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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM __________________ TO _________________
COMMISSION FILE NUMBER: 0-18280
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DIGITAL SOUND CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 95-3222624
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER)
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
6307 CARPINTERIA AVENUE, CARPINTERIA, CALIFORNIA 93013
- ------------------------------------------------ ----------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(805) 566-2000
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, NO PAR VALUE
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(TITLE OF CLASS)
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ X ]
The aggregate market value of Registrant's voting stock held by non-affiliates
of the Registrant as of January 22, 1998 was approximately $28,967,294
The number of shares outstanding of Registrant's common stock as of January 22,
1998: 20,561,593.
Documents Incorporated by Reference:
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Part of the following document is incorporated by reference to Part III of the
Form 10-K Report: Proxy Statement for Registrant's 1998 Annual Meeting of
Stockholders (the "1998 Proxy Statement").
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 18, 1998.
DIGITAL SOUND CORPORATION
By: /s/ B. Robert Suh
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B. Robert Suh
Vice President, Finance and
Chief Financial Officer
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, this report has been signed by the following persons in the
capacities and on the dates indicated.
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<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
Chief Executive Officer:
President,
/s/ Mark C. Ozur Chief Executive Officer, March 18, 1998
- ------------------------- and Director
Mark C. Ozur
Chief Financial Officer:
/s/ B. Robert Suh Vice President, Finance March 18, 1998
- ----------------------- Chief Financial Officer
Robert Suh
Directors:
/s/ John D. Beletic Director March 18, 1998
- --------------------------
John D. Beletic
/s/ Bandel L. Carano Director March 18, 1998
- -------------------------
Bandel L. Carano
/s/ J. David Hann Director March 18, 1998
- -------------------------
J. David Hann
/s/ Scot B. Jarvis Director March 18, 1998
- ------------------------
Scot B. Jarvis
/s/ Cameron D. Myhrvold Director March 18, 1998
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Cameron D. Myhrvold
/s/ Frederick J. Warren Director March 18, 1998
- ---------------------------
Frederick J. Warren
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EXHIBIT 10.40
DIGITAL SOUND CORPORATION
DESCRIPTION OF REGISTRANT'S
EXECUTIVE OFFICER BONUS PLAN FOR 1998
1998 OFFICER BONUS PLAN
CASH BONUS
. CONTRACT SIGNING BONUS - A bonus of 5% of the Officer's annual base salary
will be paid each time the Company closes a new contract in 1998 that will
produce $20 Million or more of committed, non-renegotiable revenue over not
more than a three-year period. If no such commitment is made, but the contract
does contribute $20 Million in revenue over the three-year period, the bonus
will be paid to Officers employed when the goal is reached who were also
employed when the contract was signed. Payout will be made in the first
paycheck after all signed commitment closing documents are received or the $20
Million goal recognized and audited, whichever is sooner.
. REVENUE and INCOME BONUS - At plan, the target revenue bonus is 10% of base
salary for Officer Vice Presidents and 12.5% for the President. At plan, the
target pre-tax income bonus is also 10% of base salary for Officer Vice
Presidents and 12.5% for the President.
. The percentage payoff indicated in the table below will be linearly
prorated if achievement falls between two points in a given dimension.
Separate prorated calculations will be done for revenue and pre-tax
income.
. The pre-tax loss must be less than $4 Million and revenue must be greater
than $33 Million for any bonus to be paid based on this matrix.
. The Revenue and Income Bonus payments are capped at 50% for VP's and
62.5% for the President.
. The table below sets forth the bonus percentage at various combinations
of revenue and income; for VP's, x=10%; for the President, x=12.5%.
<TABLE>
<CAPTION>
REVENUE
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<S> <C> <C> <C>
PRE-TAX BUDGET REVENUE BUDGET REVENUE BUDGET REVENUE
INCOME LESS PLUS
$8 MILLION $10 MILLION
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BUDGET
INCOME/LOSS
LESS 0x 0x 0x
$4 MILLION
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BUDGET
INCOME/LOSS 0.5x 1x 2x
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BUDGET
INCOME/LOSS
PLUS 0.75x 1.5x 2.5x
$2.5 MILLION
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</TABLE>
The 1998 Officer Bonus Plan will be administered by the Compensation Committee
of the Board of Directors, and any decision of such Committee regarding the
interpretation of the Plan or other issue in connection with payouts under the
plan will be final and within the sole discretion of the Committee.
