SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
[ ] Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Watkins-Johnson Company
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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For Further Information:
Frank E. Emery (Watkins-Johnson) 650-813-2752
George Sard (Sard Verbinnen & Co) 212-687-8080
Judy Brennan (Sard Verbinnen & Co) 212-687-8080
FOR RELEASE AT 8:00 a.m. EASTERN TIME JANUARY 29, 1999
WATKINS-JOHNSON WILL OPPOSE THREE BOARD NOMINEES BY
2.5% INVESTOR AT 1999 ANNUAL MEETING
PALO ALTO, CA, January 29, 1999 - Watkins-Johnson Company (NYSE: WJ) said today
that it has been notified by Sandera Partners L.P. that it intends to nominate
three directors for election to the Watkins-Johnson Board of Directors at the
1999 Annual Meeting of Shareholders. Sandera Partners is a Texas-based private
investment firm that stated it owns 2.5% of Watkins-Johnson common stock.
Watkins-Johnson said it previously rejected Sandera's request for two
Board seats. The Company will solicit proxies against the three Sandera
nominees, two of whom are executives of Sandera, and the third an executive of
an investment management and acquisition firm at the same address.
Watkins-Johnson has concluded that Board representation is not warranted by the
size of Sandera's investment in the Company.
The Board of Directors of Watkins-Johnson consists of eight members.
Directors of Watkins-Johnson, a California corporation, are elected by
cumulative voting.
Watkins-Johnson Company specializes in two high-technology business
areas. The Company's wireless-communications units produce radio-frequency
components, subassemblies and equipment for fixed and mobile networks worldwide.
The Semiconductor Equipment Group produces APCVD systems for high-volume
integrated-circuit manufacturing. Sales in 1998 were $212 million.
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CERTAIN INFORMATION CONCERNING PARTICIPANTS
The following individuals, all of whom are directors of Watkins-Johnson
Company, may be deemed participants in the solicitation of proxies on behalf of
Watkins-Johnson's Board of Directors: Dean A. Watkins (Chairman of the Board of
Directors of Watkins-Johnson); H. Richard Johnson (Vice Chairman of the Board of
Directors of Watkins-Johnson); W. Keith Kennedy, Jr. (President and Chief
Executive Officer of Watkins-Johnson); John J. Hartman (Financial Consultant);
Raymond F. O'Brien (Business Consultant); William R. Graham (Chairman of the
Board and President, National Security Research, Inc.); Gary M. Cusumano
(President, The Newhall Land and Farming Company); and Robert L. Prestel
(Business and Management Consultant).
Dr. Watkins is the beneficial owner of 258,020 shares of
Watkins-Johnson's Common Stock individually and through the Watkins Trust
(including 9,000 shares subject to stock options exercisable within 60 days of
December 31, 1998). Dr. Johnson is the beneficial owner of 39,259 shares of
Common Stock, individually and through the Johnson Family Trust (including 9,000
shares subject to stock options exercisable within 60 days of December 31,
1998). Dr. Kennedy is the beneficial owner of 353,091 shares (including 282,200
shares subject to stock options exercisable within 60 days of December 31,
1998). Mr. Hartman is the direct beneficial owner of 20,120 shares (including
19,520 shares subject to stock options exercisable within 60 days of December
31, 1998). Mr. O'Brien is the direct beneficial owner of 22,420 shares
(including 16,420 shares subject to stock options exercisable within 60 days of
December 31, 1998). Mr. Graham is the beneficial owner of 26,950 shares,
individually and through his spouse (including 26,650 shares subject to stock
options exercisable within 60 days of December 31, 1998). Mr. Cusumano is the
direct beneficial owner of 12,993 shares (including 12,493 shares subject to
stock options exercisable within 60 days of December 31, 1998). Mr. Prestel is
the direct beneficial owner of 12,793 shares (including 12,493 shares subject to
stock options exercisable within 60 days of December 31, 1998). The foregoing
share ownership numbers are as of December 31, 1998.
Dr. Kennedy is a party to an employment agreement with Watkins-Johnson
which provides for employment until March 2001. The employment agreement
provides for, among other things, certain payments and the continuation of
certain benefits upon a "change in control" of Watkins-Johnson as defined in
such agreement.
Drs. Watkins and Johnson are parties to consulting agreements with the
Company. Under the agreements, Drs. Watkins and Johnson receive annual fees of
$265,000 and $125,000, respectively, in addition to their regular directors'
fees described below.
Each Watkins-Johnson nonemployee director receives an annual fee of
$21,600 and a fee of $300 for attending each meeting of the Board of Directors
or Committee of the Board of Directors.
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Each nonemployee director also participates in Watkins-Johnson's 1989
Stock Option Plan for Nonemployee Directors (the "Nonemployee Directors Plan").
The Nonemployee Directors Plan provides for each nonemployee director to receive
a stock option to purchase 3,000 shares of Common Stock annually. In addition,
the Nonemployee Directors Plan provides that new directors will, upon election
by the shareowners, receive an automatic, one-time option grant to purchase
3,000 shares of Common Stock.
Watkins-Johnson's directors' retirement plan provides that each
director who has completed at least five years of active service as a director,
upon retirement from the Board, will receive one-half of his or her quarterly
fee as director for a period of years not to exceed one-half of the years of
service as a director after April 8, 1995.
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