.
b. In the UK, no Participant must have, or have had within the preceding
twelve months, a Material Interest in a close company (as defined for the
purposes of paragraph 8 of Schedule 9 ICTA 1988), which is:
(i) A company the shares of which may be acquired pursuant to the
exercise of rights obtained under the US Plan; or
(ii) A company which has control of such a company or is a member of a
consortium which owns such a company.
c. For the avoidance of doubt, any person precluded by paragraph 8 of
Schedule 9 ICTA 1988, may not obtain or exercise rights under the US Plan
while so precluded.
d. In the UK, the reference in Section 4 to 10% is to be read as 5%.
4. STOCK OPTIONS
The nature of the Options is covered by Section 6 of the US Plan, with the
following limitations:
a. The reference in section 6(c)(1) to the timing of the exercise of Options
is replaced for UK purposes by the following:
Options shall be exercisable according to a schedule specified by the
Board, but only after the third anniversary of the Date of Grant of the
relevant Options and prior to the tenth anniversary or the earlier
expiration thereof and not earlier than three years following the
latest previous exercise by the Participant of any right obtained under
the US Plan or any other approved share option scheme, which is not a
savings related share option scheme, to circumstances in which
(S) 185(3) ICTA 1988 applied.
b. That portion of Section 6(h) of the US Plan which reads "(or for such
further period as the Board may allow)" does not apply in the UK.
c. The purchase price of Options shall be paid only in cash as provided in
Section 6(e) (i) of the US Plan.
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5. LIMITATION OF RIGHTS
a. Options may not be granted in the UK under the Plan at any time if to do
so would cause the aggregate of the Option Price for all unexercised Options
granted to the Participant under the Plan or any other share option scheme
approved under Schedule 9 ICTA 1988 not being a savings related share option
scheme established by the Company or by any associated company (within the
meaning of Section 416, Income and Corporation Taxes Act 1988) of the Company
to exceed a sum equal to the greater of (Pounds)100,000 or four times the
Participant's Relevant Emoluments.
6. RESTRICTIONS
a. The Directors shall not exercise any of the powers conferred on them
under the Plan in such a way as to restrict transfers of shares which comprise
or include shares acquired pursuant to Options granted under the Plan.
b. Section 5 (g) of the US Plan shall not permit imposing restrictions on
transfer in the UK, inasmuch as any restrictions are restrictions attaching to
the shares.
c. That part of Section 6(e) of the US Plan beginning "Without limiting" and
ending with "gift or otherwise" does not apply in the UK.
d. Except as contemplated by the Plan, no conditions restricting exercise
will be imposed on Options granted to UK Participants without the prior
approval of the Inland Revenue.
7. PLAN SHARES
a. For the avoidance of doubt, it is confirmed that the Plan shares
described in Section 8 of the US Plan will satisfy the provisions of
paragraphs 10 to 12 and 14 of Schedule 9, ICTA 1988.
b. Shares will be allotted within 30 days of the date of exercise of an
Option.
8. MISCELLANEOUS
a. Section 7 of the US Plan will not apply in the UK.
b. Section 8(c) of the US Plan is replaced for UK purposes by Appendix I to
this Addendum.
c. No amendment to the US Plan or this Addendum affecting the operation of
the Plan in the UK will be made without prior Inland Revenue approval.
d. No adjustments to Options granted to UK Participants will be made without
prior Inland Revenue approval.
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<PAGE>
APPENDIX I TO UK ADDENDUM TO KEY EMPLOYEE INCENTIVE PLAN (1992)
CHANGES IN CONTROL
A. If at any time before the Final Exercise Date of an Option any person
(either alone or in concert with others) obtains Control of the Company as
a result of making:
i. a general offer to acquire the whole of the issued ordinary share
capital of the Company (or the whole other than any such share capital
already held at the date of the offer by, or by a nominee for, the
offeror, or any subsidiary thereof), which offer is made on a condition
such that if it is satisfied the person making the offer will have
Control of the Company, or
ii. a general offer to acquire all the Shares in the Company (or all other
than any such Shares already held at the date of the offer by, or by a
nominee for, the offeror or any subsidiary thereof)
the Option Holder shall be entitled to exercise that Option during the
period commencing when the persons making the offer has obtained Control of
the Company and any condition subject to which the offer is made has been
satisfied and ending six calendar months after the Commencement of the
Option Period.
B. Notwithstanding the provisions of sub-clause (A) above if any company
(hereinafter called "the acquiring company"):
a. obtains control of the Company as a result of making
i. a general offer to acquire the whole of the issued share capital of
the Company which offer is made on a condition that if the condition
is satisfied the acquiring company will have control of the Company
or
ii. a general offer to acquire all the shares in the Company which are
of the same class as the Shares;
or
b. obtains control of the Company in pursuance of a compromise or
arrangement sanctioned by the Court under Section 425 of the Companies
Act 1985; or
c. becomes bound or entitled to acquire shares in the Company under
Sections 428 to 430 of the Companies Act 1985 any Option Holder may at
any time within the appropriate period (as defined in sub-clause (D)
below) by agreement with the acquiring company release his rights under
the Plan (hereinafter called "the old rights") in consideration of the
grant to him of rights (hereinafter called "the new rights") which are
equivalent (as defined in sub-clause (E) below) to the old rights but
relate to shares in a company other than the Company (being either the
acquiring company or some other company within the provision of
paragraph 10(b) or (c) of Schedule 9 to the Taxes Act) and the terms
"Company" and "Shares" in this Plan shall thereafter be construed
accordingly.
C. For the purposes of sub-clause (B) above the appropriate period means:
a. in a case falling within (a) thereof a period of six months beginning
with the time when the acquiring company has obtained control of the
Company and any condition subject to which the offer is made is
satisfied;
b. in a case falling within paragraph (b) thereof the period of six months
beginning with the time when the Court sanctions the compromise or
arrangement; and
c. in the case falling within paragraph (c) thereof the period during which
the acquiring company remains bound or entitled as mentioned in that
paragraph.
D. For the purpose of sub-clause (B) above the rights shall be equivalent to
the old rights if the requirements of Paragraph 15(3) of Schedule 9 of the
Taxes Act are met.
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<PAGE>
EXHIBIT B
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Merger Agreement") dated as of ,
1996 by and between Data Translation, Inc., a Massachusetts corporation (the
"Company"), and Data Translation, Inc., a Delaware corporation ("Newco").
WHEREAS, the Company is a corporation duly organized and existing under the
laws of the Commonwealth of Massachusetts;
WHEREAS, Newco is a corporation duly organized and existing under the laws
of the State of Delaware;
WHEREAS, the Company has authority to issue 10,000,000 shares of Common
Stock, par value $.01 per share (the "Company's Common Stock"), of which
shares are issued and outstanding and none are held in the treasury
of the Company and 1,000,000 shares of preferred stock, none of which has been
issued;
WHEREAS, prior to the Effective Date of the Merger (as such terms are
hereinafter defined), additional shares of the Company's Common Stock may be
issued upon the exercise of options to purchase the Company's Common Stock and
pursuant to employee benefit plans of the Company and its subsidiaries;
WHEREAS, Newco has authority to issue 25,000,000 shares of Common Stock, par
value $.01 per share (the "Delaware Common Stock") and 1,000,000 shares of
preferred stock (the "Delaware Preferred Stock");
WHEREAS, one hundred (100) shares of the Delaware Common Stock are issued
and outstanding, all of which are owned, beneficially and of record, by the
Company;
WHEREAS, the respective Board of Directors of the Company and Newco have
determined that, for the purpose of effecting the reincorporation of the
Company in the State of Delaware, it is advisable and in the best interest of
both corporations that the Company merge with and into Newco upon the terms
and conditions hereinafter provided and in accordance with the laws of the
State of Delaware and The Commonwealth of Massachusetts in a transaction
qualifying as a reorganization within the meaning of Section 368(a)(1)(F) of
the Internal Revenue Code of 1986, as amended; and
WHEREAS, the respective Board of Directors of the Company and Newco have
approved this Merger Agreement and directed that this Merger Agreement be
submitted to a vote of their respective stockholders for approval.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Newco hereby
agree as follows:
1. Merger. Subject to the terms and conditions of this Merger Agreement, the
Company shall be merged with and into Newco (the "Merger") in accordance with
Section 253 of the Delaware General Corporation Law ("DGCL") and Section 79 of
the Massachusetts Business Corporation Law ("MBCL") such that Newco shall be
the surviving corporation (hereinafter referred to as the "Surviving
Corporation"). The Merger shall become effective upon the date (the "Effective
Date") on which a certified copy of this Merger Agreement or a Certificate of
Merger, executed and acknowledged on behalf of the Surviving Corporation and
the Company, in accordance with the requirements of the DGCL and the MBCL, has
been filed with the Delaware Secretary of State and the Massachusetts
Secretary of State.
2. Certificate of Incorporation. The Certificate of Incorporation of Newco,
as in effect on the Effective Date, shall be the Certificate of Incorporation
of the Surviving Corporation without change or amendment, until thereafter
amended in accordance with the provisions thereof and applicable laws.
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3. Directors, Officers and By-Laws. The directors of the Company immediately
prior to the Effective Date shall be the directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and the By-Laws of the Surviving Corporation. The officers of
the Company immediately prior to the Effective Date shall be the officers of
the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and the By-Laws of the Surviving Corporation
except that the person serving as Clerk of the Company shall serve as
Secretary of the Surviving Corporation. The By-Laws of Newco, as in effect on
the Effective Date, shall be the By-Laws of the Surviving Corporation without
change or amendment until thereafter amended in accordance with the provisions
thereof and applicable laws.
4. Succession. From and after the Effective Date, the Surviving Corporation
shall succeed, insofar as permitted by law, to all of the rights, assets,
liabilities and obligations of the Company; and the title to any real estate
vested by deed or otherwise, in either of the Company and/or the Surviving
Corporation, shall not revert or be in any way impaired by reason of the
Merger, but all rights of creditors and all liens on any property of either of
said corporation shall be reserved unimpaired, and all debts, liabilities and
duties of said corporations shall, as of the Effective Date, attach to the
Surviving Corporation, and may be enforced against the Surviving Corporation
to the same extent as if said debts, liabilities, and duties had been incurred
or contracted by it, and any claim existing or action or proceeding pending by
or against any of said corporations may be prosecuted as if the Merger had not
taken place, or the Surviving Corporation may be substituted in its place. The
employees and agents of the Company shall become the employees and agents of
Newco and continue to be entitled to the same rights and benefits which they
enjoyed as employees and agents of the Company.
5. Further Assurances. From time to time as and when requested by the
Surviving Corporation or by its successors and assigns, there shall be
executed and delivered on behalf of the Company and/or the Surviving
Corporation such deeds and other instruments, and there shall be taken or
caused to be taken by it such further and other action, as shall be
appropriate or necessary in order to vest, protect or confirm, of record or
otherwise, in the Surviving Corporation the title to and possession of all
property, interest, assets, right, privileges, immunities, powers, franchises,
and authority of the Company, and otherwise to carry out the purposes of this
Merger Agreement, and the officers and directors of the Surviving Corporation
are fully authorized, in the name and on behalf of the Company, or otherwise,
to take any and all such action and to execute and deliver any and all such
deeds and other instruments.
6. Conversion of Shares.
a. Upon the Effective Date, each share of the Company's Common Stock
issued and outstanding or held in the treasury of the Company immediately
prior thereto (other than shares of the Company's Common Stock in respect
of which dissenters' rights shall properly have been exercised in
accordance with the MBCL) shall, by virtue of the Merger and without any
action on the part of any holder thereof, be changed and converted into one
(1) fully paid and nonassessable share of Delaware Common Stock.
b. Upon the Effective Date, the one hundred (100) shares of Delaware
Common Stock currently issued and outstanding in the name of the Company
shall be canceled and retired without any consideration being issued or
paid therefor and shall resume the status of authorized and unissued shares
of Delaware Common Stock, and no shares of Delaware Common Stock or other
securities of the Surviving Corporation shall be issued in respect thereof.
c. Each outstanding option to purchase shares of the Company's Common
Stock under any of the stock option or stock purchase plans of the Company
(an "Old Option") and outstanding immediately prior to the Effective Date
shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become an option to purchase, upon
the same terms and conditions, the number of shares of Delaware Common
Stock which is equal to the same number of shares of Company's Common Stock
which may be purchased under such Old Option. The exercise price per share
under each Old Option shall be equal to the exercise price per share
immediately prior to the Effective Date. All of the Company's stock option
plans and stock options granted thereunder, outstanding immediately prior
to the Effective Date are automatically amended to permit plan continuance
and stock option continuance and conversion into those
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<PAGE>
of the Surviving Corporation following the Merger notwithstanding any
provisions heretofore contained in such plans or outstanding options
providing for termination in the event of a merger in which the Company is
not the surviving corporation.
7. Stock Certificates. Upon the Effective Date, each certificate
representing issued and outstanding shares of the Company's Common Stock
(other than shares of the Company's Common Stock in respect of which
dissenters' rights shall properly have been exercised in accordance with the
MBCL) shall be deemed and treated for all purposes as representing the shares
of Delaware Common Stock into which such shares of the Company's Common Stock
have been converted. Each stockholder of the Company may, but is not required
to, exchange any existing stock certificates representing shares of the
Company's Common Stock for stock certificates representing the same number of
shares of Delaware Common Stock. All shares of Delaware Common Stock into
which shares of the Company's Common Stock shall have been converted pursuant
to this Merger Agreement shall be deemed to have been issued in full
satisfaction of all rights pertaining to such converted shares. When the
Merger becomes effective, the holders of certificates representing the
Company's Common Stock outstanding prior to the Effective Date (except for
shares of the Company's Common Stock in respect of which dissenters' rights
shall have been properly exercised in accordance with the MBCL) shall cease to
have any rights with respect to such stock, and their sole rights shall be
with respect to the Delaware Common Stock into which their shares of the
Company's Common Stock are to be converted by the Merger. Upon the Effective
Date, the stock transfer books of the Company shall be closed and no transfer
of shares of the Company's Common Stock outstanding immediately prior to the
Effective Date shall thereafter be made or consummated.
8. Employee Option and Benefit Plans and Other Stock Rights. As of the
Effective Date: (a) all employee option, benefit or compensation plans of the
Company (collectively, the "Plans") and all obligations of the Company under
the Plans, including the outstanding options granted pursuant to the Plans,
and (b) all obligations of the Company under all other benefit or compensation
plans and outstanding stock rights in effect as of the Effective Date with
respect to which employee rights or accrued benefits or other rights are
outstanding as of the Effective Date, shall be assumed by, and continue to be
the plan of, the Surviving Corporation. To the extent any employee option,
benefit or compensation plan of the Company provided for the issuance or
purchase of, or otherwise related to, the Company's Common Stock, after the
Effective Date such plan shall be deemed to provide for the issuance or
purchase of, or otherwise relate to, Delaware Common Stock.
9. Stockholder Approval. This Merger Agreement shall be submitted to a vote
of the stockholders of the Company and the sole stockholder of the Surviving
Corporation in accordance with the laws of The Commonwealth of Massachusetts
and the State of Delaware, respectively. In the event that this Merger
Agreement shall be not approved by the requisite vote of holders of two-thirds
of the Company's Common Stock outstanding and entitled to vote at the
Company's 1996 annual meeting or any adjournment thereof, this Merger
Agreement shall thereupon be terminated without further action of the parties
hereto.
10. Amendment. Subject to applicable law, this Merger Agreement may be
amended, modified or supplemented by written agreement of the parties hereto
at any time prior to the Effective Date with respect to any of the items
contained herein.
11. Abandonment. At any time before the Effective Date, this Merger
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of either the Surviving Corporation or the Company or both,
notwithstanding the approval of this Merger Agreement by the stockholders of
the Company or the sole stockholder of Newco.
12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, except to the
extent the laws of the State of Delaware are required to apply to the Merger.
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<PAGE>
IN WITNESS WHEREOF, this Merger Agreement is hereby executed as a sealed
instrument on behalf of the Company and the Surviving Corporation by their
respective duly authorized officers.
- ------------------------------------- DATA TRANSLATION, INC.
ATTEST: (a Massachusetts corporation)
By: By:
---------------------------------- ---------------------------------
Clerk Chief Executive Officer
(Corporate Seal)
- ------------------------------------- DATA TRANSLATION, INC.
ATTEST: (a Delaware corporation)
By: By:
---------------------------------- ---------------------------------
Secretary Chief Executive Officer
(Corporate Seal)
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<PAGE>
EXHIBIT C
CERTIFICATE OF INCORPORATION
OF
DATA TRANSLATION, INC.
1. The name of this corporation is Data Translation, Inc.
2. The registered office of this corporation in the State of Delaware is
located at 1013 Centre Road, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is Corporation Service
Company.
3. The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
4. The corporation shall have two classes of stock, Common Stock, $.01 par
value per share, and Preferred Stock, $.01 par value per share. The total
number of shares that the corporation shall have authority to issue is
25,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock.
Subject to the limitations prescribed by law and the provisions of this
certificate of incorporation, the board of directors of the corporation is
authorized to issue the Preferred Stock from time to time in one or more
series, each of such series to have such voting powers, full or limited, or no
voting powers, and such designations, preferences and relative, participating,
optional or other special rights, and such qualifications, limitations or
restrictions thereof, as shall be determined by the board of directors in a
resolution or resolutions providing for the issue of such Preferred Stock.
Subject to the powers, preferences and rights of any Preferred Stock,
including any series thereof, having any preference or priority over, or
rights superior to, the Common Stock and except as otherwise provided by law,
the holders of the Common Stock shall have and possess all powers and voting
and other rights pertaining to the stock of this corporation and each share of
Common Stock shall be entitled to one vote.
5. The name and mailing address of the incorporator is: Alfred A. Molinari,
100 Locke Drive, Marlboro, Massachusetts, 01752-1192.
6. Except as otherwise provided in the provisions establishing a class of
stock, the number of authorized shares of any class of stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the voting power of the
corporation entitled to vote irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of the State of Delaware.
7. In furtherance and not in limitation of the power conferred upon the
board of directors by law, the board of directors shall have power to make,
adopt, alter, amend and repeal from time to time by-laws of this corporation,
subject to the right of the stockholders entitled to vote with respect thereto
to alter and repeal by-laws made by the board of directors.
8. A director of this corporation shall not be liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent that exculpation from liability is not
permitted under the General Corporation Law of the State of Delaware as in
effect at the time such liability is determined. No amendment or repeal of
this paragraph 8 shall apply to or have any effect on the liability or alleged
liability of any director of the corporation for or with respect to any acts
or omissions of such director occurring prior to such amendment or repeal.
9. This corporation shall, to the maximum extent permitted from time to time
under the law of the State of Delaware, indemnify and upon request advance
expenses to any person who is or was a party or is threatened to be made a
party to any threatened, pending or completed action, suit, proceeding or
claim, whether civil, criminal, administrative or investigative, by reason of
the fact that such person is or was or has agreed to be a
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director or officer of this corporation or while a director or officer is or
was serving at the request of this corporation as a director, officer,
partner, trustee, employee or agent of any corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, against expenses (including attorney's fees and expenses),
judgments, fines, penalties and amounts paid in settlement incurred (and not
otherwise recovered) in connection with the investigation, preparation to
defend or defense of such action, suit, proceeding or claim; provided,
however, that the foregoing shall not require this corporation to indemnify or
advance expenses to any person in connection with any action, suit,
proceeding, claim or counterclaim initiated by or on behalf of such person.
Such indemnification shall not be exclusive of other indemnification rights
arising under any by-law, agreement, vote of directors or stockholders or
otherwise and shall inure to the benefit of the heirs and legal
representatives of such person. Any person seeking indemnification under this
paragraph 9 shall be deemed to have met the standard of conduct required for
such indemnification unless the contrary shall be established. Any repeal or
modification of the foregoing provisions of this paragraph 9 shall not
adversely affect any right or protection of a director or officer of this
corporation with respect to any acts or omissions of such director or officer
occurring prior to such repeal or modification.
The books of this corporation may (subject to any statutory requirements) be
kept outside the State of Delaware as may be designated by the board of
directors or in the by-laws of this corporation.
10. (A) Except as set forth in Section (D) of this paragraph 10, the
affirmative vote of the holders of not less than 75% of the outstanding shares
of capital stock of the corporation entitled to vote generally in the election
of directors shall be required for the approval or authorization of any
Business Combination of the corporation with any Related Person.
(B) For purposes of this paragraph 10:
(1) The term "Business Combination" shall mean (i) any merger or
consolidation of the corporation with or into a Related Person, (ii) any
sale, lease, exchange, transfer or other disposition, including without
limitation the creation of a mortgage or any other security device of all
or any substantial part of the assets of the corporation (including without
limitation any voting securities of a subsidiary) or of a subsidiary, to a
Related Person, (iii) any merger or consolidation of a Related Person with
or into the corporation or a subsidiary of the corporation (iv) any sale,
lease exchange, transfer or other disposition of all or any substantial
part of the assets of a Related Person to the corporation or a subsidiary
of the corporation, (v) the issuance of any securities of the corporation
to a Related Person, (vi) the acquisition by the corporation or a
subsidiary of the corporation of any securities of a Related Person, (vii)
any reclassification of Common Stock of the corporation, or any
recapitalization involving Common Stock of the corporation, consummated at
a time that a Related Person exists and within two years after such Related
Person becomes a Related Person, and (viii) any agreement, contract or
other arrangement providing for any of the transactions described in this
definition of Business Combination.
(2) The term "Related Person" shall include any individual, corporation,
partnership or other person or entity (collectively, a "Person") that
together with its affiliates and associated beneficially owns in the
aggregate 5% or more of the outstanding shares of the capital stock of any
class of the corporation, and any affiliate or associate of any such
Person; provided, however, that the term "Related Person" shall not include
a Person that together with its affiliates and associates beneficially
owned on December 31, 1995 in the aggregate more than 15% of the
outstanding shares of any class of stock of the corporation's predecessor,
Data Translation, Inc., a Massachusetts corporation, or any affiliate or
associate of such Person.
(3) The term "substantial part" shall mean more than 10% of the total
assets of the corporation in question, as of the end of its most recent
fiscal year ending prior to the time the determination is being made.
(4) With respect to any proposed Business Combination, the term
"continuing director" shall mean (i) directors who were members of the
board of directors at December 31, 1995 of the corporation's predecessor
corporation, Data Translation, Inc., a Massachusetts corporation and (ii)
any other director who
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was a member of the Board of Directors of the corporation immediately prior
to the time that any Related Person involved in the proposed Business
Combination became a Related Person (or, if the transaction involves more
than one Related Person, immediately prior to the time the first of such
Persons to become a Related Person became a Related Person).
(5) Any Person shall be deemed to be the beneficial owner of any shares
of stock of the corporation
(i) that it owns directly, whether or not of record; or
(ii) that it has the right to acquire pursuant to any agreement or
understanding or upon exercise of conversion rights, warrants or
options or otherwise; or
(iii) that are beneficially owned, directly or indirectly (including
shares deemed to be owned through application of clause (ii) above), by
an affiliate or associate; or
(iv) that are beneficially owned, directly or indirectly, by any
other Person or (including any shares which such other Person has the
right to acquire pursuant to any agreement or understanding or upon
exercise of conversion rights, warrants or options or otherwise) with
which it or its affiliates or associates has any agreement or
arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of stock of the corporation.
(6) The outstanding shares of stock of the corporation shall include
shares deemed owned through the application of clauses (5)(ii), (iii) and
(iv) above, but shall not include any other shares that may be issuable
pursuant to any agreement or upon exercise of conversion rights, warrants,
options or otherwise.
(7) The term "affiliate" shall mean any individual, corporation,
partnership or other person or entity that directly, or indirectly through
one or more intermediaries, controls, or is controlled by or is under
common control with, such Person. The term "control" (including the terms
"controlling," "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
(8) The term "associate" shall mean (i) any corporation or organization
(other than this corporation or a majority-owned subsidiary of this
corporation) of which such Person is an officer, director, trustee, partner
or employee or is, directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities; (ii) any trust or other estate in
which such Person serves as a trustee or in a similar fiduciary capacity,
and (iii) any relative or spouse of such Person or any relative of such
spouse, who has the same home as such Person or who is a director or
officer of this corporation or of any of its subsidiaries.
(C) The Board of Directors of the corporation shall have the power to
determine for the purposes of this paragraph 10, on the basis of information
known to the Board of Directors, whether (1) a Person is a Related Person, and
(2) a Person is an affiliate or associate of another. Any such determination
shall be conclusive and binding for all purposes of this paragraph 10.
(D) The provisions of this paragraph 10 shall not apply to any Business
Combination with any Person if (1) the Board of Directors of the corporation
has approved a memorandum of understanding with such other Person with respect
to such transaction prior to the time such Person became a Related Person; (2)
such transaction is otherwise approved by the Board of Directors of the
corporation, provided that a majority of the members of the Board of Directors
voting for the approval of such transaction were continuing directors; or (3)
the Business Combination involves solely the corporation and a subsidiary
greater than 50% of whose stock is owned by the corporation and none of whose
stock is beneficially owned by a Related Person (other than beneficial
ownership arising solely because of control of the corporation), provided that
if the corporation is not the surviving company, each stockholder of the
corporation receives the same type of consideration in such transaction in
proportion to his stock holdings, the provisions of paragraphs 10 through 11
of this Certificate of Incorporation are continued in effect or adopted by
such surviving company as part of its articles of association and such
articles have no provisions inconsistent with such provisions, and the
provisions of the corporation's by-laws are continued in effect or adopted by
said surviving company.
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(E) This paragraph 10 may not be amended or rescinded except by the
affirmative vote of the holders of not less than 75% of the outstanding shares
of capital stock of the corporation entitled to vote generally in the election
of directors, at any regular or special meeting of the stockholders, but only
if notice of the proposed alteration or amendment was contained in the notice
of such meeting.
11. The Board of Directors of the corporation, when evaluating any offer of
another party, (a) to make a tender or exchange offer for any equity security
of the corporation or (b) to effect a Business Combination (as defined in
paragraph 10), shall, in connection with the exercise of its judgment in
determining what is in the best interest of the corporation as whole, be
authorized to give due consideration to such factors as the Board of Directors
determines to be relevant, including, without limitation:
(i) the interest of the corporation's stockholders;
(ii) whether the proposed transaction might violate federal or state
laws;
(iii) not only the consideration being offered in the proposed
transaction, in relation to the then current market price for the
outstanding capital stock of the corporation, but also to the market price
for the capital stock of the corporation over a period of years, the
estimated price that might be achieved in a negotiated sale of the
corporation as a whole or in part or through orderly liquidation, the
premiums over market price for the securities of other corporations in
similar transaction, current political, economic and other factors bearing
on securities prices and the corporation's financial condition and future
prospects; and
(iv) the social, legal and economic effects upon employees, suppliers,
customers and others having similar relationships with the corporation, and
the communities in which the corporation conducts its business.
In connection with any such evaluation, the Board of Directors is authorized
to conduct such investigations and to engage in such legal proceedings as the
Board of Directors may determine.
12. If at any time this corporation shall have a class of stock registered
pursuant to the provisions of the Securities Exchange Act of 1934, for so long
as such class is so registered, any action by the stockholders of such class
is required to be taken at an annual or special meeting of stockholders and
may not be taken by written consent.
13. The provisions of Section 203 of the Delaware General Corporation law
shall not apply to the corporation.
THE UNDERSIGNED, the sole incorporator named above, hereby certifies that
the facts stated above are true as of this day of , 1996.
-------------------------------------
Alfred A. Molinari, Jr.
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EXHIBIT D
BY-LAWS
OF
DATA TRANSLATION, INC.
SECTION 1. LAW, CERTIFICATE OF INCORPORATION AND BY-LAWS
1.1 These by-laws are subject to the certificate of incorporation of the
corporation. In these by-laws, references to law, the certificate of
incorporation and by-laws mean the law, the provisions of the certificate of
incorporation and the by-laws as from time to time in effect.
SECTION 2. STOCKHOLDERS
2.1. Annual Meeting. The annual meeting of stockholders shall be held at
10:00 a.m. on the second Wednesday in April in each year, unless that day be a
legal holiday at the place where the meeting is to be held, in which case the
meeting shall be held at the same hour on the next succeeding day not a legal
holiday, or at such other date and time as shall be designated from time to
time by the board of directors and stated in the notice of the meeting, at
which they shall elect a board of directors and transact such other business
as may be required by law or these by-laws or as may properly come before the
meeting. At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting as (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the board of directors, (b) otherwise properly brought before
the meeting by or at the direction of the board of directors, or (c) otherwise
properly brought before the meeting by a stockholder by the stockholder giving
timely notice thereof in writing to the secretary of the corporation. To be
timely, a stockholder's notice must be received at the principal executive
offices of the corporation: (1) not less than 60 days in advance of such
meeting if such meeting is to be held on a day which is within 30 days
preceding the anniversary of the previous year's annual meeting or 90 days in
advance of such meeting if such meeting is to be held on or after the
anniversary of the previous year's annual meeting; and (2) with respect to any
other annual meeting of stockholders, on or before the close of business on
the 15th day following the earliest date of public disclosure of the date of
such meeting. For purposes of this section, the date of public disclosure of a
meeting shall include, but not be limited to, the date on which disclosure of
the date of the meeting is made in a press release reported by the Dow Jones
News Services, Associated Press or a comparable national news service, or in a
document publicly filed by the corporation with the Securities and Exchange
Commission pursuant to Sections 13, 14 or 15(d) (or the rules and regulations
thereunder) of the Securities Exchange Act of 1934, as amended. A
stockholder's notice to the secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting, (b) the
name, age and business and residential address, as they appear on the
corporation's records, of the stockholder proposing such business, (c) the
class and number of shares of the corporation which are beneficially owned by
the stockholder, and (d) any material interest of the stockholder in such
business. Notwithstanding anything in the by-laws to the contrary, no business
shall be conducted at an annual meeting except in accordance with the
procedures set forth herein. The chairman of the annual meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the provisions
hereof and if the chairman should so determine, the chairman shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.
2.2. Special Meetings. A special meeting of the stockholders may be called
at any time by the chairman of the board, if any, the president or the board
of directors. A special meeting of the stockholders shall be called by the
secretary, or in the case of the death, absence, incapacity or refusal of the
secretary, by an assistant secretary or some other officer, upon application
of a majority of the directors. Any such application shall state the purpose
or purposes of the proposed meeting. Any such call shall state the place,
date, hour, and purposes of the meeting.
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2.3. Place of Meeting. All meetings of the stockholders for the election of
directors or for any other purpose shall be held at such place within or
without the State of Delaware as may be determined from time to time by the
chairman of the board, if any, the president or the board of directors. Any
adjourned session of any meeting of the stockholders shall be held at the
place designated in the vote of adjournment.
2.4. Notice of Meetings. Except as otherwise provided by law, a written
notice of each meeting of stockholders stating the place, day and hour thereof
and, in the case of a special meeting, the purposes for which the meeting is
called, shall be given not less than 10 nor more than 60 days before the
meeting, to each stockholder entitled to vote thereat, and to each stockholder
who, by law, by the certificate of incorporation or by these by-laws, is
entitled to notice, by leaving such notice with him or at his residence or
usual place of business, or by depositing it in the United States mail,
postage prepaid, and addressed to such stockholder at his address as it
appears in the records of the corporation. Such notice shall be given by the
secretary, or by an officer or person designated by the board of directors, or
in the case of a special meeting by the officer calling the meeting. As to any
adjourned session of any meeting of stockholders, notice of the adjourned
meeting need not be given if the time and place thereof are announced at the
meeting at which the adjournment was taken except that if the adjournment is
for more than 30 days or if after the adjournment a new record date is set for
the adjourned session, notice of any such adjourned session of the meeting
shall be given in the manner heretofore described. No notice of any meeting of
stockholders or any adjourned session thereof need be given to a stockholder
if a written waiver of notice, executed before or after the meeting or such
adjourned session by such stockholder, is filed with the records of the
meeting or if the stockholder attends such meeting without objecting at the
beginning of the meeting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the stockholders or any
adjourned session thereof need be specified in any written waiver of notice.
2.5. Quorum of Stockholders. At any meeting of the stockholders a quorum as
to any matter shall consist of a majority of the votes entitled to be cast on
the matter, except where a larger quorum is required by law, by the
certificate of incorporation or by these by-laws. Any meeting may be adjourned
from time to time by a majority of the votes properly cast upon the question,
whether or not a quorum is present. If a quorum is present at an original
meeting, a quorum need not be present at an adjourned session of that meeting.
Shares of its own stock belonging to the corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of
any corporation to vote stock, including but not limited to its own stock,
held by it in a fiduciary capacity.
2.6. Action by Vote. When a quorum is present at any meeting, a plurality of
the votes properly cast for election to any office shall elect to such office
and a majority of the votes properly cast upon any question other than an
election to an office shall decide the question, except when a larger vote is
required by law, by the certificate of incorporation or by these by-laws. No
ballot shall be required for any election unless requested by a stockholder
present or represented at the meeting and entitled to vote in the election.
2.7. Proxy Representation. Every stockholder may authorize another person or
persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, objecting
to or voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder or by his
attorney-in-fact. No proxy shall be voted or acted upon after three years from
its date unless such proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and, if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally. The authorization of a proxy may but
need not be limited to specified action, provided, however, that if a proxy
limits its authorization to a meeting or meetings of stockholders, unless
otherwise specifically provided such proxy shall entitle the holder thereof to
vote at any adjourned session but shall not be valid after the final
adjournment thereof.
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2.8. Inspectors. The directors or the person presiding at the meeting may,
and shall if required by applicable law, appoint one or more inspectors of
election and any substitute inspectors to act at the meeting or any
adjournment thereof. Each inspector, before entering upon the discharge of his
duties, shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best
of his ability. The inspectors, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots or consents, hear and determine
all challenges and questions arising in connection with the right to vote,
count and tabulate all votes, ballots or consents, determine the result, and
do such acts as are proper to conduct the election or vote with fairness to
all stockholders. On request of the person presiding at the meeting, the
inspectors shall make a report in writing of any challenge, question or matter
determined by them and execute a certificate of any fact found by them.
2.9. List of Stockholders. The secretary shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical order
and showing the address of each stockholder and the number of shares
registered in his name. The stock ledger shall be the only evidence as to who
are stockholders entitled to examine such list or to vote in person or by
proxy at such meeting.
SECTION 3. BOARD OF DIRECTORS
3.1. Number. The corporation shall have one or more directors, the number of
directors to be determined from time to time by vote of a majority of the
directors then in office. Except in connection with the election of directors
at the annual meeting of stockholders, the number of directors may be
decreased only to eliminate vacancies by reason of death, resignation or
removal of one or more directors. No director need be a stockholder.
3.2. Tenure. Each director shall hold office until the next annual meeting
and until his successor is elected and qualified, or until he sooner dies,
resigns, is removed or becomes disqualified.
3.3. Powers. The business and affairs of the corporation shall be managed by
or under the direction of the board of directors who shall have and may
exercise all the powers of the corporation and do all such lawful acts and
things as are not by law, the certificate of incorporation or these by-laws
directed or required to be exercised or done by the stockholders.
3.4. Vacancies. Vacancies and any newly created directorships resulting from
any increase in the number of directors may be filled by vote of the holders
of the particular class or series of stock entitled to elect such director at
a meeting called for the purpose, or by a majority of the directors then in
office, although less than a quorum, or by a sole remaining director, in each
case elected by the particular class or series of stock entitled to elect such
directors. When one or more directors shall resign from the board, effective
at a future date, a majority of the directors then in office, including those
who have resigned, who were elected by the particular class or series of stock
entitled to elect such resigning director or directors shall have power to
fill such vacancy or vacancies, the vote or action by writing thereon to take
effect when such resignation or resignations shall become effective. The
directors shall have and may exercise all their powers notwithstanding the
existence of one or more vacancies in their number, subject to any
requirements of law or of the certificate of incorporation or of these by-laws
as to the number of directors required for a quorum or for any vote or other
actions.
3.5. Committees. The board of directors may, by vote of a majority of the
whole board, (a) designate, change the membership of or terminate the
existence of any committee or committees, each committee to consist of one or
more of the directors; (b) designate one or more directors as alternate
members of any such committee who may replace any absent or disqualified
member at any meeting of the committee; and (c) determine the extent to which
each such committee shall have and may exercise the powers of the board of
directors in the management of the business and affairs of the corporation,
including the power to authorize the seal of the corporation to be affixed to
all papers which require it and the power and authority to declare dividends
or to authorize the issuance of stock; excepting, however, such powers which
by law, by the certificate of incorporation or by these by-laws
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they are prohibited from so delegating. In the absence or disqualification of
any member of such committee and his alternate, if any, the member or members
thereof present at any meeting and not disqualified from voting, whether or
not constituting a quorum, may unanimously appoint another member of the board
of directors to act at the meeting in the place of any such absent or
disqualified member. Except as the board of directors may otherwise determine,
any committee may make rules for the conduct of its business, but unless
otherwise provided by the board or such rules, its business shall be conducted
as nearly as may be in the same manner as is provided by these by-laws for the
conduct of business by the board of directors. Each committee shall keep
regular minutes of its meetings and report the same to the board of directors
upon request.
3.6. Regular Meetings. Regular meetings of the board of directors may be
held without call or notice at such places within or without the State of
Delaware and at such times as the board may from time to time determine,
provided that notice of the first regular meeting following any such
determination shall be given to absent directors. A regular meeting of the
directors may be held without call or notice immediately after and at the same
place as the annual meeting of stockholders.
3.7. Special Meetings. Special meetings of the board of directors may be
held at any time and at any place within or without the State of Delaware
designated in the notice of the meeting, when called by the chairman of the
board, if any, the president, or by one-third or more in number of the
directors, reasonable notice thereof being given to each director by the
secretary or by the chairman of the board, if any, the president or any one of
the directors calling the meeting.
3.8. Notice. It shall be reasonable and sufficient notice to a director to
send notice by mail at least forty-eight hours or by telegram at least 24
hours before the meeting addressed to him at his usual or last known business
or residence address or to give notice to him in person or by telephone at
least 24 hours before the meeting. Notice of a meeting need not be given to
any director if a written waiver of notice, executed by him before or after
the meeting, is filed with the records of the meeting, or to any director who
attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. Neither notice of a meeting nor a waiver of a
notice need specify the purposes of the meeting.
3.9. Quorum. Except as may be otherwise provided by law, by the certificate
of incorporation or by these by-laws, at any meeting of the directors a
majority of the directors then in office shall constitute a quorum; a quorum
shall not in any case be less than one-third of the total number of directors
constituting the whole board. Any meeting may be adjourned from time to time
by a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
3.10. Action by Vote. Except as may be otherwise provided by law, by the
certificate of incorporation or by these by-laws, when a quorum is present at
any meeting the vote of a majority of the directors present shall be the act
of the board of directors.
3.11. Action Without a Meeting. Any action required or permitted to be taken
at any meeting of the board of directors or a committee thereof may be taken
without a meeting if all the members of the board or of such committee, as the
case may be, consent thereto in writing, and such writing or writings are
filed with the records of the meetings of the board or of such committee. Such
consent shall be treated for all purposes as the act of the board or of such
committee, as the case may be.
3.12. Participation in Meetings by Conference Telephone. Members of the
board of directors, or any committee designated by such board, may participate
in a meeting of such board or committee by means of conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other or by any other means permitted by law.
Such participation shall constitute presence in person at such meeting.
3.13. Compensation. In the discretion of the board of directors, each
director may be paid such fees for his services as director and be reimbursed
for his reasonable expenses incurred in the performance of his duties as
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director as the board of directors from time to time may determine. Nothing
contained in this section shall be construed to preclude any director from
serving the corporation in any other capacity and receiving reasonable
compensation therefor.
3.14. Interested Directors and Officers.
(a) No contract or transaction between the corporation and one or more of
its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of the corporation's directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for this reason,
or solely because the director or officer is present at or participates in the
meeting of the board or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such
purpose, if:
(1) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the board of
directors or the committee, and the board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or
(2) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the board of directors, a
committee thereof, or the stockholders.
(b) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
SECTION 4. OFFICERS AND AGENTS
4.1. Enumeration; Qualification. The officers of the corporation shall be a
president, a treasurer, a secretary and such other officers, if any, as the
board of directors from time to time may in its discretion elect or appoint
including without limitation a chairman of the board, one or more vice
presidents and a controller. The corporation may also have such agents, if
any, as the board of directors from time to time may in its discretion choose.
Any officer may be but none need be a director or stockholder. Any two or more
offices may be held by the same person. Any officer may be required by the
board of directors to secure the faithful performance of his duties to the
corporation by giving bond in such amount and with sureties or otherwise as
the board of directors may determine.
4.2. Powers. Subject to law, to the certificate of incorporation and to the
other provisions of these by-laws, each officer shall have, in addition to the
duties and powers herein set forth, such duties and powers as are commonly
incident to his office and such additional duties and powers as the board of
directors may from time to time designate.
4.3. Election. The officers may be elected by the board of directors at
their first meeting following the annual meeting of the stockholders or at any
other time. At any time or from time to time the directors may delegate to any
officer their power to elect or appoint any other officer or any agents.
4.4. Tenure. Each officer shall hold office until the first meeting of the
board of directors following the next annual meeting of the stockholders and
until his respective successor is chosen and qualified unless a shorter period
shall have been specified by the terms of his election or appointment, or in
each case until he sooner dies, resigns, is removed or becomes disqualified.
Each agent shall retain his authority at the pleasure of the directors, or the
officer by whom he was appointed or by the officer who then holds agent
appointive power.
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4.5 Chairman of the Board of Directors, President and Vice President. The
chairman of the board, if any, shall have such duties and powers as shall be
designated from time to time by the board of directors. Unless the board of
directors otherwise specifies, the chairman of the board, or if there is none
the chief executive officer, shall preside, or designate the person who shall
preside, at all meetings of the stockholders and of the board of directors.
Unless the board of directors otherwise specifies, the president shall be
the chief executive officer and shall have direct charge of all business
operations of the corporation and, subject to the control of the directors,
shall have general charge and supervision of the business of the corporation.
Any vice presidents shall have such duties and powers as shall be set forth
in these by-laws or as shall be designated from time to time by the board of
directors or by the president.
4.6. Treasurer and Assistant Treasurers. Unless the board of directors
otherwise specifies, the treasurer shall be the chief financial officer of the
corporation and shall be in charge of its funds and valuable papers, and shall
have such other duties and powers as may be designated from time to time by
the board of directors or by the president. If no controller is elected, the
treasurer shall, unless the board of directors otherwise specifies, also have
the duties and powers of the controller.
Any assistant treasurers shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
treasurer.
4.7. Controller and Assistant Controllers. If a controller is elected, he
shall, unless the board of directors otherwise specifies, be the chief
accounting officer of the corporation and be in charge of its books of account
and accounting records, and of its accounting procedures. He shall have such
other duties and powers as may be designated from time to time by the board of
directors, the president or the treasurer.
Any assistant controller shall have such duties and powers as shall be
designated from time to time by the board of directors, the president, the
treasurer or the controller.
4.8. Secretary and Assistant Secretaries. The secretary shall record all
proceedings of the stockholders, of the board of directors and of committees
of the board of directors in a book or series of books to be kept therefor and
shall file therein all actions by written consent of stockholders or
directors. In the absence of the secretary from any meeting, an assistant
secretary, or if there be none or he is absent, a temporary secretary chosen
at the meeting, shall record the proceedings thereof. Unless a transfer agent
has been appointed the secretary shall keep or cause to be kept the stock and
transfer records of the corporation, which shall contain the names and record
addresses of all stockholders and the number of shares registered in the name
of each stockholder. He shall have such other duties and powers as may from
time to time be designated by the board of directors or the president.
Any assistant secretaries shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
secretary.
SECTION 5. RESIGNATIONS AND REMOVALS
5.1. Any director or officer may resign at any time by delivering his
resignation in writing to the chairman of the board, if any, the president, or
the secretary or to a meeting of the board of directors. Such resignation
shall be effective upon receipt unless specified to be effective at some other
time, and without in either case the necessity of its being accepted unless
the resignation shall so state. A director (including persons elected by
stockholders or directors to fill vacancies in the board) may be removed from
office with or without cause by the vote of the holders of a majority of the
issued and outstanding shares of the particular class or series entitled to
vote in the election of such director. The board of directors may at any time
remove any officer either with or without cause. The board of directors may at
any time terminate or modify the authority of any agent.
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SECTION 6. VACANCIES
6.1. If the office of the president or the treasurer or the secretary
becomes vacant, the directors may elect a successor by vote of a majority of
the directors then in office. If the office of any other officer becomes
vacant, any person or body empowered to elect or appoint that officer may
choose a successor. Each such successor shall hold office for the unexpired
term, and in the case of the president, the treasurer and the secretary until
his successor is chosen and qualified or in each case until he sooner dies,
resigns, is removed or becomes disqualified. Any vacancy of a directorship
shall be filled as specified in Section 3.4 of these by-laws.
SECTION 7. CAPITAL STOCK
7.1. Stock Certificates. Each stockholder shall be entitled to a certificate
stating the number and the class and the designation of the series, if any, of
the shares held by him, in such form as shall, in conformity to law, the
certificate of incorporation and the by-laws, be prescribed from time to time
by the board of directors. Such certificate shall be signed by the chairman or
vice chairman of the board, if any, or the president or a vice president and
by the treasurer or an assistant treasurer or by the secretary or an assistant
secretary. Any of or all the signatures on the certificate may be a facsimile.
In case an officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to
be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent, or registrar at the time of its issue.
7.2. Loss of Certificates. In the case of the alleged theft, loss,
destruction or mutilation of a certificate of stock, a duplicate certificate
may be issued in place thereof, upon such terms, including receipt of a bond
sufficient to indemnify the corporation against any claim on account thereof,
as the board of directors may prescribe.
SECTION 8. TRANSFER OF SHARES OF STOCK
8.1. Transfer on Books. Subject to the restrictions, if any, stated or noted
on the stock certificate, shares of stock may be transferred on the books of
the corporation by the surrender to the corporation or its transfer agent of
the certificate therefor properly endorsed or accompanied by a written
assignment and power of attorney properly executed, with necessary transfer
stamps affixed, and with such proof of the authenticity of signature as the
board of directors or the transfer agent of the corporation may reasonably
require. Except as may be otherwise required by law, by the certificate of
incorporation or by these by-laws, the corporation shall be entitled to treat
the record holder of stock as shown on its books as the owner of such stock
for all purposes, including the payment of dividends and the right to receive
notice and to vote or to give any consent with respect thereto and to be held
liable for such calls and assessments, if any, as may lawfully be made
thereon, regardless of any transfer, pledge or other disposition of such stock
until the shares have been properly transferred on the books of the
corporation.
It shall be the duty of each stockholder to notify the corporation of his
post office address.
8.2. Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, the board of directors may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the board of directors, and which record date
shall not be more than 60 nor less than 10 days before the date of such
meeting. If no such record date is fixed by the board of directors, the record
date for determining the stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
In order that the corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the board of
directors may fix a record date, which record date shall not precede the
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date upon which the resolution fixing the record date is adopted by the board
of directors, and which date shall not be more than ten days after the date
upon which the resolution fixing the record date is adopted by the board of
directors. If no such record date has been fixed by the board of directors,
the record date for determining stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the board of
directors is required by the General Corporation Law of the State of Delaware,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in Delaware by hand or certified or
registered mail, return receipt requested, to its principal place of business
or to an officer or agent of the corporation having custody of the book in
which proceedings of meetings of stockholders are recorded. If no record date
has been fixed by the board of directors and prior action by the board of
directors is required by the General Corporation Law of the State of Delaware,
the record date for determining stockholders entitled to consent to corporate
action in writing without a meeting shall be at the close of business on the
day on which the board of directors adopts the resolution taking such prior
action.
In order that the corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any
rights or to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than 60 days prior to such payment, exercise or other
action. If no such record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the board of directors adopts the resolution relating thereto.
SECTION 9. CORPORATE SEAL
9.1. Subject to alteration by the directors, the seal of the corporation
shall consist of a flat-faced circular die with the word "Delaware" and the
name of the corporation cut or engraved thereon, together with such other
words, dates or images as may be approved from time to time by the directors.
SECTION 10. EXECUTION OF PAPERS
10.1. Except as the board of directors may generally or in particular cases
authorize the execution thereof in some other manner, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts or other obligations made,
accepted or endorsed by the corporation shall be signed by the chairman of the
board, if any, the president, a vice president or the treasurer.
SECTION 11. FISCAL YEAR
11.1. The fiscal year of the corporation shall end on November 30 of each
year.
SECTION 12. AMENDMENTS
12.2. These by-laws may be adopted, amended or repealed by vote of a
majority of the directors then in office or by vote of a majority of the
voting power of the stock outstanding and entitled to vote. Any by-law,
whether adopted, amended or repealed by the stockholders or directors, may be
amended or reinstated by the stockholders or the directors.
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EXHIBIT E
PROVISIONS OF THE GENERAL LAWS OF MASSACHUSETTS
RELATING TO THE RIGHTS OF DISSENTING SHAREHOLDERS
(SECTIONS 86 TO 98 OF CHAPTER 156B OF THE
GENERAL LAWS OF MASSACHUSETTS)
86. RIGHT OF APPRAISAL. If a corporation proposes to take a corporate action
as to which any section of this chapter provides that a stockholder who
objects to such action shall have the right to demand payment for his shares
and an appraisal thereof, sections eighty-seven to ninety-eight, inclusive,
shall apply except as otherwise specifically provided in any section of this
chapter. Except as provided in sections eighty-two and eighty-three, no
stockholder shall have such right unless (1) he files with the corporation
before the taking of the vote of the shareholders on such corporate action,
written objection to the proposed action stating that he intends to demand
payment for his shares if the action is taken and (2) his shares are not voted
in favor of the proposed action.
87. NOTICE OF STOCKHOLDERS MEETING TO CONTAIN STATEMENT AS TO APPRAISAL
RIGHTS. The notice of the meeting of stockholders at which the approval of
such proposed action is to be considered shall contain a statement of the
rights of objecting stockholders. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock, and the directors may authorize the inclusion in any
such notice of a statement of opinion by the management as to the existence or
non-existence of the right of the stockholders to demand payment for their
stock on account of the proposed corporate action. The notice may be in such
form as the directors or officers calling the meeting deem advisable, but the
following form of notice shall be sufficient to comply with this section:
"If the action proposed is approved by the stockholders at the meeting
and effected by the corporation, any stockholder (1) who files with the
corporation before the taking of the vote on the approval of such action,
written objection to the proposed action stating that he intends to demand
payment for his shares if the action is taken and (2) whose shares are not
voted in favor of such action has or may have the right to demand in
writing from the corporation (or, in the case of a consolidation or merger,
the name of the resulting or surviving corporation shall be inserted),
within twenty days after the date of mailing to him of notice in writing
that the corporate action has become effective, payment for his shares and
an appraisal of the value thereof. Such corporation and any such
stockholder shall in such cases have the rights and duties and shall follow
the procedure set forth in section 88 to 98, inclusive, of Chapter 156B of
the General Laws of Massachusetts."
88. NOTICE TO OBJECTING STOCKHOLDER THAT CORPORATE ACTION HAS BECOME
EFFECTIVE. The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation, shall, within ten days
after the date on which such corporate action became effective, notify each
stockholder who filed written objection meeting the requirements of section
eighty-six and whose shares were not voted in favor of the approval of such
action, that the action approved at the meeting of the corporation of which he
is a stockholder has become effective. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock. The notice shall be sent by registered or certified
mail, addressed to the stockholder at his last known address as it appears in
the records of the corporation.
89. DEMAND FOR PAYMENT BY OBJECTING STOCKHOLDER. If within twenty days after
the date of mailing of a notice under subsection (e) of section eighty-two,
subsection (f) of section eighty-three, or section eighty-eight any
stockholder to whom the corporation was required to give such notice shall
demand in writing from the corporation taking such action, or in the case of a
consolidation or merger from the resulting or surviving corporation, payment
for his stock, the corporation upon which such demand is made shall pay to him
the fair value of his stock within thirty days after the expiration of the
period during which such demand may be made.
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90. DETERMINATION OF VALUE OF STOCK BY SUPERIOR COURT. If during the period
of thirty days provided for in section eighty-nine the corporation upon which
such demand is made and any such objecting stockholder fail to agree as to the
value of such stock, such corporation or any such stockholder may within four
months after the expiration of such thirty-day period demand a determination
of the value of the stock of all such objecting stockholders by a bill in
equity filed in the superior court in the county where the corporation in
which such objecting stockholder held stock had or has its principal office in
the commonwealth.
91. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING STOCKHOLDERS ON
FAILURE TO AGREE ON VALUE THEREOF ETC.; PARTIES TO BILL ETC.; SERVICE OF BILL
IN CORPORATION; NOTICE TO STOCKHOLDER PARTIES ETC. If the bill is filed by the
corporation, it shall name as parties respondent all stockholders who have
demanded payment for their shares and with whom the corporation has not
reached agreement as to the value thereof. If the bill is filed by a
stockholder, he shall bring the bill in his own behalf and in behalf of all
other stockholders who have demanded payment for their shares and with whom
the corporation has not reached agreement as to the value thereof, and service
of the bill shall be made upon the corporation by subpoena with a copy of the
bill annexed. The corporation shall file with its answer a duly verified list
of all such other stockholders, and such stockholders shall thereupon be
deemed to have been added as parties to the bill. The corporation shall give
notice in such form and returnable on such date as the court shall order to
each stockholder party to the bill by registered or certified mail, addressed
to the last known address of such stockholder as shown in the records of the
corporation, and the court may order such additional notice by publication or
otherwise as it deems advisable. Each stockholder who makes demand as provided
in section eighty-nine shall be deemed to have consented to the provisions of
this section relating to notice, and the giving of notice by the corporation
to any such stockholder in compliance with the order of the court shall be a
sufficient service of process on him. Failure to give notice to any
stockholder making demand shall not invalidate the proceedings as to other
stockholders to whom notice was properly given, and the court may at any time
before the entry of a final decree make supplementary orders of notice.
92. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING STOCKHOLDERS ON
FAILURE TO AGREE ON VALUE THEREOF, ETC.; ENTRY OF DECREE DETERMINING VALUE OF
STOCK; DATE ON WHICH VALUE IS TO BE DETERMINED. After hearing the court shall
enter a decree determining the fair value of the stock of those stockholders
who have become entitled to the valuation of and payment for their shares, and
shall order the corporation to make payment of such value, together with
interest, if any, as hereinafter provided, to the stockholders entitled
thereto upon the transfer by them to the corporation of the certificates
representing such stock if certificated or if uncertificated, upon receipt of
an instruction transferring such stock to the corporation. For this purpose,
the value of the shares shall be determined as of the day preceding the date
of the vote approving the proposed corporate action and shall be exclusive of
any element of value arising from the expectation, or accomplishments of the
proposed corporate action.
93. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING STOCKHOLDERS ON
FAILURE TO AGREE ON VALUE THEREOF, ETC.; COURT MAY REFER BILL, ETC., TO
SPECIAL MASTER TO HEAR PARTIES, ETC. The court in its discretion may refer the
bill or any question arising thereunder to a special master to hear the
parties, make findings and report the same to the court, all in accordance
with the usual practice in suits in equity in the superior court.
94. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING STOCKHOLDERS ON
FAILURE TO AGREE ON VALUE THEREOF, ETC.; STOCKHOLDER PARTIES MAY BE REQUIRED
TO SUBMIT THEIR STOCK CERTIFICATES FOR NOTATION THEREON OF PENDENCY OF BILL,
ETC. On motion the court may order stockholder parties to the bill to submit
their certificates of stock to the corporation for notation thereon of the
pendency of the bill, and may order the corporation to note such pendency in
its records with respect to any uncertificated shares held by such stockholder
parties, and may on motion dismiss the bill as to any stockholder who fails to
comply with such order.
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<PAGE>
95. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING STOCKHOLDERS ON
FAILURE TO AGREE ON VALUE THEREOF, ETC.; TAXATION OF COSTS, ETC.; INTEREST ON
AWARD, ETC. The costs of the bill including the reasonable compensation and
expenses of any master appointed by the court, but exclusive of fees of
counsel or of experts retained by any party, shall be determined by the court
and taxed upon the parties to the bill, or any of them, in such manner as
appears to be equitable, except that all costs of giving notice to
stockholders as provided in this chapter shall be paid by the corporation.
Interest shall be paid upon any award from the date of the vote approving the
proposed corporate action, and the court may on application of any interested
party determine the amount of interest to be paid in the case of any
stockholder.
96. STOCKHOLDER DEMANDING PAYMENT FOR STOCK NOT ENTITLED TO NOTICE OF
STOCKHOLDERS' MEETINGS OR TO VOTE STOCK OR TO RECEIVE DIVIDENDS, ETC.;
EXCEPTIONS. Any stockholder who has demanded payment for his stock as provided
in this chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be entitled
to the payment of dividends or other distribution on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the date of the vote approving the proposed corporate
action) unless:
(1) A bill shall not be filed within the time provided in section ninety;
(2) A bill, if filed, shall be dismissed as to such stockholder; or
(3) Such stockholder shall with the written approval of the corporation,
or in the case of a consolidation or merger, the resulting or surviving
corporation, deliver to it a written withdrawal of his objections to and an
acceptance of such corporate action.
Notwithstanding the provisions of clauses (1) to (3) inclusive, said
stockholder shall have only the rights of a stockholder who did not so demand
payment for his stock as provided in this chapter.
97. CERTAIN SHARES PAID FOR BY CORPORATION TO HAVE STATUS OF TREASURY STOCK,
ETC. The shares of the corporation paid for by the corporation pursuant to the
provisions of this chapter shall have the status of treasury stock or in the
case of a consolidation or merger the shares or the securities of the
resulting or surviving corporation into which the shares of such objecting
stockholder would have been converted had he not objected to such
consolidation or merger shall have the status of treasury stock or securities.
98. ENFORCEMENT BY STOCKHOLDER OF RIGHT TO RECEIVE PAYMENT FOR HIS SHARES TO
BE EXCLUSIVE REMEDY; EXCEPTION. The enforcement by a stockholder of his right
to receive payment for his shares in the manner provided in this chapter shall
be an exclusive remedy except that this chapter shall not exclude the right of
such stockholder to bring or maintain an appropriate proceeding to obtain
relief on the ground that such corporate action will be or is illegal or
fraudulent as to him.
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<PAGE>
DATA TRANSLATION, INC.
Annual Meeting of Shareholders
April 10, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Alfred A. Molinari, Jr. and Peter J. Rice,
and each of them, with power of substitution to each, to represent and to vote,
as designated below, at the Annual Meeting of Shareholders to be held on April
10, 1996 at 10:00 a.m., and at any adjournments thereof, all shares of Common
Stock of the Company as to which the undersigned would be entitled to vote if
present. The undersigned hereby instructs such proxies or their substitutes to
vote in such manner as they may determine on any matters which may come before
the meeting, and to vote on the following as specified by the undersigned. All
proxies heretofore given by the undersigned in respect of said meeting are
hereby revoked.
Unless otherwise specified in the boxes provided on the reverse side hereof, the
proxy will be voted IN FAVOR of (i) fixing the number of directors at four and
to elect the nominees for director or any nominees for which approval is not
withheld, (ii) approving the increase by 1,000,000 the number of shares
available for issuance under the Key Employee Incentive Plan (1992) for a total
of 2,000,000 available under such plan, to set the maximum number of shares for
which options may be granted thereunder in any year to any participant at
250,000 and to limit participation therein to key employees, (iii) approving the
amendment to the Company's Articles of Organization to increase the Company's
authorized Common Stock from 10,000,000 to 25,000,000 shares, (iv) approving the
transfer of the Company's digital media and other assets related to the Media
100 product group to a new subsidiary of the Company to be organized in Delaware
and (v) approving the reincorporation of the Company in Delaware by approving a
merger agreement between the Company and a another subsidiary to be incorporated
in Delaware and wholly owned by the Company.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
<PAGE>
[X] Please mark votes as in this example
The Board of Directors recommends a vote FOR the following proposals:
1. To fix the number of directors at four and for the following nominees except
as marked to the contrary below:
Nominees: R. Bradford Malt, Alfred A. Molinari, John A. Molinari, Paul J.
Severino
[_] For all nominees [_] Withholding from all nominees
_____________________________________________
For all nominees except as noted above.
2. To increase by 1,000,000 the number of shares available for issuance under
the Company's Key Employee Incentive Plan (1992) for a total of 2,000,000
shares, to set the maximum number of shares for which options may be granted in
any year to any participant at 250,000 and to limit participation to key
employees.
[_] For [_] Against [_] Abstain
3. To approve an amendment to the Company's Articles of Organization to
increase the Company's authorized Common Stock from 10,000,000 to 25,000,000
shares.
[_] For [_] Against [_] Abstain
4. To approve the transfer of the Company's digital media and related assets to
a new subsidiary which transfer may be deemed to be a transfer of all or
substantially all of the assets of the Company pursuant to Section 75 of the
Massachusetts General Laws, Chapter 156B.
[_] For [_] Against [_] Abstain
5. To approve the reincorporation of the Company from Massachusetts to Delaware
pursuant to a merger of the Company into a subsidiary to be incorporated in
Delaware.
[_] For [_] Against [_] Abstain
THIS PROXY WHEN EXECUTED WILL BE VOTED AS SPECIFIED. IF NO CHOICE IS SPECIFIED,
OR IF YOUR PROXY IS NOT MARKED TO WITHHOLD AUTHORITY FROM ANY NOMINEE FOR
DIRECTOR, THEN THIS PROXY WILL BE VOTED IN FAVOR OF THE NOMINEES AND OTHER
PROPOSALS RECOMMENDED BY THE BOARD OF DIRECTORS OR ANY OTHER PROPOSAL FOR WHICH
APPROVAL HAS NOT BEEN WITHHELD. THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
MARK HERE [_]
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
Please sign your name exactly as it appears on your stock certificates, write in
the date and return the proxy as soon as possible. If the stock is registered
in more than one name, each joint owner or each fiduciary should sign
personally. Only authorized officers should sign for corporations.
Signature_______________________________Date_______________
Signature_______________________________Date_______________
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended: November 30, 1995
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-14779
DATA TRANSLATION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2532613
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
ORGANIZATION OR INCORPORATION) NUMBER)
100 LOCKE DRIVE
MARLBOROUGH, MASSACHUSETTS 01752-1192
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(508) 481-3700
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
(NONE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [_] .
The aggregate market value of voting stock held by non-affiliates of the
registrant was $87,166,437 as of January 31, 1996. The number of shares of
Common Stock outstanding, $0.01 par value, as of January 31, 1996 was
7,862,195.
DOCUMENTS INCORPORATED BY REFERENCE
The information required in response to certain portions of Item 1 and Items
5, 6, 7, 8 of Part II of Form 10-K is hereby incorporated by reference to the
specified portions of the registrant's Annual Report to Stockholders for the
fiscal year ended November 30, 1995. The information required in response to
Part III of Form 10-K is hereby incorporated by reference to the specified
portions of the registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 10, 1996.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART 1
ITEM 1. BUSINESS
Data Translation, Inc. ("Data Translation" or the "Company") is a leader in
the design, development and manufacture of high performance digital media,
data acquisition and imaging products. The Company's principal products are
Media 100 (R), a digital media product that enables video producers to produce
broadcast quality videos on a Macintosh computer, and digital signal
processing boards and software, which use personal computers to receive analog
signals, convert them to digital form and process the digital data. The
Company's strategy is to leverage its core competence in digital media and
digital signal processing to identify growth opportunities and develop
products for emerging markets. See "Research and Development and New
Products." The Company currently sells products through the following three
business groups: digital media, data acquisition and imaging, and networking
distribution.
COMPANY OVERVIEW
The Company's core competence is in designing and developing systems which
convert analog signals to digital data for processing and manipulation on a
computer for data acquisition, imaging and most recently, digital media. In
1973, the Company began selling high-performance data acquisition boards for
conversion and processing of analog signals, such as temperature, pressure and
sound, to digital form in a computer. In 1983, the Company expanded its
product line to include imaging products that process images from a video
input. In the late 1980s, the Company identified an opportunity to apply its
data acquisition and imaging expertise in audio and video to digital media.
After more than three years of intensive research and development, the Company
introduced the Media 100 product in August 1993.
Media 100 is fundamentally an analog and digital conversion system, like
Data Translation's earlier products, that enables users to capture video and
audio into a Macintosh, perform random-access ("nonlinear") video editing and
audio mixing, and directly produce a finished program with broadcast quality
picture and compact disc quality sound. By combining high output quality with
simple user operation, Media 100 targets a large market of video program
producers, including nonbroadcast users, such as advertising agencies,
independent producers, businesses, law firms, universities, governments and
hospitals. The Company is targeting this growing corporate and institutional
market which includes new users in addition to existing users of production
video equipment. By eliminating the need to use comparatively complex and
expensive mechanical videotape equipment to make a video, Media 100 empowers
these individuals to compose finished videos largely on their own at
relatively low cost.
In August 1995, the Company introduced version 2.5 of Media 100 which
incorporates a board that is compatible with the Peripheral Component
Interconnect ("PCI") standard. This board, named Vincent(TM), is the first
such board in the digital media market to be compatible with the newly
introduced PCI-based Power Macintosh computers, as well as PCI-based personal
computers using Intel microprocessors, such as Pentium, and Microsoft Windows.
The market for the Company's data acquisition and imaging products is
primarily technical users, such as engineers and scientists, interested in
incorporating the Company's systems in their final product. These final
products are designed for scientific research and analysis, test and
measurement and industrial inspection. As such, the markets are affected by
the level of government funding of research and of capital expenditures by
companies. The Company has incorporated several new technologies in its data
acquisition and imaging products, including the high speed PCI bus and
software that is compatible with Windows 95 software.
The Company also distributes, integrates and supports enterprise wide
networking products manufactured by third party suppliers in the United
Kingdom through a subsidiary. The products distributed include networking
products manufactured by third party suppliers, such as 3Com Corporation
("3Com") and Hewlett-Packard Company ("Hewlett-Packard"). The Company believes
its knowledge of the latest networking technologies, such as asynchronous
transfer mode ("ATM"), will enable it to benefit from expected continued
growth in this
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<PAGE>
market. In addition, the Company believes that its networking technology
expertise will contribute to the development of new digital media and imaging
products. In September 1995, the networking distribution subsidiary became the
first value added network distributor in the United Kingdom to be awarded the
ISO 9002 accreditation, the international standard for quality systems.
The Company's digital media, data acquisition and imaging and networking
distribution businesses are described below. For geographical information, see
Note 8 of Notes to Consolidated Financial Statements included in the Company's
1995 Annual Report to Stockholders.
DIGITAL MEDIA
Market
New video and audio technologies are changing the way video, film and other
digital media are produced and edited. Much like desktop publishing has
replaced offset printing, digital, nonlinear video production technology,
which allows users to instantly access any scene or sound from anywhere on a
disk, has fundamentally improved the efficiency and productivity of working
with video. This advancement has been facilitated by an exponential increase
in microprocessing power, declining data storage costs and improved software
programming tools.
Industry sources have estimated that sales of desktop video were $4.8
billion in 1995, a 50% increase from the $3.2 billion in sales in 1994. The
Company believes the corporate and institutional market includes a growing
market of new users as well as existing users of video production equipment.
The mass market is still emerging and will be determined, the Company
believes, on the basis of price and applicable open standards.
The Company believes there are three general types of end users of digital
media production systems, professional, corporate and institutional, and mass
market users, as described below. Within this market, the Company primarily
targets the corporate and institutional users. The Company believes that
customers will migrate down from costly high-end systems as well as migrate
upward from non-integrated lower quality systems to a more cost effective and
integrated high quality production system, such as Media 100.
. Professional Users are broadcast, television and film producers,
professional video post-production facilities and cable television
stations that create finalized video programs for others or for
broadcast. These users typically spend $50,000 or more on a video editing
system.
. Corporate and Institutional Users include businesses, hospitals,
advertising agencies, law firms, government agencies, colleges,
universities and independent post-production facilities. These are users
who are creating videos themselves. The average cost of a system for a
corporate or institutional user ranges between $15,000 and $50,000.
. Mass Market Users are early stage users who desire to use video for
informal presentations, for consumer-type video needs or for in-house
communication within corporations or institutions. They are using a non-
integrated system and are attracted by the low purchase price of $15,000
or less.
Strategy
The Company's strategy in digital media is to target corporate and
institutional users by offering a product that combines high output quality
with ease of use at an affordable price. The Company's strategy includes the
elements described below.
. Ease of Use. By simplifying the process of working with video, the
Company focuses not only on existing users of video equipment but new
users. The Company's aim is to make video personal by empowering
individuals to complete video projects on their own or within small
departments from a Macintosh.
. Expanding the Market. The Company intends to continue to lower its
manufacturing costs and reduce the price of Media 100 to capture
additional market share and ultimately to increase revenues. The
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<PAGE>
Company believes that its strategy of reducing the price of a Media 100
system over time, as well as Media 100's ease of use will result in a
substantial increase in the number of new users of Media 100. See
"Business--Digital Media--Product and Options."
. Open Systems Architecture. The Company uses open standards in designing
the hardware and software system components to give Macintosh end users
the flexibility to select the system components themselves, including the
model of Macintosh, monitors and disk drives.
. High Quality Video and Audio. The Company builds high performance
hardware and software systems to support broadcast quality pictures and
compact disc quality sound.
. Complete Solution. The Company is committed to providing a product to
accomplish online and off-line draft editing all on one system (All-On-
One(TM) Mastering) with high output quality and additional features, such
as titling, special effects and animation.
. Distribution Through Value-Added-Resellers ("VARs") and Distributors. The
Company sells Media 100 through VARs and distributors and not directly to
its customers as certain of its competitors do. The Company believes that
by not directly competing with its VARs and distributors, it has
established a loyal distribution channel.
Product and Options
Media 100 consists of a core system composed of the Vincent PCI platform
board, software and a variety of software and support options. This approach
allows users to choose which features to buy and allows them to easily upgrade
their digital media systems over time according to their needs and budget. In
addition, by offering only a single core system at relatively low cost, the
Company facilitates entry level purchases and simplifies its own operations as
well as those of its resellers, distributors and end users.
The Company markets Media 100 as an open system. Users can choose required
system components themselves, including the model of Macintosh, monitors and
disk drives. These components are standard to personal computing and widely
available. Authorized resellers through which Data Translation sells Media 100
can integrate these components for end users; however, users who already own
some or all required system components may purchase Media 100 and selected
options alone from a reseller.
In August 1995, the Company began shipments of a new generation of Media
100, version 2.5, which incorporates the Company's proprietary Vincent
platform. This system is comprised of a single PCI board, as compared to the
previous version of the Media 100 system consisting of two NuBus boards, and
additional software and hardware to support faster, higher-quality effects and
graphics processing. The board, named Vincent, is the first such board in the
digital media market to be competitive with the PCI standard. Vincent operates
on the newly introduced PCI-based Power Macintosh computers and PCI-based
personal computers using Intel microprocessors, such as Pentium, and Microsoft
Windows. Media 100 version 2.5 has a built-in waveform monitor and vectorscope
as well as new features for manipulating up to eight tracks of audio in real
time while playing video.
Media 100 and its related options are described below. The Company is also
developing additional software option packages with enhanced features,
including advanced editing and advanced special effects. Completely configured
Media 100 systems range in price from approximately $25,000 to $40,000, of
which the Company receives from approximately $11,000 to $23,000. The Company
continually reviews the pricing of Media 100 and related software options to
be competitive in the market. Net sales from digital media products were
41.8%, 24.7% and 3.1% of total net sales for fiscal years ended November 30,
1995, 1994 and 1993, respectively.
In the first quarter of 1996, the Company announced a lower cost model of
Media 100 with fewer features, which is compatible with its existing products
and other third party video editing software applications such as Adobe
Premiere. The Company intends to offer a means for users to upgrade their
system to add features and capabilities. The Company plans to market and sell
this product through its existing channel of value-added
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resellers with special video expertise as well as through an expanded number
of computer-oriented resellers. The Company intends to market this product to
Apple QuickTime(TM) users, professional consumers and other entry-level users
interested in editing video on a Macintosh. The Company initially anticipates
an end user price of under $15,000 for a completely-configured system
including a Macintosh computer and disk drives of which the Company receives
under $5,000 for the product itself. This lower cost model is part of the
Company's strategy to expand its market in digital media which it anticipates
shipping in the second quarter of fiscal 1996.
Media 100 is a digital video system that captures complete source video
(both fields) and compact disc quality audio and stores this source material
digitally on standard SCSI disk drives connected to the user's Macintosh.
Media 100 is available in domestic and major international video formats (NTSC
in North America and Japan and PAL in Europe). To perform editing, users can
instantly access any scene or sound from anywhere on the disk. This random-
access, or nonlinear, real time performance greatly enhances editing by
simplifying the process and eliminating the shuttling wait-time and
rerecording time working from videotape. When Media 100 plays back video for
preview, display or final recording, the output quality is online, which means
it is virtually indistinguishable from the quality produced by videotape
equipment used for broadcasting. Media 100's user interface, built to Apple
Macintosh user interface standards, simplifies editing and is expandable with
software options to perform effects, graphics, titling and other advanced
operations.
POWER Option(TM) is a software option which contains powerful features to
make creating video easier. This option includes All-On-One Mastering, which
lets users edit large quantities of source video in a draft mode (offline) and
finish with online output quality all on one sysytem. Other features include
FastFX(TM) for accelerating video effects rendering and PowerLog logging.
HDR Option(TM) is a software option which improves the Media 100 core
system's video output quality through the support of broadcast component
signal inputs and outputs, as well as by allowing users to reduce compression
levels to as low as 4:1 for NTSC and 5:1 for PAL video formats. This option
also expands the core system's real time audio mixing from four to eight
tracks.
Suite Deal(TM) is a bundled option package which includes: FX Option for
supporting over 50 video effect types using an open, "plug in" architecture
licensed from Adobe Systems; CG Option for keying high-quality, anti-aliased
titles and graphics over video; EDL Option for generating a standard-format
edit decision list (EDL); and, in North America, the Platinum Support
Agreement (as described below).
Whole Deal(TM) is a bundled option package which includes Suite Deal, POWER
Option, and HDR Option at a reduced price.
Platinum(TM) Support Agreement gives Media 100 users a year of toll-free
technical support, automatic, free upgrades, and preferred pricing on
upgrades, replacement hardware, and some new products, and a subscription to a
quarterly newsletter. The Platinum Support Agreement is available only in
North America.
Technology and Product Features
Data Translation has designed Media 100 as an integrated hardware and
software system which offers high performance and is compatible with the
Macintosh. The Company believes the basic performance of its hardware and
software produces broadcast quality picture and compact disc quality sound,
with an open system design. Data Translation's control of the development,
design and manufacturing of both the hardware and software of Media 100 allows
it to conform one to the other, specifically and solely to support the user
requirements of the target market.
Media 100's core hardware includes broadcast quality video input and output
decoder/encoder subsystems, a proprietary, dynamically-variable JPEG
compression subsystem, a 16-bit eight-track real time digital audio subsystem,
and two high-speed 32-bit microprocessors responsible for transferring digital
audio and video data, at throughput rates up to 30 megabytes per second,
inside the Macintosh in lieu of using the Macintosh processor
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alone as other video editing systems do. The latest version of this hardware
consists of the Vincent platform, operates with excellent noise immunity and
is the primary technical facilitator of real time, nonlinear performance with
output which provides broadcast quality video and compact disc quality audio.
The output video is 30 frames per second, 60 fields per second (NTSC) or 25
frames per second, 50 fields per second (PAL) and synchronized to multiple
tracks of compact disc quality audio.
The software features a proprietary operating system which is unseen by
users and integrated with the standard Macintosh operating system. This
software governs low-level Media 100 hardware operations to ensure real time
performance, particularly by controlling the two onboard microprocessors in
concert with the Macintosh processor. Layered on top of this low level of
software, Media 100 incorporates a higher layer of software called application
software, through which the user controls every function of the Media 100
system.
Customers and Sales
In the United States, the Company authorizes and sells solely through a
network of specialized Value-Added-Resellers ("VARs") who integrate and
support Media 100 systems sales. The Company has focused on attracting a loyal
and growing following of highly qualified VARs in the United States by
offering attractive margins and factory support. The Company does not compete
with its resellers by selling directly to end users. Internationally, the
Company authorizes and sells solely through subsidiaries and distributors,
which act as resellers or establish reseller networks in their respective
territories. The Company typically enters into agreements with its
international distributors which usually are terminable for cause and has
arrangements with its domestic distributors which are generally terminable by
either party at will.
The Company manages its sales through a team of regional managers and sales
support personnel. Both the Company and resellers provide end user customer
support which provides 90 days of free technical support. By purchasing a
Platinum Support Agreement, end users in North America may extend that support
for additional one year periods.
Competition
The digital media market is highly competitive and fragmented with a large
number of suppliers providing different types of products, both linear and
nonlinear, to different segments of the market. The primary competitive
factors in markets composed of either existing users of videotape equipment or
new users are: (i) ability to do fast, easy nonlinear editing; (ii) open
system design and support for continuous feature improvement, especially for
advanced features like digital video effects; (iii) online picture and audio
quality; (iv) ability to edit and to create special features such as titling
and animation all on one system; and (v) price.
In the emerging market of corporate and institutional users, the Company has
encountered competition primarily from Avid Technology, Inc. ("Avid"), which
has greater financial resources than the Company, as well as Truevision and
Radius Inc. Because this market is new and still evolving, it is difficult to
predict future sources of competition; however, competitors will also include
larger vendors, such as Matsushita Electric Industrial Company Limited
("Matsushita") and Sony Corporation ("Sony") which currently compete in the
market of professional users.
To the extent that the Company has sold into the market of professional
users, the Company has encountered competition primarily from Avid and ImMIX
(a division of Carlton Communications PLC) in this market. In addition,
competition in this area comes from comparably sized or smaller competitors,
such as Matrox Electronic Systems Ltd. and FAST Electronic GmbH, as well as
much larger vendors, such as Matsushita and Sony, both of which have announced
plans to introduce digital, nonlinear editing systems. The Company expects
that other vendors of analog videotape editing equipment, many of which have
substantially greater financial, technical and marketing resources than the
Company, will develop and introduce competing digital, nonlinear systems.
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DATA ACQUISITION AND IMAGING
Market
The primary markets for data acquisition and imaging products are scientific
research and analysis, test and measurement, and machine vision and
inspection. End users include original equipment manufacturers, research
laboratories, universities, hospitals and government agencies. Users require
highly accurate, real time measurement and control of analog signals, such as
temperature, pressure, sound and video.
The Company believes it is one of the top five suppliers in each market
although the data acquisition and imaging markets are highly fragmented. These
markets have been adversely affected in recent years by reduced government
funding of research and lower levels of corporate capital expenditures.
Industry organizations estimate overall sales in these markets were
approximately $250 million in 1994.
Strategy
In the data acquisition and imaging area, the Company is focused on
providing system solutions which include not only exceptional hardware but
also powerful, easy to use software. The Company will continue to invest in
its current data acquisition and imaging markets, while identifying new
applications and growth opportunities in the industrial control, high end test
and measurement and machine vision and inspection markets. During fiscal 1995,
the Company adopted new technologies in an effort to increase the
marketability of its data acquisition and imaging products.
Products
The Company's data acquisition and imaging products are designed to
facilitate (i) the high-speed capture of analog signals representing physical
events, such as temperature, pressure, sound and video, (ii) the fast
conversion of such signals into digital form and (iii) the use of such digital
signals in PCs for processing. These capabilities permit customers to use PCs
to identify, measure, analyze and control physical phenomena (data
acquisition) and to analyze or enhance video images (imaging).
The Company's data acquisition and imaging systems consist of plug-in cards
and Windows-based software which provide an integrated, high performance
systems solution to the general scientific and measurement marketplace. These
systems allow customers to configure their own PC-based data acquisition,
signal processing or imaging system with higher performance and lower cost
than alternative pre-packaged or custom-integrated systems. Users are able to
integrate these products more quickly into their systems thereby reducing
their development time. DT-Open Layers(R) forms the basis of several key
software products manufactured by the Company, the most important of which are
DT-VEE(TM) for Microsoft Windows, GLOBAL LAB(R) Image and Software Development
Kits ("SDKs"). Over a three year period the Company defined and developed DT-
Open Layers, a standard set of software protocols under the Microsoft Windows
operating system. DT-Open Layers simplifies programming and accelerates the
development of new software products and permits customers to replace circuit
boards and add new functions. These products offer leading-edge functionality
for data acquisition and imaging under Windows while allowing customers to
protect their software investments and develop solutions more quickly.
The Company sells over 300 data acquisition and imaging products which range
in list price from $595 to $4,995. Domestically, the Company sells such
products directly, and internationally, the Company sells both directly and
through distributors. Such prices do not reflect distributor discounts for
international sales, which range from approximately 20% to 35% on hardware
products and up to approximately 50% on software applications. Net sales from
data acquisition and imaging products were 30.1%, 44.7% and 66.5% of total net
sales for fiscal years ended November 30, 1995, 1994 and 1993, respectively.
Data acquisition products provide capabilities ranging from simple
measurement to advanced digital signal processing (DSP) functions. While
researchers, systems integrators and original equipment manufacturers
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("OEMs") have been predominant data acquisition users in the past, new data
acquisition markets have emerged in the industrial and medical areas, such as
industrial inspection, medical diagnostic/therapeutic applications, high-
performance control, vibration analysis, acoustics, test and measurement and
liquid and gas chromatography applications. Customers incorporate Data
Translation's data acquisition boards into PCs to measure real-world
parameters, including temperature, pressure, acceleration and sound; to
analyze this data; and to use the results to control real-world events and
processes. For example, an equipment manufacturer in Canada uses the Company's
Fulcrum(TM) board to monitor and control the vibration of magnetic ball
bearings in large pump shafts.
The Company's imaging products may be used in a number of applications. In
scientific imaging applications, images can be captured from video cameras for
analysis, or images can be captured from cameras mounted on microscopes to
identify and count cells. In machine vision applications, images can be
captured and processed immediately in real time for fast, accurate inspection
of manufactured parts. In medical applications, images can be captured from
different diagnostic devices, such as CAT scanners or ultrasound imaging
devices, for enhancement, analysis and display. For example, the Company's
MACH series imaging board is used in an opthamology system which maps the
cornea for the purpose of making a diagnosis or fitting a contact lense.
The Company has incorporated several new technologies in its products. For
example, the Company's frame grabber, a product which combines software with
proprietary circuits that permit users to acquire data from a variety of video
inputs, now utilizes the PCI bus architecture. In addition, the Company has
begun using the Display Connect Interface ("DCI") standard in certain of the
Company's frame grabber products. Finally, the Company has adopted the
Personal Computer Memory Card International Association ("PCMCIA") standard, a
new technology for the portable acquisition of data.
The Company's new data acquisition and imaging products include the
following:
. DT7101 memory card, a PCMCIA standard product targeted at the portable
data acquisition and field services markets;
. DT3001 data acquisition product, which utilizes the PCI bus;
. DTVEE(TM) 3.0, an upgrade of the Company's visual programming application
software for building data acquisition systems, which now has improved
functionality, user interface functions and performance; and
. Frame Grabber SDK, DT-Open Layers support for the Company's frame grabber
products.
Technology and Product Features
The Company believes that since its inception in 1973 it has been an
industry leader in hardware design for signal processing technology. The
Company established and continues to develop leading products in high
performance signal integrity and high speed boards. In the past four years,
the Company introduced system solutions that integrate both hardware and
software to help the customer more easily measure and analyze data. Over the
last several years the Company has added to its expertise in hardware
development through DT-Open Layers to construct more systems oriented
products. The trend towards offering complete solutions to end users has meant
an increased focus on software development.
Customers and Sales
The Company sells its data acquisition and imaging products to end users and
OEMs for use primarily in the scientific, medical and industrial markets. End
users include manufacturers, research laboratories, universities, hospitals
and government agencies.
Data Translation sells its data acquisition and imaging products through a
comprehensive, widely distributed annual catalog, an in-house telemarketing
force and extensive advertising and promotional campaigns. The Company has a
full-time sales and administrative staff of over 30 employees in the United
States to support catalog sales. International sales are supported by three
subsidiaries and various distributors throughout Europe, Asia and the Pacific
rim.
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Competition
Data Translation competes in the data acquisition market principally with
National Instruments Corporation and Keithley Instruments, Inc. and in the
imaging market with Matrox Electronic Systems Ltd. and Imaging Technology,
Inc., all of which may have substantially greater financial, technical and
marketing resources than the Company. The Company also competes with a number
of smaller companies in each of these markets. The Company's data acquisition
and imaging products compete on the basis of ability to supply an integrated
system solution of hardware and software, price and performance.
NETWORKING DISTRIBUTION BUSINESS
Market
The market in the United Kingdom for networking products is composed
principally of businesses and organizations which require high performance
products and the technical support to integrate such products into their
systems. In the United Kingdom, the Company, through a subsidiary Data
Translation Networking Limited, distributes networking products manufactured
by third party suppliers. The Company believes the market for enterprise wide
networking products in the United Kingdom will continue to grow as has the
market in the United States.
Strategy
In the networking distribution market in the United Kingdom, the Company
seeks to grow its business with the enterprise wide networking business in
general and to expand its supplier and reseller base. Data Translation works
to build highly valued relationships with suppliers and customers which it
believes have been the key to its growth.
As part of its overall strategy, the Company believes that its knowledge of
the latest networking products and technologies contribute to the development
of products in the digital media and imaging markets. For example, new
technologies, such as ATM, will allow video transmission in real time from
remote locations and therefore affect the future evolution of Media 100 in a
network environment. Another part of the Company's strategy is to focus on
emerging high value-added technologies. The Company believes that it
distinguishes itself from other distributors by the fact that a significant
number of its employees, including sales personnel, in its networking
distribution business are technically trained. In September 1995, the
Company's networking distribution subsidiary became the first value added
network distributor in the United Kingdom to be awarded the ISO 9002
accreditation, the international standard for quality systems.
Products and Services
Data Translation distributes externally sourced network peripherals in the
United Kingdom. These products are manufactured by several suppliers,
including 3Com, Hewlett-Packard, Shiva Corporation and U.S. Robotics Inc. The
primary products are high value added, systems-oriented solutions that
interconnect computers and networks, such as routers, switches, bridges and
hubs. 3Com recently recognized Data Translation Networking Limited as its top
distributor of internetworking products for 3Com's fiscal year 1995. The
Company enters into annual contracts with its suppliers, some of which sell
directly into the market. Net sales from networking distribution products were
28.1%, 30.6% and 30.4% of total net sales for fiscal years ended November 30,
1995, 1994 and 1993, respectively.
In addition, the Company builds its customer base by supplying its customers
with services such as technical training, maintenance and sophisticated
technical support on a fee for services basis. The Company relies on highly
trained sales and support engineers to provide the latest networking tools and
systems to help increase a customer's productivity and information exchange.
Customers and Sales
The Company distributes networking products principally to a large number of
VARs, systems integrators and retail dealers and, to a lesser extent, to end
users in the United Kingdom. As with its data acquisition and
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imaging products, the Company distributes its networking products through a
comprehensive, widely distributed annual catalog, an in-house telemarketing
force and extensive advertising and promotional campaigns. In addition, the
Company uses a direct sales team in the United Kingdom.
Competition
The Company attempts to distinguish itself in the United Kingdom by selling
high value added products and services and offering the latest state-of-the-
art networking products. The Company's direct competitors in the United
Kingdom networking distribution business are Azlan Group PLC and Persona Group
PLC and numerous other larger competitors that have substantially greater
financial, technical and marketing resources than the Company as well as
numerous smaller competitors. Competition in the United Kingdom for networking
products is based primarily on price and value added services.
RESEARCH AND DEVELOPMENT AND NEW PRODUCTS
The Company intends to continue to invest in research and development for
new products and for enhancements to existing products. The Company is
targeting spending on research and development at an annual rate of
approximately 10% of total net sales. For the fiscal year ended November 30,
1995, the Company invested approximately $7,612,000 or 10.5% of total net
sales on product development.
The Company employed, as of January 31, 1996, 77 full-time engineers whose
primary duties relate to product development. Outside firms and consultants
are selectively engaged to develop or assist with development of products when
favorable opportunities exist.
For Media 100, the Company is focused on continued software and hardware
development. The Media 100 application software is being improved to include
advanced features. In addition, the Company has developed support for
operating with the computer video standard developed by Apple QuickTime, and
is continuing to develop greater support for operating with QuickTime
applications from third parties.
In the data acquisition and imaging area, the new areas for hardware
development include the integration of ASICs (application specific integrated
circuits) into circuit boards, which will reduce cost and advance the
development of new computer bus technologies (e.g., PCMCIA and PCI). The
Company's software development in data acquisition and imaging centers on
supporting the introduction of Windows 95. The Company is also developing
graphical programming application software, which will simplify application
development by the customer.
In addition, the Company recently began development of a product which will
allow a Windows based PC user to easily add VHS-quality digital video and
Compact Disc quality audio to any desktop application. Similar to the
Company's other products, this new digital video product will take the form of
an integrated hardware and software solution. The Company is in the process of
investigating distribution channels and is planning shipment of the product
during the second half of fiscal 1996.
MANUFACTURING
Data Translation manufactures all of its products at its facility in
Marlboro, Massachusetts. The Company believes its control of manufacturing
significantly contributes to hardware design improvements, and allows for
quicker turn-around of engineering changes for shipment to the market. The
Company periodically assesses its production efficiencies against the benefits
of outsourcing certain hardware production.
In manufacturing, the Company seeks to be the leader in both technology and
management. The Company has adopted the philosophy of Total Quality Management
(TQM), which is a systematic approach to continuous improvement. In September
1994, the Company achieved IS09001 Quality System Certification, a
certification by an internationally accredited organization that the Company
has a documented quality system. IS09001
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certification is a requirement for some exports to the European Community and
is seen as a sales advantage by many United States customers. The Company uses
work cells with higher volume products which, together with Just-In-Time
techniques, allows the Company to provide five-day shipment on most customer
orders.
The Company's fully integrated assembly and test operations enable it to
produce approximately 30,000 assembled printed circuit boards per year. In
addition, circuit boards and modules are designed using advanced computer-
aided-design (CAD) technology. Manufacturing capabilities include the assembly
of fine pitch, surface mount electronic devices utilizing state of the art
pick and place robotics for high density, multi-layered, single or double
sided boards. A majority of the Company's shipments incorporate surface-mount
components. Initial testing is performed to assure that products are free from
process-related defects after assembly. Following this, a complete functional
test is performed twice on each board, with an environmental stress screen
between tests to eliminate defects and assure long-term reliability of
products. The Company uses automated test equipment to assure product quality,
improve throughput and increase production yields.
Components used in circuit board assembly are generally available from
several distributors and manufacturers, although in the case of certain
products, only one or two manufacturers are capable of the appropriate circuit
board assembly. Suppliers are selected based on their ability to provide
defect-free products quickly at low cost. Data Translation continuously
measures the performance of key suppliers. Special programs are used to speed
availability of material and protect the Company from unplanned shifts in
product demand. These programs include ship-to-stock, and point-of-use
bonding, a program where suppliers hold material on-site at Data Translation
and as the material is used, title transfers to Data Translation and payment
is made. Certain components used by the Company do not have ready substitutes
or have been subject to industry-wide shortages. There can be no assurance
that the Company's inventories would be adequate to meet the Company's
production needs during any interruption of supply. The Company's inability to
develop alternative supply sources, if required, or a reduction or stoppage in
supply, could adversely affect its operations until new sources of supply
become available.
PROPRIETARY RIGHTS
The Company owns ten United States patents, expiring from March 2001 through
August 2013, and has six pending patent applications in the United States,
none of which the Company believes is material. The Company applied for seven
separate patents covering elements of the Media 100 core system of which two
have been granted.
The Company believes that its success depends primarily on the proprietary
know-how, innovative skills, technical competence and marketing abilities of
its employees.
BACKLOG
Most customers order products on an as-needed basis, relying, in the case of
most products, on the Company's five-day delivery capability. As a result, the
Company believes that its backlog at any point in time is not indicative of
its future sales.
EMPLOYEES
As of January 31, 1996, the Company employed approximately 347 persons
worldwide. None of the employees are represented by a labor union. The Company
believes it has good relations with its employees.
Competition for employees with the skills required by the Company is intense
in the geographic areas in which the Company's operations are located. The
Company believes that its future success will depend on its continued ability
to attract and retain qualified employees, especially in research and
development.
ITEM 2. PROPERTIES
The Company maintains its principal executive, engineering, manufacturing
and sales operations in a 103,000 square foot facility located in Marlboro,
Massachusetts. The building is leased from Nason Hill Trust
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(the "Trust"), a nominee trust of which Alfred A. Molinari, Jr., Chief
Executive Officer and Chairman of the Company, and his wife are the sole
trustees and beneficiaries.
The Company's principal facilities are leased from the Trust under operating
leases expiring on December 1, 1999. Pursuant to an amendment dated November
29, 1989, the annual lease payments are equal to the sum of (i) $1,092,000 and
(ii) any additional interest costs payable by the Trust in such year under a
note in favor of Shawmut Bank, N.A. due to the failure of the Company to
maintain the financial ratios required for the most favorable interest under
such note. In addition to such lease payments, the Company bears all of the
tax, insurance and other costs of operating the facilities and, under certain
circumstances, various costs and expenses associated with four series of
industrial revenue bonds, the proceeds of which were used in connection with
the facilities. Total rental expense charged to operations under the leases as
then in effect was $1,092,000 for each of the fiscal years 1995, 1994, and
1993.
The United Kingdom operations are conducted in an 18,050 square foot
facility in Wokingham, Berkshire, England, that is leased by Data Translation
Networking Limited under a twenty-five year net lease. Data Translation
Networking Limited has an option to terminate the lease in 1997. The minimum
annual basic rent is approximately $257,000 per year.
The German operations are conducted in a 2,420 square foot office facility
in Bietigheim-Bissingen, Germany that is leased under a five-year lease,
expiring in 2000, by Data Translation GmbH. The minimum annual basic rent is
approximately $58,000 per year.
The Italian operations are conducted in an 1,100 square foot office facility
in Brescia, Italy that is leased under a six-year lease, expiring in 1998, by
Data Translation S.r.l. The minimum annual basic rent is approximately $24,000
per year.
ITEM 3. LEGAL PROCEEDINGS
On June 7, 1995, a lawsuit was filed against the Company by Avid Technology,
Inc., a Massachusetts-based company ("Avid"), in the United States District
Court for the District of Massachusetts. The complaint alleges patent
infringement by the Company arising from the manufacture, sale, and use of the
Company's Media 100 products. The complaint includes requests for injuctive
relief, treble damages, interest, costs and fees. On July 28, 1995, the
Company filed an Answer and Counterclaim denying any infringement and
asserting that the patent in question is invalid. Discovery by the parties is
currently underway. The Company intends to vigorously defend the lawsuit,
which is currently early in the pre-trial stage. In addition, Avid has filed
papers in the United States Patent and Trademark Office requesting reissuance
of the patent and stating that it seeks patent claims broader than those set
forth in the existing patent. The reissuance proceedings remain pending. If
such broader claims were to issue, the Company expects that Avid would seek to
incorporate such claims into the litigation, although Avid has made no
reference to the reissue proceedings in the litigation to date. If the Company
does not prevail in the action, it could be required to pay substantial
damages for infringement and cease offering products that allegedly infringe
such patent, either of which results would have a material adverse effect on
the Company. Alternatively, the Company could be required to seek to obtain a
license under the patent. If so, there can be no assurance that such a license
would be available to the Company or, if available, that the terms of any such
license would be satisfactory. Moreover, the pendency and expense of the
litigation could adversely affect the Company's business, market share,
financial condition and operating results, regardless of the outcome of the
litigation. There can be no assurance that the Company will prevail in the
litigation, or that any of the above-described effects of the litigation,
whether or not successful, will not be material.
From time to time, the Company is involved in disputes and/or litigation
encountered in its normal course of business. The Company does not believe
that the ultimate impact of the resolution of any outstanding matters will
have a material effect on the Company's financial condition or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of stockholders during the fourth
quarter of fiscal 1995.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information required by this Item is incorporated herein by reference to
the "Quarterly Stock Prices" table appearing on page 23 of the Company's 1995
Annual Report to Stockholders.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated herein by reference to
the "Selected Financial Data" appearing on page 23 of the Company's 1995
Annual Report to Stockholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The information required by this Item is incorporated herein by reference to
the "Management's Discussion and Analysis of Financial Condition and Results
of Operations" appearing on page 24-26 of the Company's 1995 Annual Report to
Stockholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item and not filed with this report is
incorporated herein by reference to pages 28-39 of the Company's 1995 Annual
Report to Stockholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company will furnish to the Securities and Exchange Commission a
definitive Proxy Statement (the "Proxy Statement") not later than 120 days
after the close of its fiscal year ended November 30, 1995. The information
required by this Item is incorporated herein by reference to "Election of
Directors", "Executive Officers", and "Compliance with Section 16(a) of the
Exchange Act" in the Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to
"Executive Compensation" in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference to
"Security Ownership of Certain Beneficial Owners and Management" in the Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated herein by reference to
"Certain Relationships and Related Transactions" in the Proxy Statement.
13
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
The following documents are filed as part of this report:
(a) 1. Financial Statements
The financial statements listed in the accompanying Index to Consolidated
Financial Statements and Schedules on page 16 are filed as part of this
report.
2. Financial Statement Schedules
The schedules listed in the accompanying Index to Consolidated Financial
Statements and Schedules on page 16 are filed as part of this report.
3. Exhibits
The exhibits listed below are filed with or incorporated by reference in
this report.
<TABLE>
<C> <S>
3.1 Articles of Organization of Data Translation, Inc., as amended/1//0/
3.2 By-laws of Data Translation, Inc., as amended/1//0/
4. Specimen common stock certificate/1//1/
10.1 Key Employee Incentive Plan (1982) and form of Stock Option
Certificate/3/ /7/
10.2 1986 Employee Stock Purchase Plan as amended/3/ /8/
10.3 Data Translation, Inc. Double Sheltered Retirement Plan/2/
10.4 Lease dated as of December 1, 1979 with Nason Hill Trust, as
amended/1/
10.5 Lease dated as of April 1, 1981 with Nason Hill Trust, as amended/1/
10.6.A Fifth amendment to lease dated as of April 22, 1987/4/
10.6.B Sixth amendment to lease dated as of April 5, 1988/5/
10.6.C Seventh amendment to lease dated as of June 22, 1988/5/
10.6.D Eighth amendment to lease dated as of November 29, 1989/6/
10.7 Letter agreement between the Company and Nason Hill Trust dated as of
November 29, 1989/6/
10.8 Form of Employee Agreement/1/
10.9 Key Employee Incentive Plan (1992)/9/
10.10 Adobe Premiere Plug-In Linking Utilities License Agreement with Adobe
Systems, Incorporated dated January 8, 1993/1//2/
10.11 Adobe Premiere Plug-Ins Reproduction and Licensing Agreement with
Adobe Systems, Incorporated dated January 8, 1993/1//2/
10.12 Software License Agreement with Hewlett-Packard Company dated January
14, 1993/1//0/
13 Annual Report to Security Holders
21 Subsidiaries of Data Translation, Inc.
23 Consent of Arthur Andersen LLP
24 Power of Attorney (included in the signature page of this Form 10-K)
27 Financial Data Schedule
/1/ Incorporated herein by reference to the Company's Registration
Statement on Form S-1 (No. 33-94121).
/2/ Incorporated herein by reference to the Company's 1985 Annual
Report on Form 10-K.
/3/ Incorporated herein by reference to the Company's 1986 Annual
Report on Form 10-K.
/4/ Incorporated herein by reference to the Company's 1987 Annual
Report on Form 10-K.
/5/ Incorporated herein by reference to the Company's 1988 Annual
Report on Form 10-K.
/6/ Incorporated herein by reference to the Company's 1989 Annual
Report on Form 10-K.
/7/ Incorporated herein by reference to the Company's 1990 Annual
Report on Form 10-K.
/8/ Incorporated herein by reference to the Company's Registration
Statement on Form S-8 (No. 33-6238).
/9/ Incorporated herein by reference to the Company's Registration
Statement on Form S-8 (No. 3-50692).
/1//0/ Incorporated herein by reference to the Company's Registration
Statement on Form S-1 (No. 33-85232).
/1//1/ Incorporated herein by reference to the Company's Registration
Statement on Form S-1 (No. 33-63579).
/1//2/ Incorporated herein by reference to the Company's 1994 Annual
Report on Form 10-K.
</TABLE>
(b) Report on Form 8-K
The registrant has not filed any reports on Form 8-K during the last quarter
of the fiscal year covered by this report.
14
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To Data Translation, Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements included in Data Translation, Inc.'s
annual report to shareholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated January 4, 1996. Our audit was made for
the purpose of forming an opinion on those statements taken as a whole. The
schedules listed in Item 14(a)2 are the responsibility of the Company's
management and are presented for purposes of complying with the Securities and
Exchange Commission's rules and are not part of the basic financial
statements. These schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly state in all material respects, the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
January 4, 1996
15
<PAGE>
DATA TRANSLATION, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
COVERED BY REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<TABLE>
<CAPTION>
REFERENCE
----------------------
FORM ANNUAL REPORT
10-K TO STOCKHOLDERS
(PAGE) (PAGE)
------ ---------------
<S> <C> <C>
Data incorporated by reference from the Company's 1995
Annual Report to Stockholders:
Consolidated balance sheets at November 30, 1995 and
1994................................................ 28
For the years ended November 30, 1995, 1994, and
1993:
Consolidated statements of operations................ 29
Consolidated statement of stockholders' equity....... 30
Consolidated statements of cash flows................ 31
Notes to consolidated financial statements........... 32-39
Schedule V--Valuation and Qualifying Accounts........ 39
</TABLE>
16
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, DATA TRANSLATION, INC. HAS DULY CAUSED THIS REPORT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON
FEBRUARY 26, 1996.
Data Translation, Inc
/s/ Alfred A. Molinari, Jr
By: _________________________________
ALFRED A. MOLINARI, JR.
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
WE, THE UNDERSIGNED OFFICERS AND DIRECTORS OF DATA TRANSLATION, INC., HEREBY
SEVERALLY CONSTITUTE AND APPOINT ALFRED A. MOLINARI, JR. AND PETER J. RICE,
AND EACH OF THEM SINGLY, OUR TRUE AND LAWFUL ATTORNEYS WITH FULL POWER TO
THEM, AND EACH OF THEM SINGLY, TO SIGN FOR US AND IN OUR NAMES IN THE
CAPACITIES INDICATED BELOW, THE FORM 10K FILED HEREWITH AND ANY AND ALL
AMENDMENTS TO SAID FORM 10K (INCLUDING POST-EFFECTIVE AMENDMENTS), AND
GENERALLY TO DO ALL SUCH THINGS IN OUR NAME AND BEHALF IN OUR CAPACITIES AS
OFFICERS AND DIRECTORS TO ENABLE DATA TRANSLATION, INC. TO COMPLY WITH THE
PROVISIONS OF THE SECURITIES ACT OF 1934, AND ALL REQUIREMENTS OF THE
SECURITIES AND EXCHANGE COMMISSION, HEREBY RATIFYING AND CONFIRMING OUR
SIGNATURES AS THEY MAY BE SIGNED BY OUR SAID ATTORNEYS, OR ANY OF THEM, TO
SAID FORM 10K AND ANY AND ALL AMENDMENTS THERETO.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1934, THIS FORM 10K
HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE
INDICATED.
SIGNATURE CAPACITY DATE
/s/ Alfred A. Molinari, Jr. Chief Executive February 26,
- ------------------------------------- Officer and 1996
ALFRED A. MOLINARI, JR. Chairman
/s/ Peter J. Rice Vice President February 26,
- ------------------------------------- (Principal 1996
PETER J. RICE Financial Officer)
/s/ Gary B. Godin Chief Accounting February 26,
- ------------------------------------- Officer (Principal 1996
GARY B. GODIN Accounting Officer)
/s/ R. Bradford Malt Director February 26,
- ------------------------------------- 1996
R. BRADFORD MALT
/s/ Paul J. Severino Director February 26,
- ------------------------------------- 1996
PAUL J. SEVERINO
/s/ James M. Dow Director February 26,
- ------------------------------------- 1996
JAMES M. DOW
/s/ John A. Molinari Director February 26,
- ------------------------------------- 1996
JOHN A. MOLINARI
17
<PAGE>
Data Translation, Inc.
[FRAMED PICTURE OF "MEDIA 100/(R)/ PRODUCT OF THE
IMAGINATION" WITH A BACKGROUND OF BLUE SKY AND CLOUDS]
1995 Annual Report
<PAGE>
Imagine creating a video with the Media 100(R) digital video system. A
documentary, a music video, a comedy spot, or a training course. Right at your
desktop. Media 100 makes it easy for just about anybody serious about video to
create serious video.
And Data Translation's success in 1995 confirms it.
It took imagination to create Media 100, along with trailblazing technology
and insight into what people want. This year's annual report tells of the
strategy behind the product that has just begun to tap the huge new market for
digital video, and in doing so has electrified imaginations all over the world.
CONTENTS
FINANCIAL HIGHLIGHTS................................................1
PRESIDENT'S LETTER..................................................2
PRODUCT OF THE IMAGINATION..........................................6
MEDIA 100: BEST OF 1995............................................11
MAKING NEW VIDEOMAKERS.............................................14
CHANGING CHANNELS..................................................19
WHAT WILL WE IMAGINE NEXT?.........................................20
THOUSANDS OF MEDIA 100 CUSTOMERS...................................21
CONSOLIDATED FINANCIAL STATEMENTS..................................22
<PAGE>
Data Translation, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Fiscal Years Ended November 30,
- ----------------------------------------------------------------------------------------------
(in thousands, except per share data) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net Sales:
Digital media........................ $30,278 $12,415 $ 1,118 $ -- $ --
Data acquisition and imaging......... 21,826 22,440 23,733 24,775 25,647
Networking distribution.............. 20,348 15,382 10,850 8,787 8,206
- ----------------------------------------------------------------------------------------------
Total net sales............................ 72,452 50,237 35,701 33,562 33,853
Gross profit............................... 34,740 23,418 17,168 17,277 17,144
Income (loss) from operations.............. 4,199 405 (4,209) (3,209) (2,161)
Net income (loss).......................... 4,771 320 (4,298) (2,458) (1,170)
Net income (loss) per common share......... 0.71 0.07 (1.01) (0.59) (0.26)
Weighted average number of common
shares outstanding........................ 6,701 4,764 4,256 4,162 4,562
- ----------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable
securities................................ $35,161 $ 4,079 $ 4,117 $ 6,334 $ 8,559
Working capital............................ 42,798 8,378 7,173 10,760 12,419
Total assets............................... 60,984 19,199 16,161 18,778 21,192
Total liabilities.......................... 14,075 8,215 6,115 4,710 4,434
Long-term debt............................. -- -- -- -- --
Total stockholders' equity................. 46,909 10,984 10,046 14,068 16,758
- ----------------------------------------------------------------------------------------------
</TABLE>
NASDAQ NATIONAL MARKET SYMBOL: DATX
NET SALES
(dollars in millions)
[BAR GRAPH APPEARS HERE]
1991 33.8
1992 33.5
1993 35.7
1994 50.2
1995 72.4
NET INCOME
(LOSS)
(dollars in millions)
[BAR GRAPH APPEARS HERE]
1991 (1.2)
1992 (2.5)
1993 (4.3)
1994 .3
1995 4.8
NET INCOME
(LOSS)
(per shares in dollars)
[BAR GRAPH APPEARS HERE]
1991 (0.26)
1992 (0.59)
1993 (1.01)
1994 0.07
1995 0.71
<PAGE>
[PHOTO OF FRED MOLINARI APPEARS HERE]
PRESIDENT'S LETTER
January 31, 1996
Dear Stockholders,
The past year, 1995, was the second complete year for shipments of Media 100,
our much heralded desktop video authoring system. We have shipped over 4,000
systems to over 50 countries throughout the world. Media 100 revenues exceeded
$30 million this year versus $12 million for the previous year. What is the
reason for this success?
THE CHANGE IS HERE
The simplest answer is that Media 100 is leading a revolution in desktop video
that has taken place in many other fields where the personal computer has
completely changed how things are done, including printing, publishing, music,
and mail. Until Media 100 was introduced, video programs had been assembled
using magnetic tape to attain high quality audio and video output. Digital
systems had begun to be used, but primarily in conjunction with conventional
tape editing equipment.
Data Translation aimed to take desktop video much farther. Just three years
ago, we envisioned a complete video editing process of the highest quality,
performed completely on a desktop computer. At the time, suppliers to the video
industry ridiculed the idea that quality programs could be authored and produced
on a simple PC. But how times have changed!
Corporations, advertising agencies, hospitals, government agencies, rock
stars, cable programs, and many others have found that Media 100 saves money,
produces programs of the highest quality, and allows a single user to produce a
finished program in less time. The question now is not whether to use Media 100,
but what more can a user do with it? The new age of animation, digital effects,
video games, CD-ROM, and other digital media demand capabilities well beyond
those of conventional analog equipment.
THE FUTURE
There is a long way to go. Video is well established and will continue to be
the preferred method of communication, the largest purveyor of information in
the world today. Whether it's training people in businesses or selling a
product, whether it's entertainment or a description of how to do something,
video is now recognized as the best way to communicate, to describe, and to sell
many products. Many applications are yet to be discovered as new users learn to
use video. We have many potential customers, exciting applications, and new
techniques to develop more fully. Digital video is a major transformation, a
wave that has started and will continue over the next several years. Our aim is
to continue to be a forceful part of this shift and to develop the additional
capabilities that our markets will need.
WHERE WE CAME FROM
How did we acquire the capability to develop such a product as revolutionary
as Media 100? I'd like to give an analogy. I'm reminded of the great fighter of
oil fires, Red Adair. At critical times, he has been in great demand to put out
oil fires that cost millions of dollars a day. Often he accomplished
<PAGE>
PRESIDENT'S LETTER
his work in days, if not in hours. When asked why he was so sought-after for
this work, he replied that it took decades to acquire this skill. Our efforts in
Media 100 are derived from decades of designing highly precise signal processing
boards and software for critical measurements in industrial and scientific
applications. We have already fought the "fires" of noise, power and grounding,
sampling constraints, and more for many years.
Our software and systems capabilities continue to grow along with our signal
processing knowledge. We can now apply this systems expertise to the needs of
our digital media customers. The result is a Media 100 system that continues to
grow in power to handle the evolving requirements of our digital video
customers.
1995 WENT WELL
We continued to progress quite well in 1995. We met our goals. Our sales
reached a record level of $72 million, our earnings also set an all-time record.
Importantly, we completed nine continuous up quarters since the introduction of
Media 100.
WHERE DO WE GO FROM HERE?
We currently have three operating business units: Multimedia, Data
Acquisition/Imaging, and Networking. An embryonic fourth business unit has
recently been formed to offer much lower cost and higher volume opportunities in
the area of digital video. Our aim is to rapidly progress in technology and
capability, building on our signal processing and systems background, to meet
newer opportunities in video. Data Translation has the technology and
infrastructure to develop these leading-edge products. We will continue to
invest heavily in future digital video products.
CORE BUSINESS: DATA ACQUISITION/IMAGING
Over the last year, we have completely revised our data acquisition/imaging
product lines for the latest PCs with the Pentium PCI Bus structure, Windows 95,
and Windows NT. Because of the greater capabilities of this new bus and these
operating systems, recent Data Translation products offer greater capability at
far reduced prices. These products are being used in new applications that will
increase in volume and capability over the coming year. Their lower average
selling price will be offset by increasing volume that will gradually grow
revenues within this business unit as the year progresses. New designs are
proceeding, with much enthusiasm.
OPERATIONS
Even though we grew substantially during 1995, our operating ratios and
metrics still adhere to our conservative operating principles. Our inventory
turns are 7.7, well above industry averages; our Days Sales Outstanding (DSO)
are 58 days, just slightly above the previous year; our gross margins are
slightly up; and our operating expenses have decreased on a percentage basis. We
also have raised approximately $30 million in the last 12 months to fund our
anticipated growth over the next years. We intend to keep the same philosophy
going forward: to run a very aggressive product marketing plan while holding to
a very conservative operational effort. This formula will help us as a company
as well as our employees and stockholders.
LOOKING FORWARD
Our challenge for the future is to lead the new waves of technology in digital
video. Our focus is to adapt software and hardware to new applications that are
rapidly evolving. The end result will be a large growing video marketplace that
needs easy-to-use products. Data Translation is uniquely positioned to provide
these products.
Fred Molinari
Chairman and Chief Executive Officer
<PAGE>
[PICTURE OF VARIOUS OBJECTS INCLUDING ANTIQUE
TELEVISION, BLANK FILM REEL, ANTIQUE RADIO, RABBIT
EAR ANTENNAE WITH EYES IN BACKGROUND]
<PAGE>
[CONTINUATION OF PREVIOUS PICTURE WITH FRAMED SKY AND CLOUDS.]
<PAGE>
PRODUCT OF THE IMAGINATION
Today, our culture comes to us on video. Royal families, computer-
animated toothpaste tubes, cybergames, double overtimes, in flight safety
instructions, how-to courses, talk-show guests - you'll find them all on
video. And these days, video turns up everywhere, from TV and videocassette
to CD-ROM and the Internet.
Digital Video
IMAGES AND SOUNDS DIGITIZED FOR EASY, FAST COMPUTER MANIPULATION, AND THEN
OUTPUT AS VIDEO.
Media 100's digital video output quality matches what you would get with high-
end analog videotape equipment.
In the past, the tools of video production belonged to the broadcast
elite. To produce a high-quality program, you needed a roomful of videotape
editing and post-production equipment and a staff of trained technicians.
The Media 100 digital video system changes all that. It replaces those
high-cost trappings with one simple-to-use, powerful, affordable system.
With Media 100, one person can author a complete video program that looks
and sounds as if it came out of a million-dollar edit suite.
How did we do it?
It took imaginative engineering and innovative marketing, plus the
relentless determination to put video into the hands of anyone with the
imagination to use it.
Multimedia
ANY PRODUCTION MIXING A VARIETY OF COMPONENTS SUCH AS VIDEO, AUDIO, STILLS,
ANIMATIONS, SPECIAL EFFECTS, GRAPHICS, AND INTERACTIVITY.
Media 100's open architecture makes it the ideal hub for creating multimedia
programs or integrating animations and special effects into your video program.
We have the technology to dominate in digital video. For more than two
decades, we have produced industry-leading hardware and software for
converting sounds and pictures into digital data. So we can do what no
other digital video company can: design and manufacture software and
hardware all under one roof. This unique competitive advantage means we can
innovate quickly and monitor quality continuously.
So Media 100 boasts the highest-quality images and audio of any
digital video system - at any price. The system also simplifies and speeds
up video program authoring. Just point and click to edit, add effects and
animations, mix multi-track CD-quality audio, and create broadcast-ready
programs with unprecedented ease.
Video Authoring
THE ABILITY OF AN INDIVIDUAL TO CREATE PROFESSIONAL-QUALITY VIDEO PROGRAMS AT
THE DESKTOP.
Video authoring with Media 100 puts the communication power of video into the
hands of anybody who can use a mouse.
We also built Media 100 as an open system. So unlike competitive
products, Media 100 works on a standard Macintosh computer platform, with
off-the-shelf peripherals. It works seamlessly with the most popular
animation, graphics, and effects software, including QuickTime programs
from software leaders such as Adobe Systems and Macromedia. This means
Media 100 videomakers can use their favorite tools for creating all kinds
of programs, whether destined for network TV, the Internet, corporate
programs, or a CD-ROM adventure game.
As for innovation, in 1995 we introduced Vincent(TM), the first
digital video engine for the Power Macintosh's PCI bus. By harnessing the
power of this high-speed architecture, Vincent has elevated Media 100 to
new heights of quality and performance.
Vincent also powers a second Media 100 system, new Media 100(R) qx,
which brings the image and audio quality of Data Translation's real-time
Media 100 system to the broad market for QuickTime-based program authoring.
Media 100 qx couples Media 100 hardware and software with Adobe Premiere,
the market standard for video editing based on Apple's industry-standard
QuickTime format.
Where will Media 100 go from here? Use your imagination. To see what
the industry thinks, turn the page.
<PAGE>
"In Japan, our customers understand the superior quality and functionality of
Media 100. Data Translation develops both hardware and software, and their
manufacturing system is just like that of a Japanese manufacturer. Although
Japanese companies are strong in conventional audio/video equipment, their
concept of digital video comes from their very conventional position. Data
Translation has built Media 100 with a true digital concept. We are able to see
many advantages with this concept, as well as its big potential for the future."
- - Sueo Sasaki
Vice President of Sales
and Marketing
Image and
Measurement, Inc.
Tokyo, Japan
Media 100 Authorized
Distributor
[PHOTO OF SUEO SASAKI APPEARS HERE]
<PAGE>
[ANTIQUE ROLLTOP DESK WITH ANTIQUE ITEMS INCLUDING
TROPHIES, STATUE, AND DESK CHAIR]
<PAGE>
[CONTINUATION OF PRECEDING PAGE. CONTEMPORARY
DESK WITH VARIOUS PRESENT DAY AWARDS AND BOOKS]
<PAGE>
"Why did we win the MacUser UK award? I think it's because the Macintosh world
had never before seen anything like the stunning, lifelike, video picture
quality of Media 100. It's simply the best digital video image at any price. So
now they can go about making videos, CD-ROMs, games, new media, or whatever they
want, knowing they outclass everybody else."
- - Nigel Streatfield
Managing Director
Data Translation Ltd.
Wokingham, Berkshire,
England
[PHOTO OF NIGEL STREATFIELD APPEARS HERE]
<PAGE>
MEDIA 100: BEST OF 1995
In 1995, Media 100 won more industry awards than any other digital video
system. This shower of stars and statuettes began even before our mid-year
introduction of Media 100 version 2.5 and the Vincent digital video engine for
the Power Macintosh.
"Let's cut to the chase here: Data Translation's Media 100 crushes every digital
video system I've ever seen for quality of video, features, and price."
- - January 1995, Computer Video
"The highest quality video signal out there, period...."
- - January 1995, Wired
"'Data Translation's Media 100 is the best kept secret in the industry because
it outputs an excellent video image that passes broadcaster's specs, and
considering the system's relatively low price, that's unbelievable,' says
Anthony Rizzuto, President of Atlantic Post Group, Orlando, Florida."
- - September 1995, Shoot
Strategic partnerships with industry shapers like Apple and Adobe, and Grass
Valley Group, the leading supplier of broadcast and post-production equipment to
the television industry, also made news.
"This was our first full year selling turnkey desktop production systems
incorporating Media 100. Working with Data Translation closely, we can see the
incredible growth and adoption levels they're getting among users. Data
Translation has established itself as a viable winning alternative to the
biggest names in corporate video."
- - Dan Castles
President
Grass Valley Group
"We couldn't be happier about teaming up with Data Translation, the company that
developed broadcast-quality digital video you simply can't distinguish from what
comes out of a high-end tape system. Media 100 qx pairs this high-end
performance with our industry-standard QuickTime environment, assuring the
greatest enjoyment by the broadest possible market."
- - Satjiv Chahil
Senior Vice President Corporate Marketing
G.M. Entertainment
New Media & Internet Division
Apple Computer Inc.
"Adobe and Data Translation established a relationship several years ago when we
provided technology for the original Media 100 product. By bringing the Media
100 technology to the open QuickTime environment and bundling it with Adobe
Premiere, Data Translation's Media 100 qx provides a proven, high-quality and
cost-effective solution to the growing desktop digital video market."
- - John Kunze
Vice President of Graphics Products
Adobe Systems
AWARDS
AV Video
Platinum Award
Computer Reseller News
Top Ten Multimedia Tools Vendors
DV Magazine
Award of Excellence
(Rated 9.1 out of 10)
MacUser
Editors' Choice Award
Best Desktop-Video Product
MacUser U.K.
MacUser Award
Video Editing
MacWEEK
Four Stars
MacWorld
World Class Award
Finalist
New Media
Hyper Award
Best Video Editing System
TV Broadcast
Excellence in Engineering
Video Systems
Pick Hit of NAB
(National Association of Broadcasters Exposition)
<PAGE>
[PICTURE OF VARIOUS OBJECTS AND SHAPES.]
<PAGE>
[CONTINUATION OF PREVIOUS PAGE OF SHAPES WITH CD ROM DISC AND GEARS.]
<PAGE>
14 MAKING NEW VIDEOMAKERS
Let's drop some names: Sega Games, the Oprah Winfrey Show, Thom McAn,
eMotion Studios (Passage to Vietnam), MTV, John Deere, Grolier's Electronic
Encyclopedia, the Central Intelligence Agency, and the National Football League.
They all use Media 100 systems. So do well over 4,000 more (see page 21).
In just two years on the market, Media 100 has become one of the largest selling
real-time digital video systems.
How? By going after a new kind of video user. Market analysts estimate the
potential worldwide digital video market at $1.3 billion or more. As experienced
video producers shift from analog to digital systems, and as new videomakers
emerge because of digital video's advantages, the market should rapidly grow
into the multibillion dollar range.
Imagine the digital video market as a pyramid like that below, with three
segments: a high-end, primarily broadcast market; a fast-growing central market
for high-quality professional systems; and a nascent, low-end, low-price-point
market for video editing and playback applications offering limited performance.
The pyramid shows the relative size of each segment, with the central segment
holding the largest revenue and profit growth opportunity.
Digital Video Market
<TABLE>
<CAPTION>
Estimated Sites High End Film
<S> <C> <C>
Broadcast Video
10,000+ Professional Post Production
--------
Independent Post Production
Corporate
Industrial
100,000+ Central Market Educational
Government and Military
Multimedia
------------------------------------------------------------
Mass Market Low End Low-Cost Multimedia
Low-End Video Editing & Playback
</TABLE>
Other companies sell their digital video systems to the high end, to work
with traditional editing equipment. Media 100, however, bypasses that equipment.
A unique system, Media 100 combines power, simplicity, extraordinary ease of
use, and highest quality into one affordable package. It creates a new, larger
market for digital video - a mainstream market of quality-starved, budget-
squeezed professional communicators. So now Media 100 videomakers include
seasoned editors, communications and graphics professionals, animators, ad
agency creatives, students, forensic scientists, multimedia producers, doctors,
and games developers. With new Media 100 qx and future brand extensions, we plan
to own an even larger wedge of the pyramid.
And they ask for Media 100 by name. All our Media 100 advertising and
promotion strengthen the brand name, to equate quality, simplicity, and
price/performance with all Media 100 products. Because Media 100 lets you
produce just about anything you can imagine, all Media 100 ads close with the
provocative tag line: "What did you have in mind?"
<PAGE>
"We feel the biggest market for Media 100 will be content creators. They include
independent video producers and video design and animation shops that will
create, produce, edit and distribute content for network television, game
development, multimedia CD-ROMs, and the Internet. We refer to this market as
"New Media," and we see it growing."
- - Jean R. Georges
President
AVT, Inc.
Watertown, Massachusetts
Media 100 Authorized Reseller
[PICTURE OF JEAN R. GEORGES APPEARS HERE]
<PAGE>
16
MAKING NEW VIDEOMAKERS
Now, if you live near Paris, you don't have to buy a Media 100 system to
use it any time, day or night. France Audiovisual, a division of Eurotechnics,
has opened a 24-hour post-production house called Pret a Diffuser (Ready to
Broadcast) based exclusively on Media 100 systems. You can rent a room by the
hour to edit and assemble videos, either alone or with the help of a staff
editor. The house gets half of its business from the broadcast industry, and the
other half from corporations and educational institutions. The service costs a
third of what you would expect to pay for post-production time with dedicated
video equipment.
"At this new facility, you can make your video much more creative because
of Media 100," says Rene, Guignot, Managing Director of Macsys, the Media 100
distributor in France. "The result is richer, more elaborate post-production,
including titling, audio, color, and effects. And if you can use a mouse, you
can do it all yourself. Because Media 100 output is digital, you can easily
produce an interactive CD-ROM, something you cannot do at a traditional post-
production house."
For video professionals choosing to own a Media 100, it can change more
than just the way they work - it can alter their lifestyles. No longer tied to
million-dollar edit suites clustered in cities, they can pack up and move
wherever they want.
Bill Weaver, a television anchor/cinematographer turned independent
producer, proves it. He started Across Borders Productions on remote Cortes
Island, British Columbia, a seven-hour trek by ferry and car from mainland
Vancouver. Amidst the mountains and inlets of this watery wilderness, he and his
wife Shivon create documentaries for Canadian public television and other
broadcast clients.
"With the help of fax, e-mail, and systems like Media 100, we can make a
good living doing broadcast documentaries, yet still enjoy the beauty and sanity
of a rural lifestyle," says Weaver. "I go outside and cut wood, then go inside
and cut video. It's a great balance."
Regardless of where they live, wired Media 100 users can rub imaginations
on the Internet. At the Media 100 Worldwide Users' Group on the World Wide Web,
they trade ideas, learn techniques, solve problems, and collaborate on projects.
After all, Media 100 outputs video as pure digital data - the stuff of
cyberspace.
What moved Ron Lindeboom, a former magazine publisher with a finance
background, to start the Worldwide Users' Group? His creative side led him to
Media 100, which he uses to make music and corporate videos. But living
literally a stone's throw from the Hearst Castle on California's Big Sur
coastline led him onto the Web. "If you work in a vacuum all the time, you tend
to do things the same way. There are lots of people in towns where there's only
one Media 100, and I was in that situation. The Users' Group helps fill that
vacuum." With 150 to 175 new members registering each week, Lindeboom estimates
the group will have close to 10,000 members by the summer of 1996. See the site
for yourself at http://www.callamer.com/~boomer/media100.
And in time, you will see a lot more of Media 100 on the Web. CNN
Interactive, CNN's division for multimedia production and news distribution on
the Internet, uses the system to produce video for its Web sites. Scott Woelfel,
Editor-in-Chief for CNN Interactive, says that as high-speed modems make access
easier, the door will open for more sophisticated video on the Web. "I can't
emphasize enough how important video will be at that stage. Media 100 is really
enabling us to take the next step in the evolution of the Web."
MEDIA 100.A PROPOSITO,
CNN Interactive also uses Media 100 as the exclusive video production tool
for CD-ROMs. "By going with Media 100, we were able to put a lot more production
techniques into the video than ever before. You can see the difference - the
video is more slickly produced, and we're able to do more with music," says
Woelfel. You can view the results in the new CD-ROMs, Faces of Conflict and CNN
Time Capsule: The Defining Moments of 1995.
Now, the word "interactive" may not spring to mind when you think of Abbey
Road, the legendary recording studios still scrawled with Fab Four graffiti. But
late in 1995, Abbey Road, together with Apple Computer and EMI, launched a
custom built, fully equipped interactive multi-
<PAGE>
MAKING NEW VIDEOMAKERS 17
media development studio. There, Media 100, selected for the digital video
portion, will work to produce a new generation of multimedia enhanced-music CDs.
"We were looking for a system that could provide us with optimum quality as
well as the flexibility needed to work with multimedia applications. In our
view, Media 100 was the best possible choice," says Martin Benge, Vice President
of Abbey Road Studios.
So from the platinum-bound CDs produced at Abbey Road, to the gripping
environmental documentaries from Cortes Island, more and more video will come
from the imaginations of Media 100 users.
[MEDIA 100 LOGO APPEARS HERE]
COSA AVEVI IN MENTE? /TM/
The Media 100 tag line, What did you have in mind? as seen in Italy.
<PAGE>
"We're systems integrators - not your typical video systems dealer. Yet we're
the number one Media 100 reseller in the U.S. We primarily sell to Silicon
Valley companies in the forefront of the newest technologies. Since we
understand their technologies, we can bring them the latest communications
solutions - like Media 100. It lets us put professional broadcast-quality video
in the hands of those who never before could afford it. After all, anybody who
can use a Macintosh can use a Media 100."
- -Michael W. Dennis
Vice President of Sales and Marketing
EISI
Mountain View, California
Media 100 Authorized Reseller
[PICTURE OF MICHAEL W. DENNIS APPEARS HERE]
<PAGE>
CHANGING CHANNELS 19
Since most Media 100 videomakers don't come from traditional video roots,
how do we sell to them? We take an unconventional approach by selling through
indirect channels of resellers. By going to a local dealer, customers can
finally buy a video system just as they would buy a computer, a scanner, or a
piece of software. We handpick companies committed to building their businesses
around integrating and selling our system.
We back our resellers with seminars, demos, worldwide advertising and sales
support. The resellers can help customers by offering computer peripherals,
software and other complementary products, and additional support.
"Media 100 allows our clients to leverage standard applications such as
Adobe After Effects, Photoshop, and Electric Image, and have them function as a
fully integrated, media production suite in a box," says Jean R. Georges,
President of AVT, an authorized reseller in Watertown, Massachusetts. "We add
value to the Media 100 purchase through our customer service practices and
quality control procedures. Our background in traditional video engineering and
consulting allows us to provide complete installations, wiring, and integration
into our clients' existing analog video suite. We also provide comprehensive
training and onsite technical support."
Resellers choose Media 100 for more than just its quality. Randy Manker,
Vice President of Phoenix Presentations in South Bend, Indiana, says, "Media 100
stands out for its fantastic technical support - by far the best we have ever
used - and helpful, knowledgeable regional representatives. Selling Media 100
has increased our peripheral sales by 50 percent. It is the only digital video
system we will sell, period!"
Media 100 resellers can also take digital video where it has never gone
before. "We have many market segments," says Sueo Sasaki, Vice President of
Sales and Marketing for Image and Measurement, Inc., Tokyo. "We sell to the
architectural, industrial design, and medical fields, as well as to
entertainment and multimedia producers. We are expanding Media 100 into all of
those segments. Architectural firms, for instance, need to make presentations
for very expensive, complicated projects, and Media 100 can help them. In
medicine, doctors want professional video to present at annual meetings to best
show the results of their studies. The trend is changing from color slides to
Media 100," he says. "We believe our Media 100 sales will grow about 30 to 40
percent a year."
To sell Media 100 qx, our most affordable system, we plan to add resellers
to further expand our market. These new resellers will more than double the
number we now have.
Leave it to a reseller to sum it up. "Media 100 is simply the best digital
video system available, from the best company," says Jeffrey Levene, President
of Computer Video & Graphics in Miami, Florida. "Happy customers, unparalleled
support, great profits - it's truly a win-win relationship."
<PAGE>
WHAT WILL WE IMAGINE NEXT?
[PHOTO OF JOHN MOLINARI APPEARS HERE]
Three years ago, we began our mission to make video personal. Our idea was
to empower individuals to compose finished videos on their own. Other digital
video systems came first, but sold as offline adjuncts to videotape equipment at
dedicated video and film facilities. We imagined something different: a system
anyone could own and use independently.
The heart of our idea was to deliver output video and audio quality,
directly from the computer, which matched or exceeded the results of broadcast
videotape. Doing the job all on the computer simplified the process and
dramatically lowered costs by eliminating the analog editing equipment. The
revelation was that quality led to simplicity, and simplicity led to new users.
So we made achieving the highest possible quality in a desktop system our
central theme. We imagined new users creating new applications from the digital
realm of the personal computer without the complications of videotape. We
imagined new authors of video programs with creative backgrounds or
communications jobs, using new delivery systems, such as CD-ROM and digital
transmission over the Internet.
What we imagined is Media 100. Rather than workers on a video assembly
line, our new users are composers. We are in business to give them the
instrument of their art.
These days, someone from just about everywhere has started to notice Media
100. There are thousands of Media 100 users around the globe. What was an
unknown, generic name is becoming a recognized brand: Media 100.
Our business strategy is designed for market domination and no other
company is in a position to match it. The strategy is predicated on worldclass
audio and video output quality, simplicity, an open system philosophy, brand
name, and sales through an indirect channel of resellers.
It is a strategy that plays to our strengths. We possess a growing strength
in creating end-user software for digitally processing audio and video signals
in real time. On the hardware side, we have a rich history designing and
manufacturing board-level signal processing hardware. We know our strength in
both software and hardware is a unique and powerful advantage.
We are changing the demographics of video to favor new users. The change
also favors our business plan. It is an original idea and a mission to grow.
John Molinari
VP/General Manager
Multimedia Group
Data Translation
<PAGE>
THOUSANDS OF MEDIA 100 CUSTOMERS
GLORY IMAGE INC., OTAGO UNIVERSITY, SOUND LAB, INC., & COMMERCIAL TUDOR COLLEGE,
0.1 MEDIELABOR, 30 CUADROS, SA DE CV, 360 PRODUCTIONS, 5W GRAPHICS, 7 RUE
BISCORNET, 7TH AVENUE CREATIVE, A JOHNSON GROUP LTD, A KEY ENCOUNTER, A TO Z
AUDIO/VIDEO, A&V PRODUCTIONS, A-BEX LABORATORIES INC., A-VIDD ELECTRONICS CO.,
A.G.E., A.O. SMITH WATER PRODUCTS, A.S.F., A.V.R., AAP NOOT MIES C.V., AARDVARD
STUDIOS, AARDVARK VIDEO PRODUCTIONS, ABECEDARIAN PRODUCTIONS, INC., ABILENE
CHRISTIAN UNIVERSITY, ABINGTON HEIGHT SCHOOL, ABSOLUTE VIDEO, ACADEMIC VIDEO &
RESEARCH, ACANTHUS VIDEO, ACCESS, ACCESS CO. LTD, ACCESS CO., LTD, ACCESS IN,
ACERRA PRODUCTIONS, ACME, ACROSS BORDERS VIDEO, ACS S.P.A., ACTION VIDEO
PRODUCTIONS INC, ACUNET, ADC MULTIMEDIA PRODUCTIONS,INC, ADCO, ADDISON CAREER
DEVELOPMENT, ADM VIDEO PRODUCTIONS, ADOBE, ADP DEALER SERVICES, ADPLATES GROUP,
ADS PRODUCTIONS, ADVANCE RAPIDE, ADVANCE VISION CO.,LTD., ADVANCED
CARDIOVASCULAR SYST., ADVANCED IMAGE COMMUNICATIONS, ADVANCED MARINE
ENTERPRIZES, ADVANCED MICRO DEVICES, ADVENTISTSAMFUNDETS, ADVENTURE DIVERSIFIED,
INC., ADVENTURE FILM COMPANY, ADVENTURE UNLIMITED, ADVERTISING ASSOCIATES, AEGIS
TECHNOLOGIES, AF FILMAKERS, AFRES/SCUP, AGRO, AGRO INTERNATIONAL, INC., AGT
LIMITED, AHREN CREATIVE GROUP, AHRENS INTERACTIVE, INC., AHSAN'S STUDIO, AIR
FORCE PHILLIPS LABORATORY, AIR FORCE RESERVE, AIR FORCE SPACE COMMAND/ESR,
AIRWAVE RECORDING COMPANY, AIRWAYS VIDEO, AL-MOHAMMADIN CO, ALAN D. VAN PETTEN,
ALAN HARRIS GROUP, INC., ALASKA AIRLINES, ALCATEL DATA NETWORKS, ALGO MAS
PUBLICIDAD, S.A. DE, ALHAVI PRODUCCIONES, ALIAS RESEARCH INC., ALII ENTERPRISES,
INC., ALL VIDEO PRODUCTIONS, ALLAN CHASANOFF, ALLAN JOYNER PRODUCTIONS, ALLGAUER
REGIONAL VIDEO, ALLIED SIGNAL AEROSPACE, ALPHA CORPORATE, ALPHA PRODUCTIONS,
ALPHA VIDEO, ALPHABET GRAPHICS, ALPINE VISTA PRODUCTIONS, ALTA BATES MEDICAL
CENTER, ALTERED STATES, INC., ALTO CONTRASTE, AMAROCK PRODUCTIONS, AMBROSIA,
AMDYME CORPORATION, AMERICAN RE-INSURANCE, AMERICAN ANIMATORS, AMERICAN BUSINESS
ENTERPRISES, AMERICAN COMMUNITY ADVERTIING, AMERICAN GAS @ TECHNOLOGY, AMERICAN
SIGNATURE, AMERICAN VIDEO COMMUNICATIONS, AMERICAN VIDEO PRODUCTIONS, AMIGOS DEL
CINE, AMOCO OIL COMPANY, AMWAY (THAILAND) CO., LTD., ANDERSON CONSULTING,
ANDERSON MERCHANDISERS, ANDERSON PRODUCTIONS, ANDERSON PRODUCTIONS INC., ANDREW
CRAWFORD, ANDREW J. MCGILVRAY, INC., ANDY SPRAY, ANGEL WINGS PRODUCTIONS INC,
ANIKK COMMUNICATIONS GROUP, ANIM PICTURE CO., LTD., ANIMAC, INC., ANIMATED
IMAGING MULTIMEDIA, ANIMATICS MULTIMEDIA CORP, ANTENNENSERIVE GMBH, AP GRAPHICS,
APB COMMUNICATIONS, APEX AUDIO-VISUALS, APPLE COMPUTER, APPLE COMPUTER, INC,
APPLE COMPUTER, INC., APPLECENTERET GREENHOUSE, ARCADE INTERNATIONAL, ARCADE
VISUAL, ARCADIA-VIDEO, ARCHER MEDIA, ARCHIMEDE DI PIERO D'AMBROSIO, ARGUS VIDEO,
ARIEL WAKSMAN, ARIZONA EDUCATION FOUNDATION, ARIZONA SIGHT & SOUND, ARIZONA
STATE UNIVERSITY, ARKITEKTSKOLEN, ARMOUR PRODUCTIONS, ARQUED, ART PHOTO CO.,
LTD., ARTHUR ANDERSON, ARTHUR ANDERSON & CO., ARTISTIC SOLUTIONS, ARTPLUS
LIMITED, ASAP MEDIA SERVICES, ASBURY COLLEGE, ASIA COMPUTER TECHNOLOGY, ASINC,
ASSENDORPERSTRAAT 236, ASSOCIATED TRUCK PARTS, ASSOCIATED VIDEO PRODUCERS, ASTRO
MEDIA LTD, ASU, AT&T, ATLANTA COLLEGE OF ART, ATLANTA DIGITAL, ATLANTIC POST
GROUP, ATLANTIC VIDEO, ATLANTIC VISUAL, ATOMIC FILMS, ATOMIC IMAGING, INC,
ATOMIC IMAGING, INC., ATTCO, ATV, AUCKLAND INSTITUTE, AUDIO SERVICIO LARSA,
AUDIO VISIONS, AUDIO VISTAS, AUDIO VISUAL ADVANTAGE, AUDIO VISUAL AMERICA, AUDIO
VISUAL PRODUCTIONS, AUDIO VISUAL SERVICES, AUDIOVISUEL, AUGUST HOUSE, AURA VIDEO
FILM, AURA VIDEO FILM PRODUCTION, AUST. FILM TELEVISION & RADIO, AUSTIN/ASHLEY &
CO., AUSTRALIAN FILM TELEVISION, AUSTRALIAN FILM TELEVSION AND, AUTHUR D.
LITTLE, INC., AUVIPRO S.A., AV ACTION YUKON LTD., AV MEDIA, AVALON PICTURES, AVC
GROUP LTD, AVCC ENGINEERING CO., LTD., AVCON INC, AVERY OUTDOOR ENTERPRISES,
AVETEC, AVIC SYSTEM CO., LTD, AVICOMM PRODUCTIONS, AVIO PRODUCTION, AVN, AXIS
INFORMATIESYSTEMEN, B.I.G. CREATIVE SERVICES INC., BABSON COLLEGE, BALL
COMMUNICATIONS, INC, BAMBAR FORSYTH, BAMBER FORSYTH, BANAMI TV,BANANA ISLAND,
BANK OF AMERICA HAWAII, BAR CODE DATA SYSTEMS, BARELLI ANDREA, BARNA-ALPER
PRODUCTIONS INC., BARRY ADVERTISING, INC., BARRY FOX, BARULLI, BAY POST, BAYSIDE
TV, BAYSTATE MEDICAL CENTER, BC HYDRO, BC TEL MEDIA RESOURCES, BEACON HEALTH
CORPORATION, BELIEF PRODUCTIONS, BELLCORE, BEM TE VIDEO PROD. AUDIO, BERGEN
COUNTY TECHNICAL SCHOOL, BERKANO PRODUCTIONS, BERNUCCI SFORZA, BERRIEN COUNTY,
ISD, BEST MEDIA, INC., BETHANY BIBLE COLLEGE, BETTA BETA COMMUNICATIONS, BETTY
HUTH PHOTOGRAPHY, BIG HAND ASIA PACIFIC, BIG HAND PRODUCTIONS, BIG IDEA
PRODUCTIONS, BIG PICTURES, BIHOU, BILD WECHSEL GMBH, BILL BAGGETT PRODUCTIONS,
BIOMEDIA, INC., BIOMEDICAL COMMUNICATIONS, BIRD DOG PICTURES, BISCAYNE
PRODUCTIONS, BLAB TELEVISION, BLACKHAWK BAPTIST CHURCH, BLACKHAWKE, BLACKSHEEP
PRODUCTIONS, BLOOMBERG L.P., BLUE CROSS BLUE SHIELD OF ND, BLUE CROSS BLUE
SHIELD OF NJ, BLUE PEACH PRODUCTIONS, BLUE ROAD PRODUCTIONS, BLUE TRADE, BLUE
TURTLE, BLUEBIRD VIDEO STUDIO, BM.F1 EINSATZGRUPPE D-EDOK, BOB GEORGE, BOB
TURNER POST PROD. SERVICES, BOB WESTBROOK & ASSOCIATES, BOBST SA, BOSTON FILM
COMPANY, BOTTICELLI INTERACTIVE, BOTTOM LINE JAPAN INC., BOTTOM LINE, INC.,
BOULDER MEDIA GROUP, BOWIE STUDIO, BRAEMAR MEDIA CORPORATION, BRASS ORCHID
TECHNOLOGIES INC., BRAUER PRODUCTION, BRAVA AUSTRALIA P/L, BRE COMMUNICATIONS,
BRENTON CENTER IOWA STATE UNIV, BRENTON CENTER ISU CAMPUS, BRIGGS & COMPANY,
BRIGHAM AND WOMEN'S HOSPITAL, BRIGHAM YOUNG UNIVERSITY-MTC, BRIGHT LIGHT
PRODUCTIONS, BRILLIANT INTERACTIVE IDEAS, BRM RECORDS INC., BROADCAST EXCHANGE
INC., BROADCAST EXCHANGE, INC., BROADCAST PRODUCTIONS, BROADCAST PROMOTIONS,
BROADCAST SERVICES OF ALASKA, BROADCASTING IMAGES, BROOKHOUSE PRODUCTIONS,
BROTHER INDUSTRIES LTD., BROWARD SHERIFF'S OFFICE, BRUCE COOK PRODUCTIONS, BRUCE
RAYNER, BTI, BURCLAN PRODUCTIONS, BUREAU OF LAND MANAGEMENT, BURGER DESIGN COMM
INC., BURGESS VIDEO GROUP, BURLINGTON GRAPHICS, BURLY BEAR NETWORK, BURTON
DESIGN CONSULTANTS, BUSINESS ESSENTIALS, BUSINESS VIDEO COMMUNICATIONS, BWANA
GRAPHICS, C & V INC., C.C.G. METAMDIA, C.U.N.Y. GRADUATE CENTER, C/O DIGITAL
MEDIA DESIGN, C2C SATELITE PRODUCTIONS, CABLE AD CONNECTION, CABLE TV OF THE
KENNEBUNKS, CADBURYS LTD., CAJUN FILMS, CALGARY BOARD OF EDUCATION, CALGARY
TELEVISION, CALIFORNIA STATE POLYTECHNIC, CALIFORNIA STATE PRISON, CALIFORNIA
STATE UNIVERSITY, CALTY DESIGN RESEARCH, CALVARY BAPTIST CHURCH, CAMBRIDGE
CAREER PRODUCTS, CAMBRIDGE TELEVISION PROD., CAMEO MULTIMEDIA PROD. INC.,
CAMERLOHERSTR. 4, CAMPUS CRUSADE FOR CHRIST, CANADA PARKS SERVICE, CANADIAN
HERITAGE, CANON, INC., CAPITOL INVEST. & VENTURE INC., CARACOL TELEVISION, CAREY
VIDEO PRODUCTION, CARLTON BROADCAST FACILITIES, CARRYING INDUSTRIES, CASCO CABLE
TELEVISION, CATHOLIC CHURCH OF INDURA, CATHOLIC DIOCESE OF LITTLE ROC, CATHY
GIBBS, CAVE ART, CB TELEVISION PRODUCTION, CCB AMERICAN ENGLISH SCHOOL, CCG
METAMEDIA, CCS LTD, CDI COMPUTER SERVICES, CDLA. LA GARZOTA, CEMIQ, CENTAURO
FILMS (8433), CENTAURO STUDIOS, CENTER FOR EDUCATIONAL MEDIA, CENTER OR
CARDIOVASUCLAR, CENTRAL RESEARCH INSTITUTE, CENTRO DE DESAROLLO, CENTRO S.
CHIARA AUDIOVISIVI, CENTRO SERVIZI AMBULATORIALI, CERAM, CERTIFIED CARRERS
INSTITUTE, CHALVEDUNE, CHANNEL ISLANDS MEDIA, CHANNEL TREE LTD, CHARISMA DIGITAL
PTY LTD, CHARLES STURT UNIVERSITY, CHARTER COMMUNICATIONS, CHASE PROFIT
DEVELOPMENT LTD, CHASE PROPERTIES, INC., CHASKES PRODUCTIONS, CHAT TV, CHELSEA
MODULAR HOMES, CHESNEY COMMUNICATIONS, CHESTNUT HILL COLLEGE, CHINA TECHNOLOGY
INSTITUTE, CHIRKINIAN COMMUNICATIONS, CHIYODA CORPORATION, CHRISTOPHER NEWLING
PRODUCTION, CHROMA MIX, CHUCK YOUNG ADVERTISING, CIGNA CORPORATE VIDEO (TLP-4),
CIMA DIGITAL PRODUCTIONS, CINE FOTO VIDEO TOMASELLI, CINE SEIS OCHO S.A.,
CINEFLIX INC., CINEMA ASSOCIATES, CINEMA VISUALS, CINEMASCREEN PRODUCTION,
CINEREAL LTD, CINESETENTA, CITADEL COMMUNICATIONS, CITIZENS GAS & COKE UTILITY,
CITY OF SEATTLE WATER DEPT., CJM PRODUCTIONS, CKPG/TV, CLAIRE COMMUNICATIONS,
CLARABELLE CO., CLAUDIO CHEA FILMS, CLEAR VISIONS, CLEVER & SMART, CLOSE-UP
PRODUCTIONS, CLOSED DOOR PRODUCTIONS, CMI, CNA "INNOCENTE CARRENO", CNN
INTERACTIV, COASTAL AREA HEALTH EDUC CEN, COASTAL VIDEO PRODUCTIONS,
COBURN/LIBERSON, COCHRAN ADVERTISING COMPANY, COCO, CORPORATION, LTD., CODE
THREE CINEVISION ENT, INC, COHERENT COMMUNICATIONS SYSTEM, COLAISTE DHULAIGH,
COLB COMMUNICATIONS, COLLEGE OF EASTERN UTAH, COLLINS MUSIC, COLOR BAR CO., LTD,
COLOR GRAPHICS, COLOURFAST SYSTEMS, COLTENE WHALEDENT, COMCAST CABLEVISION, COME
ALIVE MINISTRIES, INC., COMMAND X, COMMUNICATE AMERICA, COMMUNICATION BRIDGES,
COMMUNICATIONS INC., COMMUNICATIONS UNLIMITED VIDEO, COMMUNICATOR, COMPREHENSIVE
MEDIA, INC., COMPU SYSTEMS, INC., COMPUTER ANIMATION AND DESIGN, COMPUTER
PICTURES, INC., COMPUTER VISUAL SYSTEM, INC., COMPUTER WORKS, COMPUTERS PLUS,
COMUNE DI VENEZIA, CONCEPT GO, CONCEPT STUDIO 7, CONDER MEDIA GROUP, CONDER
MEDIA GROUP, INC., CONGO PRODUCTIONS, CONNAUGHT, CONNEXION, CONNEXION LJUBLJANA,
CONSOLIDATED MEDIA SYSTEMS, CONSOLIDATED STORES, CONWAY & WHITAKER, COOK'S PEST
CONTROL, COR PRODUCTIONS, CORDUA FILM, CORE STUDIO LIMITED PARTNER, CORMANA
INC., CORNELL UNIVERISTY, CORNELL UNIVERSITY, CORNELL UNIVERSITY,PSYCHOLOGY,
CORNERSTONE VIDEO RESOURCES, CORONET VIDEO LIMITED, CORPORATE HOME VIDEO,
CORPORATE IMAGING, CORRECT PROFESSIONAL, COTTONWOOD COMMUNICATIONS, COUISUAL,
COUNTRY FILMS, COURTER FILMS & ASSOCIATES, COURTHOUSE DESIGN, COURTNEY HARMEL
VIDEO, COVEY LEADERSHIP CENTER, COVISUAL, COX COMMUNICATIONS, COYOTE
COMMUNICATIONS, INC, COYOTE PRODUCTIONS, CP MEDIA, CPAS/LPLB/US GOVERNMENT,
CRAWFORD MEMORIAL PRODUCTIONS, CRAZY GATOR VIDEO, CRE TELEVISION CANAL 12,
CREATION DIRECTE, CREATION VIDEO DYNAMIQUE INC., CREATIVE ADVANTAGE INC.,
CREATIVE COMMUNICATIONS, CREATIVE FX PRODUCTIONS INC., CREATIVE IMAGE
ENTERPRISES, CREATIVE IMAGES, CREATIVE MEDIA GROUP, CREATIVE MULTIMEDIA,
CREATIVE PRESENTATIONS, CREATIVE PRODUCERS GROUP, CREATIVISION/DIGIDOMAIN,
CREIGHTON UNIVERSITY, CRESTAR BANK, CRESTED BUTTE TV, INC, CRIMSON TECH, CS
COMMUNICATIONS, CSC, CSELT, CUBIX CORP, CURRICULUM & TECH. SERVICES, CUT AND
PASTE, CUTTING COMMENTS P/L, CVM PRODUCTIONS, INC., CVR PRODUCTIONS, CYBERTE,
D.B. MEDIA INC. & PALOMINO, D.F.L., DA INTERNATIONAL, DAHLIN,SMITH,WHITE
ADVERTISING, DAIICHI SYSTEM ENGINEERING, DAKOTA POST PRODUCTIONS, DAMAS DIGITAL,
DAN BRIGGS PRODUCTIONS, INC, DANIEL HERNANDEZ PRODUCTIONS, DANVILLE COMMUNITY
COLLEGE, DARIA SCREEN, DAT TELE PRODUCTIONS, INC., DATA SYSTEMS, DATANEX LTDA,
DAUPHIN ARTS, DAVE HOOD ENTERTAINMENT, DAVID MOYES PRODUCTIONS, DAVID REINISCH,
INC., DAVID SHNEIDER M.D., DAWN PICTURES, DAY FOR NIGHT PRODUCTIONS, DAYTON
PUBLIC SCHOOLS, DBB-VIDEO,INC., DC VIDEO PRODUCTION SERVICES, DDB NEEDHAM SYDNEY
PTY LTD, DEAHAN VIDEO, INC., DEAKIN UNIVERSITY, DEANZA COLLEGE TELEVISION,
DECKER COMMUNICATIONS, DEEPGROOVES, DEL MAR STUDIOS, DELTA JUNCTION HIGH SCHOOL,
DELTA PRODUCTIONS, DELTA TECHNOLOGY, DEMOTT/KREINES FILMS, DEN HARTOGH
PRODUCTIONS, DENTSU (THAILAND) CO., LTD., DEPARTMENT OF PATHOLOGY, DEPERSICO
DESIGN, DEPT. OF EDUCTATION-ITV, DEPT. OF FEDERAL PROGRAMS, DEPT. OF SURGICAL
NEUROLOGY, DEPT.OF NEUROLOGICAL SURGERY, DEREK WILLIAMSON, DESIGN ACCESS, INC.,
DESIGN MEDIA, DESIGN VISION, DESKTOP TECHNOLGIES LTD, DESKTOP VIDEO, DESTI FILM,
DESTINATION IMAGES, DET. 3 AFFTC (BCCBU), DIAQUEST, INC., DIE ARGENTUR,
DIFFERENTATION STRATEGIES, DIGITAL ANIMATION CORP., DIGITAL BILT, INC., DIGITAL
BYTES, DIGITAL CANVAS, DIGITAL CENTURY, DIGITAL CUTS, DIGITAL EDITING, DIGITAL
IMAGE WORKS INC., DIGITAL MASTERS, DIGITAL MEDIA ASSOCIATES, DIGITAL MONITORING
PRODUCTS, DIGITAL OASIS, DIGITAL PICTURES, DIGITAL SOLUTIONS, DIGITAL STUDIOS,
DIGITAL VIDEO ASSOCIATES, DIGITAL VIDEO ENTERPRISES, INC, DIGITAL VISION, INC.,
DIGITAL WIZARDS, DIGITAL8, DIGITEL, DIGITEL PRODUCTIONS, INC., DIGITRON,
DIGITRON CO., LTD, DIGITRON CO., LTD., DIOCESE OF FORT WAYNE, DIRECTOR
INSTRUCTIONAL SERVICE, DISTANCE LEARNING TECHNOLOGY, DISTRICT #12 BOARD OF
EDUC., DIVERSIFIED MARKETING RESOURCE, DMB PRODUCTIONS & FREELANCE, DOCUMENTARY
EDUCATIONAL RES., DON OWEN, DONAHUE, DONAU STUDIO, DORD FHIS, DOUBLE "R"
PRODUCTIONS, DOVE COMMUNICATIONS, DOVE VIDEO, DPZ, DR-TV PRESENTATIONS DESIGN,
DR. ALLEN BALL, DR. SIGMUND SILBER DREAMTIME IMAGINEERING, DREW FAIRCHILD INC,
DREXEL UNIVERSITY, DRMS-X, DT ENGLAND, DUCKBALL LTD., DUKE MARKETING, DUMAS
DIGITAL, DUPONT, DURACELL INC., DURHAM MEDIA GROUP, INC., DVG DI LORETTA GALVAN,
DYNAMIC RESOURCES, INC., DYNAMITE FILMS, E-1212 ENTERPRISE, E-MEDIA, E-MOTION
EDITING, E.T. ENTERPRISE CO., LTD., EAR, NOSE & THROAT MEDIA, EAST CAROLINA
UNIVERSITY, EAST TEXAS PRODUCTIONS, EASTERN SKY MEDIA SERVICES,INC, ECHO BRIDGE
PRODUCTIONS, ECHO SYSTEM CONSERVATION, ECLIPSE PRODUCTIONS, ECOLOGIC, ECRAN
TOTAL PRODUCTIONS, ECUAVISA CANAL 8, EDDY GRAPHIC DESIGN, EDELWEISS FILM & TV,
EDINBURGH COLLEGE OF ART, EDINBURGH'S TELFORD COLLEGE, EDIPIX WEST LTD., EDIT 1,
EDITECH, EDITH COWAN UNIVERSITY, EDITIONAL EFFECTS, INC., EDITO, EDJ MEDIA
SERVICES, EDUCATION DEV CENTER, EDUCATION RESOURCE CENTRE, EDUCATION SERVICE,
EDUCATIONAL EDUCATIONAL VIDEO, EDUCATIONAL MEDIA CONSULTANTS, EDUCATIONAL VIDEO
NETWORK, EDUCATIONAL VIDEO RESOURCES, EDWARD JANNE, EFFECTS HOUSE, EISI, EL
ARMADILLO, ELBOR LTD., ELECTRI CO., LTD., ELECTRIC IMAGE, ELECTRIC IMAGE
PRODUCTIONS, ELECTRIC PICTURE COMPANY, ELECTRIC VISION CO.,LTD., ELECTRO LAB
CIA. LTDA., ELECTROLAB, ELECTRONIC ARTS, ELECTRONIC CAMERA CONCEPTS, ELEKTRA
DIGITAL, ELIAS GROUP, EMC CORPORATION, EMERSON ENTERTAINMENT, EMORY UNIV. SCHOOL
OF NURSING, ENDORFMAN PRODUCTIONS, ENERGIE VIDEO PRODUCTION, ENTERTAINMENT
MARKETING, ENTERTRAINING PRODUCTIONS, ENTERTRANING PRODUCTIONS, ENVISION,
EPICENTER FILMS CORPORATION, ER ELECTRONICS, ER ELECTRONIQUES, ERIC SOLSTEIN
PRODUCTIONS INC, ERINGA MEDIA, ERNST & YOUNG LLP, ERNST KUBITZA VIDEO, ES
(HIRE), ES VIDEO, ESRI, ESSM EIDGEN,SPORTSCHULE, ETS/MICHIGAN TECH. UNIVERSITY,
EUREKA STUDIOS, EVE'S GARDEN, INC., EVENTURE, INC, EVERETT BANNING
COMMUNICATIONS, EVERGREEN VIDEO, EWALD MOTION PICTURES, INC., EXTRA FRAME CO.,
LTD., EXTRO DESIGN, EXXON RESEARCH & ENGINEERING, EYECON INTERACTIVE MEDIA,
INC., F.M. KEESLING PRODUCTIONS, F/X VIDEO, FABRICA, FACHSTELLE FUR
MEDIENARBEIT, FAIRVIEW HEALTH SYSTEMS, FALMOUTH COLLEGE OF ART, FANTASY FACTORY,
FAO/NACINES UNIDAS, FAR NORTH QUEENSLAND INSTITUTE, FEATURE PRESENTATIONS,
FEDERAL JUDICIAL CENTER, FERNANDEZ EDITORES, FERNSEHEN DER UNIVERSITAT, FIEDLER
& LORCK PRODUKTION, FILM & VIDEO PRODUKTION, FILM CREW PRODUCTIONS, FILM
FACILITIES, FILM U. VIDEOPRODUKTION, FILMAKERS LTD., FILMCOM INC., FILMMAKERS,
FILMONTAGE PRODUCTIONS, FILMPOINT SDN. BHD., FIMA, FINDERS BURO, FINELINE, FIRST
MULTIMEDIA CENTER, FISH CREATION, FITNESS ADVENTURES, FIVE STAR VIDEO
PRODUCTIONS, FLAGLER PRODUCTIONS, FLAMINGO PRODUCCIONES, FLF FILMS, FLF FIMS,
FLINDERS UNIVERSITY OF SA, FLYING FISH LTD, FM TELEVISION, FOCUS PRODUCTION,
FOERSTER CONSULTING, FOLKLORE INSTITUTE, FOLKUS ATLANTIC, FOLLGARD CD-VISIONS
INC., FORD MOTOR COMPANY, FORENSIC METEOROLOGY ASSOC INC, FORESIGHT TECHNOLOGY,
FORESTRY MEDIA CENTER, FORREST FILMS VIDEO PRODUCTION, FOTO FLASH DI ANTICHI,
FOU RIRE PRODUCTIONS, FOUNDATIONS FOR EXCELLENCE, FOUNTAIN TV, FOUR SQUARE
PRODUCTIONS, FOUR TWO TWO COMPANY, FOX VIDEO PRODUCTIONS, FOXWOODS HS BINGO &
CASINO, FRAME BY FRAME, FRAME BY FRAME DIGITAL, FRAME BY FRAME PRODUCTIONS,
FRANCISCO ORTIZ, FRANCOIS SINGER PRODUCTION, FRANK DEW, FRANKFURT BALKIND
PARTNERS, FRANKLIN & MARSHAL COLLEGE, FRED WOODS PRODUCTIONS, FREE WILL BAPTIST
FOREIGN, FREELANCE, FREELANCE DIGITAL POST, FREEWAY VISUALS INC., FREIE
UNIVERSITAT BERLIN, FROM CONCEPTS TO REALITY, INC, FRONTIER MEDIA, FRY
COMMUNICATIONS GROUP, FTB-EDUCATION AND OUTREACH, FUKUOKA BROADCCASTING SYSTEM,
FULL FRAME PRODUCTIONS, FURY FILMS, FUTURE EDUCATIONAL FILMS, INC., FWB, INC.,
G&B PRODUCTIONS PTY LTD, GADD ENTERPRISES, GAJAH TUNGGAL GROUP, GALLASPY & LOBEL
ADVERTISING, GAMA PRODUCTION, GANESA MEDIA LABS, GANS PRODUCTIONS, GARY LEIB,
GEFFEN PROD./REEL TO REAL, GENENTECH, GENERAL ELECTRIC, GENERAL PLANNING
CORPORATION, GENESIS, GENETECH, GEORGIA TECT, GIESEN & PARTNER MEDIA GMBH,
GIGABYTES, GIJUTSU SHIEN SYSTEMS, INC., GILESPIE GRAPHICS, GILLHAM ADVERTISING,
GILLIES BROADCAST/MEDIA CORP., GIRAFX PRODUCTIONS, GIRARD PRODUCTIONS INC.,
GIUNTI MULTIMEDIA, GLADYS KIDD & ASSOCIATES, INC., GLASS EY PRODUCTIONS,
GLASSROOM PRODUCTIONS, GLEN JOSEPH PRODUCTIONS, GLEN OAKS COMMUNITY COLLEGE,
GLOBAL TV, GLOBAL VISION, GLORY IMAGE, GOLD STANDARD PRODUCTIONS, GONOSHAHAJJO
SANKISTHA (GSS), GONZALEZ ADVERTISING, GOOD DAY FILMPRODUKTION, GOTHAM PICTURES,
GPI INTERMEDIA, GPI PRODUCTIONS, INC., GPI PRODUCUCTIONS, GPU NUCLEAR
CORPORATION, GRABITY CORPORATION CO.LTD, GRACELAND COLLEGE, GRAFICOL, GRAND M,
GRAND VALLEY STATE UNIVERSITY, GRAPHIC NATURE, GRAPHIC NATURE, LTD., GRAPHIC
ZONE CO., LTD., GRAPHICS COMPANY, GRAPHTECH, GRAPHYDUCK PRODUCTIONS, GREENPEACE,
GREENWICH PUBLIC SCHOOLS, GRIFFIN MEDIA GROUP, INC, GROLIER ELECTONIC
PUBLISHING, GROUP DUNES, GRYBAUSKAS PRODUCTIONS, GTV INCORPORATED, GUARDIAN
FIBERGLASS, GUSMER, H-GUN LABS, H.V.C SKIRBALL CULTURAL CENTER, H2O
PRODUCCIONES, H30, H30 HAWAIIAN HEAVYWATER INC., HAAFRES/SCVP, HAICHIN INDUSTRY
COLLEGE, HAMMER MEDIA, HAND-MADE PRODUCTIONS, HARDIE INTERACTIVE, HARPERCOLLINS
PUBLISHERS, HARPERS, HARPO, HARRIS DURRY COHEN, HAYASHI, HEADS CO., LTD., HEALTH
CARE CONCEPS, HEALTH FOR LIFE, HEARST NEW MEDIA, HEBE MEDIEN GMBH, HEINLE &
HEINLE, HEMISHPERES UNITED, HENDERSON GRIME ASSOCIATES, HENLEY PRODUCTIONS,
HENRY LESS PRODUCTIONS INC., HENRY RUSSELL BRUCE ADV, HERITAGE PRODUCTIONS,
HERNAN R. PADILLA, HERRMANN FILM, HEWLETT PACKARD, HEWLETT PACKARD COMPANY, HI-
RISE RECYCLING SYSTEMS, INC, HIGASHI MATSUDO MUNICIPAL, HIGUS PROJECTS LTD, HILL
CREATIVE SERVICES, INC., HILL VISION ASSOCIATES, HILLSIDE INVESTMENTS, HISTORE
DIMAGES, HITACHI DATA SYSTEMS, HITACHI SEISAKUJYO INC., HITENDRA VADGAMA, HITHER
HILLS PRODUCTIONS, HITNER HILLS PRODUCTIONS, HITOTSU-BISHI, HMB, HNTB,
HODESCHOOL EMSCHEDE, HOKKAIDO CHUOH COMPUTER, HOKKAIDO UNIVERSITY OF ED.,
HOLLAND & HART, HOLLYWOOD AT HOME PRODUCTIONS, HOME LIFE, INC., HONEYWELL IAC,
HONOR TRADING, LTD, HONOR TRADING, LTD., HOOSIER VIDEO SERVIES INC., HORIZON
AIR, HORIZON FILMS, HORIZON PRODUCTIONS INC, HORIZONS VIDEO & FILM INC.,
HORKARNKA UNIVERSITY, HOT SPLICE PICTURES, HOVANESS DESIGN INC., HOW IT WORKS,
HOWARD UNIVERSITY, HOWARDS, HPM INERNATIONAL, HQ TRAINING COMMAND, HQ, INC.,
HTBLA, HUCKABY EBERT POST, HUMAN CODE, HUNTERDON CENTRAL REGIONAL, HUTCHINSON
HIGH SCHOOL, I'COM MEGA MEDIA, I-MAG CORP, I-NET, INC., IAN RYAN & ASSOCIATES,
ICARI INC, ICARO, IDAHO POWER CO, IDEC CO., LTD., IDETIX, INC., IDEXX
LABORATORIES INC, IDS, IHK BILDUNGSZENTRUM COTTBUS, IKA MEDIA, ILLINOIS DEPT OF
CORRECTIONS, ILLUMINATED MEDIA, ILLUSTRATED MAN PRODUCTIONS, ILTEK LTD., IMAC
TRADING, IMAGE 4D PTE LTD, IMAGE BASE INC., IMAGE BASE, INC., IMAGE CENTER LTD,
IMAGE COUNTS, IMAGE DYNAMICS, IMAGE IMPACT INC., IMAGE MAKER, IMAGE PACIFIC
COMMUNICATIONS, IMAGE QUEST, IMAGEN Y DISENO, IMAGENES Y SYSTEMS, IMAGES FOR
EDUCATION, IMAGES IN FOCUS PRODUCTION LTD, IMAGES PRODUCTIONS, IMAGIC, IMAGICA
PRODUCTIONS, IMAGIN', IMAGINE THAT, IMMEDIATE IMAGE, IMOTION S.A.R.L., IMPACT
MEDIA, IMPACT VIDEO, IN THE MEDIUM INTERNATIONAL, INCESSANT PICTURES, INCOGNITO
ADVERTISING & DESIGN, INDIANA UNIVERSITY, INFINITE SOLUTIONS, INFINITY
COMMUNICATIONS, INFOCOMP / INTERTRADE, INFODIRECT TECHNOLOGIES, INFOEDUCACION
CANARIAS, INGRAF INC., INN 4 TEL FILM, INNERVIEW PRODUCTIONS, INNOVISIE AUDIO,
INNOVISIONS, INOUE KOGYU CO., LTD, INSIDER PRODUCTIONS, INSTANT ONLINE,
INSTITUTE OF TECHNOLOGY, INSTITUTO BRAZILEIRO, INTERCON INC., INTERESTING
TELEVISION, INTERFACES TECHNOLOGY, INTERLOGIC TECHNIQUES, INTERNATIONAL
CHILDREN'S CARE, INTERNEWS, INTERSECT INCORPORATED, INTERVAL RESEARCH,
INTERWEAVE ENTERTAINMENT INC., INVESTMENT FUND FOR FOUNDATION, INVISION,
INVISION PRODUCTIONS, IRIS FILMS, IRONWOOD POST, IRS TRAINING BRANCH, ISLAND
ADWORX ADVERTISING INC., ISTV AUDIOVISUEL, ITD COMMUNICATIONS, INC., ITM INC,
ITODA 2-26 KANAZAWA, ITV, J. AMBA S.A.S., J. GARLAND, J. WALTER THOMPSON, J.
WALTER THOMPSON - DETROIT, J. WALTER THOMPSON CO SA PTY, J.P. MORGAN, JADE
PRODUCTIONS, JAG ENTERPRISES, JAMES COOK UNIVERSITY, JAMES MADISON UNIVERSITY,
JAMIE SHOOP, JAMMIN STUDIOS, JANETZLKO F.P. BERLIN, JAPAN CREATIONS CO., LTD.,
JAPAN POLYOLEFINS CO., LTD., JARED KOTLER, JEAN B. STOCK, JEET VIDEO, JENNIFER
RHODES, JESATI, ET PILOT, JHPIEGO, JIKU EIZOU CO., JILBANDI PTY LTD., JIM
GOODMAN PRODUCTIONS, JIM MCNITT, JN PRODUCTIONS, JOHN BRAIN ADVERTISING, JOHN
DEERE HEALTH CARE, JOHN FRASSANITO & ASSOCIATES, JOHN HOPKINS BAYVIEW MEDICAL,
JOHN MARSHALL, JOHN SINGLETON ADVERTISING, JOHN SLATER ASSOCIATES INC., JOINT
INTELLIGENCE CENTER PAC., JONES & JONES MULTIMEDIA, JOONG N. BAE, JOSE CADAVEILO
(M-161), JOSEPH WERTH, JOSSOS OLHOS, JOY COMPANY, JPA, JPC TRAINING &
CONSULTING, JUDD LILLEJORD, JURUDATA SDN. BHD., KAGAMI PRODUCTIONS, INC., KAMO
HOUSE CO., LTD., KANAZAWA COLLEGE OF ART, KAZE CO., LTD, KBIM-TV, KBL MEDIA,
KBSH-TV, KCFW-TV, KDN VIDEOWORK, KEIL CENTER, KEIPRINT, KEL-LIVE GMBH, KELCO,
KELLOGG COMMUNITY COLLEGE, KEMLEE INC., KENN PERKINS AND ASSOCIATES, KENNY KIPER
VIDEO PRODUCTIONS, KENT SUPERIOR PICTURES, KENW TV, KESSINGER PRODUCTIONS, INC.,
KESSINGER/HUNTER, KESTER AND ASSOCIATES, KESTREL FILM & VIDEO, KEVIN TIERNEY
INC., KEY INDUSTRIES, KEY VIDEO COMMUNICATIONS, KEYSTONE PRODUCTIONS, KEYWEST
VIDEO SERVICES, KGMB TV, KIEL CENTER, KINE GRAFFITI, KINGS ENTERPRISES INC.,
KINGWEST PRODUCTIONS, KIRAKU WEST, KIRLOSKAR MULTIMEDIA LTD., KIT, KIWI FILM, KL
CITY CENTRE, KLACTOVEESEDSTENE ANIMATIONS, KLAMATH COUNTY, KNIGHTLINE
PRODUCTIONS, KNN PRODUCTIONS, KNOTTS BERRY FARM, KNOWLEDGE UNLIMITED, KOBE CABLE
VISION, KOFY-TV - MIKE LINCOLN, KOHL'S DEPARTMENT STORES, KONAMI CO., KOPRO
LTD., KOZK-TV, KRSC-TV/ROGERS STATE COLLEGE, KSNT TV, KSWT-TV, KTKA-TV, KTNV,
KTWU-11, KUROKAWA CAD CENTER, KVOA, KVOA-TV, KWQC-TV CHANNEL 6, KYLE O
PRODUCTIONS, KYTV-TV, LA MAGVINA DIGITAL S.A., LAHEY HITCHCOCK MEDICAL CENTER,
LAISSEZ FAIRE ADVERTISING INC., LAKE COUNTY VIDEO PRODUCTION, LANDMARK
PRODUCTIONS, LANDSCAPE ENGINEERING LAB, LANGE FILM FRANKFURT, LARRY WARNER
PRODUCTIONS, LASALA DESIGN, LASER GRAPHICS, LASER VIDEO PRODUCTIONS, LAUREL HILL
PRESS, LAWRENCE LIVERMORE LABS, LAZERPRO VIDEO PRODUCTIONS, LE GROUPE
MEDIAVISION INC., LE STUDIO DU CENTRE-VILLE, INC, LEA FILMS PRODUCTION, LEADER
PRODUCTIONS, LEARN KEY, INC., LEATHERDALE PRODUCTION, LEGACY VIDO SERVICES,
LEGAL VIDEO, LEGEND PRODUCTIONS, LEO DE HAAS TV PRODUCTIONS, LEVINSON
PRODUCTIONS, LIGHTFALL PRODUCTIONS, LIGHTPOINT DIGITAL MEDIA, LIGHTSCAPE
PRODUCTIONS, LIMELIGHT COMMUNICATIONS, INC, LINCOLN CENTER,INC., LINDA FILM,
LIRU PRODUCTIONS, LITTLE RED OAK PRODUCTIONS CO., LITTLE ROCK DIOCESE, LLT
PRODUCTIONS, LOCKHEED AERONAUTICAL SYSTEMS, LOCKHEED MARTIN, LOCTITE
CORPORATION, LOGICA, LOGO, LONG COMMUNICATIONS, LOUISIANA STATE UNIVERSITY,
LUBOK, LUCAS PRO, LUCKY DOG, LUDICROUS PRODUCTIONS, LUFTHANSA AG, LUMEN 2000, EL
SALVADOR, LUMENA 2000, LUNA MEDIA, LYNCHBURG COLLEGE, LYNX MULTIMEDIA, M SQUARED
PRODUCTIONS, M&B SALES, M-21 FILME LTDA, MAC CARE INC., MAC USER MAGAZINE,
MACARTHUR ANGLICAN SCHOOL, MACHINE, MACMEDIA, MACNET SA, MACQUARIE UNIVERSITY,
MACROMEDIA, MACVIDEO MULTIMEDIA, MADISON METRO SCHOOL DISTRICT, MAE PRODUCTIONS
INC., MAEDA CORPORATION, MAEDA KIKAKU SEKKEI, MAGIA DIGITAL, MAGIC INC., MAGIC
LANTERN STUDIOS, MAGNETIC ARTS, INC., MAGPIE PRODUCTIONS, MAHONEY MEDIA GROUP,
INC., MAINSTREAM MEDIA, MAIRIE DE GENNEVILLIERS, MAJESTIC VIDEO & PHOTO, MALIN
POST PRODUCTION, MANAGEMENT DEVELOPMENT ASSOC., MANDALA COMMUNICATIONS,
MANHATTAN PRODUCTION PARTNERS, MARC WEIR, MARFIELD VIDEO, MARIO ACERA
PRODUCTIONS, MARK FUKUDA, MARK STAFFORD PRODUCTIONS, MARKAY ENTERPRISES, MARKS
COMMUNICATIONS, MARS PRODUCTIONS, INC., MARSHALL MEDIA GROUP, MARTIN/BUSTIAN,
MARUNAKA CG, INC., MASAYUKI FUKUMORI, MASON VIDEO, MASS TRANSIT RAILWAY, MASTER
CHEMICAL, MASTER VISION DI MAURO POCCI, MASTEREDIT/JOHN ALARID, MASTERGROUP SRC,
MASTERPIECE VIDEO PRODUCTIONS, MATSUSHITA ELECTRIC WORKS, LTD, MAUI VIDEO
COMPANY, MCCANN-ERICKSON, MCGAW, INC., MCKENZIE COMEDY GROUP, MCM DIGITAL,
MCMAINS, MCROBERTS SOFTWARE, MDI, MEADOWBLUFF STUDIOS, MECOM GMBH, MED-SCENE,
MEDIA CLUB SRI "SUN", MEDIA CONNEX, MEDIA MAX, MEDIA PEOPLE, MEDIA PRODUCTION
CENTER, MEDIA PRODUCTIONS AND SERVICES, MEDIA SERVICES, INC, MEDIA SYSTEMS,
PPHA, MEDIA TECH, MEDIA TECHNOLOGY SERVICE, MEDIA VISION INC., MEDIACOM,
MEDIAMIND PRODUCTIONS INC., MEDIATRON, MEDIAWORKS MEDIEN CENTER, MEDIEN SYSTEM
SERVICE GMBH, MEDIENBETRIEBS GMBH, MEDIENTECHNIK & CONSULTING, MEGA MEDIA,
MEGASCOPE GRAPHICS PTY LTD., MEGCOMM VIDEO PRODUCTIONS, MEIJER INC., MEMORY
TECHNOLOGIES TEXAS INC, MENNONITE MEDIA PRODUCTIONS, MERCY GENERAL HOSPITAL,
MERCY SHIPS, MERLIN PRODUCTIONS, MERLINO PRODUZIONI, META MEDIA ARTS, META MEDIA
ARTS LLC/MED MEDIA, METAMEDIA, METAMORPH, METATEC CORPORATION, METRO DADE
TRANSIT AGENGY, METRO PRODUCTIONS, METRO-DADE CITY COMMUNICATIONS, METROPOLITAN
MUSEUM OF ART, METROPRODUCCIONES S.A., METTLE COMMUNICATIONS, MFA INCORPORATED,
MGM GRAND HOTEL & CASINO, MHX DESIGN, INC., MIAMI TELEPRODUCTION GROUP, MIAMI
VALLEY HOSPITAL, MIAMI-DADE COMMUNITY COLLEGE, MICHAEL BOVEE PRODUCTIONS,
MICHIGAN DEPARTMENT, MICHIGAN UNITED CONSERVATION, MICRO COSMOS, MICRO
INFORMATION CONSELL, MICRO LOGIC, MICRO VIDEO INC., MICROCOMPUTER MANAGER,
MICRONET TECHNOLOGY, MICROPOLIS, MID PROGRAM, UNIV OF THE ARTS, MIDDLEBURY
COLLEGE, MIDLAND TAFE, MIDLOTHIAN COUNCIL, MILANO FILM, FOTO & VIDEO, MILANO
FOTO, FILM & VIDEO, MILLBROOK STUDIOS, MILLE BRAINS CO., LTD., MILLER MAURO
GROUP, INC., MILLIGAN MEDIA, MILLWARD BROWN, INC., MINDESIGN LIMITED, MINDS EYE
NEW MEDIA, MINISTERE DE L'AGRICULTURE, MINISTERO DELLA DEFESA, MINNEGASCO,
MISSION TRAILS REGIONAL PARK, MISSION VIDEO SUPPORT, INC., MISSOURI BONE AND
JOINT CENTER, MITSUBISHI MOTORS CORPORATION, MITSUIKI ISHI ARCHITECT &,
MITZUBISHI ESTATE CO., LTD., MM VIDEO, MODERN WORLD MEDIA PRODUCTIONS, MODULOS,
MOMENTUM, MOMENTUM PRODUCTIONS, MONADNOCK MEDIA INC., MONSOON FILMS, MONTAGE,
INC., MORNING STAR MULTIMEDIA, MORRIS COMMUNICATIONS CORP, MOSES MEDIA, MOTION
CITY FILMS, MOTOROLA, MOUNT IDA COLLEGE, MOUNTAIN MULTIMEDIA, MOVIE TEAM AG,
MOVING IMAGES, MOXIE PRODUCTIONS, MPI FILM & VIDEO, MR. PETER BOHM, MRB
PRODUCTIONS, MSC COMMUNICATIONS, MSH MANAGEMENT STRATEGIEN, MTF PRODUCTIONS, MTI
GRAPHICS, MTV BRAZIL, MTV HANNOVER, MTV NETWORK, MTV NETWORKS, MULTI IMAGE
GROUP, MULTIMEDIA CORP., MULTIMEDIA DESIGN CORP, MULTIMEDIA EMPRESARIAL,
MULTIMEDIA RESOURCES INC., MULIVISION, MUNICH PRODUCTION PARTNERS, MUSEUM OF
SYDNEY, MUSKEGON COMMUNITY COLLEGE, MYRIAD PRODUCTIONS, N.A.M.E., NAGASAKI
MORINOKI, NASH HEALTH CAKE SYSTEMS, NASHUA HIGH SCHOOL, NATIONAL COMPUTER
SYSTEMS, NATIONAL EDUCATIONAL VIDEO, NAVAL AIR WARFARE CENTER, NAVAL SURFACE
WARFARE, NAVAL TRAINING CENTER(CODE TA), NAZCA DESIGN OFFICE, NC JUSTICE
ACADEMY, NEC CORPORATION, NEC CREATIVE, INC., NEC CREATIVE, LTD, NEFTOCHIN-TV
STUDIO, NEP, NETTWERK PRODUCTIONS, NETWORK VIDEO, NEW ENGLAND MEDIA, NEW HORIZON
PRODUCTIONS, NEW RIVER MEDIA, NEW VISION PRODUCTIONS, NEW YORK STATE-DMV, NEW
YORK UNIVERSITY (HEOP), NEW ZEALAND FUNDS MANAGEMENT, NFL PROPERTIES, NICEGATE
INTERNATIONAL, NICHOLE MOON ENTERTAINMENT INC, NIIGATA ENGINEERING CO., LTD.,
NIKKEN SEKKEI LTD., NIPPON ASOBI PLANS INC., NIPPON TELEGRAPH AND, NISHIHARA
ENVIRONMENTAL, NISHIMATSU CONSTRUCTION, NITE LITE PRODUCTIONS, NON-LINEAR POST,
NOODLE HEAD NETWORK, NORFOLK MUSIC PRODUCTIONS, INC, NORMEO MULTI-MEDIA, NORTH
COAST MEDICAL, NORTH HAMPTON COMM. COLLEGE, NORTH TYNESIDE COLLEGE, NORTHAMPTON
COMMUNITY COLLEGE, NORTHCOAST PICTURES INC., NORTHEAST METRO TECH COLLEGE,
NORTHERN LIGHTS, NORTHERN TELECOM, NORTHWEST OHIO ROUND TABLE, NORTHWESTERN
UNIVERSITY, NOVA S.E. UNIVERISTY, NOVA SCOTIA POWER, NOVA VIDEO PRODUCTIONS,
NOVOCOM, NTTV, NUESTRA DIRECCION EN SAN DIEGO, NUMEDIA, NUTAAQ, NUTAAQ MEDIA
INC., NUTOPIA, NYU CTR FOR DIGITAL MULTIMEDIA, O.N.E. ENTERTAINMENT, O.N.E.
PRODUCTIONS, OBJECTIF LUNE, OCEAN DIGITAL POST PROD. LTD., OCEAN DIGITAL POST
PRODUCTION, OCEAN VIDEO, OFF-THE-WALL PRODUCTIONS INC., OFFICE OF
COMMUNICATIONS, OGILVIE & MATHER, OMEGA BAY HOLDINGS, OMNI INNOVATIONS INC.,
OMNISCIENT PRODUCTIONS, OMNIX INTERNATIONAL, ON CALL COMMUNICATIONS, ON LINE
VIDEO DESIGN, ON SITE PRODUCTIONS, ON-AIR PRODUKTION, ONE SQUARE COMMUNICATIONS,
ONLINE SUBURBAN VIDEO, ONSITE PRODUCTIONS, OPCION DIGITAL, OPTEL AUDIO VISUAL,
OPTIONS INC, OPTUS COMMUNICATIONS PTY LTD, ORANGE SA, ORCHID INTERNATIONAL,
OREGON GRADUATE INSTITUTE, OREGON STATE UNIVERSITY, ORIGIN SYSTEMS, OSAKA KYOKU
UNIVERSITY, OSAKA UNIVERSITY, OSCAR LAGOS, OTSUKA, INC., OZ FILMS, P.R.C. TRUST,
PACE PRODUCTIONS, PACIFIC ACCESS, PACIFIC MEDIA CENTER, PAGANO SCHENCK & KAY,
PAGEWORKS, PAL PRODUCCIONES, PALITRA, PALM TOP LINK, PAN AMERICAN HEALTH
ORGANIZATION, PAN OPTIC, PAN VIDEO PRODUCTIONS, PANO STUDIO CO.,LTD., PANORAMICA
35, PAPAI VAROSI TELEVIZIO, PAPER PLANE PUBLISHING LTD., PARADESA MEDIA, PARAGON
CABLE, PARASHOOT PRODUCTIONS, PARKER & COMPANY, PARKER HANNIFIN, PARLCER BERTEA
AEROSPACE, PASSEY ADVERTISING, PAUL VAN NESS PRODUCTIONS, PAULO FERNANDES DE
CARVALHO, PAY TV MOVIES AUSTRALIA, PCOM CREATIVE SERVICES, PEAK IMAGE
COMMUNICATIONS, PECO ENERGY, PECO ENERGY COMPANY, PENN ST. CENTER/ACADEMIC
COMP., PENNSYLVANIA COLLEGE OF TECH, PENTA MEDIACONCEPT, PERCEPCIONES,
PERCEPTIONS, PEREGRINE VIDEO PRODUCTIONS, PERFECT WORLD, PERFORMANCE
PRODUCTIONS, PERKINS PRODUCTIONS INC., PERO VIDEO, PERSPECTIVE, PETER BOEHM,
PETER GOODMAN, PETER HITCHCOCK PRODUCTIONS, PEUGEOT DCAV, PHATOM MEDIA, PHOENIX
PRESENTATIONS, PHOTO AV, PHOTO LIVE CO., LTD., PHOTO PUBLICITY INC., PHOTOS BY
CODY BELL, PHOTOVIDEO PRODUCTIONS, PIETROBON FILM & TELEVISION, PIK GMBH, PILOT
VIDEO & ROBERT SHAFER, PIMA COMMUNITY COLLEGE, PIPELINE DIGITAL, PIXEL LTD,
PIXEL MAGIC, PIXEL POINT PTY. LTD, PIXEL STUDIO, PIXEL WORKSHOP INC., PLYMOUTH
UNIVERSITY, POC MANAGEMENT, POINTEN PRODUCTIONS, POINTON PRODUCTIONS LTD,
POLARIS CORPORATION, POLILOGNE CONSTRUCTION CO, POLILOGUE CONSTRUCTION, POLY
HEALTH MEDIA, POLYMEDIA, POLYMER DYNAMICS, PORT ADELAIDE TAFE, POSITIVE IMAGE,
POSITIVE PICTURES, POST 22, POST ALTERNATIVE, POST HOUSE PRODUCTION, POST MODERN
PRODUCTION, POST PLUS MEDIA SERVICES, INC., POST-OP VIDEO, POWER IMAGES, PRAXIS,
PRAXIS FILMS, PRAXIS, INC., PRECISION VIDEO, PRELUDE PRESS, PREM RAWAT, PRESS
HERE!, PRESS OFFICE,SAN JUAN CTY HALL, PRESTON PRODUCTIONS, PRESTON-TURRI
PRODUCTION, PRICE WESTERN, PRIMA VISION, PRIME PRODUCTIONS/MEGAVISIONS, PRINTMAN
CREATION WORKSHOP, PRISM PRODUCTION PTY LTD, PRISMA, PRISMA VISUAL TECHNOLOGIES,
PRISMA-LIGHT PRODUCTIONS, PRO MOION PICTURES, PRO TV, PROALPHA, S.A. DE C.V.,
PRODUCTION, PRODUCTION DEVELOPMENT MULTI, PRODUCTION GROUP, PRODUCTIONS MAG2
INC., PRODUCTIVITY TRAINING CORP., PROF. MEDIEN VERTRIEBS GMBH, PROFESSIONAL
PRESENTATIONS, PROFESSIONELLE MEDIEN BMBH, PROFILE (TADEI), PROJECTIONS, INC.,
PROMEDIA LTD, PROMEDIA, INC., PROMOVIDEO SERVICE, PROOF POSITIVE FARROWLYNE
ASOC, PROPABILITY, PROPAGATIDA, PROTELE-NY, PROVIDEO, PSA "LA GARENNE", PSI
INC., PT. TRIPAR MULTIVISION PLUS, PTP S.R.L., PUBLIC INFO. OFFICE, PUBLIC
PRODUCTION GROUP, INC., PUMA VIDEO, PURDUE UNIVERSITY, PXL WORKS, PYNX
PRODUCTIONS, PYRAMID PHOTOGRAPHICS, Q FILMS, QUANTUMMEDIA, QUARANTA MULTIMEDIA,
QUESTED, QUILEZ & ASSOC, R & D EDIT DESIGN, R & D EDIT DESIGN INC., R & R WERBE
AG, R. BENTO DE ANDRADE 660, R.A. PEARSON COMPANY, R.A.M.M. FILMS & VIDEO, INC.,
R.S. FILM CO., LTD., R.U. PRODUCTIONS, RAC PRODUCTIONS, RADICAL MEDIA, RADIO
TELETUS EIREAINN, RAFAL GAWESKI, RAFORM INTERNATIONAL TRADING, RAINBOW FOIL
IMAGES, RALPH BUDD VIDEO PRODUCTION, RALPH MERCADO PRESENTS, RALSTON-PURINA,
RAMAPO COLLEGE OF NEW JERSEY, RAMPION VISUAL PRODUCTIONS, RAPTOR LTD, RAPTOR
LTD., RAWLINGS PRODUCTIONS, RAYBURN FILM PRODUCTIONS, INC., RAYMOND JAMES &
ASSOC., RCN OF NEW ENGLAND, RDP PRODUCTIONS, INC, RE/MIX AFFILIATES, RED BOX USA
INC., RED CARPET, RED HOT MEDIA, RED LETTER COMMUNICATIONS, RED OCHRE
PRODUCTIONS LIMITED, REDIRECTIONS, INC., REDMOND HIGH SCHOOL, REDMOND SCHOOL
DISTRICT, REEL IDEAS 1993, REEL PRODUCTIONS, REFERENCIA VIDEO, REFLEX CREATIVE
SERVICES LTD, REIL UND GOTTSCHALK, REMSZEITUNG, REPUBLIC FILMS, RESORT SPORTS
NETWORK, RESPONSABLE AUDIOVISUAL, REUTERS HEALTH INFORMATION SRV, REVISIONS, RFX
PTY LTD, RGGU, RHB INDUSTRIES, RIA CORP, RICCELLI CREATIVE, RICE UNIVERSITY,
RICHARD BROWN PRODUCTIONS, RICHARD FRITZ & PARTNER GMBH, RICHARD MILLS EDITING
INC, RICHLAND GRAPHICS SYSTEMS, RICK FRY, RICK SIMON & CO., RIDER UNIVERSITY,
RING WORLD CO., LTD., RITE DES SCIENCES ET DE, RITTEN HOUSE COMMUNICATIONS,
RIVER RUN MOVING PI
<PAGE>
Data Translation, Inc. and Subsidiaries
22
Selected Financial Data and Quarterly Stock Prices...........................23
Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................................24
Report of Independent Public Accountants.....................................27
Consolidated Balance Sheets as of November 30, 1995 and 1994.................28
Consolidated Statements of Operations for the Fiscal Years Ended
November 30, 1995, 1994 and 1993.............................................29
Consolidated Statement of Stockholders' Equity for the
Fiscal Years Ended November 30, 1995, 1994 and 1993..........................30
Consolidated Statements of Cash Flows for the Fiscal Years Ended
November 30, 1995, 1994 and 1993.............................................31
Notes to Consolidated Financial Statements...................................32
<PAGE>
Data Translation, Inc. and Subsidiaries
SELECTED FINANCIAL DATA
23
<TABLE>
<CAPTION>
Fiscal Years Ended November 30,
- -----------------------------------------------------------------------------------------------------------
(in thousands, except per 1995 1994 1993 1992 1991
share data and employees)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales:
Digital media............................... $30,278 $12,415 $ 1,118 $ --- $ ---
Data acquisition and imaging................ 21,826 22,440 23,733 24,775 25,647
Networking distribution..................... 20,348 15,382 10,850 8,787 8,206
- -----------------------------------------------------------------------------------------------------------
Total net sales............................. 72,452 50,237 35,701 33,562 33,853
Net income (loss)........................... 4,771 320 (4,298) (2,458) (1,170)
Net income (loss) per share...................... 0.71 0.07 (1.01) (0.59) (0.26)
Gross margin..................................... 47.9% 46.6% 48.1% 51.5% 51.5%
Research and development
expenses as a percent of total net sales........ 10.5% 13.6% 17.9% 16.6% 13.9%
Selling, marketing, general, and administrative
expenses as a percent of total net sales........ 31.6% 32.2% 42.0% 44.5% 44.0%
Operating income (loss)
as a percent of total net sales sales........... 5.8% 0.8% (11.8%) (9.6%) (6.4%)
Net income (loss) as a
percent of total net sales...................... 6.6% 0.6% (12.0%) (7.3%) (3.5%)
Total assets..................................... $60,984 $19,199 $16,161 $18,778 $21,192
Employees at year-end............................ 335 259 219 237 230
- -------------------------------------------------------------------------------------------------------------
</TABLE>
QUARTERLY STOCK PRICES
<TABLE>
<CAPTION>
Fiscal Year Ended November 30,
- --------------------------------------------------------------------------------
1994 High Low
- --------------------------------------------------------------------------------
<S> <C> <C>
First Quarter....................... 5 1/8 3
Second Quarter...................... 7 1/2 4 5/8
Third Quarter....................... 8 1/4 6 3/8
Fourth Quarter...................... 7 7/8 6 5/8
1995
- --------------------------------------------------------------------------------
First Quarter....................... 11 1/4 7 1/8
Second Quarter...................... 16 1/4 10 3/4
Third Quarter....................... 17 5/8 13 1/16
Fourth Quarter...................... 19 3/4 16
1996
- --------------------------------------------------------------------------------
First Quarter through January 31, 1996 20 12 1/2
- -------------------------------------------------------------------------------
</TABLE>
The common stock of the Company is traded in the over-the-counter market and is
reported on the Nasdaq National Market System under the symbol: DATX. The
preceding table sets forth, for the periods indicated, the last reported high
and low sales prices per share of the Company's common stock as reported on the
Nasdaq National Market. The Company has never paid a cash dividend on its common
stock, and the Board of Directors does not anticipate paying cash dividends in
the foreseeable future. As of January 31, 1996, there were approximately 251
stockholders of record of the Company's common stock. The last sale price per
share of the Company's common stock as reported on the Nasdaq National Market on
January 31, 1996 was $13.25. All share and per share data have been
retroactively restated to reflect the Company's two-for-one stock split effected
in the form of a stock dividend, effective on July 31, 1995.
<PAGE>
Data Translation, Inc. and Subsidiaries
24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company was incorporated in December 1973. The Company currently sells
products through the following three business groups: digital media, data
acquisition and imaging, and networking distribution.
The Company historically experienced growth in total net sales and net
income with total net sales increasing to $41,984,000 in fiscal 1989. Total net
sales declined in fiscal 1990 and remained relatively flat from fiscal 1990
through fiscal 1993. Losses from fiscal 1990 through fiscal 1993 were due to a
number of factors, including the Company's increased spending on product
development, a decline in government spending on research and development,
increased competition in the data acquisition and imaging market, a cyclical
downturn in capital spending by the Company's traditional customers, overall
price reductions for computer products and a slowdown in the growth of
scientific product sales.
From fiscal 1991 to fiscal 1995, research and development expenses
increased from $4,694,000 to $7,612,000, principally as a result of the
development of Media 100.(R) At the same time, the Company continued to invest
in its data acquisition and imaging business, which led to the introduction of
DT-VEE(TM) software and the Fidelity(TM) and Fulcrum(TM) series of products.
During fiscal 1994 and fiscal 1995, total net sales have continued to
increase due to the growth in unit sales of the Company's digital media product,
Media 100, as well as growth in the networking distribution business of the
Company's United Kingdom subsidiary, Data Translation Networking Limited.
Although sales from the networking distribution business have increased, these
sales carry a significantly lower gross margin than the other product lines
offered by the Company, thus adversely affecting the Company's overall gross
margin. In fiscal 1995, increased sales of Media 100, which carry a higher
margin, offset the adverse affect of increased networking sales.
Markets for the Company's products are characterized by rapidly changing
technology, evolving industry standards and frequent new product introductions.
The Company's future success will depend in part upon its ability to enhance its
existing products and to introduce new products and features to meet changing
customer requirements and emerging industry standards. The Company expects that
sales of Media 100 will account for a significant and growing proportion of the
Company's overall sales for the foreseeable future. The Company's ability to
increase sales of Media 100 will depend, in part, on its ability to expand its
customer base, which includes the rate at which the digital media market gains
new users drawn to video, and no assurance can be given that increased sales
will result in profitability. Any competitive, technological or other factor
adversely affecting sales of Media 100 would have a material adverse effect on
the Company.
As the Company has historically operated with a small backlog, sales for
any quarter are dependent on orders booked and shipped during that quarter.
Operating expenses which are relatively fixed and based principally on future
sales expectations could adversely affect operating results if sales do not meet
the Company's expectations in any quarter.
RESULTS OF OPERATIONS
The following table shows certain consolidated statement of operations
data as a percentage of total net sales.
<TABLE>
<CAPTION>
Fiscal Years Ending November 30,
- --------------------------------------------------------------------------------
1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales:
Digital media......................... 41.8% 24.7% 3.1%
Data acquisition and imaging.......... 30.1 44.7 66.5
Networking distribution............... 28.1 30.6 30.4
- --------------------------------------------------------------------------------
Total net sales............................ 100.0 100.0 100.0
Gross margin............................... 47.9 46.6 48.1
Research and development expenses.......... 10.5 13.6 17.9
Selling and marketing expenses............. 25.5 25.4 32.0
General and administrative expenses........ 6.1 6.8 10.0
- --------------------------------------------------------------------------------
Income (loss) from operations.............. 5.8 0.8 (11.8)
Interest income (expense) and other, net... 0.9 0.2 (0.3)
Provision (benefit) for income taxes....... 0.1 0.4 (0.1)
- --------------------------------------------------------------------------------
Net income (loss).......................... 6.6% 0.6% (12.0)%
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Data Translation, Inc. and Subsidiaries
25
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COMPARISON OF FISCAL 1995 TO 1994
Total net sales for the fiscal year ended November 30, 1995 were
$72,452,000, an increase of $22,215,000, or 44.2%, over the same period a year
ago. The increase was primarily a result of higher unit sales from Media 100
which increased 143.9% to $30,278,000 and accounted for 41.8% of the Company's
total net sales, compared to $12,415,000, or 24.7%, in the same period a year
ago. During fiscal 1995, networking distribution sales increased $4,966,000, or
32.3%, from the comparable period in fiscal 1994 due to increased demand in the
market for networking products. Data acquisition and imaging net sales were down
slightly despite an increase in unit sales from the same period in fiscal 1994
and represented 30.1% of the Company's total net sales, compared to 44.7% in
fiscal 1994. These lower net sales represent a shift in the data acquisition and
imaging market toward new, lower priced hardware and software solutions.
Gross margin for fiscal 1995 was 47.9%, compared to 46.6% in the comparable
period of a year ago. This increase reflects higher margins on the Company's
manufactured products due to higher utilization of the Company's manufacturing
capacity as well as a favorable product mix. In addition, networking
distribution sales constituted a lesser percentage of the Company's total net
sales, thereby increasing gross margins since the networking products carry a
significantly lower gross margin than the Company's manufactured products.
Income from operations for fiscal 1995 was $4,199,000, compared to $405,000
in fiscal 1994. The increase in operating income reflects the higher net sales
and gross margins, partially offset by higher operating expenses. However,
selling and marketing expenses and general and administrative expenses as a
percentage of total net sales were relatively flat for the two fiscal years.
Research and development expenses increased $791,000 from the prior year,
reflecting the continued investment in product development. However, as a
percentage of total net sales, research and development expenses represented
10.5%, compared to 13.6% for the prior year, reflecting the impact of increased
networking distribution sales of products manufactured by third parties and to a
lesser extent, the growth in Media 100 sales in fiscal 1995. Although operating
expenses were higher than in the prior year, as a percent of total net sales,
operating expenses decreased from 45.8% to 42.1%.
Interest income was $772,000 for fiscal 1995 compared to $152,000 in fiscal
1994, reflecting an increase in cash balances including cash equivalents and
marketable securities on hand during 1995.
The tax provision of $87,000 for fiscal 1995 compares to a $199,000 tax
provision in fiscal 1994. The tax provision in 1995 is the result of providing
for alternative minimum tax on the Company's domestic operations and to a lesser
extent, profitable operations in the United Kingdom, whereas the fiscal 1994 tax
provision was solely a result of profitable operations in the United Kingdom.
Substantially all of the potential tax provision resulting from profitable
operations in the Company's domestic operations has been offset by net operating
loss carryforwards in fiscal 1995. The Company anticipates higher effective tax
rates in the future due to decreases in net operating loss carryforwards
available to be used against future taxable income. For a discussion of the net
operating loss carryforwards, see Note 7 to Consolidated Financial Statements.
Net income for fiscal 1995 was $4,771,000 or $0.71 per share, compared to
$320,000 or $0.07 per share for the prior fiscal year.
COMPARISON OF FISCAL 1994 TO 1993
Total net sales for the fiscal year ended November 30, 1994 were
$50,237,000, which was an increase of 40.7%, or $14,536,000, over the same
period of a year ago. The increase was primarily a result of shipments of Media
100 which began in the third quarter of fiscal 1993, as well as higher net sales
from the networking distribution business in the United Kingdom. Media 100
accounted for 24.7% of the Company's total net sales in fiscal 1994. During
fiscal 1994, networking distribution sales remained at approximately 30.6% of
total net sales. The increase in networking distribution sales of 41.8% over the
same period of a year ago represents improved performance of Data Translation
Networking Limited since a new management team was installed in November 1991,
as well as the growth in the enterprise-wide networking market in the United
Kingdom. Net sales from the Company's data acquisition and imaging products
declined $1,293,000, or 5.4%, compared to fiscal 1993, primarily due to changes
in the product mix, including the introduction of new, lower priced hardware
products.
While total net sales increased 40.7% in fiscal 1994, the gross margin
decreased to 46.6% of total net sales, compared to 48.1% of total net sales in
fiscal 1993. The lower gross margin was primarily a result of lower gross
margins on networking distribution sales.
The income from operations for fiscal 1994 was $405,000, compared to an
operating loss of $4,209,000 for the prior fiscal year. Income from operations
primarily reflects higher net sales from Media 100 and networking distribution,
partially offset by lower gross margins in networking distribution and an
increase in operating expenses of $1,636,000. Total selling and marketing
expenses have increased by $1,343,000, or 11.7%, from the comparable period,
largely due to the additional costs associated with the sales and promotion of
Media 100. Research and development expenses have increased by $429,000 from a
year ago, demonstrating the Company's continued investment in product
development. The increased expenses were partially offset by a decrease in
general and administrative expenses of approximately $136,000.
<PAGE>
Data Translation, Inc. and Subsidiaries
26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The tax provision of $199,000 for fiscal 1994 compares to a tax benefit of
$24,000 for fiscal 1993. The tax provision for fiscal 1994 reflects taxable
operations of the Company's United Kingdom subsidiary. Any future potential tax
benefits due to operating losses by the Company's domestic operations have not
been recognized and any potential deferred tax asset has been fully reserved as
disclosed in the Notes to the Consolidated Financial Statements.
In fiscal 1994, the Company returned to profitability with a third quarter
profit of $236,000 and a fourth quarter profit of $380,000. The net income for
fiscal 1994 was $320,000, compared to a net loss of $4,298,000 for the prior
fiscal year. The return to profitability reflects the increase in total net
sales, partially offset by lower gross margins and higher operating expenses. As
a result, the net income per share was $0.07 for fiscal 1994, compared to a
$1.01 net loss per share in fiscal 1993.
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 1995, the Company's cash and cash equivalents balance
increased by $27,010,000. The increase was primarily a result of two public
stock offerings generating net proceeds of approximately $30,109,000, offset by
the net of cash provided by operations, less investing activities including
purchases of capital equipment. As of November 30, 1995, net proceeds from the
stock offerings were invested in money market funds and U.S. Treasury bills with
maturities ranging from three months to one year. Cash provided by operating
activities was $2,489,000. This was the result of net income of $4,771,000,
partially offset by higher working capital requirements for the Company's
growing operations.
As of November 30, 1995, the Company's United Kingdom subsidiaries, Data
Translation Networking Limited and Data Translation Ltd. had bank overdraft
facilities of approximately $1,950,000 and $150,000, respectively. On November
30, 1995, approximately $657,000 and $39,000 were outstanding on these
facilities, respectively. Each facility is secured by the subsidiary's
receivables and guaranteed by the Company.
The Company believes that the net proceeds from its stock offerings,
together with existing cash and cash generated from future operations, will be
sufficient to meet the Company's cash requirements for the foreseeable future.
<PAGE>
Data Translation, Inc. and Subsidiaries
27
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Data Translation, Inc.:
We have audited the accompanying consolidated balance sheets of Data
Translation, Inc. (a Massachusetts corporation) and subsidiaries as of November
30, 1995 and 1994, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended November 30, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Data Translation, Inc. and
subsidiaries as of November 30, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
November 30, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 4, 1996
<PAGE>
Data Translation, Inc. and Subsidiaries
28
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
November 30, November 30,
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents....................... $28,602,000 $ 1,592,000
Marketable securities........................... 6,559,000 2,487,000
Accounts receivable, net of reserves
of $505,000 in 1995 and $ 435,000
in 1994...................................... 15,057,000 9,045,000
Inventories..................................... 5,532,000 2,759,000
Prepaid expenses................................ 1,060,000 647,000
Prepaid income taxes............................ 60,000 61,000
- --------------------------------------------------------------------------------
Total current assets.................... 56,870,000 16,591,000
Equipment and leasehold improvements, net.......... 3,897,000 2,367,000
Other assets - net................................. 217,000 241,000
- --------------------------------------------------------------------------------
Total Assets....................................... $60,984,000 $19,199,000
================================================================================
CURRENT LIABILITIES:
Accounts payable................................ $ 5,133,000 $ 3,745,000
Due to related party............................ -- 546,000
Borrowings from bank............................ 696,000 --
Accrued expenses................................ 7,233,000 3,697,000
Deferred revenue................................ 1,010,000 225,000
- --------------------------------------------------------------------------------
Total current liabilities............... 14,072,000 8,213,000
Commitments and Contingencies (Note 6)
Deferred income taxes.............................. 3,000 2,000
Stockholders' Equity:
Preferred Stock, $.01 par value,
Authorized - 1,000,000 shares, none issued... -- --
Common Stock, $.01 par value, Authorized -
10,000,000 shares, issued - 8,491,208 in
1995 and 6,765,472 in 1994................... 85,000 68,000
Capital in excess of par value.................. 37,062,000 8,739,000
Retained earnings............................... 11,665,000 6,894,000
Cumulative translation adjustment............... (5,000) 64,000
Treasury stock, at cost, 869,096 shares in
1995 and 2,254,496 in 1994................... (1,843,000) (4,781,000)
Unrealized holding loss on available
for sale securities.......................... (55,000) --
- --------------------------------------------------------------------------------
Total stockholders' equity...................... 46,909,000 10,984,000
- --------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity......... $60,984,000 $19,199,000
================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Data Translation, Inc. and Subsidiaries
29
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Fiscal Years Ended November 30,
- ----------------------------------------------------------------------------------
1995 1994 1993
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales:
Digital media........................ $30,278,000 $12,415,000 $ 1,118,000
Data acquisition and imaging......... 21,826,000 22,440,000 23,733,000
Networking distribution.............. 20,348,000 15,382,000 10,850,000
- ----------------------------------------------------------------------------------
Total net sales......................... 72,452,000 50,237,000 35,701,000
Cost of sales........................... 37,712,000 26,819,000 18,533,000
- ----------------------------------------------------------------------------------
Gross profit......................... 34,740,000 23,418,000 17,168,000
Research and development expenses....... 7,612,000 6,821,000 6,392,000
Selling and marketing expenses.......... 18,465,000 12,781,000 11,438,000
General and administrative expenses..... 4,464,000 3,411,000 3,547,000
- ----------------------------------------------------------------------------------
Income (loss) from operations........ 4,199,000 405,000 (4,209,000)
Interest income......................... 772,000 152,000 244,000
Interest expense........................ (35,000) (10,000) (37,000)
Other expense........................... (78,000) (28,000) (320,000)
- ----------------------------------------------------------------------------------
Income (loss) before tax provision
(benefit).......................... 4,858,000 519,000 (4,322,000)
- ----------------------------------------------------------------------------------
Tax provision (benefit)................. 87,000 199,000 (24,000)
- ----------------------------------------------------------------------------------
Net income (loss).................... $ 4,771,000 $ 320,000 $(4,298,000)
==================================================================================
Net income (loss) per common share...... $0.71 $0.07 $(1.01)
==================================================================================
Weighted average number of common and
common equivalent shares outstanding... 6,701,000 4,764,000 4,256,000
==================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Data Translation, Inc. and Subsidiaries
30
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock Unrealized
$.01 Par Value Holding
-------------- Loss on
Capital in Cumulative Available
Issued Excess of Retained Translation Treasury for Sale
Shares Amount Par Value Earnings Adjustment Stock Securities
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, November 30, 1992.......... 6,439,688 $65,000 $ 7,988,000 $10,872,000 $ (76,000) $(4,781,000) $ --
Proceeds from stock plans........... 123,762 1,000 301,000 -- -- -- --
Translation adjustment.............. -- -- -- -- (26,000) -- --
Net loss............................ -- -- -- (4,298,000) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, November 30, 1993.......... 6,563,450 $66,000 $ 8,289,000 $ 6,574,000 $(102,000) $(4,781,000) $ --
Proceeds from stock plans........... 248,986 2,000 761,000 -- -- -- --
Effect of stock-for-stock exercise.. (46,964) -- (311,000) -- -- -- --
Translation adjustment.............. -- -- -- -- 166,000 -- --
Net income.......................... -- -- -- 320,000 -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, November 30, 1994.......... 6,765,472 $68,000 $ 8,739,000 $ 6,894,000 $ 64,000 $(4,781,000) $ --
Proceeds from stock plans........... 325,736 3,000 1,166,000 -- -- -- --
Public sale of treasury stock, net
of issuance costs of $375,000.... -- -- 5,864,000 -- -- 2,938,000 --
Public sale of common stock, net
of issuance costs of $400,000.... 1,400,000 14,000 21,293,000 -- -- -- --
Translation adjustment.............. -- -- -- -- (69,000) -- --
Net income.......................... -- -- -- 4,771,000 -- -- --
Unrealized holding loss on
available for sale securities.... -- -- -- -- -- -- (55,000)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, November 30, 1995.......... 8,491,208 $85,000 $37,062,000 $11,665,000 $ (5,000) $(1,843,000) $(55,000)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Data Translation, Inc. and Subsidiaries
31
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Fiscal Years Ended November 30,
- ------------------------------------------------------------------------------------------------------
1995 1994 1993
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................................... $ 4,771,000 $ 320,000 $(4,298,000)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES -
Depreciation and amortization........................ 1,714,000 1,693,000 1,735,000
Deferred income taxes................................ 1,000 -- (9,000)
Loss on sale of equipment............................ 2,000 4,000 8,000
(Gain) loss on sale of marketable securities......... 35,000 3,000 (20,000)
Changes in assets and liabilities -
Accounts receivable.............................. (6,012,000) (3,341,000) (156,000)
Income tax refund receivable..................... -- -- 546,000
Inventories...................................... (2,773,000) (115,000) (530,000)
Prepaid expenses................................. (413,000) (69,000) 121,000
Prepaid income taxes............................. 1,000 182,000 (25,000)
Accounts payable................................. 1,388,000 1,059,000 802,000
Due to related party............................. (546,000) -- 546,000
Accrued expenses................................. 3,536,000 816,000 466,000
Deferred revenue................................. 785,000 225,000 --
- ------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating
activities.......................................... $ 2,489,000 $ 777,000 $ (814,000)
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements.... (3,081,000) (1,215,000) (1,246,000)
Proceeds from sale of equipment...................... 5,000 7,000 53,000
Increase in other assets............................. (136,000) (199,000) (133,000)
Purchases of marketable securities................... (13,270,000) (943,000) (4,021,000)
Proceeds from sales of marketable securities......... 9,108,000 1,042,000 5,569,000
- ------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities.. $ (7,374,000) $(1,308,000) $ 222,000
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from bank................................. 696,000 -- (400,000)
Proceeds from stock plans............................ 1,169,000 452,000 301,000
Net proceeds from public sale of treasury stock...... 8,802,000 -- --
Net proceeds from public sale of common stock........ 21,307,000 -- --
- ------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities.. $ 31,974,000 $ 452,000 $ (99,000)
- ------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH................. (79,000) 143,000 2,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.... $ 27,010,000 $ 64,000 $ (689,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.......... 1,592,000 1,528,000 2,217,000
- ------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD................ $ 28,602,000 $ 1,592,000 $ 1,528,000
======================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash received (paid) for income taxes................ $ (46,000) $ (11,000) $ 487,000
======================================================================================================
Cash paid for interest............................... $ 35,000 $ 10,000 $ 37,000
======================================================================================================
OTHER TRANSACTIONS NOT PROVIDING (USING) CASH:
Decrease in value of marketable securities........... $ 55,000 $ -- $ --
Increase in unrealized holding loss on
available for sale securities....................... $ (55,000) $ -- $ --
- ------------------------------------------------------------------------------------------------------
$ -- $ -- $ --
======================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Data Translation, Inc. and Subsidiaries
32
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Data Translation, Inc. (the "Company") was incorporated in 1973 as a
Massachusetts corporation. The Company designs, develops and manufactures high
performance digital media, data acquisition and imaging products for use with
personal computers. The Company's principal products are digital signal
processing boards and software which receive analog signals, convert them to
digital form and process the digital data. In addition, the Company distributes,
integrates and supports enterprise-wide networking products in the United
Kingdom, which are manufactured by third-party suppliers.
The consolidated financial statements reflect the application of certain
significant accounting policies as described in this note and elsewhere in the
accompanying consolidated financial statements and notes.
(a) Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. All material intercompany
accounts and transactions have been eliminated in consolidation.
(b) Cash, Cash Equivalents and Marketable Securities
Cash equivalents are carried at cost, which approximates market value,
and have original maturities of less than three months. Cash equivalents include
money market accounts, U.S. Treasury bills and repurchase agreements with
overnight maturities.
Effective December 1, 1994, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for
Certain Investments in Debt and Equity Securities. Under this standard, the
Company is required to classify all investments in debt and equity securities
into one or more of the following three categories: held-to-maturity, available-
for-sale or trading. All marketable securities classified as held-to-maturity
are recorded at their amortized cost. Available-for-sale securities are recorded
at fair market value with unrealized gains and losses excluded from earnings and
reported to stockholders' equity. Trading securities are also recorded at fair
market value and unrealized gains and losses are included in earnings.
Marketable securities held as of November 30, 1995, consist of the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Maturity Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Investments available for sale:
U.S. Treasury Bills............. less than 1 year $3,930,000
U.S. Treasury Bills............. 1 - 3 years 1,491,000
- --------------------------------------------------------------------------------
Total U.S. Treasury Bills..... 5,421,000
U.S. Agency Bonds............... 1 -- 5 years 545,000
U.S. Agency Bonds............... 6 -- 10 years 296,000
- --------------------------------------------------------------------------------
Total U.S. Agency Bonds....... 841,000
Utility Bonds................... 1-- 5 years 297,000
- --------------------------------------------------------------------------------
Total investments available for sale $6,559,000
- --------------------------------------------------------------------------------
</TABLE>
Marketable securities had a cost of $6,614,000 and $2,600,000 at
November 30, 1995 and 1994, respectively, and a market value of $6,559,000 and
$2,487,000, respectively. To reduce the carrying amount of the marketable
securities portfolio to market value, a valuation allowance has been reflected
as a separate component of stockholders' equity on November 30, 1995 pursuant to
the provisions of SFAS No. 115. On November 30, 1994, a valuation allowance in
the amount of $113,000 was established with a corresponding charge to net
income.
<PAGE>
Data Translation, Inc. and Subsidiaries
33
Notes to Consolidated Financial Statements (Cont'd)
(c) Inventories
Inventories are stated at the lower of first-in, first-out (FIFO) cost
or market and consist of the following:
<TABLE>
<CAPTION>
November 30
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Raw materials................... $1,763,000 $ 617,000
Work-in-process................. 383,000 434,000
Finished goods.................. 3,386,000 1,708,000
- --------------------------------------------------------------------------------
$5,532,000 $2,759,000
- --------------------------------------------------------------------------------
</TABLE>
Work-in-process and finished goods inventories include material, labor
and manufacturing overhead. Management performs periodic reviews of inventory
and disposes of items not required by their manufacturing plan.
(d) Depreciation and Amortization
The Company provides for depreciation and amortization, using the
straight-line and declining balance methods, by charges to operations in amounts
that allocate the cost of the equipment and leasehold improvements over the
following estimated useful lives:
Description Useful Lives
--------------------------------------------------------
Machinery and equipment............... 3 to 7 years
Furniture and fixtures................ 7 years
Vehicles.............................. 3 years
Leasehold improvements are amortized over the shorter of their economic life or
the life of the lease.
(e) Equipment and Leasehold Improvements, Net
Equipment and leasehold improvements are stated at cost, less
accumulated depreciation and amortization, and consist of the following:
<TABLE>
<CAPTION>
November 30,
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Machinery and equipment.......... $17,881,000 $15,198,000
Furniture and fixtures........... 2,435,000 2,219,000
Vehicles......................... 86,000 86,000
Leasehold improvements........... 1,755,000 1,659,000
- --------------------------------------------------------------------------------
$22,157,000 $19,162,000
Less accumulated depreciation and
amortization..................... 18,260,000 16,795,000
- --------------------------------------------------------------------------------
$ 3,897,000 $ 2,367,000
- --------------------------------------------------------------------------------
</TABLE>
(f) Foreign Currency
The Company translates the assets and liabilities of its foreign
subsidiaries at the rates of exchange in effect at year-end. Revenues and
expenses are translated using exchange rates in effect during the year. Gains
and losses from foreign currency translation are credited or charged to
"Cumulative translation adjustment" included in stockholders' equity in the
accompanying consolidated balance sheets. Foreign currency transaction gains
and losses are included in "Other Expense" in the accompanying consolidated
statements of operations. Foreign currency transaction gains and losses were not
significant for the years ended November 30, 1995 and 1994. Foreign currency
transaction gains and losses totaled $211,000 for the year ended November 30,
1993.
<PAGE>
Data Translation, Inc. and Subsidiaries
34
Notes to Consolidated Financial Statements (Cont'd)
(g) Revenue Recognition
The Company recognizes revenue when products are shipped or, for
postcontract support agreements, ratably over the term of the agreements. The
Company's policy is to defer the revenue associated with any vendor and
postcontract support obligations remaining at the time of shipment until the
related obligations are satisfied. Costs of service and warranty are not
significant and are charged to operations as incurred. Revenues from hardware
systems with other than incidental software components and stand alone software
sales are recognized upon shipment, provided that no significant vendor or
postcontract support obligations remain outstanding and collection of the
resulting receivable is deemed probable.
(h) Capitalized Software Development Costs
The Company capitalizes certain computer software development costs.
Capitalization of costs commences upon establishing technological feasibility.
Capitalized costs, net of accumulated amortization, were approximately $190,000
and $215,000 as of November 30, 1995 and 1994, respectively, and are included in
other assets. These costs are amortized on a straight-line basis over two years,
which approximates the economic life of the product. Amortization expense,
included in cost of sales in the accompanying consolidated statements of
operations, was $160,000, $170,000 and $70,000 in 1995, 1994 and 1993,
respectively.
(i) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. Net Income (Loss) Per Common Share
Net income (loss) per common share is determined by dividing net income
(loss) by the weighted average number of common and common equivalent shares
outstanding during each period. Common equivalent shares have been calculated in
accordance with the treasury stock method and are included for all periods where
their effect is dilutive. Fully diluted net income (loss) per common share has
not been separately presented, as the amounts would not be materially different
from net income (loss) per share.
3. Stockholders' Equity
(a) Stock Split
On June 28, 1995, the Board of Directors approved a 2-for-1 stock split
effected in the form of a dividend for all shareholders of record as of July 17,
1995. All share and per share data included in these financial statements have
been retroactively restated to reflect the stock split.
(b) Stock Options
Prior to April 1992, options were granted under the Company's 1982 Key
Employee Incentive Plan (the "1982 Plan"). Subject to certain limitations
imposed by the 1982 Plan, options were granted at a price determined by the
Board. The Board resolved to issue options under the 1982 Plan at not less than
100% of fair market value. The options expire six years from the date of grant
and become exercisable at the rate of 20% per year beginning one year from the
date of grant. No further options may be granted under the 1982 Plan.
In 1992, the Company adopted the 1992 Key Employee Incentive Plan (the
"1992 Plan"), and 1,000,000 shares of common stock were reserved for issuance.
Options granted pursuant to the 1992 Plan may, at the discretion of the Board,
be incentive stock options as defined by the Internal Revenue Code. Subject to
the provisions of the 1992 Plan, options granted are at a price as specified by
the Board. The Board has to date issued options under the 1992 plan at not less
than 100% of fair market value. The options become exercisable at a rate of 20%
per year beginning one year from the date of grant unless otherwise specified by
the Board. The Board will determine when the options will expire, but in no
event will the option period exceed ten years. No options may be granted under
the 1992 Plan on or after February 20, 2002.
<PAGE>
Data Translation, Inc. and Subsidiaries
35
Notes to Consolidated Financial Statements (Cont'd)
Information concerning stock options for each of the three years ended
November 30, 1995 follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Number of Option
Options Price Ranges
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding November 30, 1992............. 890,534 $1.38 -- $ 6.75
Options granted.................. 276,500 3.63 -- 4.95
Options exercised................ (77,586) 1.38 -- 3.38
Options expired/canceled......... (117,246) 1.50 -- 5.82
- --------------------------------------------------------------------------------
Outstanding at November 30, 1993.......... 972,202 $1.38 -- $ 6.75
Options granted.................. 356,700 4.13 -- 7.38
Options exercised................ (208,490) 1.38 -- 6.75
Options expired/canceled......... (90,436) 1.38 -- 7.00
- --------------------------------------------------------------------------------
Outstanding at November 30,1994........... 1,029,976 $1.38 -- $ 7.38
Options granted.................. 338,000 7.50 -- 17.00
Options exercised................ (305,806) 1.38 -- 7.38
Options expired/canceled......... (15,290) 1.50 -- 11.00
- --------------------------------------------------------------------------------
Outstanding at November 30, 1995.......... 1,046,880 1.38 -- 17.00
================================================================================
Exercisable at November 30, 1995.......... 213,040 $1.50 -- $ 7.50
================================================================================
Available for grant at November 30, 1995.. 6,180
================================================================================
</TABLE>
In 1994, the Company amended the 1986 Employee Stock Purchase Plan (the
"Plan"), pursuant to which an additional 200,000 shares of common stock were
reserved for issuance for a total of 600,000 shares. Effective July 1, 1995,
employees who have worked for the Company for at least one month are eligible to
participate in the Plan. Prior to July 1995, employees had to have worked at
least six months for the Company to be eligible to participate in the Plan. The
Plan allows participants to purchase common stock of the Company at 85% of the
fair market value as defined. Under the Plan, the Company issued 22,930, 38,222
and 46,176 shares in fiscal years 1995, 1994 and 1993, respectively. At November
30, 1995, there were 193,604 shares available for grant under the Plan.
4. Retirement Plan
In November 1985, the Company adopted an employee savings plan (the
"Savings Plan") in compliance with Section 401(k) of the Internal Revenue Code.
Effective April 1, 1995, the Savings Plan provides for annual Company
contributions of up to 15% of the first 6% of total compensation per
participant. On July 1, 1993, the Company suspended Company contributions to the
Savings Plan. These contributions vest incrementally over a five-year period.
The Company's contributions to the Savings Plan were $44,000, $0 and $78,000 in
1995, 1994 and 1993, respectively.
The Company does not provide postretirement benefits to any employees as
defined under SFAS No. 106, Employer's Accounting for Postretirement Benefits
Other Than Pensions.
5. Bank Facilities
The Company's United Kingdom subsidiaries, Data Translation Networking
Limited and Data Translation Ltd., have bank overdraft facilities of
approximately $1,950,000 and $150,000, respectively. Each facility bears
interest at the bank's base rate (6.75% at November 30, 1995) plus 1.75%.
Approximately $657,000 and $39,000 were outstanding, respectively, at November
30, 1995. No amounts were outstanding on November 30, 1994.
<PAGE>
Data Translation, Inc. and Subsidiaries
36
Notes to Consolidated Financial Statements (Cont'd)
6. Lease Commitments and Contingencies
(a) Lease Commitments
The Company has operating lease agreements expiring December 1, 1999 for
a building and property owned by a related party trust. The agreements provide
for aggregate minimum annual rental payments plus other expenses of the lessor
on a net basis. Total rental expense charged to operations on these leases was
$1,092,000 for each of the years ended November 30, 1995, 1994 and 1993.
In addition, the Company leases sales facilities and equipment under
leases expiring through 2000. Rent expense under these agreements totaled
$634,000, $342,000 and $354,000 in fiscal years 1995, 1994 and 1993
respectively.
Future minimum lease payments under all operating leases are as follows:
Fiscal Years Ended November 30,
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Amount
- --------------------------------------------------------------------------------
<S> <C>
1996................................... $1,836,000
1997................................... 1,920,000
1998................................... 1,326,000
1999................................... 1,283,000
2000................................... 130,000
- --------------------------------------------------------------------------------
Total minimum lease payments........... $6,495,000
================================================================================
</TABLE>
(b) Contingencies
On June 7, 1995, a lawsuit was filed against the Company by Avid
Technology, Inc., in the United States District Court for the District of
Massachusetts. The complaint generally alleges patent infringement by the
Company arising from the manufacture, sale, and use of the Company's Media 100
product. The complaint includes requests for injunctive relief, treble damages,
interest, costs and fees. In July, 1995, the Company filed an Answer and
Counterclaim denying any infringement and asserting that the patent is invalid.
Discovery by the parties is currently underway. The Company intends to
vigorously defend the lawsuit. In addition, Avid Technology, Inc. is seeking
reissuance of the patent for claims broader than in the existing patent. These
proceedings also remain pending. There can be no assurance that the Company will
prevail in the litigation, or that any of the effects of the litigation, whether
or not successful, will not be material.
From time to time, the Company is involved in other disputes and/or
litigation encountered in its normal course of business. The Company does not
believe that the ultimate impact of the resolution of such other outstanding
matters will have a material effect on the Company's financial condition or
results of operations.
7. Income Taxes
The Company accounts for income taxes in accordance with the provisions
of SFAS No. 109. The components of the net deferred tax liability recognized in
the accompanying consolidated balance sheets are as follows:
<TABLE>
<CAPTION>
November 30,
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets.................. $ 3,493,000 $ 4,344,000
Deferred tax liabilities............. (366,000) (340,000)
- --------------------------------------------------------------------------------
Subtotal............................. 3,127,000 4,004,000
- --------------------------------------------------------------------------------
Valuation allowance.................. (3,130,000) (4,006,000)
$ (3,000) $ (2,000)
================================================================================
</TABLE>
Due to the uncertainty surrounding the timing of realizing the benefits
of its favorable tax attributes in future income tax returns, the Company has
placed a valuation allowance against its otherwise recognizable deferred tax
assets.
<PAGE>
Data Translation, Inc. and Subsidiaries
37
Notes to Consolidated Financial Statements (Cont'd)
The approximate tax effect of each type of temporary difference and
carryforward before allocation of the valuation allowance is summarized as
follows:
<TABLE>
<CAPTION>
November 30,
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Net operating loss carryforwards........... $ 305,000 $ 2,055,000
Other temporary differences, principally
nondeductible reserves.................... 1,324,000 811,000
Research and development credits........... 1,448,000 1,088,000
Alternative minimum tax credits............ 50,000 50,000
- --------------------------------------------------------------------------------
$ 3,127,000 $ 4,004,000
================================================================================
</TABLE>
The tax credits and net operating loss carryforwards expire at various
dates through 2008. The Tax Reform Act of 1986 contains provisions that may
limit the net operating loss and tax credit carryforwards available to be used
in any given year in the event of significant changes in ownership, as defined.
The income tax provision (benefit) shown in the accompanying consolidated
statements of operations comprise the following:
<TABLE>
<CAPTION>
Fiscal Years Ended November 30,
- --------------------------------------------------------------------------------
1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal:
Current............................ $ 72,000 $ -- $ --
Deferred........................... -- -- --
- --------------------------------------------------------------------------------
72,000 -- --
- --------------------------------------------------------------------------------
State:
Current............................ 1,000 -- --
Deferred........................... -- -- --
- --------------------------------------------------------------------------------
1,000 -- --
- --------------------------------------------------------------------------------
Foreign - Current (benefit)................ 14,000 199,000 (24,000)
- --------------------------------------------------------------------------------
$ 87,000 $199,000 $(24,000)
================================================================================
</TABLE>
The effective income tax rate varies from the amount computed using the
statutory U.S. income tax rate as follows:
<TABLE>
<CAPTION>
Fiscal Years Ended November 30,
- --------------------------------------------------------------------------------
1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Tax provision (benefit) at statutory rate.. 34.0% 34.0% (34.0%)
Federal benefit from loss carryforward.....(28.2) -- --
Federal losses not benefited............... -- -- 42.7
Foreign losses not benefited............... 1.2 11.4 --
Foreign benefit from loss carryforward..... -- -- (3.7)
Foreign taxes.............................. -- 1.9 --
Tax credits and other...................... (5.2) (9.0) (5.6)
- --------------------------------------------------------------------------------
1.8% 38.3% (0.6%)
================================================================================
</TABLE>
<PAGE>
Data Translation, Inc. and Subsidiaries
38
Notes to Consolidated Financial Statements (Cont'd)
8. Geographic Information
Operations in various geographic areas for the three years ended November
30, 1995 are summarized as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
United States Europe Eliminations Consolidated
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiscal 1993
Sales to unaffiliated customers(1).................. $ 19,807,000 $ 15,894,000 $ -- $ 35,701,000
Sales or transfers between geographic areas......... 2,672,000 -- (2,672,000) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total net sales..................................... $ 22,479,000 $ 15,894,000 $ (2,672,000) $ 35,701,000
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations............. $ (3,752,000) $ (546,000) $ 89,000 $ (4,209,000)
Interest income (expense) - net..................... 226,000 (19,000) -- 207,000
Other income (expense).............................. (1,252,000) 932,000 -- (320,000)
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before provision (benefit) for
income taxes...................................... $ (4,778,000) $ 367,000 $ 89,000 $ (4,322,000)
==================================================================================================================================
Identifiable assets................................. $ 11,953,000 $ 5,959,000 $ (1,751,000) $ 16,161,000
==================================================================================================================================
Fiscal 1994
Sales to unaffiliated customers(1).................. $ 28,964,000 $ 21,273,000 $ -- $ 50,237,000
Sales or transfers between geographic areas......... 3,328,000 -- (3,328,000) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total net sales..................................... $ 32,292,000 $ 21,273,000 $ (3,328,000) $ 50,237,000
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations............. $ 142,000 $ 324,000 $ (61,000) $ 405,000
Interest income (expense) - net..................... 145,000 (3,000) -- 142,000
Other income (expense).............................. (151,000) 236,000 (113,000) (28,000)
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before provision for
income taxes...................................... $ 136,000 $ 557,000 $ (174,000) $ 519,000
==================================================================================================================================
Identifiable assets................................. $ 13,239,000 $ 8,401,000 $ (2,441,000) $ 19,199,000
==================================================================================================================================
Fiscal 1995
Sales to unaffiliated customers(1).................. $ 44,343,000 $ 28,109,000 $ -- $ 72,452,000
Sales or transfers between geographic areas......... 4,426,000 -- (4,426,000) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total net sales..................................... $ 48,769,000 $ 28,109,000 $ (4,426,000) $ 72,452,000
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations............. $ 4,244,000 $ (59,000) $ 14,000 $ 4,199,000
Interest income (expense) - net..................... 767,000 (30,000) -- 737,000
Other income (expense).............................. (39,000) (39,000) -- (78,000)
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before provision for
income taxes...................................... $ 4,972,000 $ (128,000) $ 14,000 $ 4,858,000
==================================================================================================================================
Identifiable assets................................. $ 51,896,000 $ 12,291,000 $ (3,203,000) $ 60,984,000
==================================================================================================================================
</TABLE>
(1) Foreign sales from the United States to unaffiliated customers for the years
ended November 30, 1995, 1994 and 1993 were approximately $11,991,000,
$7,153,000 and $3,511,000, respectively.
9. Accrued Expenses
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
November 30,
- ----------------------------------------------------------------------------------------------------------------------------------
1995 1994
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accrued commissions...................................... $ 126,000 $ 417,000
Payroll and related taxes................................ 1,878,000 752,000
Other.................................................... 5,229,000 2,528,000
- ----------------------------------------------------------------------------------------------------------------------------------
$ 7,233,000 $ 3,697,000
==================================================================================================================================
</TABLE>
<PAGE>
Data Translation, Inc. and Subsidiaries
39
Notes to Consolidated Financial Statements (Cont'd)
10. Valuation and Qualifying Accounts
The following table sets forth activity in the Company's accounts
receivable reserve account:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at Charges to Exchange Rate Balance at
Beginning Cost and Difference End
of Year Expense and Deductions of Year
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
For the Year Ended November 30, 1993:..................... $ 347,000 $ 148,000 $ 174,000* $ 321,000
==================================================================================================================================
For the Year Ended November 30, 1994:..................... $ 321,000 $ 297,000 $ 183,000* $ 435,000
==================================================================================================================================
For the Year Ended November 30, 1995:..................... $ 435,000 $ 155,000 $ 85,000* $ 505,000
==================================================================================================================================
</TABLE>
* Includes exchange rate differences of $2,000, $(6,000) and $3,000 in
1995, 1994 and 1993, respectively.
11. Selected Quarterly Information (unaudited)
<TABLE>
<CAPTION>
For the Fiscal Quarter Ended:
- ----------------------------------------------------------------------------------------------------------------------------------
1995 February 28 May 31 August 31 November 30
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales:
Digital media.................................... $ 5,207,000 $ 6,979,000 $ 8,137,000 $ 9,951,000
Data acquisition and imaging..................... 5,775,000 5,001,000 5,583,000 5,470,000
Networking distribution.......................... 3,855,000 5,396,000 5,353,000 5,745,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total net sales........................................... 14,837,000 17,376,000 19,073,000 21,166,000
Gross profit.............................................. 7,126,000 8,341,000 9,140,000 10,133,000
Net income................................................ 707,000 1,031,000 1,426,000 1,607,000
==================================================================================================================================
Net income per common share............................... $ 0.11 $ 0.15 $ 0.21 $ 0.23
==================================================================================================================================
1994
Net sales:
Digital media.................................... $ 1,623,000 $ 2,840,000 $ 3,453,000 $ 4,499,000
Data acquisition and imaging..................... 5,943,000 5,601,000 5,408,000 5,488,000
Networking distribution.......................... 3,386,000 3,770,000 3,730,000 4,496,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total net sales........................................... 10,952,000 12,211,000 12,591,000 14,483,000
Gross profit.............................................. 5,062,000 5,668,000 5,903,000 6,785,000
Net income (loss)......................................... (256,000) (40,000) 236,000 380,000
==================================================================================================================================
Net income (loss) per common share........................ $ (0.06) $ (0.01) $ 0.05 $ 0.08
==================================================================================================================================
</TABLE>
<PAGE>
Data Translation, Inc. and Subsidiaries
Corporate Information
World Headquarters
Data Translation, Inc.
100 Locke Drive
Marlboro, MA 01752-1192
(508) 481-3700
Directors
Alfred A. Molinari, Jr.
Chairman and Chief Executive Officer
Data Translation, Inc.
R. Bradford Malt
Partner, Ropes & Gray
Paul Severino
Chairman, Bay Networks, Inc.
John A. Molinari
Vice President/General Manager - Multimedia Group
Data Translation, Inc.
James M. Dow
Chairman, Microcom, Inc.
Additional Information
A copy of the Company's 1995 annual report on Form 10-K filed with the
Securities and Exchange Commission can be obtained without charge by any
stockholder upon request to:
Investor Relations Department
Data Translation, Inc.
100 Locke Drive
Marlboro, MA 01752-1192
(508) 481-3700
Annual Meeting
Data Translation, Inc. will hold an Annual Stockholders' Meeting on Wednesday,
April 10, 1996, at 10:00 am
at Corporate Headquarters, 100 Locke Drive, Marlboro, MA.
Stock Trading
Data Translation's common stock is traded on the Nasdaq National Market System
under the symbol "DATX." At January 31, 1996, there were approximately 251
stockholders of record.
Independent Public Accountants
Arthur Andersen LLP
Boston, MA
General Counsel
Ropes & Gray
Boston, MA
Subsidiaries
UK Subsidiaries
Data Translation
Networking Limited
Wokingham, Berkshire
England
Data Translation Ltd.
Wokingham, Berkshire
England
German Subsidiary
Data Translation GmbH
Bietigheim-Bissingen, Germany
Italian Subsidiary
Data Translation S.r.l.
Brescia, Italy
Transfer Agent
Bank of Boston
c/o Boston EquiServe, L.P.
Mail Stop 45-02-64
P.O. Box 644
Boston, MA 02102-0644
Executive Officers
Alfred A. Molinari, Jr.
Chairman and Chief Executive Officer
Peter J. Rice
Vice President - Finance, Treasurer
and Chief Financial Officer
Ellen W. Harpin
Vice President - Administration
John A. Molinari
Vice President/General Manager -
Multimedia Group and Director
Mark L. Basler
Vice President - Strategic Marketing
Paul Klinkby-Silver
Vice President/General Manager - Data Translation
Networking Limited
Kim Gray
Vice President/General Manager - Data Acquisition
and Imaging Group
<PAGE>
[LOGO OF DATA TRANSLATION APPEARS HERE]
Corporate Headquarters
Data Translation, Inc.
100 Locke Drive
Marlboro, MA 01752
Tel: (508) 481-3700
Fax: (508) 481-8620
http://www.datx.com
http://www.media100.com/
(C) 1996 Data Translation, Inc.
All rights reserved. Printed in U.S.A.
Data Translation and Media 100 are registered trademarks of
Data Translation, Inc.
All other products and brands are trademarks of their repective holders.
