<PAGE>
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
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Media 100 Inc.
- --------------------------------------------------------------------------------
(Name of 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):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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>
MEDIA 100 INC.
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 15, 1998
---------------------
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 15, 1998 at 10:00 a.m. for the following purposes:
1. To elect five directors.
2. To increase the number of shares of Common Stock authorized for
issuance under the 1986 Employee Stock Purchase Plan by 200,000 to a total
of 800,000 shares.
3. 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 3, 1998 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 1997 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 13, 1998
<PAGE>
MEDIA 100 INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 1998
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 15, 1998 at the principal executive offices of the Company,
located at 290 Donald Lynch Boulevard, Marlboro, Massachusetts 01752, and any
adjournments thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting.
This Proxy Statement is first being distributed to stockholders on or about
March 13, 1998. The Company's 1997 Annual Report to Stockholders, which includes
the Company's Annual Report on Form 10-K for the fiscal year ended November 30,
1997, accompanies this Proxy Statement.
VOTING RIGHTS AND OUTSTANDING SHARES
As of March 3, 1998, the Company had outstanding 8,251,095 shares of Common
Stock. Each share of Common Stock entitles the holder of record thereof at the
close of business on March 3, 1998 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 also 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 (i) to elect
the five nominees listed under "Election of Directors," or the nominees for
which approval has not been withheld, and (ii) in favor of increasing the number
of shares of Common Stock authorized for issuance under the 1986 Employee Stock
Purchase Plan, as amended (the "1986 Plan"), by 200,000 to a total of 800,000
shares. 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. A
favorable vote of a
<PAGE>
majority of the shares present or represented by proxy and voting at the Annual
Meeting is required for the approval of the other matters to be voted on.
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) 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.
1. 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. Information regarding
nominees is set forth below. All nominees are currently directors of the
Company.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- -------------------------------------------------------- ----------- ----------------------------------------
<S> <C> <C>
John A. Molinari........................................ 35 President and Chief Executive Officer
Maurice L. Castonguay................................... 46 Director
Roger W. Redmond........................................ 44 Director
Bruce I. Sachs.......................................... 38 Director
Paul J. Severino........................................ 51 Director
</TABLE>
Mr. Molinari has been a director since June 1995. He has been President and
Chief Executive Officer of the Company since November 1996. Prior to that, he
served as Vice President and General Manager of the Company's multimedia group
from 1990 to November 1996.
Mr. Castonguay has been a director since February 1997. He has been Chief
Financial Officer, Treasurer and Vice President of Finance and Administration of
Stratus Computer, Inc., a provider of fault tolerant computer systems, since
August 1997. Prior to that, he was employed by Gradient Technologies, Inc., a
provider of distributed computing and security solutions for the enterprise and
intranet markets, where he was Vice President and Chief Financial Officer from
March 1996 to August 1997. Prior to that, he was employed by Xylogics, Inc., a
supplier of remote access communications products, where he was Chief Financial
Officer from September 1990 to the company's acquisition by Bay Networks, Inc.
in December 1995, and remained in a transition role following the acquisition
until March 1996.
Mr. Redmond has been a director since February 1998. He has been President
and Chief Executive Officer of Teletraining Systems, Inc., a provider of
training for distance educators, since August 1997. Prior to that, he was a
Managing Director of Piper Jaffray, Inc., an investment banking firm, for
thirteen years. Mr. Redmond is also a director of Spire Corporation, a provider
of photovoltaic module manufacturing equipment, optoelectronic products and
biomedical processing services.
Mr. Sachs has been a director since December 1996. He has been President and
Chief Executive Officer of Stratus Computer, Inc., a provider of fault tolerant
computer systems, since May 1997. Prior to that, he was employed by Bay
Networks, Inc., a supplier of internetworking communication products, where he
was Executive Vice President and General Manager of the Internet Telecom
Business Group from May 1996 to May 1997, and President and General Manager of
the Remote Access Business Unit 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
2
<PAGE>
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. Mr. Sachs is also a director of Stratus Computer, Inc.
Mr. Severino has been a director since April 1985. He has been the Chairman
and Acting Chief Executive Officer of NetCentric Corporation, a provider of
internet protocol telephony applications, since August 1997. 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 also a director of Bay Networks, Inc., Stratus
Computer Inc., a provider of fault tolerant computer systems, and MTDC
(Massachusetts Telecommunications Development Corporation).
BOARD OF DIRECTORS
During the fiscal year ended November 30, 1997, the Company's Board of
Directors held eight meetings and acted by written consent on four additional
occasions. Each of the directors attended at least 75% 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 a 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. Castonguay, Sachs and Severino and former directors
R. Bradford Malt and Alfred A. Molinari, Jr. were members of the Audit Committee
during the fiscal year ended November 30, 1997. Messrs. Malt, Sachs and Severino
resigned from the committee in February 1997, and Messrs. Castonguay and
Molinari were appointed to the committee in their stead. Mr. Molinari
subsequently resigned from the committee in connection with his resignation from
the Board of Directors in January 1998. Mr. Redmond was appointed to the
committee in February 1998. During the fiscal year ended November 30, 1997, the
Audit Committee met on three occasions.
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, Sachs and Severino were members of the Compensation
Committee during the fiscal year ended November 30, 1997. Mr. Malt resigned from
the committee in February 1997. During the fiscal year ended November 30, 1997,
the Compensation Committee met on six occasions and acted by written consent on
two additional occasions.
During the fiscal year ended November 30, 1997, the Company compensated each
director who is not also an employee of the Company ("Non-Employee Directors")
$8,000 per year plus $1,000 per Board meeting attended 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 Mr. Severino,
also under the Company's Key Employee Incentive Plan (1982).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the fiscal year ended
November 30, 1997 were Messrs. Malt, Sachs and Severino. Mr. Malt, who resigned
from the committee in February 1997 in connection with his decision not to stand
for re-election as a director, 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.
3
<PAGE>
2. APPROVAL OF INCREASE IN NUMBER OF SHARES AUTHORIZED
FOR ISSUANCE UNDER THE 1986 EMPLOYEE STOCK PURCHASE PLAN
Under the 1986 Plan, eligible employees of the Company and its subsidiaries
are given the option to purchase shares of Common Stock at the lower of 85% of
fair market value at the date of grant of the option or 85% of fair market value
at the date of exercise of the option by means of payroll deductions.
In 1994, the Company's stockholders approved an increase in the number of
shares authorized for issuance under the 1986 Plan from 400,000 to 600,000 (as
adjusted to reflect the Company's two-for-one stock split that was effected in
July 1995). As of March 3, 1998, 54,090 shares remain available for future
grants under the 1986 Plan, which will not be sufficient to cover the election
by eligible employees to purchase shares for the six-month period ending
December 31, 1998. As a result, the Board of Directors has approved, and
submitted to the stockholders for approval, an increase in the number of shares
that may be purchased under the 1986 Plan of 200,000 for a total of 800,000
shares, subject to adjustment as described below. The Board of Directors
recommends a vote in favor of this increase.
The 1986 Plan permits the Company to grant six-month options to
participating employees to purchase shares. Each employee of the Company or one
of its subsidiaries having at least one month of continuous service on the date
of grant is eligible to participate in the 1986 Plan, except for any employee
who immediately after the grant of an option would be deemed under the Internal
Revenue Code of 1986, as amended, to own 5% or more of the Common Stock.
Options are granted twice yearly, on January 1 and July 1, and are
exercisable through accumulations of payroll deductions (of not less than 2% nor
more than 10% of compensation), for the number of whole shares determined by
dividing the balance in the employee's withholding account on the last day of
the option period by the purchase price per share for the stock determined under
the 1986 Plan. The purchase price for the shares will be the lower of 85% of the
fair market value of the stock at the time of grant, or 85% of said value at the
time of exercise.
The number of shares each employee is entitled to purchase is subject to
proportionate reduction in the event the number of shares then available under
the 1986 Plan is otherwise insufficient. No employee will be granted an option
under the 1986 Plan which would permit his or her right to purchase shares to
accrue at a rate which exceeds $25,000 in fair market value of Common Stock
(determined at the time the option is granted) for any calendar year (or $12,500
for any option period).
An employee may at any time prior to exercise cancel his or her option, and
upon such cancellation, payments made by the employee shall be returned to him
or her without interest. Each employee's rights in an option will be exercisable
during his or her lifetime only by him or her and may not be sold, pledged,
assigned, or otherwise transferred. The employee may elect to have the amount
credited to his or her withholding account at the time of his or her death
applied to the exercise of his or her option for the benefit of named
beneficiaries. Nothing in the 1986 Plan is to be construed so as to give an
employee the right to be retained in the service of the Company.
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 change in the capital stock of the Company, the aggregate number
of shares available under the 1986 Plan and under any outstanding options, the
option price, and other relevant provisions, will be appropriately adjusted. The
Company will have the right to amend the 1986 Plan at any time, but cannot make
an amendment (other than as stated above) relating to the aggregate number of
shares available under the Plan or the option price without the approval of the
stockholders. The Company may suspend or terminate the 1986 Plan at any time,
but such termination will not affect the rights of employees holding options at
the time of termination.
4
<PAGE>
The Compensation Committee administers the 1986 Plan, determines all
questions arising thereunder, and adopts, administers and interprets such rules
and regulations relating to the Plan as it deems necessary or advisable.
FEDERAL TAX EFFECTS. In general, for United States federal income tax
purposes, a participating employee will not recognize taxable income upon the
grant or exercise of an option awarded under the 1986 Plan.
An employee who purchases shares under the 1986 Plan and disposes of such
shares within two years after the first day of the applicable option period will
recognize ordinary income on the difference between the price paid per share and
the fair market value on the last day of that option period. The Company will
generally be entitled to a deduction in the amount of this income, subject to
possible limitation in the case of certain of the Company's officers.
In addition to ordinary income, an employee who sells shares within this
two-year period will recognize a capital gain or loss on the difference between
the amount realized on the sale and the employee's basis in the shares (i.e.,
the price paid by the employee under the 1986 Plan plus ordinary income
recognized by reason of the sale). A loss in connection with a sale to a family
member or certain other related parties would not be allowable for federal
income tax purposes.
If the employee disposes of shares purchased under the 1986 Plan more than
two years after the first day of the applicable participation period, or dies at
any time while holding the shares, ordinary income will be recognized equal to
the lesser of (i) the excess of the fair market value of the shares at the time
of disposition or death over the price paid under the 1986 Plan, or (ii) 15% of
the fair market value of the shares on the first day of the applicable
participation period. The Company would not be entitled to a deduction for this
amount. In addition to ordinary income, a capital gain will be recognized on the
excess, if any, of the amount realized on a sale over the employee's basis in
the shares (i.e., the price paid by the employee under the 1986 Plan plus any
ordinary income recognized by reason of such sale).
The foregoing is intended as a summary of federal income tax consequences
associated with the 1986 Plan and does not involve any discussion of federal
employment tax consequences or other federal tax consequences or of state, local
or other taxes.
As of March 3, 1998, approximately 180 employees were eligible to
participate in the 1986 Plan. Participation in the plan is discretionary on the
part of eligible employees, and the number of shares allocable to any
participant depends on the amount of that person's payroll deduction and the
applicable purchase price of the shares with respect to any option period.
Therefore, the Company cannot now determine the number of shares that may be
received by any particular person or group under the Plan. As of March 3, 1998,
the last reported sale price of the Common Stock on the Nasdaq National Market
was $3.50.
5
<PAGE>
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 13, 1998 (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>
Maurice L. Castonguay(2) 2,000 *
55 Fairbanks Boulevard
Marlboro, Massachusetts 01752
John A. Molinari 120,612 1.46%
290 Donald Lynch Boulevard
Marlboro, Massachusetts 01752
Roger W. Redmond 0 *
77 Garden Drive
Burnsville, Minnesota 55337
Bruce I. Sachs(3) 2,000 *
55 Fairbanks Boulevard
Marlboro, Massachusetts 01752
Paul J. Severino(4) 100,340 1.21
17 Msgr. O'Brien Highway
Cambridge, Massachusetts 02141
Anthony B. Dolph 0 *
290 Donald Lynch Boulevard
Marlboro, Massachusetts 01752
Peter J. Rice 0 *
290 Donald Lynch Boulevard
Marlboro, Massachusetts 01752
Anthony M. Scotto 0 *
290 Donald Lynch Boulevard
Marlboro, Massachusetts 01752
All executive officers and directors as a group (7 persons in all) 224,952 2.71
ADDITIONAL 5% STOCKHOLDERS
- ------------------------------------------------------------------------------------------
Alfred A. Molinari, Jr.(5) 1,038,549 12.48
100 Locke Drive
Marlboro, Massachusetts 01752
West Highland Capital, Inc.(6) 1,000,000 12.12
300 Drake's Landing Road, Suite 290
Greenbrae, California 94904
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY
ADDITIONAL 5% STOCKHOLDERS OWNED(1) PERCENT(1)
- ------------------------------------------------------------------------------------------ ----------- -----------
Dimensional Fund Advisors Inc.(7) 446,200 5.41
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
<S> <C> <C>
The Clark Estates, Inc.(8) 445,900 5.40
One Rockefeller Plaza
New York, New York 10020
</TABLE>
- ------------
* Represents less than 1%.
(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 13, 1998 held by a particular beneficial owner that are included in
the first column.
(2) Includes 2,000 shares subject to options exercisable within sixty days of
February 13, 1998.
(3) Includes 2,000 shares subject to options exercisable within sixty days of
February 13, 1998.
(4) Includes 40,000 shares subject to options exercisable within sixty days of
February 13, 1998.
(5) Includes 72,062 shares subject to options exercisable within sixty days of
February 13, 1998.
(6) 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.
(7) As reported in, and based solely upon, a Schedule 13G dated February 9,
1998, filed with the Securities and Exchange Commission by Dimensional Fund
Advisors Inc. (the "Dimensional Schedule 13G"). According to the Dimensional
Schedule 13G, Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 446,200 shares
of the Company's Common Stock as of December 31, 1997, all of which shares
are held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(8) As reported in, and based solely upon, a Schedule 13D dated October 10, 1997
filed with the Securities and Exchange Commission by The Clark Estates, Inc.
7
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company as of March 13, 1998 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ------------------------------------------------- ----------- -----------------------------------------------------
<S> <C> <C>
John A. Molinari................................. 35 President and Chief Executive Officer and Director
Anthony B. Dolph................................. 39 Vice President, Marketing
Anthony M. Scotto................................ 42 Vice President, Product Development
</TABLE>
Mr. Molinari has been President and Chief Executive Officer since November
1996. Prior to that, he served as Vice President and General Manager of the
Company's multimedia group from 1990 to November 1996. See "Election of
Directors."
Mr. Dolph has been Vice President, Marketing since January 1998. Prior to
that, he served as Vice President, Business Development from October 1997 to
January 1998, as Vice President, Strategic Planning from November 1996 to
October 1997, and as director of marketing for the Company's multimedia group
from June 1994 to November 1996. 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 has been Vice President, Product Development since November 1996.
Prior to that, he served as Vice President of Product Development for the
Company's multimedia group from June 1996 to November 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.
8
<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 Chief Executive Officer and each of the other executive officers whose
cash compensation exceeded $100,000 annually for the fiscal years ended November
30, 1997, 1996 and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS(1)
ANNUAL COMPENSATION SECURITIES
--------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(2)
- ---------------------------------------------- --------- ---------- ---------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
John A. Molinari(3)........................... 1997 $ 200,000 $ 0 20,000 $ 336
President and Chief Executive Officer 1996 140,000 105,000 60,000 235
1995 138,442 27,475 0 233
Anthony B. Dolph(4)........................... 1997 125,250 25,750 30,000 210
Vice President, Marketing 1996 111,882 20,625 0 188
1995 -- -- -- --
Peter J. Rice(5).............................. 1997 150,000 6,750 0 1,002
Vice President and Chief Financial 1996 140,000 52,500 40,000 1,510
Officer, Treasurer 1995 58,462 20,000 30,000 25
Anthony M. Scotto(6).......................... 1997 155,000 29,063 0 1,259
Vice President, Product Development 1996 75,558 24,219 40,000 63
1995 -- -- -- --
</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 and (ii) contributions to a defined contribution plan with respect
to (a) Mr. Rice in 1997 and 1996 and (b) Mr. Scotto in 1997.
(3) Mr. Molinari was appointed President and Chief Executive Officer effective
November 30, 1996. Prior to that he was Vice President and General Manager
of the Company's multimedia group.
(4) Mr. Dolph was appointed an executive officer of the Company effective
November 30, 1996.
(5) Mr. Rice commenced employment with the Company on July 31, 1995, and his
salary for that year included a signing bonus. Mr. Rice terminated his
employment with the Company on February 20, 1998.
(6) Mr. Scotto commenced employment with the Company on June 24, 1996, and was
appointed an executive officer of the Company effective November 30, 1996.
9
<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:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE 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 ($/SH) (1) DATE (1) ($) ($)
- ------------------------------------------ ----------- ----------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
John A. Molinari(3)....................... 20,000 4.4% $ 10.00 12/16/02 $ 68,019 $ 154,312
Anthony B. Dolph(3)....................... 10,000 2.2 10.00 12/16/02 34,010 77,156
20,000 4.4 4.63 7/2/03 31,359 71,269
Peter J. Rice............................. 0 -- -- -- -- --
Anthony M. Scotto......................... 0 -- -- -- -- --
</TABLE>
- ------------
(1) In January 1998, the Company offered employees the opportunity to
participate in an option repricing program, pursuant to which each employee
could elect to replace his or her then outstanding options with new options
on a one-for-one basis. The per share exercise price of the replacement
options is $3.94. The replacement options are exercisable as follows:
replacement options that were granted in exchange for exercisable old
options become exercisable six months following the new grant date;
replacement options that were granted in exchange for unexercisable old
options become exercisable over four years from the new grant date, 12.5%
six months following the new grant date and 6.25% quarterly thereafter; and
all replacement options expire ten years after the new grant date. All of
the options listed in the table were exchanged for new options pursuant to
the foregoing program.
(2) The amounts shown do not reflect the stock option repricing program
described in the preceding footnote.
(3) These options, when initially granted, would have become exercisable over
five years, 20% on each anniversary of the grant, and have expired six years
after grant.
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the Named
Executive Officers, concerning the unexercised options held as of the end of the
fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT
OPTIONS AT FY-END (#) FY-END ($)(1)
SHARES ACQUIRED VALUE ------------------------- -------------
NAME ON EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE
- ----------------------------------- --------------------- ------------------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
John A. Molinari................... 0 0 36,482 105,768 $ 791
Anthony B. Dolph................... 0 0 12,000 38,000 0
Peter J. Rice...................... 0 0 20,000 50,000 0
Anthony M. Scotto.................. 0 0 8,000 32,000 0
<CAPTION>
NAME UNEXERCISABLE
- ----------------------------------- -----------------
<S> <C>
John A. Molinari................... $ 0
Anthony B. Dolph................... 0
Peter J. Rice...................... 0
Anthony M. Scotto.................. 0
</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 stock option repricing program described in footnote 1 to the
preceding table.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for reviewing the compensation of
the executive officers of the Company. The committee also grants stock options
under the Company's stock option plans and administers the Company's employee
stock purchase plan.
COMPENSATION PHILOSOPHY. The Company operates in a highly competitive and
rapidly evolving high technology business. The committee seeks to establish
compensation policies that provide management with a performance incentive, and
that align the interests of senior management with stockholder interests. The
program includes three principal components: salary, annual incentives, and
stock option awards. The committee considers the past performance and
anticipated future contribution of each executive officer in establishing the
total amount and mix of each element of compensation.
SALARY. The salaries of the executive officers (including the Chief
Executive Officer) are reviewed annually by the committee in light of survey
information developed by an independent compensation and benefits consultant.
The committee considers the median compensation levels for comparable positions
at other technology companies, but does not, as a matter of policy, fix
compensation of all executive officers as a percentage of such median levels.
Accordingly, compensation levels for an executive officer may be set by the
committee above or below such median levels, based on the committee's subjective
assessment of other factors, including the scope of an individual's
responsibilities, his or her prior level of experience and competition for
executives with the skills required by the Company. Based on the above
considerations, the base salaries of the executive officers were increased
during fiscal 1997 between 0% and 43% over the levels in effect at the end of
fiscal 1996.
ANNUAL INCENTIVES. The committee annually reviews and approves an executive
incentive plan which provides executive officers (including the Chief Executive
Officer) with the opportunity to earn specified percentages of their base salary
based upon targeted financial goals and, in certain instances, on the
achievement of individual objectives and a subjective assessment of the
executive's performance. For the last fiscal year, the financial targets
approved by the committee included goals for revenue and operating income, and
the percentage of the target incentive tied to each financial goal varied among
the executive officers depending on the scope of an individual's
responsibilities and the significance of an individual's anticipated
contribution to the overall objectives of the Company. The committee approved
the range of the target incentives for the executive officers at 30% to 50% of
base compensation, based on the above considerations.
No incentive payments under the fiscal 1997 plan were made with respect to
the targeted financial goals. Certain executive officers received payments under
the plan with respect to their achievement of individual objectives and a
subjective assessment by the committee of their performance.
STOCK OPTION AWARDS. Stock option awards are designed to align the
interests of the executive officers with the long-term interests of the
stockholders. The committee awards stock options generally at fair market value
on the date of grant, and such awards are subject to vesting periods which are
intended to encourage the executive officer to remain with the Company. The
timing and amount of stock option awards given to the executive officers in
fiscal 1997 were based in each case on the committee's subjective judgment of
the particular circumstances of the individual.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Mr. Molinari's salary, annual
incentive opportunity and stock option award for fiscal 1997 were determined by
the committee in accordance with the philosophy described above. Mr. Molinari's
base salary was fixed at $200,000 to reflect his appointment and added
responsibilities as Chief Executive Officer. Mr. Molinari's annual incentive
opportunity represented 50% of his base salary at target, and was based upon the
Company's achievement of certain targeted revenue and operating income goals. No
incentive payment was made to Mr. Molinari for fiscal 1997 as the Company's
performance fell below the prescribed plan thresholds. In December 1996 Mr.
Molinari was granted non-qualified stock options to purchase 20,000 shares at
11
<PAGE>
the then fair market value of $10.00 per share, such options becoming
exercisable annually over five years and expiring six years from the date of
grant. This grant was determined by the committee to be appropriate, in light of
Mr. Molinari's appointment as Chief Executive Officer, as well as his existing
level of stock options.
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a tax deduction to public companies for compensation over $1,000,000
in any year to the company's chief executive officer or any of 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 1997, the committee anticipates that in fiscal 1998 all
compensation to executive officers will be fully deductible under Section
162(m). The committee therefore has not yet found it necessary to enact a policy
with respect to qualifying compensation paid to executive officers for
deductibility.
COMPENSATION COMMITTEE
Bruce I. Sachs
Paul J. Severino
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to moving into its current Marlboro, Massachusetts facility on May 2,
1997, the Company's principal executive, engineering, manufacturing and sales
operations occupied space in a facility (the "Facility") which it shared with
its former subsidiary, Data Translation, Inc. ("DTI"). Mr. Alfred A. Molinari,
Jr., a former director of the Company, is the Chairman and Chief Executive
Officer of DTI, and is the father of Mr. John A. Molinari. The Facility is
leased by DTI and owned by Nason Hill Trust, a nominee trust of which Mr. A.
Molinari and his wife are the sole trustees and beneficiaries. During the period
of the Company's occupancy of the Facility from December 2, 1996 to May 2, 1997,
the Company paid DTI monthly license fees in the aggregate of $526,885. These
fees were 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 belonging to DTI.
During the period from December 2, 1996 to July 14, 1997, the Company's
United Kingdom operations occupied a portion of a facility leased by Data
Translation Ltd., a subsidiary of DTI, for which the Company paid monthly
license fees in the aggregate of approximately $36,000. During the period from
December 2, 1996 to March 31, 1997, the Company's German operations occupied a
portion of a facility leased by Data Translation GmbH, a subsidiary of DTI, and
obtained certain administrative services, for which the Company made a lump-sum
payment equal to approximately $60,000.
The Company and DTI are parties to a Corporate Services Agreement, pursuant
to which DTI provided certain finance and administrative and manufacturing
services and support to the Company during the fiscal year ended November 30,
1997. The amount payable by the Company to DTI under the agreement is based on
the particular 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. On November 18, 1997, the
parties agreed to extend the original term of the agreement until the earlier of
the discontinuance or termination of all services thereunder or September 30,
1998. In addition, the Company contracts with DTI for certain other engineering
services on an as-needed basis. For the fiscal year ended November 30, 1997, the
Company paid $443,233 for services provided by DTI as described above.
12
<PAGE>
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 CRSP Total Return Index for The Nasdaq Stock
Market (U.S. Companies) (the "Nasdaq Stock Market (U.S.) Index") and the CRSP
Index for Nasdaq Electronic Component Stocks (the "Nasdaq Electronic Component
Index") for the period of five fiscal years commencing November 30, 1992 and
ending November 30, 1997.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ STOCK NASDAQ ELECTRONIC MEDIA 100 INC.
<S> <C> <C> <C>
Market (U.S.) Index Component Index (MDEA)
1992 $100.00 $100.00 $100.00
1993 $243.42 $153.57 $101.40
1994 $243.90 $172.57 $253.50
1995 $347.75 $318.28 $659.10
1996 $425.82 $494.67 $384.47
1997 $530.35 $581.33 $154.23
</TABLE>
The above graph compares the performance of the Company with that of the
Nasdaq Stock Market (U.S.) Index, which is an index comprising all domestic
shares traded on the Nasdaq National Market and the Nasdaq SmallCap Market, and
the Nasdaq Electronic Component Index, which is an industry index. Both these
indices are prepared by the Center of Research in Securities Prices at the
University of Chicago, and 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, 1992 in each of the Nasdaq
Stock Market (U.S.) Index and the Nasdaq Electronic Component 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, 1997 all filing requirements
applicable to its officers, directors and such 10% beneficial owners were
complied with, except that Mr. Castonguay's Form 3 was inadvertently filed more
than ten days after his appointment as a director of the Company.
13
<PAGE>
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") or any other matter
presented hereunder are not received by April 15, 1998, 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 and all such other 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.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1999 Annual Meeting of
Stockholders must be received at the Company's principal executive offices
located at 290 Donald Lynch Boulevard, Marlboro, Massachusetts 01752 not later
than November 13, 1998, 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 1998. 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.
14
<PAGE>
MEDIA 100 INC.
1986 EMPLOYEE STOCK PURCHASE PLAN,
AS AMENDED THROUGH MARCH 2, 1998
Section 1. PURPOSE OF PLAN.
The Media 100 Inc. ("Media 100") 1986 Employee Stock Purchase Plan (the
"Plan") is intended to provide a method by which eligible employees of Media 100
(formerly Data Translation, Inc.) and its subsidiaries (collectively, the
"Company") may use voluntary, systematic payroll deductions to purchase shares
of Common Stock of Media 100 ("stock") and thereby acquire an interest in the
future of the Company. For purposes of the Plan, a subsidiary is any
corporation in which Media 100 owns, directly or indirectly, stock possessing
50% or more of the total combined voting power of all classes of stock.
Section 2. OPTIONS TO PURCHASE STOCK.
Under the Plan, there is available an aggregate of not more than 600,000
shares of stock (subject to adjustment as provided in Section 16) for sale
pursuant to the exercise of options ("options") granted under the Plan to
employees of the Company ("employees"). The stock to be delivered upon exercise
of options under the Plan may be either shares of Media 100's authorized but
unissued stock, or shares of reacquired stock, as the Board of Directors of
Media 100 (the "Board of Directors") shall determine.
Section 3. ELIGIBLE EMPLOYEES.
Except as otherwise provided in Section 20, each employee who has completed
one month of continuous service in the employ of the Company shall be eligible
to participate in the Plan.
Section 4. METHOD OF PARTICIPATION.
Subject to the second paragraph of Section 8, the periods January 1 to June
30 and July 1 to December 31 of each year shall be option periods. Each person
who will be an eligible employee on the first day of any option period may elect
to participate in the Plan by executing and delivering, at least 15 days prior
to such day, a payroll deduction authorization in accordance with Section 5.
Such employee shall thereby become a participant ("participant") on the first
day of such option period and shall remain a participant until his participation
is terminated as provided in the Plan. Each participant shall execute, prior to
or contemporaneously with his election to participate in the Plan, the Company's
then standard form of Employee Agreement relating to confidentiality, inventions
and the like.
A-1
<PAGE>
Section 5. PAYROLL DEDUCTIONS.
The payroll deduction authorization shall request withholding, at a rate of
not less than 2% nor more than 10%, from the participant's compensation, by
means of substantially equal payroll deductions over the option period. For
purposes of the Plan, "compensation" shall mean all compensation paid to the
participant by the Company including compensation paid as bonuses and
commissions, but excluding overrides, overseas allowances, and payments under
stock option plans and other employee benefit plans A participant may change
the withholding rate of his payroll deduction authorization by written notice
delivered to the Company at least 15 days prior to the first day of the option
period as to which the change is to be effective. All amounts withheld in
accordance with a participant's payroll deduction authorization shall be
credited to a withholding account for such participant.
Section 6. GRANT OF OPTIONS.
Each person who is a participant on the first day of an option period shall
as of such day be granted an option for such period. Such option shall be for
the number of shares of stock to be determined by dividing (a) the balance in
the participant's withholding account on the last day of the option period by
(b) the purchase price per share of the stock determined under Section 7, and
eliminating any fractional share from the quotient. The Company shall reduce on
a substantially proportionate basis the number of shares of stock receivable by
each participant upon exercise of his option for an option period in the event
that the number of shares then available under the Plan is otherwise
insufficient.
Section 7. PURCHASE PRICE.
The purchase price of stock issued pursuant to the exercise of an option
shall be 85% of the fair market value of the stock at (a) the time of grant of
the option or (b) the time at which the option is deemed exercised, whichever is
less. Fair market value shall be determined in accordance with the applicable
provisions of the Internal Revenue Code of 1986, as amended or restated from
time to time (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 the stock is traded on the day in question or the last prior date on which
a trade occurred as reported in the Wall Street Journal; or, if the Wall Street
Journal is not published or does not list the stock, then in such other
appropriate newspaper of general circulation as the Board of Directors may
prescribe; or, if the last price at which the stock traded is not generally
reported, then the mean between the reported bid and asked prices at the close
of the market on the day in question or the last prior date when such prices
were reported.
A-2
<PAGE>
Section 8. EXERCISE OF OPTIONS.
If an employee is a participant in the Plan on the last business day of an
option period, he shall be deemed to have exercised the option granted to him
for that period. Upon such exercise, the Company shall apply the balance of the
participant's withholding account to the purchase of the number of whole shares
of stock determined under Section 6, and as soon as practicable thereafter shall
issue and deliver certificates for said shares to the participant and shall
return to him the balance, if any, of his withholding account in excess of the
total purchase price of the shares so issued. No fractional shares shall be
issued hereunder.
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to deliver any shares unless and until, in the opinion of the
Company's counsel, all requirements of applicable federal and state laws and
regulations (including any requirements as to legends) have been complied with,
nor, if the outstanding 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.
Section 9. INTEREST.
No interest will be payable on withholding accounts.
Section 10. CANCELLATION AND WITHDRAWAL.
A participant who holds an option under the Plan may at any time prior to
exercise thereof under Section 8 cancel all (but not less than all) of his
option by written notice delivered to the Company. Upon such cancellation, the
balance in his withholding account shall be returned to him.
A participant may terminate his payroll deduction authorization as of any
date by written notice delivered to the Company and shall thereby cease to be a
participant as of such date. Any participant who voluntarily terminates his
payroll deduction authorization prior to the last business day of an option
period shall be deemed to have canceled his option.
Section 11. TERMINATION OF EMPLOYMENT.
Except as otherwise provided in Section 12, upon the termination of a
participant's employment with the Company for any reason whatsoever, he shall
cease to be a participant, and any option held by him under the Plan shall be
deemed cancelled, the balance of his withholding account shall be returned to
him, and he shall have no further rights under the Plan. For purposes of this
Section 11, a participant's employment will not be considered terminated in the
case of sick leave or other bona fide leave of absence approved for purposes of
this Plan by Media 100 or a subsidiary or in the case of a transfer to the
employment of a subsidiary or to the employment of Media 100.
A-3
<PAGE>
Section 12. DEATH OR RETIREMENT OF PARTICIPANT.
In the event a participant holds any option hereunder at the time his
employment with the Company is terminated (1) by his retirement with the consent
of the Company, and such retirement is within three months of the time such
option becomes exercisable, or (2) by his death whenever occurring, then such
participant (or in the event of death, his legal representative) may, by a
writing delivered to the Company on or before the date such option is
exercisable, elect either (a) to cancel any such option and receive in cash the
balance in his withholding account, or (b) to have the balance in his
withholding account applied as of the last day of the option period to the
exercise of his option pursuant to Section 8. In the event such participant (or
his legal representative) does not file a written election as provided above,
any outstanding option shall be treated as if an election had been filed
pursuant to subparagraph (a) above.
Section 13. PARTICIPANT'S RIGHTS NOT TRANSFERABLE, ETC.
All participants granted options under the Plan shall have the same rights
and privileges. Each participant's rights and privileges under any option
granted under the Plan shall be exercisable during his lifetime only by him, and
shall not be sold, pledged, assigned, or otherwise transferred in any manner
whatsoever except by will or the laws of descent and distribution. In the event
any participant violates the terms of this Section, any options held by him may
be terminated by the Company and upon return to the participant of the balance
of his withholding account, all his rights under the Plan shall terminate.
Section 14. EMPLOYMENT RIGHTS.
Neither the adoption of the Plan nor any of the provisions of the Plan
shall confer upon any participant any right to continued employment with Media
100 or a subsidiary or affect in any way the right of the Company to terminate
the employment of a participant at any time.
Section 15. RIGHTS AS A SHAREHOLDER.
A participant shall have the rights of a shareholder only as to stock
actually acquired by him under the Plan.
Section 16. CHANGE IN CAPITALIZATION.
In the event of a stock dividend, stock split or combination of shares,
recapitalization, merger in which Media 100 is the surviving corporation or
other change in Media 100's capital stock, the number and kind of shares of
stock or securities of Media 100 to be subject to the Plan and to options then
outstanding or to be granted hereunder, the maximum number of shares or
securities which may be delivered under
A-4
<PAGE>
the Plan, the option price and other relevant provisions shall be appropriately
adjusted by the Board of Directors, whose determination shall be binding on all
persons. In the event of a consolidation or merger in which Media 100 is not
the surviving corporation or in the event of the sale or transfer of
substantially all Media 100's assets (other than by the grant of a mortgage or
security interest), all outstanding options shall thereupon terminate, provided
that prior to the effective date of any such merger, consolidation or sale of
assets, the Board of Directors shall either (a) return the balance in all
withholding accounts and cancel all outstanding options, or (b) accelerate the
exercise date provided for in Section 8, or (c) if there is a surviving or
acquiring corporation, arrange to have that corporation or an affiliate of that
corporation grant to the participants replacement options having equivalent
terms and conditions as determined by the Board of Directors.
Section 17. ADMINISTRATION OF PLAN.
The Plan will be administered by the Board of Directors. The Board of
Directors will have authority, not inconsistent with the express provisions of
the Plan, to take all action necessary or appropriate hereunder, to interpret
its provisions, and to decide all questions and resolve all disputes which may
arise in connection therewith. Such determinations of the Board of Directors
shall be conclusive and shall bind all parties.
The Board may, in its discretion, delegate its powers with respect to the
Plan to an Employee Benefit Plan Committee or any other committee (the
"Committee"), in which event all references to the Board of Directors hereunder,
including without limitation the references in Section 18, shall be deemed to
refer to the Committee. 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.
Section 18. AMENDMENT AND TERMINATION OF PLAN.
The Board of Directors may at any time or times amend the Plan or amend any
outstanding option or options for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law, provided that (except to the extent explicitly
required or permitted herein) no such amendment will, without the approval of
the shareholders of Media 100, (a) increase the maximum number of shares
available under the Plan, (b) reduce the option price of outstanding options or
reduce the price at which options may be granted, or (c) amend the provisions of
this Section 18 of the Plan, and no such amendment will adversely affect the
rights of any participant (without his consent) under any option theretofore
granted.
The Plan may be terminated at any time by the Board of Directors, but no
such termination shall adversely affect the rights and privileges of holders of
the outstanding options.
A-5
<PAGE>
Section 19. APPROVAL OF SHAREHOLDERS.
The Plan shall be subject to the approval of the shareholders of the
Company, which approval shall be secured within twelve months after the date the
Plan is adopted by the Board of Directors. Notwithstanding any other provisions
of the Plan, no option shall be exercised prior to the date of such approval.
For purposes of the foregoing, any increase in the number of shares described in
Section 2, other than pursuant to adjustment as provided in Section 16, shall be
treated as an adoption of the Plan with respect to the additional shares.
Section 20. LIMITATIONS ON ELIGIBILITY.
Notwithstanding any other provision of the Plan,
(a) An employee shall not be eligible to receive an option pursuant to the
Plan if, immediately after the grant of such option to him, he would (in
accordance with the provisions of Sections 423 and 425(d) of the Code) own or be
deemed to own stock possessing 5% or more of the total combined voting power or
value of all classes of stock of the employer corporation or of its parent or
subsidiary corporation, as defined in Section 425 of the Code.
(b) No employee shall be granted an option under the Plan which would
permit his rights to purchase shares of stock under all employee stock purchase
plans of the Company and any parent and subsidiary corporations to accrue at a
rate which exceeds $25,000 in fair market value of such stock (determined at the
time the option is granted) for each calendar year during which any such option
granted to such employee is outstanding at any time, as provided in Sections 423
and 425 of the Code. Without limiting the foregoing, the maximum number of
shares for which an employee may be granted an option under the Plan for any
six-month option period shall be the number of whole shares obtained by dividing
$12,500 by the fair market value of one share of Common Stock on the date of
grant.
A-6
<PAGE>
DETACH HERE
PROXY
MEDIA 100 INC.
ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John A. Molinari and Steven D. Shea, 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 15, 1998 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 FAVOR of increasing the number of shares of Common Stock authorized for
issuance under the 1986 Employee Stock Purchase Plan by 200,000 to a total of
800,000 shares and in the discretion of the name 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 |
------------
<PAGE>
DETACH HERE
<TABLE>
<S> <C>
PLEASE MARK ___
/X/ VOTES AS IN |
THIS EXAMPLE. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS:
PLEASE DO NOT FOLD THIS PROXY.
FOR AGAINST ABSTAIN
1. Election of Directors. 2. Increasing the number of / / / / / /
shares of Common Stock
NOMINEES: Maurice L. Castonguay, John A. Molinari, authorized for issuance
Roger W. Redmond, Bruce I. Sachs, Paul J. Severino under the 1986 Employee
Stock Purchase Plan by
/ / FOR / / WITHHELD 200,000 to a total of 800,000
ALL FROM ALL shares.
NOMINEES NOMINEES
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
/ /________________________________________ AS SPECIFIED. IF NO CHOICE IS SPECIFIED, THEN THIS
For all nominees except as noted above PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS
OF ALL NOMINEES NAMES HEREON, OR ANY OF SUCH
NOMINEES FOR WHICH APPROVAL HAS NOT BEEN WITHHELD,
AND IN FAVOR OF INCREASING THE NUMBER OF SHARES OF
COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER THE 1986
EMPLOYEE STOCK PURCHASE PLAN BY 200,000 TO A TOTAL OF
800,000 SHARES. 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 of each
fiduciary should sign personally. Only authorized
officers should sign for corporations.
Signature: _________________________ Date: ___________________ Signature: _________________________ Date: ___________________
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