<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Media 100 Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] 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 fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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> 2
MEDIA 100 INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 16, 1997
------------------------
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of Media 100
Inc., a Delaware corporation (the "Company"), will be held at the offices of the
Company, 290 Donald Lynch Boulevard, Marlboro, Massachusetts 01752, on
Wednesday, April 16, 1997 at 10:00 a.m. for the following purposes:
1. To elect five directors.
2. To transact any and all other business that may properly come
before the meeting.
All stockholders of record at the close of business on March 4, 1997 are
entitled to notice of and to vote at this meeting.
Stockholders 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. The Company's 1996 Annual Report to Stockholders, which contains
financial statements and other information of interest to stockholders, is
enclosed with this Notice and the accompanying Proxy Statement.
By order of the Board of Directors
Craig Barrows
Secretary
March 14, 1997
<PAGE> 3
MEDIA 100 INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 16, 1997
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Media 100 Inc., a Delaware corporation (the
"Company"), for the Annual Meeting of Stockholders of the Company to be held on
Wednesday, April 16, 1997 at the offices of the Company, 290 Donald Lynch
Boulevard, Marlboro, Massachusetts, and any adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting. The Company was
founded in 1973 as Data Translation, Inc., a Massachusetts corporation, changed
its state of incorporation from Massachusetts to Delaware in September 1996 and
adopted its present name on December 2, 1996. The Company's principal executive
offices are currently located at 100 Locke Drive, Marlboro, Massachusetts 01752.
Starting May 1, 1997, the Company's principal executive offices will be located
at 290 Donald Lynch Boulevard, Marlboro, Massachusetts 01752.
This Proxy Statement is first being distributed to stockholders on or about
March 14, 1997. The Company's 1996 Annual Report to Stockholders accompanies
this Proxy Statement.
VOTING RIGHTS AND OUTSTANDING SHARES
As of March 4, 1997, the Company had outstanding 8,119,002 shares of Common
Stock. Each share of Common Stock entitles the holder of record thereof at the
close of business on March 4, 1997 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 the Company. In addition to the
solicitation of proxies by use of the mails, the Company may utilize the
services of some of its officers and employees (who will receive no compensation
therefor in addition to their regular salaries) to solicit proxies personally
and by mail, telephone and telegraph from brokerage houses and other
stockholders.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted. If the stockholder specifies in the proxy how
the shares are to be voted, they will be voted as specified. If the stockholder
does not specify how the shares are to be voted, they will be voted to elect the
five nominees listed under "Election of Directors," or the nominees for which
approval has not been withheld. Should any person so named be unable or
unwilling to serve as director, the persons named in the form of proxy for the
Annual Meeting intend to vote for such other person as the Board of Directors
may recommend. Any stockholder 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 Secretary 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 the Company 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.
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 five 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.
<PAGE> 4
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) only as shares that are present and entitled to vote on the matter for
purposes of determining the presence of a quorum, but neither abstentions nor
broker non-votes have any effect on the outcome of voting on the matter.
THE SPIN-OFF
On November 11, 1996, the Company sold substantially all of the assets of
its U.K.-based networking distribution business in connection with the winding
up of that business. On December 2, 1996, the Company effected the spin-off of
its remaining non-MEDIA 100(R) related businesses (the "Spin-Off") by
contributing its data acquisition and imaging and commercial products businesses
and the remaining assets and liabilities of the networking distribution business
to a newly-formed subsidiary, Data Translation II, Inc. ("DTI"), the stock of
which was then distributed as a dividend to the Company's stockholders in the
ratio of one share of DTI common stock for every four shares of the Company's
Common Stock. In connection with the Spin-Off, DTI changed its name to Data
Translation, Inc. and the Company changed its name to Media 100 Inc.
ELECTION OF DIRECTORS
At the Annual Meeting it is intended that the Company's Board of Directors
be elected to hold office 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 THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
John A. Molinari................... 34 President and Chief Executive Officer
Alfred A. Molinari, Jr............. 55 Director
Paul J. Severino................... 50 Director
Bruce I. Sachs..................... 37 Director
Maurice L. Castonguay.............. 45 Director
</TABLE>
Mr. J. Molinari was appointed President and Chief Executive Officer on
November 30, 1996 in connection with the Spin-Off. Prior to that, he was Vice
President/General Manager -- Multimedia Group, which conducted the Company's
MEDIA 100 digital video business prior to the Spin-Off, since 1990. He has been
a director since 1995.
Mr. A. Molinari is Chairman and Chief Executive Officer of Data
Translation, Inc., to which the Company contributed its non-MEDIA 100 related
businesses in connection with the Spin-Off. Mr. A. Molinari is the founder of
the Company, and has been a director since its inception in 1973. He was
President and Chief Executive Officer of the Company from 1973 to November 29,
1996, and Chairman of the Board of the Company from 1995 to November 29, 1996.
Mr. A. Molinari is the father of Mr. J. Molinari.
Mr. Severino has been a director of the Company since April 1985. He is the
founder and former Chairman of Bay Networks, Inc., a supplier of internetworking
communication products, where he served as Chairman of the Board from October
1994 to October 1996, and as President and Chief Executive Officer from 1985 to
October 1994. Mr. Severino is a director of Bay Networks, Inc., Stratus Computer
Inc., a provider of fault tolerant computer systems, and MTDC (Massachusetts
Telecommunications Development Corporation).
Mr. Sachs has been a director of the Company since December 1996. He has
been the Executive Vice President and General Manager of the Internet Telecom
Business Group of Bay Networks, Inc. since May 1996. Prior to that, he was
President and General Manager of the Remote Access Business Unit of Bay
Networks, Inc. from December 1995 to May 1996. Prior to that, he was employed by
Xylogics, Inc., a supplier of remote access communications products, where he
was President and Chief Executive Officer from 1993 to the company's acquisition
by Bay Networks, Inc. in December 1995, and Executive Vice President from 1992
to 1993.
2
<PAGE> 5
Mr. Castonguay has been a director of the Company since February 1997. He
has been the Vice President of Finance and Chief Financial Officer of Gradient
Technologies, Inc., a provider of distributed computing and security solutions
for the enterprise and Intranet markets, since March 1996. Prior to that, he was
employed by Xylogics, Inc., where he was Chief Financial Officer from 1990 to
March 1996.
BOARD OF DIRECTORS
The Company's Board of Directors currently consists of six members. R.
Bradford Malt, a director of the Company since 1982, has decided not to stand
for re-election, and, as authorized by the Company's By-laws, the Board of
Directors has fixed the number of directors at five, effective upon the election
of directors at the Annual Meeting. Mr. Malt, age 42, is a partner with the law
firm of Ropes & Gray.
During the fiscal year ended November 30, 1996, the Company's Board of
Directors held nine meetings and acted by written consent on two additional
occasions. Each of the directors attended 75% or more of the aggregate of the
meetings of the Board and all committees of the Board on which he served which
were held while he was a director. 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 were the members of the Audit
Committee during the fiscal year ended November 30, 1996. Mr. Sachs was
appointed to the Audit Committee in December 1996. In February 1997, Messrs.
Malt, Severino and Sachs resigned from the Audit Committee and Messrs. A.
Molinari and Castonguay were appointed in their stead. During the fiscal year
ended November 30, 1996, 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 were the members of the Compensation Committee
during the fiscal year ended November 30, 1996. Mr. Sachs was appointed to the
Compensation Committee in December 1996, and Mr. Malt resigned from the
Compensation Committee in February 1997. During the fiscal year ended November
30, 1996, the Compensation Committee met on four occasions and acted by written
consent on four additional occasions.
During the fiscal year ended November 30, 1996, the Company compensated
each director who is not also an employee of the Company ("Non-Employee
Directors") $7,500 per year plus $500 per meeting attended for services as a
director. Beginning on December 1, 1996, the Company compensates each Non-
Employee Director $8,000 per year, plus $1,000 per Board meeting and $500 per
Committee meeting attended for services as a director. In addition, each
Non-Employee Director has been granted options to purchase Company Common Stock
under the Company's Key Employee Incentive Plan (1992) and, in the case of
Messrs. Malt and Severino, also under the Company's Key Employee Incentive Plan
(1982).
3
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the Company's
Common Stock owned as of February 14, 1997 (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 other
individuals named in the Summary Compensation Table (hereafter referred to as
the "Named Executive Officers") and (iv) all current executive officers and
directors as a group. Except as otherwise indicated in the footnotes to this
table, the Company believes that each of the persons or entities 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
DIRECTORS AND NAMED EXECUTIVE OFFICERS OWNED(1) PERCENT(1)
- -------------------------------------- ------------ ----------
<S> <C> <C>
John A. Molinari(2).................................. 164,362 2.09%
100 Locke Drive
Marlboro, Massachusetts 01752
Alfred A. Molinari, Jr.(3)........................... 1,008,599 12.83
100 Locke Drive
Marlboro, Massachusetts 01752
R. Bradford Malt(4).................................. 42,600 *
One International Place
Boston, Massachusetts 02110
Paul J. Severino(4).................................. 100,340 1.28
8 Federal Street
Billerica, Massachusetts 01821
Bruce I. Sachs....................................... 0 *
5 Federal Street
Billerica, Massachusetts 01821
Maurice L. Castonguay................................ 0 *
2 Mount Royal Place
Marlboro, Massachusetts 01752
Peter J. Rice(5)..................................... 14,000 *
100 Locke Drive
Marlboro, Massachusetts 01752
Anthony B. Dolph(6).................................. 8,000 *
100 Locke Drive
Marlboro, Massachusetts 01752
Paul Klinkby-Silver.................................. 0 *
TFS (Wokingham) Ltd.
The Mulberry Business Park, Wokingham
Berkshire RG11 2QJ, England
Kim J. Gray(7)....................................... 8,400 *
100 Locke Drive
Marlboro, Massachusetts
All executive officers and directors as a
group (9 persons in all)........................... 1,337,901 16.1
ADDITIONAL 5% STOCKHOLDERS
West Highland Capital, Inc.(8)....................... 1,000,000 12.32
300 Drake's Landing Road, Suite 290
Greenbrae, California 94904
Dawson Samberg Capital Management, Inc.(9)........... 712,500 8.78
354 Pequot Avenue
Southport, Connecticut 06490
Brinson Partners, Inc.(10)........................... 506,200 6.24
209 South LaSalle Street
Chicago, Illinois 60604
</TABLE>
- ---------------
* Represents less than 1%.
4
<PAGE> 7
(1) The number and percent of the outstanding shares of Common Stock treat as
outstanding all shares issuable on options exercisable within sixty days of
February 14, 1997 held by a particular beneficial owner that are included
in the first column.
(2) Includes 43,750 shares subject to options exercisable within sixty days of
February 14, 1997.
(3) Includes 43,531 shares subject to options exercisable within sixty days of
February 14, 1997. Does not include 17,614 shares owned by Mr. A.
Molinari's wife, as to all of which Mr. Molinari disclaims beneficial
ownership.
(4) Includes 40,000 shares subject to options exercisable within sixty days of
February 14, 1997.
(5) Includes 14,000 shares subject to options exercisable within sixty days of
February 14, 1997.
(6) Includes 8,000 shares subject to options exercisable within sixty days of
February 14, 1997.
(7) Includes 8,400 shares subject to options exercisable within sixty days of
February 14, 1997.
(8) As reported in, and based solely upon, an Amendment No. 2 to Schedule 13D
dated February 7, 1997, filed with the Securities and Exchange Commission
by West Highland Capital, Inc. (the "West Highland Schedule 13D").
According to the West Highland Schedule 13D, of the 1,000,000 shares of the
Company's Common Stock owned collectively by West Highland Capital, Inc.
and its affiliates (the "West Highland Shares"), (i) West Highland Capital,
Inc. beneficially owns all 1,000,000 of the West Highland Shares, (ii) Lang
H. Gerhard beneficially owns 820,198 of the West Highland Shares, (iii)
Estero Partners, LLC beneficially owns 820,198 of the West Highland Shares,
(iv) West Highland Partners, L.P. beneficially owns 670,260 of the West
Highland Shares, and (v) Buttonwood Partners, L.P. beneficially owns
149,938 of the West Highland Shares. In each case, the beneficial owner
listed above shares voting and dispositive power over such shares.
(9) As reported in, and based solely upon, a Schedule 13G dated January 31,
1997, filed with the Securities and Exchange Commission by Dawson Samberg
Capital Management, Inc.
(10) As reported in, and based solely upon, a Schedule 13G dated February 12,
1997, filed with the Securities and Exchange Commission by Brinson
Partners, Inc. (the "Brinson Schedule 13G"). According to the Brinson
Schedule 13G, of the 506,200 shares of the Company's Common Stock owned
collectively by Brinson Partners, Inc. and its affiliates (the "Brinson
Shares"), (i) Brinson Partners, Inc., Brinson Holdings, Inc., SBC Holdings
(USA), Inc. and Swiss Bank Corporation beneficially own all 506,200 of the
Brinson Shares and (ii) Brinson Trust Company beneficially owns 144,990 of
the Brinson Shares. In each case, the beneficial owner listed above shares
voting and dispositive power over such shares.
5
<PAGE> 8
EXECUTIVE OFFICERS
The executive officers of the Company as of February 14, 1997 are as
follows:
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
[S] [C] [C]
John A. Molinari...... 34 President and Chief Executive Officer and Director
Anthony B. Dolph...... 39 Vice President, Strategic Planning
Peter J. Rice......... 44 Vice President and Chief Financial Officer,
Treasurer
Anthony M. Scotto..... 41 Vice President, Product Development
Mr. Molinari was appointed President and Chief Executive Officer on
November 30, 1996 in connection with the Spin-Off. Prior to that, he served as
Vice President/General Manager -- Multimedia Group since November 1990. See
"Election of Directors."
Mr. Rice was appointed Vice President and Chief Financial Officer on
November 30, 1996 in connection with the Spin-Off. Prior to that, he served as
Vice President -- Finance, Treasurer and Chief Financial Officer beginning in
July 1995. Prior to joining the Company, he was employed by M/A-COM, Inc., a
supplier of microwave semiconductors, components and subsystems, where he was
Vice President, Corporate Controller and Chief Accounting Officer from 1991 to
July 1995.
Mr. Dolph was appointed Vice President, Strategic Planning on November 30,
1996 in connection with the Spin-Off. Prior to that, he served as director of
marketing for the Multimedia Group beginning in June 1994. Prior to joining the
Company, he was employed by Progress Software Corporation, a supplier of
computer application technology for the client/server market, where he was
Director, Corporate Communications from 1992 to June 1994.
Mr. Scotto was appointed Vice President, Product Development on November
30, 1996 in connection with the Spin-Off. Prior to that, he served as vice
president of product development for the Multimedia Group beginning in June
1996. Prior to joining the Company, he was employed by EMC Corporation, a
supplier of computer storage products and services, where he was Vice President,
Software Engineering, Open Storage Group from 1994 to June 1996. Prior to that,
he was employed by GenRad, Inc., a supplier of automatic test and measurement
equipment, where he was Vice President, Engineering and Customer Support from
1993 to 1994, and Director, Engineering from 1992 to 1993.
6
<PAGE> 9
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 Chief Executive Officer, each of the other executive officers whose cash
compensation exceeded $100,000 annually and certain other former executive
officers for the fiscal years ended November 30, 1996, 1995 and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1) COMPENSATION($)(2)
- --------------------------- ---- -------- -------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
John A. Molinari(3)................... 1996 $140,000 $105,000 60,000 $ 240
President and Chief Executive 1995 138,442 27,475 0 233
Officer 1994 112,500 12,007 100,000 230
Alfred A. Molinari, Jr.(4)............ 1996 229,327 0 60,000 1,735
Former Chief Executive Officer 1995 223,945 50,000 100,000 1,256
1994 206,700 10,335 0 422
Anthony B. Dolph(5)................... 1996 111,882 20,625 0 63
Vice President, Strategic Planning 1995 -- -- -- --
1994 -- -- -- --
Peter J. Rice(6)...................... 1996 140,000 52,500 40,000 1,515
Vice President and Chief Financial 1995 58,462 20,000 30,000 25
Officer, Treasurer 1994 -- -- -- --
Paul Klinkby-Silver(7)................ 1996 143,283 0 30,000 14,136
Vice President/General Manager, 1995 144,379 0 4,000 32,354
Data Translation Networking Limited 1994 120,427 69,752 20,000 9,705
Kim J. Gray(8)........................ 1996 114,173 0 30,000 1,244
Vice President/General Manager, 1995 92,000 25,000 4,000 696
Data Acquisition and Imaging Group 1994 -- -- -- --
</TABLE>
- ---------------
(1) The Company has not issued stock appreciation rights or granted 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 reported represent (i) the dollar value of premiums paid by the
Company on term life insurance for the benefit of the Named Executive
Officers (other than Mr. Klinkby-Silver in 1996) and (ii) contributions to a
defined contribution plan with respect to (a) Mr. A. Molinari and Ms. Gray
in 1996 and 1995, (b) Mr. Rice in 1996 and (c) Mr. Klinkby-Silver in 1996,
1995 and 1994.
(3) Mr. J. Molinari was appointed President and Chief Executive Officer
effective November 30, 1996 in connection with the Spin-Off. Prior to that
he was Vice President/General Manager -- Multimedia Group.
(4) Mr. A. Molinari resigned as an officer of the Company in connection with the
Spin-Off on November 29, 1996. The Summary Compensation Table does not show
any bonus paid to Mr. Molinari by DTI subsequent to the effective date of
the Spin-Off.
(5) Mr. Dolph was appointed an executive officer of the Company effective
November 30, 1996 in connection with the Spin-Off.
(6) Mr. Rice commenced employment with the Company on July 31, 1995, and his
salary for that year included a signing bonus.
7
<PAGE> 10
(7) Mr. Klinkby-Silver ceased to be an executive officer of the Company in
connection with the disposal of the networking distribution business
operated by the Company's former U.K subsidiary, Data Translation Networking
Limited ("DTN"). In connection with the Spin-Off, DTN became a wholly owned
subsidiary of DTI. Dollar amounts for Mr. Klinkby-Silver are based on the
blended exchange rate for the respective year.
(8) Ms. Gray was appointed an executive officer of the Company in 1995, and
resigned as an officer of the Company in connection with the Spin-Off on
November 29, 1996. The Summary Compensation Table does not show any bonus
paid to Ms. Gray by DTI subsequent to the effective date of the Spin-Off.
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:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZED VALUE
AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
-------------------------------------------------------- STOCK PRICE
NUMBER OF % OF TOTAL APPRECIATION FOR
SECURITIES OPTIONS EXERCISE OPTION TERM (2)
UNDERLYING GRANTED TO OR BASE ---------------------
OPTIONS EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME GRANTED(#) FISCAL YEAR ($/SH)(1) DATE ($) ($)
- ---- ---------- ------------- -------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
John A. Molinari(3)..... 60,000 10.89% $17.75 4/10/02 $362,202 $821,712
Alfred A. Molinari,
Jr.(3)................ 60,000 10.89 16.25 4/11/02 331,596 752,274
Anthony B. Dolph........ -- -- -- -- -- --
Peter J. Rice(3)........ 40,000 7.26 16.25 4/11/02 221,064 501,516
Paul
Klinkby-Silver(4)..... 30,000 5.44 16.25 4/11/06 306,585 776,949
Kim J. Gray(3).......... 30,000 5.44 16.25 4/11/02 165,798 376,137
</TABLE>
- ---------------
(1) In connection with the Spin-Off, all outstanding Company stock options were
adjusted, effective December 2, 1996, by a reduction in the exercise price
of the Company stock options and the granting of DTI stock options. The
reductions to the exercise prices of the options listed in the table above
were as follows: (a) the exercise price of the options granted to Mr. J.
Molinari was reduced to $16.91 and (b) the exercise price of the options
granted to Messrs. A. Molinari, Rice and Klinkby-Silver and Ms. Gray was
reduced to $15.48.
(2) The amounts shown do not reflect the exercise price adjustments described in
the preceding footnote.
(3) These options become exercisable over five years, 20% on each anniversary of
the grant, and expire six years after grant.
(4) These options become exercisable three years after the grant and expire ten
years after grant.
8
<PAGE> 11
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the Named
Executive Officers, concerning the unexercised options held as of the end of the
fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John A. Molinari......... 31,250 $348,031 5,500 116,750 $ 35,337 $ 276,275
Alfred A. Molinari,
Jr..................... -- -- 36,531 143,469 106,000 32,125
Anthony B. Dolph......... -- -- 8,000 12,000 37,000 55,550
Peter J. Rice............ -- -- 6,000 64,000 -- --
Paul Klinkby-Silver...... 9,000 100,625 -- 54,000 -- 81,500
Kim J. Gray.............. 800 10,600 1,600 34,000 7,600 8,500
</TABLE>
- ---------------
(1) Market value of underlying securities at November 30, 1996, minus the
exercise price of "in-the-money" options. These amounts do not take into
account the exercise price adjustments that were effected in connection with
the Spin-Off as of December 2, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
R. Bradford Malt, who is a director and served on the Compensation
Committee until February 1997, was Clerk of the Company from 1980 to September
1996, and is a partner with the law firm of Ropes & Gray, which furnishes legal
services to the Company.
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 1986 Employee Stock Purchase Plan. Paul Severino and Bruce Sachs
currently serve on the Compensation Committee. Mr. Sachs was appointed to the
Committee in December 1996 and R. Bradford Malt served on the Committee during
fiscal 1996.
In providing for the compensation of the executive officers (other than the
Chief Executive Officer), the Chief Executive Officer makes recommendations to
the Compensation Committee based on his judgment of the individual's
contribution to the growth and profitability of the Company. The Committee then
considers the Chief Executive's recommendations, taking into account
opportunities that exist generally at other technology companies for positions
with comparable responsibilities, and the Company's need to attract, motivate
and retain talented executives who are critical to the Company's long-term
success. The Chief Executive Officer's base salary is determined independently
by the Committee based on the same factors considered in determining the base
salaries of the other executive officers. In addition, annual bonuses are
provided for, the payment and the amount of which will depend on the Company's
degree of attainment of pre-established revenue and operating income targets
and, in certain instances, upon the attainment of certain pre-established
individual objectives. The Committee considers the median compensation levels
for comparable positions at other technology companies, as shown in a survey
provided by an independent compensation and benefits consultant, in determining
the compensation of the executive officers (including the Named Executive
Officers), but does not, as a matter of policy, fix compensation of all
executive officers as a percentage of such median levels. Accordingly, total
compensation for an executive officer may be set by the Committee above or below
such median levels, depending on the Committee's assessment of other factors,
including an individual's prior level of experience and competition for
executives with the skills required by the Company.
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<PAGE> 12
Base salaries for executive officers were not increased in fiscal 1996
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.
Annual bonuses for fiscal 1996 were tied to the attainment of
pre-established revenue and operating income targets for the Company's business
units. If business units performed at 100% of the targets, full bonus
compensation would have represented 100% of base salary for Mr. J. Molinari
(reflecting in part greater emphasis in his case on bonus compensation) and
between 25% and 50% of base salary for the other executive officers (including
the executive officers appointed on November 30, 1996). Bonuses for Messrs. J.
Molinari, Rice and Dolph were tied to the performance targets for the Company's
Multimedia Group, which operated the Company's MEDIA 100 business prior to the
Spin-Off. Based on the actual performance of the Multimedia Group for fiscal
1996, Mr. J. Molinari received a bonus equal to 73% of his base salary, and,
except as set forth below, bonuses for the other executive officers ranged
between 18% to 38% of base salaries.
The Committee did not consider or award bonus compensation to former
executive officers, including the former Chief Executive Officer, who resigned
their positions as officers of the Company or otherwise ceased to be executive
officers of the Company in connection with the Spin-Off.
Annual bonuses for fiscal 1997 will be tied to the attainment of
pre-established revenue and operating income for the Company and, in the case of
certain executive officers, to the attainment of pre-established individual
objectives. If the Company performs at 100% of the targets and all individual
objectives are achieved, depending on the executive officer, full bonus
compensation would represent between 30% and 50% of their base salary (50% in
the case of the Chief Executive Officer). In addition, the Committee approved an
increase in Mr. J. Molinari's fiscal 1997 base salary to $200,000 to reflect his
appointment and added responsibilities as Chief Executive Officer, and increases
in the base salaries of two other executive officers, in one case to conform the
allocation of his base salary and bonus more closely to the median levels of
comparable positions at other technology companies, and in the other case to
reflect a change in the individual's responsibilities. The Committee believes
that these adjusted compensation levels are reasonable and appropriate in the
context of the individuals' prior levels of experience and new responsibilities
in light of the Spin-Off.
The Compensation Committee has traditionally awarded stock options to the
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 executives'
interests more closely with stockholders' interests. In granting stock options,
the Committee considers the individual's performance and continuing contribution
to the Company and, in the case of subsequent grants, the existing level of
stock options. The Committee is in the process of reviewing the guidelines for
option grants during the remainder of fiscal 1997 and thereafter.
In fiscal 1996, 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. Such
options are intended to be incentive stock options, except in the case of
Messrs. J. Molinari and A. Molinari, who received non-qualified stock options.
The Committee granted options to the executive officers in amounts intended to
bring their overall stock option participation, when compared to all other
participants in the stock option plan, into line with the Committee's view of
their management responsibilities.
In connection with the Spin-Off, all then outstanding stock options were
retained by their holders, whether such individuals remained employees of the
Company or became employees of DTI, and were adjusted as follows. The exercise
prices of the Company options were multiplied by a fraction, the numerator of
which was the first sale price of the Company's Common Stock on the ex-dividend
date following the Spin-Off, and the denominator of which was the last sale
price of the Company's Common Stock on the last trading day immediately
preceding the ex-dividend date. In addition, holders of Company options received
a number of new DTI options determined by the same 1-for-4 distribution ratio
paid to stockholders in the Spin-Off, which options had exercise prices
determined by multiplying the pre-adjusted exercise price of the related Company
options by a fraction, the numerator of which was the first sale price of DTI's
common stock on the
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<PAGE> 13
ex-dividend date, and the denominator of which was the last sale price of the
Company's Common Stock on the last trading day immediately preceding the
ex-dividend date.
In December 1996, Mr. J. Molinari was granted non-qualified stock options
to purchase 20,000 shares at the then fair market value of $10.00 per share, and
with other terms as set forth above with respect to stock option grants
generally. This grant was determined by the Committee to be appropriate, in
light of his recent appointment as Chief Executive Officer, as well as his
existing level of stock options. One other executive officer was granted options
at the same time determined by the Committee to be appropriate to reflect a
change in the individual's responsibilities, and which the Committee believes
are consistent with option grants held by other senior executives of the
Company.
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
allows a tax deduction to public companies for compensation over $1,000,000 paid
to the company's chief executive officer and the four other highest paid
executive officers. Qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are satisfied. As was the
case in fiscal 1996, the Committee anticipates that in fiscal 1997 all
compensation to executive officers will be fully deductible under Section
162(m). The Compensation Committee therefore has not yet found it necessary to
enact a policy with respect to qualifying compensation paid to executive
officers for deductibility.
EXECUTIVE COMPENSATION
AND STOCK OPTION COMMITTEE
Paul J. Severino
Bruce I. Sachs
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the Spin-Off, the Company entered into a Distribution
Agreement with DTI which provides for, among other things, the principal
corporate transactions required to effect the Spin-Off. The agreement provides
for indemnification of DTI by the Company, and of the Company by DTI, in a
manner designed, as between the two companies, to place with DTI financial
responsibility for the businesses contributed by the Company to DTI, and to
place with the Company financial responsibility for the business retained by the
Company. The agreement also provides for a tax sharing arrangement in which,
among other things, the Company and DTI agree to share responsibility for
certain tax liabilities that may be associated with the Spin-Off. Alfred A.
Molinari, Jr., a director and former Chief Executive Officer of the Company, is
Chairman and Chief Executive Officer of DTI.
The Company's principal executive, engineering, manufacturing and sales
operations occupy space in a facility (the "Facility") which the Company
currently shares with DTI. The facility is owned by Nason Hill Trust, a nominee
trust of which Mr. A. Molinari and his wife are the sole trustees and
beneficiaries. Prior to December 2, 1996, the effective date of the Spin-Off,
the Facility was leased directly to the Company. Total rental expense for the
Facility in fiscal 1996 was $1,092,000, of which $546,000 was charged to
continuing operations, and the remainder of which was charged to the businesses
contributed to DTI.
In connection with the Spin-Off, the Company assigned its leasehold
interest in the Facility to DTI, which in turn granted a license to the Company
to use a portion of the Facility so as to enable the Company to conduct its
operations at that location. Such use and occupancy agreement remains in effect
until April 30, 1997, and the Company pays DTI a monthly license fee for the use
of the Facility equal to $105,377. This fee is intended to compensate DTI for
the Company's pro rata portion of the rental charges and operating expenses
associated with the Facility and the use by the Company of certain manufacturing
equipment that was transferred to DTI in connection with the Spin-Off.
In connection with the Spin-Off, the Company and DTI entered into a
Corporate Services Agreement, pursuant to which DTI provides certain finance and
administrative and manufacturing services and support to the Company. The amount
payable by the Company to DTI under the agreement is based on the particular
11
<PAGE> 14
services being provided during any monthly period. The Company may terminate any
service upon 30 days prior written notice to DTI, and DTI may terminate any
service upon 30 days prior written notice to the Company if it no longer
provides such service to its own organization. The agreement will terminate upon
the earlier of the discontinuance or termination of all services thereunder or
December 31, 1997. In addition, the Company contracts with DTI for certain other
engineering services on an as-needed basis. Through January 31, 1997, the
Company had paid $94,960 for services provided by DTI as described above.
In connection with the Spin-Off, the Company and DTI entered into an
Intellectual Property Agreement, which provides for, among other things,
royalty-free perpetual cross-licenses from the Company and DTI to the other, for
all technologies covered by existing patents and patent applications, trade
secrets and know-how held by the Company and DTI, respectively, as of the
effective date of the Spin-Off. The Company and DTI also agreed to cross-license
to each other technologies under patents issued pursuant to applications made in
the two-year period following the effective date of the Spin-Off. The
cross-licenses provide for termination upon a change in control of the licensee
with respect to patents issued pursuant to applications made after August 31,
1996, although the licensee may continue to use such patents in products already
being shipped or which are substantially near completion of development.
Sean Sullivan, who is employed by the Company and earned $75,586 during
fiscal year 1996, is the son-in-law of Mr. A. Molinari and the brother-in-law of
Mr. J. Molinari.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder 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, 1991 and ending November 30, 1996.
<TABLE>
<CAPTION>
CRSP Index for
NASDAQ Electronic
Measurement Period Component NASDAQ Composite Media 100 Inc.
(Fiscal Year Covered) Stocks Index (MDEA)
<S> <C> <C> <C>
1991 100 100 100
1992 156.89 125.96 116.00
1993 240.93 145.85 109.09
1994 270.73 146.13 272.73
1995 499.25 208.34 709.09
1996 766.04 255.21 545.45
</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 in
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, 1991 in
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<PAGE> 15
each of the CRSP Index for NASDAQ Electronic Component Stocks, the NASDAQ
Composite Index and the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1996 all filing requirements
applicable to its officers, directors and such 10% beneficial owners were
complied with, except that Mr. Klinkby-Silver did not report on Form 4 a sale of
7,000 shares of Common Stock, but did report such sale on his Form 5 for the
fiscal year ended November 30, 1996, and West Highland Capital, Inc. and certain
of its affiliates listed in "Security Ownership of Certain Beneficial Owners and
Management" did not report on Form 3 or 4 fourteen transactions that occurred
during the fiscal year ended November 30, 1996, but did report such transactions
on Form 5 for the fiscal year ended November 30, 1996.
ADJOURNMENT OF MEETING
In the event that sufficient votes in favor of the election of the nominees
for director listed in this Proxy Statement (the "Nominees") are not received by
April 16, 1997, 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
present 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. They will vote against
any such adjournment those proxies withholding authority to vote on any Nominee.
The Company will pay the costs of any additional solicitation and of any
adjourned meetings.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1997 Annual Meeting
of Stockholders must be received at the Company's new principal executive
offices located at 290 Donald Lynch Boulevard, Marlboro, Massachusetts 01752 not
later than November 14, 1997, in order to be considered for inclusion in the
proxy statement and form of proxy relating to that meeting.
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 1997. 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.
13
<PAGE> 16
0721PS97
<PAGE> 17
PROXY
MEDIA 100 INC.
ANNUAL MEETING OF STOCKHOLDERS,
APRIL 16, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John A. Molinari and Peter J. Rice, each of
them with power of substitution to each, to represent and to vote at the Annual
Meeting of Stockholders to be held on April 16, 1997 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 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 FOR THE ELECTION AS DIRECTORS OF ALL NOMINEES
NAMED HEREON OR ANY OF SUCH NOMINEES FOR WHICH APPROVAL IS NOT WITHHELD AND IN
THE DISCRETION OF THE NAMED PROXIES AS TO ANY OTHER MATTER NOT KNOWN A
REASONABLE TIME BEFORE THIS SOLICITATION THAT MAY COME BEFORE THIS MEETING OR
ANY ADJOURNMENTS THEREOF.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
/SEE REVERSE SIDE/
- --------------------------------------------------------------------------------
DETACH HERE
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
PLEASE DO NOT FOLD THIS PROXY.
1. Election of Directors
NOMINEES: John A. Molinari, Alfred A. Molinari, Jr., Paul J.
Severino, Bruce I. Sachs, Maurice L. Castonguay
FOR WITHHELD
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
--------------------------------------------------
For all nominees except as noted above
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED. IF NO CHOICE
IS SPECIFIED, THEN THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS
OF ALL NOMINEES NAMED HEREON, OR ANY OF SUCH NOMINEES FOR WHICH APPROVAL
HAS NOT BEEN WITHHELD. IN THEIR DISCRETION, 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 this 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:
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