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                                                                    EXHIBIT 10.3
                    

                                 MEDIA 100 INC.

                       Key Employee Incentive Plan (1992),
                       -----------------------------------
                      as amended through December 16, 1996
                      ------------------------------------


1.      PLAN; PURPOSE; GENERAL. The purpose of this Key Employee Incentive 
     Plan (1992) (the "Plan") is to advance the interests of Media 100 Inc.
     (formerly Data Translation, Inc.) (the "Company") by enhancing the ability
     of the Company and its subsidiaries to attract and retain selected
     advisers, consultants, key employees and directors, by creating for such
     persons incentives and rewards for their contributions to the success of
     the Company, and by encouraging such persons to become owners of shares of
     the Company's Common Stock, par value $0.01 per share (the "common stock"
     or "stock"). Options granted pursuant to the Plan may be incentive stock
     options as defined in Section 422 of the Internal Revenue Code of 1986, as
     amended (the "Code") (such options being referred to herein as "incentive
     options") or non-incentive options. The proceeds received from the sale of
     stock pursuant to the Plan shall be used for general corporate purposes.
     Except as otherwise expressly provided with respect to an option grant, no
     option granted pursuant to the Plan shall be an incentive option.

2.      EFFECTIVE DATE OF PLAN. This Plan will become effective upon approval
     by at least a majority of the votes cast at the next duly called Annual
     Meeting of Stockholders of the Company at which a quorum representing a
     majority of the voting power of all outstanding voting stock of the Company
     is, either in person or by proxy, present and voting thereon or at any
     adjournment thereof. Grants of awards under the Plan may be made prior to
     that date (but after Board adoption of the Plan), subject to approval of
     the Plan by such shareholders.

3.      ADMINISTRATION OF THE PLAN. The Plan will be administered by the Board
     of Directors (the "Board") of the Company. The Board will have authority,
     to take all action necessary or appropriate thereunder, to interpret its
     provisions, and to decide all questions and resolve all disputes which may
     arise in connection therewith. Such determinations of the Board shall be
     conclusive and shall bind all parties.

        The Board may, in its discretion, delegate some or all of its powers
     with respect to the Plan to the Executive Compensation and Stock Option
     Committee or any other committee (the "Committee"), in which event all
     references to the Board hereunder, except the references in Section 11
     hereof, shall be deemed to refer to the Committee. The Committee, if one is
     appointed, shall consist of not fewer than two members, and each member of
     the Committee shall be, at the time of his appointment and at any time he
     exercises discretion in administering the Plan, a "non-employee director"
     as that term is defined in Rule 16b-3 adopted pursuant to the Securities
     Exchange Act of 1934, as amended. A majority of the 




                                      
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     members of any such Committee shall constitute a quorum, and all
     determinations of the Committee shall be made by a majority of its members.
     Any determination of the Committee under the Plan may be made without
     notice or meeting of the Committee by a writing signed by a majority of the
     Committee members.

4.      ELIGIBILITY. The "Participants" in the Plan will be such key 
     employees, including part-time employees, advisers, consultants and
     directors whether or not they are employees, of the Company or of any of
     its present or future subsidiaries (as defined in Section 10) as may be
     selected from time to time by the Board in its discretion.

        No incentive option shall be granted to a Participant who is not an
     "employee" as defined in the provisions of the Code or regulations
     thereunder applicable to incentive options. No incentive option shall be
     granted to a Participant who at the time of grant owns, directly or
     indirectly through application or the attribution rules of Section 424(d)
     of the Code, stock possessing more than 10% of the total combined voting
     power of all classes of stock of the Company or of its subsidiaries (a
     "Ten-Percent Shareholder") unless (i) the option price at the time it is
     granted is at least 110% of the fair market value of the stock subject to
     the option, and (ii) the period of the option does not exceed five years
     from the date of grant.

5.      GRANT OF AWARDS. Subject to the express provisions of the Plan, the 
     Board shall have the sole authority and discretion (a) to determine which
     Participants will be granted awards; (b) to grant awards consisting of
     options or stock appreciation rights ("SARs"), or both to Participants; (c)
     to determine whether the options granted to any Participants shall be
     incentive options or non-incentive options; (d) to determine the time or
     times when awards will be granted and the number of shares of common stock
     to be subject to each award; (e) to determine the option price of the
     shares subject to each option in accordance with Section 6(a) hereof and
     the value of the shares subject to each SAR on the exercise date of such
     SAR in accordance with Section 6(d) hereof, and the method of payment of
     such price; (f) to determine the time or times when each award becomes
     exercisable and the duration of the exercise period; (g) to impose
     additional conditions or restrictions on any award, such conditions or
     restrictions, if any, to be set forth on the award form or other instrument
     evidencing the award; (h) to prescribe the form or forms of any instruments
     evidencing any awards granted under the Plan and of any other instruments
     required under the Plan and to make changes in such forms from time to
     time; (i) to determine the price, vesting schedule and other attributes of
     awards granted to Participants working abroad; and (j) to adopt, amend and
     rescind rules and regulations for the administration of the Plan and the
     awards and for its own acts and proceedings. Subject to Section 12 hereof,
     the Board shall also have the authority, in its sole discretion, both
     generally and in particular instances, to waive compliance by a Participant
     with any obligation to be performed by him under an award, to waive any
     condition or 




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     provision of an award, and to amend or cancel any award (and if an award is
     cancelled, to grant a new award on such terms as the Board shall specify)
     except that the Board may not take any action with respect to an
     outstanding award that would adversely affect the rights of the Participant
     under such award without such Participant's consent. Nothing in the
     preceding sentence shall be construed as limiting the power of the Board to
     make adjustments required by Section 8(c) hereof.

          No award shall be granted on or after February 20, 2002 but awards
     previously granted may extend beyond that date.

6.        Terms and Conditions of Awards.
          ------------------------------

     a.   EXERCISE PRICE OF OPTIONS. The purchase price per share for shares
          issuable upon exercise of options shall be determined by the Board but
          in the case of incentive options, shall not be less than 100% (110% in
          the case of an incentive option granted to a Ten-Percent Shareholder)
          of the fair market value of the stock on the date of grant; nor shall
          the option price be less, in the case of an original issue of
          authorized stock, than par value per share. For this purpose, "fair
          market value" will be determined as set forth in Section 10 hereof.

     b.   PERIOD OF OPTIONS. An option shall be exercisable during such period
          or periods as the Board may specify. The latest date on which an
          option may be exercised (the "Final Exercise Date") shall be the date
          which is ten years (five years, in the case of an incentive option
          granted to a Ten-Percent Shareholder) from the date the option was
          granted or such earlier date as may be specified by the Board at the
          time the option is granted.

     c.   Exercise of Options.
          -------------------

        (i)   Unless the Board at the time of grant or at any other time
              otherwise specifies in the case of a particular option or options,
              each option shall first become exercisable with respect to
              one-fifth of the shares covered by it upon the completion of one
              year from the date of the grant of the option (the "Initial
              Exercise Date"), and with respect to an additional one-fifth each
              succeeding year until the option becomes exercisable with respect
              to all of the shares covered by it.

        (ii)  In the case of options intended to be incentive options, any award
              forms or other instruments evidencing such options


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              shall contain such provisions relating to exercise and other
              matters as are required of incentive options under the applicable
              provisions of the Code and Treasury Regulations, as from time to
              time in effect.

       (iii)  A person electing to exercise part or all of his options shall
              give written notice to the Company, as specified by the Board, of
              his election and of the number of shares he has elected to
              purchase, such notice to be accompanied by the instrument
              evidencing such option and any other documents required by the
              Board, and shall at the time of such exercise tender the purchase
              price of the shares he has elected to purchase. If the notice of
              election to exercise is given by the executor or administrator of
              a deceased Participant, or by the person or persons to whom the
              option has been transferred by the Participant's will or the
              applicable laws of descent and distribution, the Company will be
              under no obligation to deliver shares pursuant to such exercise
              unless and until the Company is satisfied that the person or
              persons giving such notice is or are entitled to exercise the
              option.

       (iv)   In the case of an option that is not an incentive option, the
              Board shall have the right to require that the Participant
              exercising the option remit to the Company an amount sufficient to
              satisfy any federal, state, or local withholding tax requirements
              (or make other arrangements satisfactory to the Company with
              regard to such taxes) prior to the delivery of any common stock
              pursuant to the exercise of the option. If permitted by the Board,
              either at the time of the grant of the option or the time of
              exercise, the Participant may elect, at such time and in such
              manner as the Board may prescribe, to satisfy such withholding
              obligation by (i) delivering to the Company common stock owned by
              such individual having a fair market value equal to such
              withholding obligation, or (ii) requesting that the Company
              withhold from the shares of common stock to be delivered upon
              exercise of the option a number of shares of common stock having a
              fair market value equal to such withholding obligation.

          In the case of an incentive option, if at the time the option is
          exercised the Board determines that under applicable law and
          regulations the Company could be liable for the withholding of any
          federal, state or local tax with respect to a disposition of the





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          common stock received upon exercise, the Board may require as a
          condition of exercise that the Participant exercising the option agree
          (i) to inform the Company promptly of any disposition (within the
          meaning of Section 424(c) of the Code and the regulations thereunder)
          of common stock received upon exercise, and (ii) to give such security
          as the Board deems adequate to meet the potential liability of the
          Company for the withholding of tax, and to augment such security from
          time to time in any amount reasonably deemed necessary by the Board to
          preserve the adequacy of such security.

     d.   STOCK APPRECIATION RIGHTS. The Board in its discretion may grant SARs
          either in tandem with or independent of options awarded under the
          Plan. Except as hereinafter provided, each SAR will entitle the
          Participant to receive upon exercise, with respect to each share of
          common stock to which the SAR relates, the excess of (i) the share's
          value on the date of exercise, over (ii) the share's fair market value
          on the date it was granted. For purposes of clause (i), "value" shall
          mean fair market value; PROVIDED, that the Board may adjust such value
          to take into account dividends on the stock and may also grant SARs
          that provide, in such limited circumstances following a change in
          control of the Company (as determined by the Board) as the Board may
          specify, that "value" for purposes of clause (i) is to be determined
          by reference to a specified value (which may include an average of
          values) for the common stock during a period immediately preceding the
          change in control, all as determined by the Board. The amount payable
          to a Participant upon exercise of an SAR shall be paid either in cash
          or in shares of common stock, as the Board determines. Each SAR shall
          be exercisable during such period or periods and on such terms as the
          Board may specify. No SAR shall be exercisable after the date which is
          ten years from the date of grant.

     e.   PAYMENT FOR AND DELIVERY OF SHARES. Shares which are subject to
          options shall be issued only upon receipt by the Company of full
          payment of the purchase price for the shares as to which the award is
          exercised. The purchase price shall be payable by the option holder to
          the Company either (i) in cash or by check, bank draft or money order
          payable to the order of the Company; or (ii) if so permitted by the
          Board (which in the case of an incentive option, shall specify such
          method of payment at the time of grant), (A) through the delivery of
          shares of common stock (duly owned by the option holder and for which
          the option holder has good title free and clear of any liens and
          encumbrances and which, in the case of common stock acquired from the
          Company, shall have been held




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          for at least six months) having a fair market value on the last
          business day preceding the date of exercise equal to the purchase
          price or (B) by delivery of a promissory note of the option holder to
          the Company, such note to be payable on such terms as are specified by
          the Board or (C) by delivery of an unconditional and irrevocable
          undertaking by a broker to deliver promptly to the Company sufficient
          funds to pay the exercise price; or (iii) by a combination of the
          permissible forms of payment as provided in (i) and (ii) above;
          PROVIDED, that if the common stock delivered upon exercise of the
          option is an original issue of authorized common stock, at least so
          much of the exercise price as represents the par value of such common
          stock shall be paid other than with a personal check or promissory
          note of the person exercising the option.

             The Company shall not be obligated to deliver any shares unless 
          and until, in the opinion of the Company's counsel, all applicable
          federal and state laws and regulations have been complied with, nor,
          if the outstanding common stock is at the time listed on any
          securities exchange, unless and until the shares to be delivered have
          been listed (or authorized to be added to the list upon official
          notice of issuance) upon such exchange, nor unless or until all other
          legal matters in connection with the issuance and delivery of shares
          have been approved by the Company's counsel. Without limiting the
          generality of the foregoing, the Company may require from the person
          exercising an option such investment representation or such agreement,
          if any, as counsel for the Company may consider necessary in order to
          comply with the Securities Act of 1933, as amended, and may require
          that such person agree that any sale of the shares will be made only
          on a national securities exchange or in such other manner as is
          permitted by the Board and that he will notify the Company before he
          makes any disposition of the shares whether by sale, gift or
          otherwise.

             A Participant shall have the rights of a shareholder only as to 
          shares actually acquired by him under the Plan.

     f.   NONTRANSFERABILITY OF AWARDS. No award may be sold, assigned or
          otherwise transferred or disposed of in any manner whatsoever other
          than by will or by the laws of descent and distribution, and during
          the Participant's lifetime the award may be exercised only by him.



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     g.   FORFEITURE OF AWARDS UPON TERMINATION OF EMPLOYMENT. If a
          Participant's (other than a non-employee director's) employment or
          service with the Company and its subsidiaries terminates for any
          reason other than death, all awards held by the Participant shall
          terminate unless the Board determines, in its sole discretion, that
          such awards as were exercisable immediately prior to termination shall
          continue to be exercisable for a period of time after termination (but
          in no event beyond the Final Exercise Date). If the Board determines
          that a post-termination exercise period for exercisable awards is
          appropriate, such awards shall terminate and be forfeited after
          completion of such period to the extent not previously exercised,
          expired or terminated. For purposes of this Section 6(g), employment
          shall not be considered terminated (i) in the case of sick leave or
          other bona fide leave of absence approved for purposes of the Plan by
          the Board, so long as the Participant's right to reemployment is
          guaranteed either by statute or by contract, (ii) in the case of a
          transfer of employment between the Company and a subsidiary or between
          subsidiaries, or to the employment of a corporation (or a parent or
          subsidiary corporation of such corporation) issuing or assuming an
          option in a transaction to which Section 424(a) of the Code applies,
          or (iii) in the case of a transfer of employment between the Company
          and its wholly-owned subsidiary Data Translation, Inc. (formerly Data
          Translation II, Inc.) ("DTI") and subsequent distribution of the stock
          of such subsidiary to the Company's stockholders (the "Distribution");
          provided, that this clause (iii) shall apply only in the case of
          Participants whose transfer of employment to DTI occurs in connection
          with the Distribution; and further provided, that in the case of any
          such Participant, post-Distribution service for DTI shall be treated
          for purposes of this paragraph as service for the Company and any
          post-Distribution termination of employment with DTI shall be treated
          for purposes of this paragraph as a termination of employment with the
          Company and its subsidiaries. The Company may require that any
          Participant described in clause (iii) above provide, prior to any
          post-Distribution exercise of an award hereunder by such Participant
          and as a condition thereto, evidence satisfactory to the Company as to
          the period of such Participant's employment with DTI.

     h.   DEATH. If a Participant dies at a time when he is entitled to exercise
          an option, then at the time or times within one year after his death
          (or such further period as the Board may allow) such option may be
          exercised, as to all or any of the shares which the Participant was
          entitled to purchase immediately prior to his death, by his executor
          or administrator or the person or persons to whom the option is




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          transferred by will or the applicable laws of descent and
          distribution, and except as so exercised such option will expire at
          the end of such period. In no event, however, may any option be
          exercised after the Final Exercise Date.

     i.   CONFIDENTIALITY AGREEMENT. Each Employee, including employees of DTI
          who received options while employees of the Company, shall execute,
          prior to or contemporaneously with the grant of any option to such
          Participant hereunder, the Company's then standard form of agreement
          relating to confidentiality, inventions and the like.

7.      REPLACEMENT AWARDS. The Company may grant awards under the Plan on 
     terms differing from those provided in Section 6, where such awards are
     granted in substitution for awards held by employees of another corporation
     who concurrently become employees of the Company or a subsidiary as the
     result of a merger or consolidation of that corporation with the Company or
     a subsidiary, or the acquisition by the Company or a subsidiary of property
     or stock of that corporation. The Board may direct that the substitute
     awards be granted on such terms and conditions as the Board considers
     appropriate in the circumstances. Such awards will be in addition to those
     which may be granted under the Plan and will not be counted as granted
     under the Plan.

8.      Shares Subject to Plan.
        ----------------------

     a.   NUMBER OF SHARES AND STOCK TO BE DELIVERED. Shares delivered pursuant
          to this Plan shall in the discretion of the Board be authorized but
          unissued shares of common stock or previously issued stock acquired by
          the Company. Subject to adjustment as described below and exclusive of
          the shares that are subject to the options provided for in Section 13,
          the aggregate number of shares which may be delivered under this Plan
          shall not exceed 2,000,000 shares of common stock of the Company.

     b.   LIMITATIONS ON GRANTS TO INDIVIDUALS. Subject to adjustment as
          described below and exclusive of the shares that are subject to the
          options provided for in Section 13, the aggregate number of shares for
          which options may be granted under this Plan to any individual in any
          calendar year shall not exceed 250,000 shares of common stock of the
          Company.

     c.   CHANGES IN STOCK. In the event of a stock dividend, stock split or
          combination of shares, recapitalization, merger in which the Company
          is the surviving corporation or other change in the Company's capital
          stock, the number and kind of shares of stock or 




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          securities of the Company to be subject to the Plan and to options
          then outstanding or to be granted thereunder, the maximum number of
          shares or securities which may be delivered under the Plan, the option
          price and other relevant provisions shall be appropriately adjusted by
          the Board, whose determination shall be binding on all persons. In the
          event of a consolidation or merger in which the Company is not the
          surviving corporation or which results in the acquisition of
          substantially all the Company's outstanding stock by a single person
          or entity, or in the event of the sale or transfer of substantially
          all the Company's assets, all outstanding awards shall thereupon
          terminate, provided that at least twenty days prior to the effective
          date of any such merger, consolidation or sale of assets, all
          outstanding awards shall become exercisable immediately prior to
          consummation of such merger, consolidation or sale of assets, unless
          the Board shall have arranged for the surviving or acquiring
          corporation or an affiliate of that corporation to assume the awards
          or to grant to the Participants replacement awards having equivalent
          terms and conditions as determined by the Board including, in the case
          of incentive options, terms and conditions that satisfy the
          requirements of Section 424(a) of the Code.

               The Board may also adjust the number of shares subject to 
          outstanding awards granted under Sections 5 or 6 hereof, the exercise
          price of outstanding options and the terms of outstanding options to
          take into consideration material changes in accounting practices or
          principles, consolidations or mergers (except those described in the
          immediately preceding paragraph), acquisitions or dispositions of
          stock or property or any other event if it is determined by the Board
          that such adjustment is appropriate to avoid distortion in the
          operation of the Plan, including without limitation, the special
          option adjustments made in connection with the Distribution and
          described in Section 14 herein.

9.      EMPLOYMENT RIGHTS. Neither the adoption of the Plan nor the grant of 
     awards shall confer upon any Participant any right to continued employment
     with the Company or a subsidiary or affect in any way the right of the
     Company to terminate the employment of a Participant at any time. Except as
     specifically provided by the Board, in its sole discretion, in any
     particular case, the loss of existing or potential profit in awards granted
     under this Plan shall not constitute an element of damages in the event of
     termination of the relationship of a Participant even if the termination is
     in violation of an obligation of the Company to the Participant by contract
     or otherwise.



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10.     Definitions.
        -----------

     a.   For purposes of the Plan a subsidiary is any corporation (i) in which
          the Company owns, directly or indirectly, stock possessing 50% or more
          of the total combined voting power of all classes of stock, (ii) over
          which the Company has effective operating control; provided, however,
          that no corporation shall be deemed a subsidiary for the purpose of
          any provisions applicable to incentive options, and no incentive
          options shall be granted to employees of such corporation, unless in
          each case, such corporation shall constitute a subsidiary as defined
          in clause (i) above. For special rules relating to DTI, see Section
          14, below.

     b.   The fair market value of the common stock shall be determined in
          accordance with the applicable provisions of the Code or regulations
          issued thereunder, or in the absence of any such provisions or
          regulations, shall be deemed to be the last sale price at which such
          common stock is traded on the date in question as reported in the Wall
          Street Journal; or, if the Wall Street Journal is not published at the
          date in question or does not list the common stock, then in such other
          appropriate newspaper of general circulation as the Board may
          prescribe; or, if there is no sale of the common stock on the date in
          question or the last price at which the common stock traded is not
          listed, then the mean between the bid and asked price at the close of
          the market on such day.

11.     INDEMNIFICATION OF BOARD. In addition to and without affecting such 
     other rights of indemnification as they may have as members of the Board or
     otherwise, each member of the Board shall be indemnified by the Company to
     the extent legally possible against reasonable expenses, including
     attorneys' fees, actually and reasonably incurred in connection with the
     defense of any action, suit or proceeding, or in connection with any appeal
     therein, to which he may be a party by reason of any action taken or
     failure to act under or in connection with the Plan, or any option granted
     thereunder, and against all judgments, fines and amounts paid by him in
     settlement thereof; provided that such payment of amounts so indemnified is
     first approved by a majority of the members of the Board who are not
     parties to such action, suit or proceeding, or by independent legal counsel
     selected by the Company, in either case on the basis of a determination
     that such member acted in good faith and in a manner he reasonably believed
     to be in or not opposed to the best interests of the Company; and except
     that no indemnification shall be made in relation to matters as to which it
     shall be adjudged in such action, suit or proceeding that such Board member
     is liable for negligence or misconduct in his duties; and provided, further
     that the Board member shall in writing offer the Company the opportunity,
     at its own expense, to handle and defend the same.



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12.     AMENDMENTS. The Board may at any time discontinue granting awards under
     the Plan. The Board may at any time or times amend the Plan or amend any
     outstanding award or awards for the purpose of satisfying the requirements
     of Section 422 of the Code or of any changes in applicable laws or
     regulations, to comply with any applicable laws and requirements of foreign
     jurisdictions or for any other purpose that may at the time be permitted by
     law, provided that no such amendment will adversely affect the rights of
     any Participant (without his consent) under any award theretofore granted.

13.     NON-EMPLOYEE DIRECTORS. Notwithstanding anything to the contrary 
     contained elsewhere herein:

     a.   ELIGIBLE DIRECTORS AND GRANT. Each director of the Company who is not
          a full-time employee of the Company or any of its subsidiaries and is
          a director on April 8, 1992 shall be automatically granted on such
          date non-incentive stock options covering 10,000 shares of common
          stock and each non-employee director who is initially elected after
          April 8, 1992 and prior to February 20, 2002 shall be granted on the
          date of such election non-incentive stock options covering 10,000
          shares of common stock (notwithstanding the two-for-one split of the
          common stock effected on July 31, 1995), all such options to be
          exercisable with respect to one-fifth of the covered shares one year
          from the date of grant and with respect to an additional one-fifth
          each succeeding year.

     b.   TERMS OF OPTIONS. The Final Exercise Date of options granted pursuant
          to Section 13(a) hereof shall be 10 years from the date of grant. If a
          director's service with the Company terminates for any reason other
          than death, in lieu of the provisions of Section 6(g) hereof, all
          options held by the director that are exercisable on the date of
          termination shall continue to be exercisable for a period of six
          months, but shall terminate immediately if the director was removed
          for cause or resigned under circumstances which in the opinion of the
          Board of Directors casts such discredit on the Company or him as to
          justify termination of his options. After completion of said six-month
          period, such options shall terminate to the extent not previously
          exercised, expired or terminated. All options held by a director that
          are not exercisable on the date such director's service with the
          Company terminates shall immediately terminate. The purchase price for
          shares of common stock issuable upon the exercise of options granted
          pursuant to Section 13(a) hereof shall be the fair market value of the
          common stock at the close of business on the date the option is
          granted, determined in 




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          accordance with Section 10(b) hereof; PROVIDED, HOWEVER, that in no
          event shall the exercise price be less than par value per share.
         

14.     SPECIAL OPTION ADJUSTMENTS. Notwithstanding any other provision of the
     Plan, each option outstanding under the Plan immediately prior to the
     Distribution (an "affected option") shall be adjusted in accordance with
     Section 8.7 of the Distribution Agreement between the Company and DTI dated
     as of November 19, 1996 (the "Distribution Agreement"). Except as otherwise
     provided herein, the adjusted option shall have substantially the same
     terms as prior to the Distribution. To the extent any such adjustment shall
     be treated as an option grant for purposes of Section 8.7 of such
     Agreement, it shall be made in accordance with the terms of said Section
     8.7 and without regard to the option-grant rules and limitations set forth
     in this Plan.






























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