DATAMARINE INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 21, 2001
To Holders of Common Stock of Datamarine International, Inc.:
The Annual Meeting of the Shareholders (the "Meeting") of DATAMARINE
INTERNATIONAL, INC. (the "Company") will be held on Wednesday, March 21,
2001 at 10:30 a.m. at the offices of Datamarine International, Inc.,
7116 220th St. S.W., Mountlake Terrace, Washington 98043, for the
following purposes:
1. To elect two directors for terms ending in 2003 and two
directors for terms ending in 2004.
2. To approve the adoption of the Datamarine International, Inc.
2001 Stock Incentive Plan.
3. To approve an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of
Preferred Stock from 1,000,000 shares to 5,000,000 shares.
4. To approve an amendment to the Company's Articles of
Incorporation giving the Board of Directors authority to set the
rights and preferences for one or more series of Preferred Stock.
5. To ratify the selection by the Board of Directors of Grant
Thornton LLP as the Company's independent auditors for 2001.
6. To consider and act upon any other business which may properly
come before the Meeting and any adjournments or postponements
thereof.
The Board of Directors has fixed the close of business on February 14,
2001 as the record date for the Meeting. All Shareholders of record on that
date are entitled to notice of and to vote at the Meeting and any
adjournments or postponements thereof.
All shareholders are cordially invited to attend the meeting in
person. TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE
FILL IN, SIGN AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE, using
the return envelope which requires no postage if mailed in the United
States. Certain shareholders may also vote by telephone or Internet as
described on the proxy card.
On behalf of the Board of Directors,
David C. Thompson
President, CEO and Secretary
Mountlake Terrace, Washington
February 26, 2001
DATAMARINE INTERNATIONAL, INC.
PROXY STATEMENT
Introduction
This statement is furnished to shareholders of Datamarine
International, Inc. (the "Company") in connection with the solicitation by
the Board of Directors of proxies to be used at the Annual Meeting of
shareholders of the Company (the "Meeting") to be held on March 21, 2001, at
the time and place set forth in the Notice of the Meeting, and at any
adjournments or postponements thereof. The individuals named as proxies are
Stephen W. Frankel and David C. Thompson. The approximate date on which
this Proxy Statement and form of proxy are first being sent to shareholders
is on or about February 26, 2001.
Procedural Matters
If the enclosed proxy is properly executed and returned, it will be
voted in the manner directed by the shareholder.
Shareholders of record (that is, shareholders who hold shares in their
own name) can vote by completing and returning a written proxy card.
If you are a registered shareholder and attend the Meeting, you may
deliver your completed proxy card in person. Any person giving the enclosed
form of proxy has the power to revoke it by voting in person at the Meeting,
or by giving written notice of revocation to the Secretary of the Company at
any time before the proxy is exercised.
If your shares are held in the name of a bank, broker or other holder
of record (that is "street name"), you will receive instructions from the
holder of record that you must follow in order for your shares to be voted.
Street name shareholders who wish to vote at the Meeting will need to obtain
a proxy form from the institution that holds their shares. If you vote by
telephone of the Internet, your electronic vote authorizes the named proxies
in the same manner as if you had signed, dated and returned your proxy card.
If you vote by telephone or the Internet, you should not return your proxy
card.
Unless you give other instructions on your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board's recommendation is
set forth together with the description of each item in this proxy
statement. In summary, the Board recommends a vote for:
* the nominees for director listed in these materials and on the
proxy; and
* the approval of the adoption of the Datamarine International,
Inc. 2001 Stock Incentive Plan; and
* the approval of an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of
Preferred Stock from 1,000,000 shares to 5,000,000 shares; and
* the approval of an amendment to the Company's Articles of
Incorporation giving the Board of Directors authority to set the
rights and preferences for one or more series of Preferred Stock;
and
* the ratification of Grant Thornton LLP as the Company's
independent auditors for 2001.
With respect to any other matter that properly comes before the
Meeting, the proxy holders will vote as recommended by the Board of
Directors or, if no recommendation is given, in their own discretion.
Only shareholders of record at the close of business on the record
date, February 14, 2001, are entitled to receive notice of the Meeting and
to vote the shares of Common Stock they held on that date at the Meeting, or
any postponement or adjournment of the Meeting. Each outstanding share
entitles its holder to cast one vote on each matter to be voted upon.
Shareholders do not have cumulative voting rights in the election of
directors.
The Company will bear the costs of this solicitation. It is expected
that the solicitation will be made primarily by mail, but regular employees
or representatives of the Company (none of whom will receive any extra
compensation for their activities) may also solicit proxies by telephone,
mail and in person and arrange for brokerage houses and their custodians,
nominees and fiduciaries to send proxies and proxy material to their
principals at the expense of the Company.
Quorum; Abstentions; Broker Non-Votes
The holders of a majority in interest of all Common Stock issued,
outstanding and entitled to vote are required to be present in person or be
represented by proxy at the Meeting in order to constitute a quorum for the
transaction of business. As of the record date, the Company had outstanding
and entitled to vote 5,749,848 shares of Common Stock with a par value of
$.01 per share. Shares that are voted "FOR", "AGAINST" or "ABSTAIN" in a
matter are treated as being present at the Meeting for purposes of
establishing quorum. Accordingly, abstentions and broker non-votes will be
counted for the purposes of determining the absence or presence of a quorum
for the transaction of business, but will not be counted for purposes of
determining the number of votes cast with respect to a proposal.
In the election of directors, the four candidates receiving the
highest number of affirmative votes will be elected as directors. Proposals
2 and 5 require the affirmative vote of a majority of the votes cast at the
meeting. Proposals 3 and 4 require the affirmative vote of a majority of
the shares of Common Stock outstanding at the record date.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with each class
as nearly equal in number as possible. Directors are elected, by class, for
three year terms. Successors to the class of directors whose term expires
at any annual meeting are elected to three year terms. Each of Arthur P.
Stasik and Gerald E. Setka is nominated to serve for a two-year term until
the annual meeting of shareholders in 2003. Each of David C. Thompson and
Joseph L. Stephens is nominated to serve for a three-year term until the
annual meeting of shareholders in 2004. A nominee would normally be elected
to serve for a term of three years commencing on the date of the Meeting and
continuing until his or her successor is duly elected and qualified. Both
Arthur P. Stasik and Joseph L. Stevens were appointed to fill Board
vacancies in November 2000, and Gerald E. Setka was appointed to fill a
Board vacancy in January 2001.
Certain information as of February 14, 2001 regarding each director is
set forth below, including such individual's age and principal occupation, a
brief account of business experience during at least the last five years,
and directorships held at other publicly held companies.
Position with Company or Principal
Name Age Director Since Occupation During the Past Five Years
---- --- -------------- -------------------------------------
Nominated for a term ending in 2003:
Arthur P. Stasik 64 2000 Since 1991, private investor, primarily in
specialized mobile radio. From 1960 to 1991,
electronics engineer for the United States
Department of Defense.
Nominated for a term ending in 2003:
Gerald E. Setka 51 2001 Since 1999, Business Systems Support Manager
for PG&E National Energy Group, a power utility.
From 1994 through 1999, independent consulting
engineer to nuclear and electric power and
telecommunications industries.
Nominated for a term ending in 2004:
David C. Thompson 71 1987 President and CEO of the Company since October
1997. Secretary and Treasurer of the Company
since March 1996. Principal Financial and
Accounting Officer of the Company from 1995 to
October 1997. President and CEO of SEA Inc., a
wholly owned subsidiary of the Company. Previously
President and CEO of Stephens Engineering
Associates, Inc., which was acquired by the Company
in 1986.
Nominated for a term ending in 2004:
Joseph L. Stephens 42 2000 Since 1995, President of Millcreek Management
Corporation, a facility management company for
health care providers. Since 1995, President of
Rehabilitation Centers, Inc., providers of
mental health services.
Serving for a term ending in 2002:
Stephen W. Frankel 54 1997 Since 1996, self-employed private investor. From
1988 through 1995, served in various capacities
including President, COO, Chairman and CEO of
RETIX, a manufacturer of networking products.
Director Compensation
Each non-employee director of the Company receives a fee of $500 per
quarter plus $400 for each meeting of the Board of Directors attended. In
addition, each non-employee director who serves on a committee of the Board
receives $300 for each committee meeting attended (other than on the day of
a Board meeting). Directors also receive reimbursement for out-of-pocket
expenses relating to attendance at Board or committee meetings. Effective
March 1996, each non-employee director also receives an immediately
exercisable option to purchase 2,000 shares of the Company's Common Stock as
of the date of each of the annual meetings of the Board of Directors. Such
options have a per share exercise price equal to the fair market value of
the Company's Common Stock at the time the option is granted.
Board Meetings and Committees
During fiscal 2000 there were two meetings of the Board of Directors
of the Company. All the Directors attended at least 75% of the aggregate of
(1) the total number of meetings of the Board and (2) the total number of
the meeting held by committees of the Board on which they served. The Board
of Directors has a standing Audit Committee.
The current members of the Board's Audit Committee are Stephen W.
Frankel, Arthur P. Stasik and Joseph L. Stephens. During fiscal 2000 there
was one meeting of the Audit Committee. The Board of Directors has adopted
a charter governing the duties and responsibilities of the Audit Committee.
A copy of the Audit Committee charter is included in this proxy statement as
Exhibit A. The Audit Committee reviews with the Company's independent
auditors the scope of the audit for the year, the results of the audit when
completed and the independent auditor's fees for services performed. The
Audit Committee reviews the relationships between the Company and the
external auditors to ascertain the independence of the external auditors.
The Audit Committee also recommends independent auditors to the Board of
Directors and reviews with management various matters related to the
Company's system of internal accounting controls. The report of the Audit
Committee is set forth below.
Report of the Audit Committee of Datamarine International, Inc.
January 5, 2001
We have reviewed and discussed with management the Company's audited
consolidated financial statements as of and for the fiscal year ended
September 30, 2000.
We have received and reviewed the written disclosures and the letter
from the independent auditors required by Independence Standard No. 1,
Independence Discussions with Audit Committees, as amended, by the
Independence Standards Board, and have discussed with the auditors the
auditor's independence.
We have discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standard No. 61, Communication with
Audit Committees, as amended, by the Auditing Standards Board of the
American Institute of Certified Public Accountants.
Based on the reviews and discussions referred to above, we recommend
to the Board of Directors that the consolidated financial statements
referred to above be included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended September 30, 2000.
By /s/ STEPHEN W. FRANKEL
-------------------------------
Stephen W. Frankel
Chairman
By /s/ ARTHUR P. STASIK
-------------------------------
Arthur P. Stasik
Member
By /s/ JOSEPH L. STEPHENS
-------------------------------
Joseph L. Stephens
Member
Audit Fees
(a) Audit Fees: Aggregate fees billed for professional services
rendered for the audit of the Company's fiscal 2000 annual
financial statements and review of the financial statements in
the Company's Reports on Form 10-QSB. $63,650.
(b) Audit Related Fees: Aggregate fees billed for professional
services rendered during fiscal 2000, primarily meeting with
the Audit Committee and consultation on accounting standards.
$1,450.
(c) Financial Information Systems Design and Implementation Fees:
None.
(d) All Other Fees: Tax Matters: $150.
Executive Officers
The names of the executive officers of the Company, their positions
and offices with the Company, and their ages are set forth below.
Name Age Office
---- --- ------
David C. Thompson 71 President and Chief Executive Officer
Jan Kallshian 46 Chief Financial Officer
David C. Thompson was named President and CEO of the Company in
October 1997. Mr. Thompson has been Secretary and Treasurer of the Company
since March 1996, and served as the Company's Principal Financial and
Accounting Officer from 1995 to October 1997. Mr. Thompson is also
President and CEO of SEA Inc., a wholly owned subsidiary of the Company.
Mr. Thompson was previously President and CEO of Stephens Engineering
Associates, Inc., which was acquired by the Company in 1986.
Jan Kallshian was named Chief Financial Officer of the Company in
October 1997. Since April 1995 Mr. Kallshian has served as a consultant to
the Company which included performing the duties of the Chief Financial
Officer. Mr. Kallshian has over 18 years experience in the high technology
manufacturing industry and has held positions in finance and general
management. Mr. Kallshian is a CPA and was previously with the accounting
firm of Coopers & Lybrand.
Security Ownership of Certain Beneficial Owners and Management
As of February 14, 2001 there were 5,749,848 shares of Common Stock
issued and outstanding. The following table sets forth information
regarding the beneficial ownership of the Company's Common Stock as of
February 14, 2001 by (a) each person known by the Company to beneficially
own more than five percent of the outstanding shares of Common Stock, (b)
each director of the Company who beneficially owns any shares,(c) each Named
Officer (see "Executive Compensation"), and (d) all directors and officers
as a group.
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership (1) of Class
-------------- ------------------- ------------------------ --------
Common Stock Joseph L. Stephens, Director 435,957 (2) 7.6%
7030 220th St. SW
Mountlake Terrace WA 98043
Common Stock Arthur P. Stasik, Director 411,500 (3) 7.2%
7030 220th St. SW
Mountlake Terrace WA 98043
Common Stock David C. Thompson, President 335,534 (4) 5.7%
and Director
7030 220th St. SW
Mountlake Terrace WA 98043
Common Stock Stephen W. Frankel, Director 139,096 (5) 2.4%
7030 220th St. SW
Mountlake Terrace WA 98043
Common Stock Jan Kallshian, Chief Financial 63,249 (6) 1.1%
Officer
7030 220th St. SW
Mountlake Terrace WA 98043
Common Stock Gerald E. Setka, Director 31,250 (7) 0.5%
7030 220th St. SW
Mountlake Terrace WA 98043
Common Stock All Directors and Executive 1,285,129 21.8%
Officers as a group (6 persons)
___________________
Represents shares of Common Stock held and/or options held by such
individuals that were exercisable at February 14, 2001 or within 60
days thereafter.
Represents 302,500 shares held of record, 2,000 shares subject to
presently exercisable stock options and 131,457 shares held in trust
for the Company's Employee Investment Plan for which Mr. Stephens
serves as a co-trustee.
Represents 409,500 shares held of record and 2,000 shares subject to
presently exercisable stock options.
Represents 88,289 shares held of record, 74,264 shares subject to
presently exercisable stock options, 41,524 shares subject to
presently exercisable Common Stock warrants, and 131,457 shares held
in trust for the Company's Employee Investment Plan for which Mr.
Thompson serves as a co-trustee.
Represents 121,076 shares held of record, 8,000 shares subject to
presently exercisable stock options and 10,020 shares subject to
presently exercisable Common Stock warrants.
Represents 46,569 shares held of record, 10,000 shares subject to
presently exercisable stock options and 6,680 shares subject to
presently exercisable Common Stock warrants.
Represents 29,250 shares held of record 2,000 shares subject to
presently exercisable stock options.
EXECUTIVE COMPENSATION
The following table summarizes compensation information for the last
three fiscal years for the Company's Chief Executive officer and each of the
Company's executive officers other than the Chief Executive Officer who were
serving as executive officers of the Company at the end of the fiscal year
(collectively, the "Named Executive Officers").
Summary Compensation Table
Long Term
Compen-
sation
Annual Compensation Awards
----------------------------------- ----------
Other All
Annual Other
Compen- Compen-
Name and Principal sation Stock sation
Position(s) Year Salary ($) Bonus ($) ($) (1) Options (#) ($)
------------------ ---- ---------- --------- ------- ----------- -------
David C. Thompson 2000 129,010 - - 29,632 3,019 (2)
President and Chief 1999 116,991 - - - 3,510 (2)
Executive Officer 1998 115,608 - - - 3,408 (2)
Jan Kallshian 2000 117,650 - - - -
Chief Financial 1999 110,923 - - - -
Officer 1998 109,070 - - - -
___________________
The dollar value of perquisites and other personal benefits for each
of the named executive officers was less than the established
reporting thresholds.
Represents amounts contributed by the Company under its 401(k) Plan.
Option Grants in Last Fiscal Year
The following table sets forth certain information regarding the
grants of stock options to each of the Named Executive Officers during the
fiscal year ended September 30, 2000.
Number of Percent of Total
Securities Options
Underlying Granted to Exercise or Market
Options Granted Employees in Base Price Price at Date Expiration
Name (#) Fiscal Year ($/Sh) of Grant Date
---- --------------- ----------------- ----------- ------------- ----------
David C. Thompson 29,632 29.10% $0.75 $0.75 6/6/10
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year End Option Values
The following table sets forth information on option exercises by the
Named Executive Officers during the fiscal year ended September 30, 2000 and
the value of unexercised options held by the Named Executive Officers on
September 30, 2000.
Number of Shares Underlying
Unexercised Options at Value of Unexercised Options
Shares September 30, 2000 (#) at September 30, 2000 ($) (1)
Acquired On Value ----------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
David C. Thompson None None 74,264 - $59,379 -
___________________
Value of unexercised options represents the difference between the
exercise prices of the stock options and the closing price ($2.4375
per share) of the Company's Common Stock on the OTCBB on September
29, 2000 the last trading day of the Company's fiscal year. Only
in-the-money options are considered in the calculation.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 2000 the Company made principal repayments of $2,865 and
additional borrowings of $462,865 on subordinated loans from David Thompson,
the Company's President. During the year the Company made interest payments
on the loans of $33,409. The balance owed to Mr. Thompson on the loans at
September 30, 2000 was $812,000. In connection with the same loans, Mr.
Thompson was granted 8,834 $0.10 and 10,000 $0.01 warrants to purchase
shares of the Company's Common Stock. The fair value of those warrants at
the grant date, calculated using the Black-Scholes model, was $26,415.
PROPOSAL 2
ADOPTION OF THE DATAMARINE INTERNATIONAL, INC.
2001 STOCK INCENTIVE PLAN
There will be presented at the Meeting a proposal to adopt the
Datamarine International, Inc. 2001 Stock Incentive Plan (the "Plan"). The
Plan will replace the Datamarine International, Inc. 1991 Stock Option Plan
which, by its terms, expires on December 10, 2001. The Board of Directors
believes stock options and other stock-based incentives play an important
role in retaining the services of outstanding personnel and in encouraging
such employees to have a greater financial investment in the Company
(although the Plan does not necessarily require them to hold for investment
stock received under the Plan). Accordingly, on December 12, 2000, the
Board of Directors unanimously approved the Plan and directed that it be
submitted for consideration and action at the Meeting. If the Plan is
approved by the shareholders, no further options will be granted under the
Company's existing 1991 Stock Option Plan.
The following summary describes features of the Plan. This summary is
qualified in its entirety by reference to the specific provisions of the
Plan, the full text of which is set forth as Exhibit B.
General Information
Plan Administration. The Plan is administered by the Board of
Directors, or a Committee of one or more persons appointed by the Board
of Directors (either the "Administrator"). The Administrator establishes
the terms and conditions of awards granted under the Plan, subject to
certain limitations in the Plan. There are currently approximately 100
individuals eligible to participate in the Plan.
Eligible Participants. The Administrator may grant incentive stock
options under the Internal Revenue Code of 1986, nonqualified stock options,
stock appreciation rights, stock bonuses and restricted stock grants to
regular employees of the Company and its subsidiaries, officers, independent
contractors, Directors, board advisors, trustees or consultants.
Shares Available. The aggregate number of shares of the Company's
Common Stock that may be issued or transferred to grantees under the Plan
shall not exceed 625,000 shares. No further options or other benefits are
to be granted under the 1991 Stock Option Plan; provided, however, that any
outstanding options or other benefits under such plan may be exercised in
accordance with the terms thereof. If there is a stock split, stock
dividend or other relevant change affecting the Company's shares,
appropriate adjustments will be made in the number of shares that may be
issued or transferred in the future and in the number of shares and price of
all outstanding grants made before such event. If shares under a grant are
not issued or transferred, those shares would again be available for
inclusion in future grants. Payment of cash in lieu of shares would be
considered an issuance or transfer of the shares. On February 5, 2001, the
closing price of the Company's Common Stock on the OTCBB was $1.25.
Grants Under the Plan
Stock Options. The Administrator may grant options qualifying as
incentive stock options under the Internal Revenue Code of 1986, other
statutory stock options and nonqualified stock options. The term of an
option shall be fixed by the Administrator, but shall not exceed ten years.
The exercise price for incentive stock options shall not be less than the
fair market value of the Company's Common Stock on the date of grant.
Stock Appreciation Rights. The Administrator may grant stock
appreciation rights ("SARs") either singly or in tandem with an underlying
stock option under the Plan. The term of a SAR shall be fixed by the
Administrator. SARs entitle the grantee to receipt of the same economic
value that would have been derived from exercise of an option. Payment may
be made in cash, in shares or a combination of both, at the discretion of
the Administrator. If a SAR granted in combination with an underlying stock
option is exercised, the right under the underlying option to purchase
shares would terminate.
Stock Bonuses. The Plan allows the Administrator to provide awards of
Stock Bonuses of Common Stock consistent with the objectives and limitations
of the Plan. The Plan provides, in general, for awarding shares of Common
Stock of the Company to both employees (including executive officers) and
non-employees of the Company and its subsidiaries. An award is by way of a
bonus and is not regarded as part of the recipient's regular compensation.
Restricted Stock Grants. The Administrator may also award shares
under a Restricted Stock Grant. The grant would be subject to terms and
restrictions determined by the Administrator and may concern
transferability, repurchase or forfeiture of shares issued. For example, a
Restricted Stock Agreement may require that the grantee remain in the employ
of the Company in order to retain the shares under grant. If the grantee's
employment terminates during the period, the grant would terminate and the
grantee would be required to return the shares to the Company. However, the
Administrator may provide complete or partial exceptions to this requirement
as it deems equitable. The grantee could not dispose of the shares prior to
the expiration of the restriction period. During this period, the grantee
would be entitled to vote the shares and, at the discretion of the
Administrator, receive dividends, if any. Each certificate would bear a
legend giving notice of the restrictions in the grant.
U.S. Federal Income Tax Consequences
Following is an explanation of the U.S. federal income tax
consequences for optionholders who are subject to tax in the United States.
Stock Options. The grant of an incentive stock option or a
nonqualified stock option would not result in income for the grantee or in a
deduction for the Company.
The exercise of a nonqualified stock option would result in ordinary
income for the grantee and a deduction for the Company measured by the
difference between the option price and the fair market value of the shares
received at the time of exercise. Income tax withholding would be required.
The exercise of an incentive stock option would not result in income
for the grantee if the grantee (i) does not dispose of the shares within two
years after the date of grant or one year after the transfer of shares upon
exercise, and (ii) is an employee of the Company or a subsidiary of the
Company from the date of grant and through and until three months before the
exercise date. If these requirements are met, the basis of the shares upon
later disposition would be the option price. Any gain will be taxed to the
employee as long-term capital gain and the Company would not be entitled to
a deduction.
If the grantee disposes of the shares prior to the expiration of
either of the holding periods, the grantee would recognize ordinary income
and the Company would be entitled to a deduction equal to the lesser of the
fair market value of the shares on the exercise date minus the option price
or the amount realized on disposition minus the option price. Any gain in
excess of the ordinary income portion would be taxable as long-term or
short-term capital gain.
SARs. The grant of a SAR would not result in income for the grantee
or in a deduction for the Company. Upon the exercise of a SAR the grantee
would recognize ordinary income and the Company would be entitled to a
deduction measured by the fair market value of the shares plus any cash
received. Income tax withholding would be required.
Stock Bonuses. Upon the receipt of shares the grantee would recognize
ordinary income and the Company would be entitled to a deduction measured by
the fair market value of the shares received. Income tax withholding would
be required.
Restricted Stack Grants. The grant of Restricted Stock should not
result in income for the grantee or in a deduction for the Company for
federal income tax purposes, assuming the shares transferred are subject to
restrictions resulting in a "substantial risk of forfeiture" as intended by
the Company. If there are no such restrictions, the grantee would recognize
ordinary income upon receipt of the shares. Dividends, if any, paid to the
grantee while the stock remained subject to restriction would be treated as
compensation for federal income tax purposes. At the time the restrictions
lapse, the grantee would receive ordinary income and the Company would be
entitled to a deduction measured by the fair market value of the shares at
the time of lapse. Income tax withholding would be required.
Other Information
Upon approval by the Company's stockholders, the Plan will be
effective on December 12, 2000 and will terminate on December 11, 2010,
unless terminated earlier by the Board of Directors or extended by the Board
with the approval of the stockholders. The Board may amend the Plan as it
deems advisable but, if the Securities Exchange Act of 1934 requires the
Company to obtain stockholder approval, then such approval will be sought.
Options are not assignable or transferable except for limited circumstances
upon death, or pursuant to rules that may be adopted by the Administrator.
The Administrator may establish rules and procedures to permit an
optionholder to defer recognition of gain upon the exercise of a stock
option.
Employees who will participate in the Plan in the future and the
amounts of their allotments are to be determined by the Administrator
subject to any restrictions outlined above. Since no such determinations
have yet been made, it is not possible to state the terms of any individual
options which may be issued under the Plan or the names or positions of, or
respective amounts of the allotments to, any individuals who may
participate.
Required Vote
The affirmative vote of a majority of the votes cast at the meeting is
required to approve the 2001 Stock Incentive Plan.
The Board of Directors unanimously recommends a vote FOR this proposal.
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED PREFERRED SHARES
Proposed Action
The Board is proposing that an amendment (the "Amendment") to the
Company's Articles of Incorporation be made to increase the number of
authorized shares of $1.00 par value Preferred Stock from 1,000,000 shares
to 5,000,000 shares.
Description of Proposal
Section 3 of the Company's Articles of Incorporation currently
authorizes the Company to issue 1,000,000 shares of $1.00 par value
Preferred Stock. In October 2000 shareholders approved an increase in the
Company's authorized $0.01 par value Common Stock from 3,000,000 shares to
20,000,000 shares, but there was no commensurate increase in the amount of
authorized Preferred shares.
If the increase is approved, the increased number of Preferred shares
will be available for issuance, from time to time, for such purposes and
consideration, and on such terms as the Board of Directors may approve
(subject to shareholder approval of Proposal 4), and no further vote of the
shareholders of the Company will be required, except as provided under the
Washington Business Corporation Act or the rules of the appropriate stock
exchange.
If the proposed amendment is approved, 5,000,000 shares of $1.00 par
value Preferred Stock would be authorized but unissued. An increase in
authorized Preferred Stock will enable the Company to meet possible
contingencies and opportunities in which the issuance of shares may be
deemed advisable, such as equity and convertible debt financings and
acquisition transactions.
The timing of the actual issuance of additional Preferred shares, if
any, will depend upon market conditions, the specific purpose for which the
stock is to be issued, and other similar factors. The issuance of Preferred
Stock could have the effect of diluting earnings per share, voting power and
shareholdings of stockholders. Holders of Preferred Stock typically would
have a liquidation preference over Common stockholders. It could also have
the effect of making it more difficult for a third party to acquire control
of the Company. The Company has no present intent to issue any shares of
Preferred Stock.
Upon approval by the shareholders, Section 3 of the Articles of
Incorporation will be amended to read in its entirety as follows:
SECTION 3
SHARES
This corporation is authorized to issue twenty million (20,000,000)
shares of common stock with a par value of one cent ($.01) and five million
(5,000,000) shares of preferred stock with a par value of one dollar
($1.00).
Required Vote
The affirmative vote of a majority of the shares of Common Stock
outstanding at the record date is required to approve the Amendment.
The Board of Directors unanimously recommends a vote FOR this proposal.
PROPOSAL 4
APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES
OF INCORPORATION AUTHORIZING THE BOARD OF
DIRECTORS TO SET THE RIGHTS AND PREFERENCES OF PREFERRED STOCK
Proposed Action
Section 4 of the Company's Articles of Incorporation specifies the
terms for two series of $1.00 Preferred Stock, none of which are issued of
outstanding. Terms for Preferred Stock are typically set by the Company's
Board of Directors at such time as the issuance of Preferred Stock is
contemplated.
If the proposed amendment is approved, the Company's Board of
Directors will have the power to set the rights and preferences with respect
to Preferred shares. Such powers were vested in the Company's Board until
1999. In October 1999 shareholders approved a change in the Company's
state of domicile from Massachusetts to Washington. At that time the
Company's Articles of Incorporation were restated, but an administrative
error resulted in the inadvertent omission of the language granting the
Board the power to set the terms of Preferred Stock. The result of that
omission is that the Company has authorized Preferred Stock and no mechanism
for the Board to define the terms and issue said stock, without calling a
meeting of the shareholders. The Board believes that having to call a
meeting of the shareholders for the purpose of setting the terms of a
particular issuance of Preferred Stock would result in unnecessary expense
and delay.
Section 4 of the Articles of Incorporation is currently comprised
entirely of the terms for Convertible Preferred Stock and Redeemable
Preferred Stock authorized by the Board in connection with the 1995 issuance
of a Subordinated Convertible Debenture. No such shares were ever issued or
outstanding, and the underlying debentures were redeemed in 2000. The
current text of the Company's Articles of Incorporation was filed as Exhibit
3.1 to the Company's Form 10-QSB for the period ending July 1, 2000 and is
hereby incorporated by reference.
Upon approval by the shareholders, Section 4 of the Articles of
Incorporation will be amended to add the following language to the beginning
of Section 4:
Preferred Stock
The Preferred Stock, par value $1.00 per share, may be issued from
time to time in one or more series as may from time to time be determined by
the Board of Directors. Each of said series shall be distinctly designated.
All shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which dividends,
if any, thereon shall be cumulative, if made cumulative. The voting powers,
if any, and the designations, preferences and relative, participating,
optional or other special rights or privileges of each series, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding; and, there is
hereby expressly vested in the Board of Directors of the Corporation the
authority to issue one or more series of Preferred Stock and to fix in the
resolution or resolutions providing for the issue of such stock adopted by
the Board of Directors of the Corporation the voting powers, if any, and the
designations, preferences and relative, participation, optional or other
special rights or privileges, and the qualifications, limitations or
restrictions of such series, including, but not without limiting the
generality of the foregoing, the following:
1. The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series. The designation of a
series of preferred stock need not include the words "preferred" or
"preference" and may be designated "special" or other distinctive term.
Unless otherwise provided in he resolution issuing such series, the number
of shares of any series of Preferred Stock may be increased or decreased
(but not below the number of shares thereof then outstanding) by the Board
of Directors in the manner prescribed by law.
2. The rate and times at which, and the terms and conditions upon
which, dividends, if any, on Preferred Stock of such series shall be paid,
the extent of the preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or series of the same or
other classes of stock and whether such dividends shall be cumulative or
noncumulative and, if cumulative, the date from which such dividends shall
be cumulative.
3. Whether the series shall be convertible into, or exchangeable
for, at the option of the holders of Preferred Stock of such series of the
Corporation or upon the happening of a specified event, shares of any other
class or classes or any other series of the same or any other class or
classes of stock of the Corporation, and the terms and conditions of such
conversion or exchange, including provisions for the adjustment of any such
conversion rate in such events as the Board of Directors shall determine.
4. Whether or not Preferred Stock of such series shall be subject
to redemption at the option of the Corporation or the holders of such series
or upon the happening of a specified event, and the redemption price or
prices and the time or times at which, and the terms and conditions upon
which, Preferred Stock at such series may be redeemed.
5. The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding-up of the
Corporation.
6. The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series.
7. Whether such series of Preferred Stock shall have full, limited
or no voting powers including, without limiting the generality of the
foregoing, whether such series shall have the right, voting as a series by
itself or together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of dividends
on any one or more series of Preferred Stock or under such other
circumstances and on such conditions as the Board of Directors may
determine.
The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each
other series of Preferred Stock shall, in each case, be fixed from time to
time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted hereunder. The consent, by class or series
vote or otherwise, of the holders of such of the series of Preferred Stock
as are from time to time outstanding shall not be required for the issuance
by the Board of Directors of any other series of Preferred Stock whether or
not the powers, preferences and rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution or
resolutions as to any series of Preferred Stock adopted pursuant hereto, the
conditions, if any, under which the consent of the holders of a majority (or
such greater proportion as shall be fixed therein) of the outstanding shares
of such series shall be required for the issuances of any or all other
series of Preferred Stock. Shares of any series of Preferred Stock
designated herein may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
Required Vote
The affirmative vote of a majority of the shares of Common Stock
outstanding at the record date is required to approve the Amendment.
The Board of Directors unanimously recommends a vote FOR this proposal.
PROPOSAL 5
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Subject to ratification by the shareholders, the Board of Directors
has selected the firm of Grant Thornton LLP as the Company's independent
auditors for the current year. Grant Thornton LLP has served as the
Company's independent auditors since 1998.
Representatives of Grant Thornton LLP are expected to be present at
the Annual Meeting. They will have the opportunity to make a statement if
they desire to do so and will also be available to respond to appropriate
questions from shareholders.
If the shareholders do not ratify the selection of Grant Thornton LLP
as the Company's independent auditors, the selection of such auditors will
be reconsidered by the Board of Directors.
Required Vote
The affirmative vote of a majority of the votes cast at the meeting is
required to approve the selection of Grant Thornton LLP as the Company's
independent auditors for 2001.
The Board of Directors unanimously recommends a vote FOR this proposal.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's stock, to file initial reports of
ownership and reports of changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than ten percent
holders of Common Stock are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based upon a review of filings with the Securities and Exchange
Commission and written representations that no other reports were required,
the Company believes that all of the Company's directors and executive
officers complied during fiscal 2000 with the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934.
DEADLINES FOR SUBMISSION OF
SHAREHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission,
any proposal submitted for inclusion in the Company's Proxy Statement
relating to the Annual Meeting of Shareholders to be held in 2002 must be
received at the Company's principal executive offices in Mountlake Terrace
on or before October 8, 2001. Receipt by the Company of any such proposal
from a qualified shareholder in a timely manner will not ensure its
inclusion in the proxy material because there are other requirements in the
proxy rules for such inclusion.
OTHER MATTERS
Management knows of no matters to be brought before the meeting other
than the election of director. However, if any other matters properly come
before the Meeting, the persons named in the enclosed proxy will vote in
accordance with their best judgment.
10-KSB REPORT
THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH
A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR, WITHOUT
CHARGE, UPON RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST
SHOULD BE DIRECTED TO CHIEF FINANCIAL OFFICER, DATAMARINE INTERNATIONAL,
INC., 7030 - 220TH STREET S.W., MOUNTLAKE TERRACE, WASHINGTON 98043.
On behalf of the Board of Directors
DAVID C. THOMPSON,
Secretary
Mountlake Terrace, Washington
February 26, 2001
EXHIBIT A
Datamarine International, Inc. Audit Committee Charter
Organization
There shall be a committee of the Board of Directors to be known as
the audit committee. The audit committee shall be composed of directors who
are independent of the management of the corporation and are free of any
relationship that, in the opinion of the Board of Directors, would interfere
with their exercise of independent judgment as a committee member. The
audit committee shall be comprised of at least two independent directors.
Statement of Policy
The audit committee shall provide assistance to the corporate
directors in fulfilling their responsibility to the shareholders, potential
shareholders, and investment community relating to corporate accounting,
reporting practices of the corporation, and the quality and integrity of the
financial reports of the corporation. In so doing, it is the responsibility
of the audit committee to maintain free and open means of communication
between the directors, the independent auditors, and the financial
management of the corporation. The outside auditors ultimately are
accountable to the board of directors and the audit committee.
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality. The audit
committee and the Board of Directors are responsible for the selection,
evaluation and replacement of the independent auditors.
In carrying out these responsibilities, the audit committee will:
* Review and recommend to the directors the independent auditors
to be selected to audit the financial statements of the corporation and its
subsidiaries.
* Meet with the independent auditors and financial management of
the corporation to review the scope of the proposed audit for the current
year and the audit procedures to be utilized, and at the conclusion thereof
review such audit, including any comments or recommendations of the
independent auditors.
* Review with the independent auditors, and financial and
accounting personnel, the adequacy and effectiveness of the accounting and
financial controls of the corporation, and elicit any recommendations for
the improvement of such internal control procedures or particular areas
where new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to expose
any payments, transactions, or procedures that might be deemed illegal or
otherwise improper. Further, the committee periodically should review
company policy statements to determine their adherence to the code of
conduct.
* Receive from the outside auditors a formal written statement
delineating all relationships between the auditor and the company,
consistent with ISB standard No. 1.
* Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders. Any changes in
accounting principles should be reviewed.
* Provide sufficient opportunity for the independent auditors to
meet with the members of the audit committee without members of management
present. Among the items to be discussed in these meetings are the
independent auditors' evaluation of the corporation's financial and
accounting personnel, and the cooperation that the independent auditors
received during the course of the audit.
* Review accounting and financial human resources and succession
planning within the company.
* Submit the minutes of all meetings of the audit committee to, or
discuss the matters discussed at each committee meeting with, the Board of
Directors.
* Investigate any matter brought to its attention within the scope
of its duties, with the power to retain outside counsel for this purpose if,
in its judgment, that is appropriate.
Review
The audit committee must review and reassess this charter annually.
Initially adopted by the board of directors on December 12, 2000.
By /s/ STEPHEN W. FRANKEL
Stephen W. Frankel
Chairman
EXHIBIT B
Datamarine International, Inc. 2001 Stock Incentive Plan
SECTION 1. Purpose. The purpose of this 2001 Stock Incentive Plan
(this "Plan") is to provide a means for Datamarine International, Inc. (the
"Company") to continue to attract, motivate and retain selected employees,
officers, independent contractors, consultants, advisors and directors, and
to encourage a sense of ownership in the Company by granting such
individuals any or all of the following: ISOs, nonqualified stock options,
stock appreciation rights, stock bonuses, and offering the opportunity to
purchase restricted stock. These grants, rights and options in Company
stock are designed to provide these individuals with greater incentive for
their service to the Company by linking their interests in the success of
the Company with the those of the Company and its shareholders.
SECTION 2. Effective Date. Subject to Section 19, this Plan is
effective December 12, 2000 (the "Effective Date").
SECTION 3. Stock Subject to This Plan. The stock issuable under this
Plan is the Company's common stock (the "Common Stock"), either authorized
but unissued, or reacquired by the Company.
3.1 Amount. Subject to adjustment under Section 12.1, the
maximum amount of Common Stock which may be issued for Stock
Incentives under this Plan is 625,000 shares, as such Common Stock was
constituted on the effective date of this Plan.
3.2 Returned Shares. If any outstanding Stock Incentive (as
defined under Section 4.1) expires, or is exchanged, canceled or
terminated for any reason without having been exercised or realized in
full, then the unpurchased or unissued shares subject to such Stock
Incentive shall again be available for issuance under this Plan. If a
Recipient forfeits, or the Company repurchases, stock subject to or
issued under a Stock Incentive, then the forfeited or repurchased
stock shall again be available for issuance under the Plan.
3.3 Determination of Fair Market Value. The "Fair Market
Value" per share of the Common Stock for purposes of this Plan means
the closing price of Datamarine stock on the OTCBB or other stock
exchange on a given day or, if the Common Stock is not traded on such
exchange, the price shall be determined by the Administrator by (a)
averaging the price of Common Stock that has been sold to third
parties in arms-length transactions within the past six months, (b)
the recommendation of an external consultant, or (c) in good faith.
SECTION 4. Stock Incentives and Eligible Participants.
4.1 Types. Subject to Section 5, the Administrator is
authorized to, from time to time, take the following actions,
separately or in any combination, under this Plan:
* grant "Incentive Stock Options" ("ISOs"), as defined in
Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") and as provided in Section 6;
* grant options that do not qualify as an ISO ("NQSOs") as
provided in Section 6;
* award shares of the Company's common stock as bonuses
("Stock Bonuses") as provided in Section 7;
* sell or grant shares of the Company's common stock subject
to certain restrictions ("Restricted Stock") as provided
in Section 8; and
* grant the Recipient the right to receive the appreciation
between the Fair Market Value of a specified number of
shares of Common Stock on the Grant Date and on the date
of exercise ("Stock Appreciation Rights") as provided in
Section 9,
(collectively, "Stock Incentives").
4.2 Eligible Participants. The following persons may be
eligible to receive Stock Incentives ("Eligible Participants"):
employees, officers, independent contractors, directors, Board
advisors, trustees or consultants who render services to the Company,
except that:
4.2.1 no person is eligible to receive Stock Incentives
as compensation paid in connection with any capital raising
transaction on behalf of the Company, and
4.2.2 only employees of the Company, at the time the
Option is granted (the "Grant Date"), shall be eligible to
receive ISOs under this Plan. Members of the Board shall not be
eligible to receive ISOs unless they are also employees of the
Company.
The determination as to whether a person is an Eligible Participant
will be made by the Administrator, in its sole discretion, and the decision
will be binding and final. Individuals who receive any type of Stock
Incentive are referred to as "Recipients" throughout this Plan.
4.3 Terms and Conditions. The terms and conditions of Stock
Incentives granted under this Plan need not be identical in any
respect, even when grants are made simultaneously or to persons with
the same or similar status.
SECTION 5. Administration. The Board of Directors of the Company
(the "Board") or a committee of one or more persons appointed by the Board
will administer this Plan (either, the "Administrator"). However, if a
committee is appointed, the Board shall have exclusive authority to: (a)
designate the amount and type of Stock Incentives that the Administrator may
grant or issue to Eligible Participants from time to time under this Plan
and the type of Eligible Participants who may receive such Stock Incentives,
(b) amend or terminate this Plan as provided in Section 18, (c) remove
members from, add members to, and fill any vacancies in, the Administrator,
and (d) approve the grant of Stock Incentives covering more than 100,000
shares of Common Stock.
5.1 Procedures. If the Administrator is a committee composed
of more than one member, the committee may designate one of its
members as chairperson. The Administrator may hold meetings at such
times and places as it shall determine. The acts of a majority of the
members of the Administrator present at meetings at which a quorum
exists, or acts approved in writing by all Administrator members,
shall be valid acts of the Administrator.
5.1.1 Grants to Administrator. If the Administrator is
one person, then Stock Incentive grants to the Administrator
must be approved by a majority of the full Board, not including
the vote of the proposed recipient. If the Administrator is a
committee, then Stock Incentive grants to one of its members
must be approved by the majority vote of the other committee
members, without counting the vote of the proposed recipient.
However, the proposed recipient may be counted in determining
the presence of a quorum at the committee or Board meeting.
5.1.2 Grants to Board Members. Issuance of Stock
Incentives to members of the Board shall be governed by the
provisions of Washington RCW 23B.08.700 through RCW 23B.08.730.
If the Board or the Administrator deems it advisable to do so,
they shall comply with RCW 23B.08.720 or RCW 23B.08.730 in
issuing such Stock Incentives.
5.2 Responsibilities. Except as stated elsewhere in this
Plan, the Administrator shall have full discretionary authority to
determine all matters relating to Stock Incentives, including but not
limited to:
* select Eligible Participants to receive Stock Incentives;
* set the number of shares subject to each Stock Incentive;
* set the consideration to be paid, if any, for any Stock
Incentive;
* set or accelerate any vesting or forfeiture schedule;
* accelerate the exercise date;
* waive or modify any restriction applicable to stock
(except those imposed by law); and
* determine any other terms and conditions.
The Administrator shall periodically report to the Board the names of
persons granted Stock Incentives, the number of shares covered by each Stock
Incentive, and the terms and conditions of each Stock Incentive. The
Administrator may from time to time adopt and amend rules and regulations
relating to the administration of the Plan, and make other determinations in
the judgment of the Administrator that are necessary or desirable for the
administration of the Plan.
5.3 Plan Construction and Interpretation. Subject to Section
5.4, the Administrator may correct any defect, supply any omission, or
reconcile any inconsistency (a) within the Plan, (b) between the Plan
and any related agreement, or (c) between the Plan and any rule or
regulation promulgated under the Plan, in the manner and to the extent
the Administrator shall deem appropriate to carry out the Plan. The
Administrator's interpretation or construction of any such Plan
provision, related agreement, rule or regulation shall be final,
conclusive and binding on all interested parties, so long as such
interpretation and construction with respect to ISOs correspond to the
requirements of Section 422 of the Code and applicable regulations.
5.4 Amendment of Stock Incentives. The Administrator may
modify or amend outstanding Stock Incentives granted under this Plan.
The modification or amendment of an outstanding Stock Incentive shall
not, without the consent of the Recipient, impair, diminish or
terminate any of the rights of the Recipient or any of the obligations
of the Company under such Stock Incentive, except as otherwise
provided in this Plan. However, unless the Recipient agrees
otherwise, any changes or adjustments made to outstanding ISOs granted
under this Plan shall be made in such a manner so as not to constitute
a "modification" as defined in Code Section 424(h) and so as not to
cause any ISO issued hereunder to fail to continue to qualify as an
ISO as defined in Code Section 422(b).
SECTION 6. General Rules Relating to Options. Except as provided in
Section 6.5, the provisions of this Section 6 apply to both ISOs and NQSOs
(together, "Options"):
6.1 Option Agreement. The terms and conditions of Options
shall be evidenced by an agreement executed by the Recipient and the
Company (the "Option Agreement"). The Option Agreement shall:
* specify whether the Option is an ISO or a NQSO,
* incorporate this Plan by reference,
* contain a termination date for the Option,
* set forth the schedule under which the Option shall be
exercisable,
* specify the maximum number of shares that may be
purchased upon the exercise of each Option,
* specify the price per share at which each Option is
exercisable (the "Exercise Price"), and
* contain any other terms, conditions, restrictions,
representations and warranties required by the
Administrator.
6.2 Exercise Price. (a) An ISO's Exercise Price shall not be
less than the Fair Market Value per share of the Common Stock as of
the Grant Date. (b) The Administrator shall determine the Exercise
Price of NQSOs.
6.3 Term. The term of each Option shall be ten years from the
Grant Date unless the Administrator establishes a shorter period of
time.
6.4 Vesting. The Administrator may grant fully vested Options
or accelerate the time at which all or part of an Option may be
exercised.
6.5 Incentive Stock Option Provisions. ISOs are subject to
the following terms and conditions, in addition to the other
provisions of Section 6:
6.5.1 Greater than 10% Shareholders. If the Company
grants ISOs to employees who own more than 10% of the total
combined voting power of all classes of stock of the Company,
the term of such ISOs shall not exceed five years and the
Exercise Price shall be not less than 110% of the Fair Market
Value of the Common Stock on the ISO's Grant Date. Stock
ownership to be determined in light of the attribution rules set
forth in Section 424(d) of the Code. This Section 6.5.1 shall
control notwithstanding any conflicting terms contained in a
Stock Option Agreement or any other document.
6.5.2 Limitation on Value. If the aggregate Fair Market
Value of the Common Stock with respect to which the Recipient
may exercise ISOs (under this Plan and any other incentive stock
option plan) for the first time in any calendar year (within the
meaning of Code Section 422) exceeds $100,000, then those
Options beyond the $100,000 threshold shall be treated as NQSOs.
6.6 Exercise. The Recipient shall exercise Options by
delivering notice to the Administrator of the number of shares sought
to be exercised ("Notice of Exercise"), together with payment of the
Exercise Price. The Administrator shall determine the form of such
Notice of Exercise and the manner of its delivery. Subject to any
vesting schedule in the Stock Option Agreement and to any additional
holding period required by law, the Recipient may exercise each Option
in whole or in part, except that only whole shares will be issued
pursuant to the exercise of any Option. The certificates representing
the shares subject to the Options exercised shall bear any legends
required by the Administrator and applicable law.
6.7 Payment of Exercise Price. The Recipient shall pay the
Exercise Price in full at the time the Recipient delivers a Notice of
Exercise to the Administrator. Payment of the Exercise Price shall be
in cash, by bank certified or cashier's check or by personal check
(unless at the time of exercise the Administrator in a particular case
determines not to accept a personal check). However, the
Administrator may determine, as of the Grant Date for ISOs or at any
time before exercise for NQSOs, that alternative forms of payment will
be permitted, including installment payments on such terms as the
Administrator may determine.
SECTION 7. Stock Bonuses. The Administrator may award Stock Bonuses
of Common Stock under the Plan. Shares awarded as a Stock Bonus shall be
subject to the terms, conditions, and restrictions determined by the
Administrator, including restrictions concerning transferability. However,
the Administrator may not require the Recipient to pay any monetary
consideration for the Stock Bonus other than amounts necessary to satisfy
tax-withholding requirements as provided in Section 14. As a condition of
delivering certificates representing shares subject to a Stock Bonus to the
Recipient, the Administrator may require the Recipient to enter a stock
bonus agreement executed by the Company and the Recipient ("Stock Bonus
Agreement"), which may contain any terms, conditions, restrictions,
representations and warranties required by the Administrator. For example,
a Stock Bonus Agreement may provide that shares subject to the Stock Bonus
will be forfeited unless the Recipient's employment continues for a
specified duration.
SECTION 8. Restricted Stock. The Administrator may issue Restricted
Stock under the Plan in exchange for consideration (including promissory
notes and services) and subject to terms and restrictions determined by the
Administrator. The restrictions may concern transferability, repurchase, or
forfeiture of the shares issued. As a condition of delivering certificates
representing Restricted Stock to the Recipient, the Administrator may
require the Recipient to enter an agreement executed by the Company and the
Recipient ("Restricted Stock Agreement"), which may contain any terms,
conditions, restrictions, representations or warranties required by the
Administrator. For example, a Restricted Stock Agreement may provide that
shares of Restricted Stock will be forfeited unless the Recipient's
employment continues for a specified duration.
SECTION 9. Stock Appreciation Rights. The Administrator may grant
Stock Appreciation Rights under this Plan either alone or in tandem with
Options, as provided in this Section 9.
9.1 Stock Appreciation Rights Agreement. Stock Appreciation
Rights shall be subject to an agreement executed by the Company and
the Recipient ("Stock Appreciation Rights Agreement"). The Stock
Appreciation Rights Agreement may contain any terms, conditions,
restrictions, representations and warranties required by the
Administrator. The Stock Appreciation Rights Agreement shall specify
whether the Stock Appreciation Right is granted alone or in tandem
with an Option.
9.2 Vesting. Any Stock Appreciation Right granted under this
Plan shall vest according to the schedule set forth in the Stock
Appreciation Rights Agreement. The Administrator may, in its sole
discretion, grant fully vested Stock Appreciation Rights, specify a
vesting schedule, or accelerate the time at which all or part of a
Stock Appreciation Right or installment thereof may vest or be
exercised.
9.3 Exercise. The Recipient shall exercise a Stock
Appreciation Right by delivering notice to the Administrator of the
number of shares as to which the Recipient seeks to exercise its Stock
Appreciation Right. The Stock Appreciation Rights Agreement shall
determine the form of such notice and the manner of its delivery.
Subject to the vesting and exercise provisions described in the Stock
Appreciation Rights Agreement, the Recipient may exercise each Stock
Appreciation Right in whole or in part, except that only whole shares
will be issued pursuant to the exercise of any Stock Appreciation
Right.
9.4 Tandem Arrangements. If a Stock Appreciation Right is
granted in tandem with an Option, the following rules shall apply:
* the Recipient may exercise a Stock Appreciation Right only
to the extent and on the same conditions that the related
Option could be exercised;
* the Recipient may exercise a Stock Appreciation Right only
when the Fair Market Value of the Common Stock exceeds the
exercise price of the related Option;
* the Stock Appreciation Right shall be for no more than
100% of the amount by which the Fair Market Value of the
stock at the time of exercise exceeds the Option exercise
price;
* the Stock Appreciation Right expires no later than
expiration of the underlying Option;
* upon exercise of all or part of a Stock Appreciation
Right, the corresponding Option or portion to which the
Stock Appreciation Right relates terminates; and
* upon exercise of all or part the Option, the related Stock
Appreciation Right or portion terminates.
9.5 Determination of Value. Upon exercise of a Stock
Appreciation Right, the Company shall pay the Recipient an amount
equal to: (a) the Fair Market Value of one share of Common Stock on
the date of exercise, minus (b) the Fair Market Value of one share of
Common Stock on the Grant Date, multiplied by (c) the number of shares
covered by the Stock Appreciation Right or the Option that are being
exercised. In the case of a Stock Appreciation Right granted in
connection with an Option, the Company shall pay the Recipient (a) the
Fair Market Value on the date of exercise of one share of Common Stock
minus (b) the Exercise Price per share under the Option to which the
Stock Appreciation Right relates.
9.6 Payment of Stock Appreciation Rights. The Company's
payment may be made in cash, in shares or a combination of both, at
the discretion of the Administrator. Payment will typically be made
in cash unless cash payment would (a) cause the Company to become
insolvent or (b) preclude the accomplishment of a Liquidation Event.
In such case, the Administrator may determine, at the time the
Recipient exercises the Stock Appreciation Right, that all or part of
the payment shall be made in shares of Common Stock. If the Company
pays all or part of the exercised Stock Appreciation Rights with
shares of Common Stock, then the Fair Market Value (at the time of
issuance) of the total shares issued shall equal the value of the
Stock Appreciation Right, as determined in Section 9.5, less any cash
payment. However, no fractional shares may be issued upon the
exercise of a Stock Appreciation Right. Any certificates representing
shares of Common Stock issued, if any, shall bear any legends required
by the Administrator and applicable law.
9.7 Effect on Reserved Shares. Cash payments of Stock
Appreciation Rights shall not reduce the number of shares of Common
Stock reserved for issuance under the Plan. Payment of an exercised
Stock Appreciation Right in Common Stock shall reduce the number of
shares of Common Stock reserved for issuance under the Plan.
SECTION 10. Termination of Relationship with Company. All Stock
Incentives which are unvested or still subject to forfeiture automatically
expire upon termination of a Recipient's relationship with the Company
voluntarily or involuntarily, and for any reason. The effect of termination
on vested and non-forfeitable Stock Incentives is as follows:
10.1 Termination For Cause
10.1.1 Effect Upon Stock Incentives. Subject to the
terms of any Option Agreement, Stock Bonus Agreement, Restricted
Stock Agreement or Stock Appreciation Rights Agreement which
provides otherwise, if the Company terminates a Recipient's
employment or other relationship with the Company for Cause as
described in Section 10.1.2, then, as of the Company's first
discovery of any of the grounds for termination for Cause: (a)
any Option or Stock Appreciation Right held by that Recipient
shall automatically terminate and the Recipient shall have no
present or future right to exercise Options or Stock
Appreciation Rights, whether vested or unvested; and (b) all
Restricted Stock and Stock Bonus Shares, to the extent
forfeitable upon the date of termination, shall be forfeited as
of that date. If a Recipient is suspended pending an
investigation of whether or not the Recipient shall be
terminated for Cause, then all of the Recipient's rights under
any Stock Incentive shall also be suspended during the period of
investigation.
10.1.2 Definition of Cause. Except as may be specified
in a Recipient's employment agreement with the Company,
termination for "Cause" means the Recipient's (a) dismissal from
employment as the result of the Recipient's intentional
misconduct, gross negligence, insubordination or failure to
comply with the Company's policies, (b) conviction or confession
of a crime punishable by law (except minor violations), (c)
performance of an illegal or non-consensual act involving moral
turpitude while purporting to act in the Company's behalf, (d)
engagement in activities directly in competition or antithetical
to the best interests of the Company, or (e) the material breach
or termination by the Recipient of any agreement between the
Recipient and the Company.
10.2 Termination Because of Total Disability
10.2.1 Effect Upon Stock Incentives. If a Recipient's
relationship with the Company terminates because of a Total
Disability, then the Recipient's (a) ISOs shall not terminate or
cease to be treated as ISOs until the end of the 12 month period
following such termination (unless the ISO terminates and
expires before that date by its terms), and (b) NQSOs shall
terminate pursuant to Section 10.4 unless otherwise approved by
the Administrator.
10.2.2 Definition of Total Disability. "Total
Disability" means a mental or physical impairment, which (a) is
expected to result in death or has lasted or is expected to last
for a continuous period of 12 months or more and (b) causes a
person to be unable to perform the person's duties for the
Company and to be engaged in any substantial gainful activity,
after reasonable accommodation, in the opinion of the Company
and two independent physicians. Total Disability shall be
deemed to exist on the first day after the Company and the two
independent physicians have furnished their opinion to the
Administrator.
10.3 Termination Because of Death. If a Recipient dies (a)
during its relationship with the Company or (b) within the 90-day
period (or 12 month period in the case of Total Disability) following
cessation of such relationship, then any vested ISOs may be exercised
within 12 months after death by the personal representative or the
person to whom the Recipient's rights pass by will or by the laws of
descent and distribution. Any vested Stock Appreciation Rights or
NQSOs may be exercised within 90 days after death by the personal
representative or the person to whom the Recipient's rights pass by
will or by the laws of descent and distribution. Any Restricted Stock
or Stock Bonus Shares, which are subject to forfeiture on the date of
death, shall be forfeited as of the date of death, unless otherwise
provided in a Restricted Stock Agreement or Stock Bonus Agreement.
10.4 Other Terminations. Except as provided in Section 12, if
a Recipient's relationship with the Company terminates due to any
reason other than for Cause, death or Total Disability, the following
shall apply:
10.4.1 Effect Upon ISOs. The Recipient must exercise all
of its vested but unexercised ISOs by the earlier of (a) the end
of the 90-day period following termination of a Recipient's
employment with the Company, or (b) the termination date stated
in Stock Option Agreement. All unexercised vested ISOs will
expire upon the expiration of that period. However, the
Administrator may extend the exercise period, in its the sole
discretion. In that case, any vested ISO will automatically
convert into a NQSO upon expiration of the 90-day period if it
is not exercised prior to that time. If the status of a
Recipient holding ISOs changes from employee to non-employee
(such as a consultant), such change shall constitute a
termination of the Recipient's employment with the Company.
10.4.2 Effect Upon Other Stock Incentives. The Recipient
must exercise vested but unexercised NQSOs or Stock Appreciation
Rights by the earlier of (a) the end of the 90-day period
following termination of a Recipient's relationship with the
Company, or (b) the termination date stated in Stock Option
Agreement or Stock Appreciation Rights Agreement, as the case
may be. All unexercised vested NQSOs or Stock Appreciation
Rights will expire upon the expiration of that period, unless
(a) otherwise provided in the Stock Option Agreement or the
Stock Appreciation Rights Agreement, or (b) extended by the
Administrator.
10.5 Military Leave, Sick Leave and Bona Fide Leave of Absence.
To the extent determined by the Administrator, a Recipient's
relationship with the Company may be deemed to continue while the
Recipient is on military leave, sick leave or other bona fide leave of
absence. However, with respect to ISOs, employment shall not be
deemed to continue beyond the first 90 days of such leave, unless the
individual's reemployment rights are guaranteed by statute or by
contract.
SECTION 11. Stock Incentives Not Transferable. Stock Incentives are
personal to the Recipient during the Recipient's lifetime and may not be
transferred, assigned, pledged, attached or otherwise disposed of in any
manner ("Non-Transferable"), except as provided under this Section 11, by
will, or by the laws of descent and distribution.
* ISOs and Stock Appreciation Rights are Non-Transferable without
exception.
* NQSOs are Non-Transferable, except that the Recipient may
transfer the Non-Statutory Stock Option into a revocable trust
created by the Recipient for the benefit of the Recipient's
descendants, to an immediate family member, or to a partnership
in which only immediate family members or such trusts are
partners.
* Shares of stock issued under Options, Stock Appreciation Rights,
Stock Bonuses, and Restricted Stock are Non-Transferable except
as provided in their respective agreements and as permitted by
applicable federal and state securities law.
Any attempt to transfer, assign, pledge, attach or otherwise dispose
of any Stock Incentive, which is contrary to the Code or this Section 11,
shall be null and void, except as permitted under any agreement entered into
in connection with the grant of the Stock Incentive.
SECTION 12. Changes in Company's Capital Structure.
12.1 Adjustments Upon Changes in Capitalization. In the event
of any merger, consolidation, reorganization, stock split, stock
dividend or other event causing a capital adjustment effecting the
Common Stock of the Company ("Capitalization Change"), the
Administrator shall make adjustments upon any Capitalization Change so
that the Recipient's proportionate interest in the Stock Incentive is
the same before and after the Capitalization Change. The
Administrator shall make adjustments, as necessary, in: (a) the
aggregate number or kind of shares for which Stock Incentives may be
granted under this Plan; (b) the number or kind of shares covered by
any outstanding Stock Incentives under this Plan; and (c) and in all
other provisions of the Plan or Stock Incentive that include a
reference to number or kind of shares. Any fractional shares
resulting from such adjustment shall be disregarded. The
Administrator's determination as to what adjustments shall be made and
the extent of such adjustments shall be final, binding, and
conclusive. This Section 12.1 does not provide anti-dilution to any
shareholder with respect to subsequent sales of stock by the
Corporation.
12.2 Effect of Liquidation or Reorganization.
12.2.1 Acceleration of Stock Incentives. Subject to
Section 12.2.3 and subject to any provision of an individual's
Option Agreement, Stock Incentives are subject to special
provisions upon the occurrence of a Liquidation Event with
respect to the Company. If within twelve months of a
Liquidation Event there occurs a Triggering Event with respect
to the employment of the Participant, (a) any unvested Options
or Stock Appreciation Rights shall become fully vested and
exercisable, and (b) any shares of Restricted Stock or shares of
a Stock Bonus that are still subject to forfeit shall become
non-forfeitable.
(a) "Liquidation Event" means a sale of
substantially all of the Company's property or more than
80% of the Company's outstanding stock to another
corporation, or a merger, consolidation, acquisition of
property or stock, separation, reorganization,
liquidation, or similar event.
(b) "Triggering Event" means a termination of
employment by the Company other than for cause, a
termination of employment by the participant following a
reduction in position, pay or other constructive
termination event, or a failure by the successor company
to assume or continue plan awards.
12.2.2 Termination of Stock Incentives. Notwithstanding
the provisions of Section 12.2.1, unless provision is made in
accordance with Section 12.2.3., any unexercised Options or
Stock Appreciation Rights shall terminate and cease to be
effective on the applicable expiration date of the Stock
Incentive.
12.2.3 Conversion on Stock for Stock Exchange. If the
shareholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of
Common Stock as a result of any Liquidation Event, then the
Company and the corporation issuing the Exchange Stock may
provide that any unexercised Options or Stock Appreciation
Rights under this Plan will be converted into shares of Exchange
Stock. The amount and price of Exchange Stock shall be
determined by adjusting the amount and price of the unexercised
Options or Stock Appreciation Right in the same proportion as
used for determining the number of shares of Exchange Stock that
the shareholders of Common Stock receive in the Liquidation
Event. In such case, all of the terms and conditions relating
to Common Stock in this Plan shall apply to Exchange Stock,
unless otherwise determined by the Administrator.
SECTION 13. Securities Regulation and Other Required Approvals. The
Company shall not issue shares subject to a Stock Incentive unless the
exercise, issuance and delivery of such shares comply with all relevant
provisions of law, including any applicable state securities laws, the
Securities Act of 1933 (the "Securities Act"), the Securities Exchange Act
of 1934 (the "Exchange Act"), any relevant securities rules and regulations,
and the requirements of any stock exchange upon which the shares may then be
listed. The issuance of shares shall be further subject to the approval of
counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance and sale of
any shares under this Plan.
13.1 Effect of Lack of Authority. The Company will use its
best efforts to obtain from the appropriate regulatory agencies any
requisite authorization in order to issue and sell such number of
shares of its Common Stock as shall be sufficient to satisfy the
requirements of this Plan. The Company's inability to obtain the
authority Company's counsel deems to be necessary for the lawful
issuance of any shares under this Plan, or the unavailability of an
exemption from registration for the issuance and sale of any shares
under this Plan, shall relieve the Company of any liability with
respect to the non-issuance of such shares.
13.2 Section 16(b) Compliance; Bifurcation of Plan. In the
event the Company registers any of its equity securities pursuant to
Section 12(b) or 12(g) of the Exchange Act, this Plan and the Stock
Incentives granted under this Plan shall comply in all respects with
Rule 16b-3 under the Exchange Act. If any Plan provision is later
found not to be in compliance with such Rule, such provision shall be
deemed null and void. Furthermore, in all events this Plan shall be
construed in favor of its meeting the requirements of Rule 16b-3.
Notwithstanding anything in this Plan to the contrary, the
Administrator, in its absolute discretion, may bifurcate this Plan so
as to restrict, limit or condition the use of any provision of this
Plan to Recipients who are officers and directors subject to Section
16(b) of the Exchange Act without so restricting, limiting or
conditioning other Recipients. This provision shall not obligate the
Company to undertake registration of any of the Stock Incentives.
13.3 Representations and Warranties. As a condition to
granting any Stock Incentive, the Company may require the Recipient to
make any representation or warranty to the Company as may be required,
in the judgment of the Company, under any applicable law or
regulation, including executing and delivering to the Company an
agreement as may from time to time be necessary to comply with the
federal and state securities laws. At the option of the Company, a
stop-transfer order against any shares of stock may be placed on the
official stock books and records of the Company, and a legend
indicating that the stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel is provided (concurred in by
counsel for the Company) stating that such transfer is not in
violation of any applicable law or regulation, may be stamped on stock
certificates in order to assure exemption from registration.
13.4 Legends on Stock Incentive Agreements and Stock
Certificates. Unless an appropriate registration statement is filed
pursuant to the Securities Act, with respect to the shares of Common
Stock issued under this Plan, each certificate representing such
Common Stock shall be endorsed with the following legend or its
equivalent:
The securities represented by this certificate are issued and the
shares represented hereby have not been registered under the Securities Act
of 1933, as amended, or any applicable state law, and no interest therein
may be sold, distributed, assigned, offered, pledged or otherwise
transferred unless (a) there is an effective registration statement under
such act and applicable state securities laws covering any such transaction,
or (b) the company receives an opinion of legal counsel for the holder of
these securities (concurred in by legal counsel for the company) stating
that such transaction is exempt from registration or the company otherwise
satisfies itself that such transaction is exempt from registration.
In addition to this legend, each agreement setting forth the terms of
a Stock Incentive and each certificate representing shares of Common Stock
acquired upon the exercise of a Stock Incentive shall be endorsed with all
legends, if any, which are required by applicable state securities laws and
the Administrator.
SECTION 14. Withholding Tax Requirement. The Company shall have the
right to retain and withhold from any payment of cash or shares of Common
Stock, the amount of taxes required by any government to be withheld or
otherwise deducted and paid with respect to such payment. The Company may
require an individual receiving cash or shares of Common Stock to reimburse
the Company for any such taxes required to be withheld and may withhold any
distribution in whole or in part until the Company is so reimbursed. In
lieu of such withholding or reimbursement, the Company shall have the right
to withhold from any other cash amounts due or to become due from the
Company to the individual in an amount equal to such taxes or to retain and
withhold a number of shares having a market value not less than the amount
of such taxes required to be withheld as reimbursement for any such taxes
and cancel (in whole or in part) any such shares so withheld.
SECTION 15 Status of Shareholder. No Recipient nor any party to
which such Recipient's rights and privileges under any Stock Incentive may
pass shall be, or have any of the rights or privileges of, a shareholder of
the Company with respect to any of the shares related to the Stock
Incentive, unless, until, and to the extent the Recipient: (a) exercises an
Option or exercises a Stock Appreciation Right for shares, (b) receives
shares subject of a Stock Bonus, or (c) purchases the Restricted Stock, as
the case may be.
SECTION 16. Rights and Relationships. This Plan is purely voluntary
on the part of the Company. The adoption or continuance of this Plan shall
not be deemed to constitute a contract between the Company and Eligible
Recipient or any other person. Nothing in this Plan, or in any Stock
Incentive granted pursuant to this Plan, shall give any Recipient any right
to continue performing services for the Company, or to interfere in any way
with the right of the Company or the Recipient to terminate the Recipient's
service relationship with the Company at any time.
SECTION 17 Amendment and Termination.
17.1 Board Action. The Board may at any time suspend, amend or
terminate this Plan, provided that the approval of the Company's
shareholders is necessary within 12 months before or after the
adoption by the Board of any amendment which will: (a) increase the
number of shares reserved for the issuance of Stock Incentives under
this Plan; or (b) permit the granting of Stock Incentives to a class
of persons other than those presently permitted to receive Stock
Incentives under this Plan. However, this Plan may not, without the
approval of the shareholders, be amended in any manner that would
cause ISOs issued under this Plan to fail to qualify as ISOs as
defined in Section 422(b) of the Code.
17.2 Automatic Termination. Unless sooner terminated by the
Board, this Plan shall terminate:
(a) ten years from the earlier of: (1) the date on which this
Plan is adopted by the Board or (2) the date on which this
Plan is approved by the shareholders of the Company; or
(b) Upon consummation of a Liquidation Event, unless expressly
assumed by any successor entity.
17.3 Effect. No Stock Incentive may be granted after such
termination or during any suspension of this Plan. In addition, no
amendment, suspension or termination of this Plan shall adversely
effect Stock Incentives granted on or prior to the date thereof,
without the consent of the Recipients.
SECTION 18. Applicable Law. This Plan shall be governed and
construed in accordance with the laws of the State of Washington.
SECTION 19. Effectiveness of This Plan. This Plan shall become
effective on the Effective Date upon adoption by the Board. For any option
to qualify as an ISO, this Plan must be approved by the Company's
shareholders any time within 12 months before or after the adoption of this
Plan.
Adopted by the Board on December 12, 2000, and approved by the
shareholders on __________, 2001.
PROXY
DATAMARINE INTERNATIONAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
March 21, 2001
The undersigned hereby appoints Stephen W. Frankel and David C.
Thompson, and each of them, with full power of substitution, proxies to
represent the undersigned at the Annual Meeting of the Shareholders of
DATAMARINE INTERNATIONAL, INC. to be held March 21, 2001 at 10:30 a.m. at the
offices of Datamarine International, Inc., 7116 220th St. SW, Mountlake
Terrace, Washington 98043, and at any adjournments or postponements thereof,
to vote in the name and place of the undersigned, with all powers which the
undersigned would possess if personally present, all of the shares of
DATAMARINE INTERNATIONAL, INC. standing in the name of the undersigned upon
such business as may properly come before the meeting.
PLEASE DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
DATAMARINE INTERNATIONAL INC.
c/o EquiServe
P.O. Box 9040
Boston, MA 02266-9040
DETACH HERE
[X] Please mark
votes as in
this example.
This proxy is solicited on behalf of the Board of Directors. The Board
recommends an affirmative vote on all proposals specified. Shares will
be voted as specified. If no specification is made, the shares represented
will be voted FOR the Election of Directors and FOR proposals 2, 3, 4 and 5
as set forth in the Proxy Statement.
1. Election of Director
Nominees:
For Withheld
Arthur P. Stasik [ ] [ ]
Gerald E. Setka [ ] [ ]
David C. Thompson [ ] [ ]
Joseph L. Stephens [ ] [ ]
For Against Abstain
2. To approve the adoption of the 2001 [ ] [ ] [ ]
Stock Incentive Plan
3. To approve an amendment to the Company's [ ] [ ] [ ]
Articles of Incorporation to increase
the number of shares of Preferred
Stock from 1,000,000 shares to 5,000,000
shares
4. To approve an amendment to the Company's [ ] [ ] [ ]
Articles of Incorporation giving the
Board of Directors authority to set
terms for Preferred Stock
5. To ratify the selection of Grant Thornton [ ] [ ] [ ]
LLP as independent auditors for 2001
Please sign exactly as your name(s)
appear(s) on the Proxy. When shares are
held by joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian, please
give full title as such. If a corporation,
please sign in full corporate name by
President or authorized officer. If a
partnership, please sign in partnership
name by authorized person.
Signature: ___________ Date: ______ Signature: ___________ Date: ______