SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DATRON SYSTEMS INCORPORATED
- -------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
DATRON SYSTEMS INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, AUGUST 14, 1996 AT 11:00 A.M.
To the Stockholders of Datron Systems Incorporated:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of
DATRON SYSTEMS INCORPORATED will be held at the Company's headquarters at
304 Enterprise Street, Escondido, California
on August 14, 1996 at 11:00 A.M. for the following purposes:
1. To elect seven directors to hold office until the
next annual meeting of stockholders and until their
successors are elected and qualified; and
2. To transact any other business that properly comes
before the meeting and any adjournments thereof.
Only stockholders of record at the close of business on June 18, 1996
are entitled to notice of, and to vote at, the meeting and any
adjournments and postponements thereof.
By Order of the Board of Directors
Victor A. Hebert
Secretary
Escondido, California
July 8, 1996
___________________________________________________________________
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN AND RETURN THE ACCOMPANYING PROXY CARD
AS SOON AS POSSIBLE IN THE ENCLOSED POSTPAID ENVELOPE.
___________________________________________________________________
<PAGE> 1
DATRON SYSTEMS INCORPORATED
_________
PROXY STATEMENT
To the Stockholders of Datron Systems Incorporated:
The enclosed proxy is solicited on behalf of the Board of Directors
(the "Board") of Datron Systems Incorporated, a Delaware corporation (the
"Company"), for use at the Company's Annual Meeting of Stockholders and
any adjournments and postponements thereof (the "Annual Meeting") to be
held at 11:00 a.m. on Wednesday, August 14, 1996, at the Company's
principal executive offices. The Company's principal executive offices are
located at 304 Enterprise Street, Escondido, California 92029; the
Company's telephone number is (619) 747-3734.
Only stockholders of record as of the close of business on June 18,
1996 are entitled to notice of, and to vote at, the Annual Meeting. At
the close of business on that date, 2,627,192 shares of the Company's
common stock, $0.01 par value, (the "Common Stock") were outstanding.
Holders of Common Stock are entitled to one vote for each share of Common
Stock held.
Any stockholder giving a proxy in the form accompanying this Proxy
Statement has the power to revoke the proxy prior to its use. A proxy can
be revoked (i) by an instrument of revocation delivered prior to the
Annual Meeting to the Secretary of the Company, (ii) by a duly executed
proxy bearing a later date or time than the date or time of the proxy
being revoked, or (iii) by voting in person at the Annual Meeting.
Attendance at the Annual Meeting alone will not revoke a proxy.
A stockholder who abstains from voting on any or all matters will be
deemed present at the meeting for quorum purposes, but will not be deemed
to have voted on the particular matter (or matters) as to which the
stockholder has abstained. Similarly, in the event a nominee (such as a
brokerage firm) holding shares for beneficial owners votes on certain
matters pursuant to discretionary authority or instructions from
beneficial owners, but with respect to one or more other matters does not
receive instructions from beneficial owners and/or does not exercise
discretionary authority (a so-called "non-vote"), the shares held by the
nominee will be deemed present at the meeting for quorum purposes but will
not be deemed to have voted on such other matters.
The approximate date on which this Proxy Statement and the
accompanying proxy card are being mailed to the Company's stockholders is
July 8, 1996. Solicitation of proxies may be made by directors, officers
and other employees of the Company by personal interview, telephone or
facsimile. Costs of solicitation will be borne by the Company.
<PAGE>2
PROPOSAL 1 - NOMINATION AND ELECTION OF DIRECTORS
Nominees
Seven directors are to be elected at the Annual Meeting to serve
until the next annual meeting and until their respective successors are
elected and qualified. The Company will nominate the seven incumbent
directors. Six of these directors were elected at the Company's last
annual meeting; the seventh, Michael F. Bigham, was elected by the Board
on May 21, 1996, to fill the vacancy created by the death of Prentis C.
Hale. If any nominee is unable or unwilling to serve as a director,
proxies may be voted for substitute nominees designated by the Board. The
Board has no reason to believe that any of the persons named below will be
unable or unwilling to serve as a director if elected. Proxies received
will be voted "FOR" the election of the nominees named below unless marked
to the contrary. Pursuant to applicable Delaware law, assuming the
presence of a quorum, seven directors will be elected from among those
persons duly nominated for such positions by a plurality of the votes
actually cast by stockholders entitled to vote at the meeting who are
present in person or by proxy. Thus, the seven nominees who receive the
highest number of votes in favor of their election will be elected,
regardless of the number of abstentions or non-votes.
The following table sets forth certain information regarding each
nominee as of June 18, 1996.
<TABLE>
<CAPTION>
Positions Common Stock
with Beneficially Percentage
Name Age the Company Owned <F1><F2> Ownership
- ------------------- --- ---------------------- -------------- ----------
<S> <C> <C> <C> <C>
Richard W. Pershing 68 Chairman of the Board; 38,687<F3> 1.5%
Director
David A. Derby 54 President and Chief 93,128 3.5%
Executive Officer; Director
Kent P. Ainsworth 50 Director 13,000 0.5%
Michael F. Bigham 38 Director 0 0%
Adrian C. Cassidy 80 Director 16,050<F4> 0.6%
Peter F. Scott 69 Director 13,072<F5> 0.5%
Robert D. Sherer 60 Director 5,400 0.2%
</TABLE>
<F1>Assumes the exercise of all outstanding options held by such
person to the extent exercisable on or before August 14, 1996,
and that no other person has exercised any outstanding options.
Includes 11,000, 37,500, 10,000, 10,000, 10,000 and 5,000 shares
subject to options held by Messrs. Pershing, Derby, Ainsworth,
Cassidy, Scott and Sherer, respectively.
<F2> The persons named in the table have sole voting and investment
power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws
where applicable and to the information contained in the other
footnotes to this table.
<F3> Includes 10,181 shares which are owned of record by a trust of
which Mr. Pershing is one of three co-equal trustees who may
act only by majority vote, and excludes 1,099 shares owned
of record by Mr. Pershing's wife. Mr. Pershing disclaims
beneficial ownership of all such shares. The beneficiary of
the trust of which Mr. Perhsing is a trustee is not related
to Mr. Pershing.
<F4> Includes 6,050 shares owned by a trust of which Mr. Cassidy
is co-trustee and a beneficiary.
<F5> Includes 3,072 shares owned by a trust of which Mr. Scott is
a co-trustee and a beneficiary.
<PAGE>3
Business Experience of the Nominees
Richard W. Pershing has been a director of the Company since 1979
and Chairman of the Board of Directors of the Company since September
1984.
David A. Derby has been a director, President and Chief Executive
Officer of the Company since May 1982. He also was President of the
Company's wholly owned subsidiary, Datron World Communications Inc.
(formerly known as Trans World Communications, Inc.), from March 1993
through March 1995. He has been a director of AML Communications,
Inc. since December 1995.
Kent P. Ainsworth has been a director of the Company since May
1985. From May 1985 until December 1986, he was President and Chief
Executive Officer of Hale Systems, Inc., of which the Company's
predecessor, a California corporation, was a subsidiary prior to May
1985. From January until October 1987, Mr. Ainsworth was a
consultant. From October 1987 through February 1990, Mr. Ainsworth
was Chief Financial Officer of Di Giorgio Corporation. From January
1991 until April 1996 he was Vice President and Chief Financial
Officer of U.R.S. Corporation. Since April 1996, he has been
Executive Vice President and Chief Financial Officer of U.R.S.
Corporation.
Michael F. Bigham became a director of the Company in May 1996.
Effective July 1, 1996, he will be the President and Chief Executive
Officer of Coulter Pharmaceutical Inc. He is presently Chief
Financial Officer and Executive Vice President for Operations of
Gilead Sciences, Inc., positions he has held since 1989 and 1994,
respectively. From July 1988 until April 1992 he was Vice President
of Corporate Development of Gilead Sciences, Inc.
Adrian C. Cassidy has been a director of the Company since
September 1984. He was a director of Basic American Foods, Inc. from
1979 to 1988. He is presently a director of Clemente Global Growth
Fund, Inc. and First Philippine Fund, Inc., positions he has held
since 1987 and 1989, respectively. From June 1986 to April 1990, he
was senior marketing executive for Discount Corporation of New York
Advisors. He also works as a financial consultant.
Peter F. Scott became a director of the Company in September
1984. He was a director, President,Chief Executive Officer and
Chairman of Di Giorgio Corporation from 1974, 1980, 1982 and 1984,
respectively, through February 1990. On July 1, 1992, Mr. Scott
became President and Chief Executive Officer of Blue Shield
of California. He retired from that position on October 1, 1993.
Robert D. Sherer became a director of the Company in May 1989.
He is the President and owner of Quality Concepts, Inc., which he
founded in 1986.
All directors hold office until the next annual meeting of
stockholders and until their successors are elected and qualified.
There are no family relationships between any directors or executive
officers of the Company.
Meetings and Committees of the Board
Regular meetings of the Board are generally held on a quarterly
basis, while special meetings are called when necessary. The Board
held five (5) meetings during the fiscal year ended March 31, 1996
("Fiscal 1996"). During Fiscal 1996, each incumbent director (with the
exception of Mr. Bigham, who became a director on
May 21, 1996) attended 75% or more of the meetings of the Board and of
Board committees on which such director served. Each director who is
not an employee of the Company receives an attendance fee of $1,000
for each meeting of the Board and $500 for each meeting of any
committee on which the director serves and an annual retainer of
$5,000.
The Board presently has three standing committees, the Audit
Committee, the Compensation Committee, and the Administration
Committee for Stock Option Plans.
<PAGE>4
Audit Committee
During Fiscal 1996, the Audit Committee consisted of Messrs.
Ainsworth, Scott and Sherer. This committee consults with the
Company's auditors concerning their auditing plan, the results of
their audit, the appropriateness of accounting principles utilized by
the Company and the adequacy of the Company's general accounting
controls. This committee met two (2) times during Fiscal 1996.
Compensation Committee
During Fiscal 1996, the Compensation Committee consisted of
Messrs. Ainsworth, Cassidy and Scott. The function of the Compensation
Committee is to recommend to the Board of Directors the salary and
bonus levels of officers and directors of the Company. Until November
9, 1995, as during previous fiscal years, the Compensation Committee
also administered the Company's 1985 Stock Option Plan and the
Company's 1995 Stock Option Plan (collectively, the "Stock Option
Plans"). The Compensation Committee met two (2) times during Fiscal
1996.
Administration Committee for Stock Option Plans
On November 9, 1995, the Board formed a new Administration
Committee, consisting of Messrs. Derby and Pershing. The function of
the Administration Committee is to administer the Company's Stock
Option Plans. The Administration Committee met two (2) times during
Fiscal 1996.
<PAGE>5
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information regarding the
compensation for services in all capacities paid or accrued for the
Fiscal Years indicated by the Company (a) to the Chief Executive
Officer of the Company and (b) to the two executive officers of the
Company whose combined salary and bonuses exceeded $100,000 for
Fiscal 1996. No other executive officer of the Company received
salary and bonus of more than $100,000 during Fiscal 1996.
<TABLE>
<CAPTION>
Long-Term
ANNUAL COMPENSATION Compensation
----------------------------------------------
Awards
------
Securities
Fiscal Other Underlying
Year Annual Options/ All Other
Name and Principal Ended Salary Bonus Compensation SARs Compensation
Position March 31, ($) (S) ($) (#)<F1> ($)
- --------------------- -------- ------- ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
David A. Derby, 1996 249,995 0 1,463<F2> 0 0
President and Chief 1995 249,995 114,290 471<F2> 0 20,826<F3>
Executive Officer 1994 227,507 219,050 2,049<F2> 0 95,858<F4>
Richard W. Pershing, 1996 119,995 0 1,931<F2> 0 0
Chairman of the 1995 119,995 57,145 3,552<F2> 0 20,826<F3>
Board 1994 108,525 109,525 2,624<F2> 0 20,858<F5>
William L. Stephan, 1996 130,000 0 1,332<F2> 0 0
Vice President, Chief 1995 120,016 57,145 2,236<F2> 0 20,826<F3>
Financial Officer and 1994 52,622 33,000 656<F2> 20,000 0
Treasurer
</TABLE>
- --------------------------
<F1>Options granted were incentive stock options with a term of ten years.
The exercise price for each option was set at 100% of the fair market
value of the Company's Common Stock at the date of grant. The options vest
in substantially equal portions at the end of the first, second and third
years following the date of grant.
<F2>Amounts paid under an arrangement by which the Company reimburses
officers of the Company for medical expenses not paid for under the
Company's regular health insurance plan.
<F3>Represents a $10,260 contribution to the Company's Qualified Employee
Profit Sharing Plan and a $10,566 contribution to the Company's Non-
Qualified Supplemental Executive Profit Sharing Plan.
<F4>Includes a $75,000 relocation allowance and a $20,858 contribution to
the Company's Qualified Employee Profit Sharing Plan.
<F5>Represents a $20,858 contribution to the Company's Qualified Employee
Profit Sharing Plan.
<PAGE>6
Fiscal 1996 Option Grants
No options were granted during Fiscal 1996 to the Company's executive
officers.
Fiscal Year 1996 Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
The following table sets forth information with respect to the
options held at the end of Fiscal 1996 by the Company's Chief Executive
Officer and both of the other executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options/SARs
Shares Value Options/SARs at at Fiscal Year-End<F1>
Acquired on Realized Fiscal Year-End (#) ($)
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Derby, CEO 15,000 78,750 37,500 0 181,125 0
Richard W. Pershing 5,000 30,313 11,000 0 45,125 0
William L. Stephan<F2> 0 0 13,200 6,800 37,950 19,550
</TABLE>
- ----------------------------
<F1> Market value of the underlying securities at fiscal year-end minus
the exercise price of "in the money" options.
<F2> Mr. Stephan joined the Company as its Vice President, Chief
Financial Officer and Treasurer effective November 1, 1993.
Employment Contracts and Indemnification Agreements
Employment Contracts
The Company has an employment agreement with Mr. Derby (the
"Agreement") providing for Mr. Derby's services as President and Chief
Executive Officer of the Company pursuant to which he is currently paid
at an annual salary of $250,000, with vacation, holidays, insurance and
other benefits permitted under policies established by the Board. The
Agreement provides that, upon an assignment of the Agreement by the
Company, Mr. Derby has the right to terminate the Agreement if any
successor entity is not acceptable to him. The Agreement will expire on
April 30, 1999, unless sooner terminated under the terms of the Agreement.
The Company may terminate the Agreement if Mr. Derby commits any material
act of dishonesty in the discharge of his duties. The Company has a
substantially similar employment agreement, which expires on April 30,
1999,with Mr. Pershing providing for Mr. Pershing's services as Chairman
of the Board pursuant to which he is currently paid at an annual salary of
$120,000.
Indemnification Agreements
Mr. Derby and both of the other executive officers identified in the
Summary Compensation Table (as well as the Company's other officers and
directors) are parties to Indemnification Agreements with the Company
in substantially the form approved by the stockholders at the 1992 Annual
Meeting.
<PAGE>7
Loans
In 1988, the Company established the Key Employee Stock Purchase Plan
to assist key employees in acquiring an equity stake in the Company.
Pursuant to the plan, Mr. Derby has been loaned money by the Company to
acquire shares of the Company's Common Stock. During Fiscal 1996, Mr.
Derby had outstanding a full recourse promissory note in the original
principal amount of $164,000 payable to the Company on April 10, 1999, the
proceeds of which he used to acquire 25,000 shares of Common Stock on
April 11, 1988.
In June 1995, Mr. Derby exercised an incentive stock option to
acquire 15,000 shares of Common Stock granted to him under the 1985 Stock
Option Plan. As partial payment for the exercise price, Mr. Derby was
loaned $80,000 by the Company and he executed a full recourse promissory
note in the same amount payable to the Company on June 11, 1998.
Compensation Committee and Administration Committee Report on
Executive Compensation
Set forth below is a report of the Compensation Committee and the
Administration Committee with respect to the Company's compensation
policies during Fiscal 1996 as they affect the Company's Chief Executive
Officer and the Company's other executive officers.
Compensation Policies For Executive Officers
The Company's compensation policies for its executive officers are
designed to provide compensation levels that are competitive with those of
other similar companies and thereby to enable the Company to attract
and retain qualified executives. More specifically, the Company's
compensation policies aim, through a combination of base salary, annual
bonus and equity-based compensation, to motivate officers to assist the
Company in meeting the Company's annual and long-range business objectives
and thereby to enhance stockholder value. The cumulative effect of the
Company's compensation policies for executive officers is to tie
such compensation closely to the Company's performance. Given the
Company's loss for Fiscal 1996, this has resulted in no bonuses for
executive officers during Fiscal 1996.
Each of the Company's executive officers receives a base salary. The
Company sets base salary for executive officers based upon a number of
factors, including the particular qualifications of the executive, levels
of pay for similar positions at public and private companies of comparable
size and in comparable businesses to that of the Company, the degree to
which the executive can help the Company achieve its goals, and direct
negotiation with the executive.
At present, the annual base salaries of Mr. Pershing as Chairman of
the Board and Mr. Derby as Chief Executive Officer are $120,000 and
$250,000, respectively. There was no proposal from the executive officers
and no discussions by the Compensation Committee with respect to changes
in these base salaries for Fiscal 1996. Accordingly, the base salaries
were unchanged from those paid in Fiscal 1995.
An important element of the Company's compensation for executive
officers are bonuses which are tied closely to the Company's annual
financial results. The executive officers named in the Summary
Compensation Table participate in three bonus plans. The first of these
is the Company's Qualified Employee Profit Sharing Plan (the "Qualified
Plan"). The Qualified Plan provides employees with supplemental
retirement benefits through a plan treated favorably for tax purposes.
The Qualified Plan reflects the belief that some portion of all employees'
compensation should be tied to the performance of the Company in order to
provide a sound incentive to enhance that performance and to keep the
Company's compensation policies competitive with those of other similar
companies. All employees of the parent company, Datron Systems
Incorporated, are eligible to participate in the Qualified Plan beginning
on the April 1 following their date of employment. Annual
contributions to the plan are determined by the Board. There were no
contributions to the Qualified Plan during
Fiscal 1996. Participant accounts in the Qualified Plan vest over a
seven-year period beginning after three years
of service.
<PAGE>8
The second bonus plan is the Company's Non-Qualified Supplemental
Executive Profit Sharing Plan (the "Non-Qualified Plan"). The Non-
Qualified Plan was established to provide the executive officers named in
the Summary Compensation Table with retirement benefits in excess of those
permitted by the Qualified Plan. The benefits provided by the Non-
Qualified Plan are in the form of deferred compensation, which is not
treated favorably for tax purposes. The Non-Qualified Plan is designed to
supplement retirement benefits provided by the Qualified Plan, which are
limited by federal regulation and which the Compensation Committee elieves
are not competitive with other similar companies. The Board determines
which executive officers are eligible to participate in the Non-Qualified
Plan and the amount of annual contributions. There were no contributions
to the Non-Qualified Plan for Fiscal 1996. Participant accounts in the
Non-Qualified Plan vest over a seven-year period beginning after three
years of service.
The individuals identified in the Summary Compensation Table are also
participants in the Company's Key Employee Incentive Plan (the "Key
Employee Plan"). The Key Employee Plan further ties key executive
compensation to Company financial performance by providing a bonus to be
allocated among designated employees selected by the Board, upon
recommendation by the Compensation Committee, after pre-determined
profit goals and other criteria have been reached and after provision for
the Qualified Plan and the Non-Qualified Plan. The income and profit
goals for the Key Employee Plan, and the associated contributions to the
bonus pool, are determined annually by the Board. There were no
contributions to the Key Employee Plan during Fiscal 1996.
The fourth element in the Company's executive officer compensation
package is equity-based compensation. The Compensation Committee and the
Administration Committee believe that by providing executive officers with
an equity interest in the Company those officers are provided with
additional incentives to work to maximize stockholder value over the long
term. Such incentives have been provided principally by the granting of
options under the Company's 1995 Stock Option Plan which was approved by
the stockholders at the 1995 Annual Meeting. Under the 1995 Stock Option
Plan, the options are designed to vest over a three-year period, to
encourage officers to continue in the employ of the Company and reinforce
the role of the options in providing a longer term incentive than do the
annual bonus plans. There were no stock options granted to executive
officers during Fiscal 1996. The Company also has a limited stock
purchase plan, the Key Employee Stock Purchase Plan, which has a similar
purpose and pursuant to which Mr. Derby acquired 25,000 shares of Common
Stock in 1988.
CEO Compensation
Mr. Derby has been President and Chief Executive Officer of the
Company since 1982. Mr. Derby's base salary for Fiscal 1996 remained at
$250,000 pursuant to his employment agreement. Mr. Derby's participation
in the Company's Qualified Plan, Non-Qualified Plan and Key Employee Plan,
pursuant to which his bonus is determined, provides an incentive to
maximize Company profitability on an annual basis. Through his equity
ownership in the Company, consisting of 55,628 shares of Common Stock and
options to purchase 37,500 shares of Common Stock, Mr. Derby shares with
the other stockholders of the Company a significant stake in the long-
range success of the Company's business.
COMPENSATION COMMITTEE ADMINISTRATION COMMITTEE
Kent P. Ainsworth David A. Derby
Adrian C. Cassidy Richard W. Pershing
Peter F. Scott
<PAGE> 9
Compensation Committee and Administration Committee Interlocks and
Insider Participation
As noted above, during Fiscal 1996 executive compensation policy
(other than the grant of options under the Company's Stock Option Plans
from and after November 9, 1995) was set by the Compensation Committee.
Each member of the Compensation Committee is a non-employee director of
the Company.
On November 9, 1995, the Board formed a new Administration Committee,
consisting of Messrs. Derby and Pershing, whose function is to administer
the Company's Stock Option Plans. Mr. Derby is President and Chief
Executive Officer of the Company and Mr. Pershing is Chairman of the
Board. Neither Mr. Derby nor Mr. Pershing have been granted options
during Fiscal 1996 (nor were they granted any options during the one year
prior to November 9, 1995) nor will they be eligible to receive grants of
options unless they cease to be members of the Administration Committee.
COMPARATIVE STOCK PERFORMANCE
Set forth below are line graphs which illustrate for the purpose of
comparison the percentage change in the cumulative total stockholder
return on the Company's Common Stock from March 31, 1991 through March 31,
1996 with the percentage change in the cumulative total return over the
same period on (i) the CRSP Index for the NASDAQ Stock Market - U.S.
Companies, and (ii) the CRSP Index for the NASDAQ Stock Market -
Communications Equipment Companies. This graph assumes an initial
Investment of $100 in each of the Company's Common Stock, the CRSP Index
for the NASDAQ Stock Market - U.S. Companies and the CRSP Index for the
NASDAQ Stock Market - Communications Equipment Companies on March 31, 1991
and that all dividends, if any, were reinvested.
<TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
AMONG DATRON SYSTEMS INCORPORATED, CRSP NASDAQ-U.S. COMPANIES AND
CRSP NASDAQ-COMMUNICATIONS EQUIPMENT COMPANIES
[GRAPH APPEARS HERE]
<CAPTION>
Measurement Period
(Fiscal Year Covered)
- ---------------------
CRSP Index CRSP Index-NASDAQ
Datron Systems NASDAQ Communications Equipment
Measurement Point Incorporated U.S. Companies Companies
- ----------------- -------------- -------------- -----------------------
<S> <C> <C> <C>
FYE 3/31/91 $100 $100 $100
FYE 3/31/92 $83 $128 $116
FYE 3/31/93 $46 $147 $149
FYE 3/31/94 $94 $158 $201
FYE 3/31/95 $116 $176 $272
FYE 3/31/96 $116 $239 $397
</TABLE>
<PAGE>10
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 18, 1996 certain
information concerning (a) each person known to the Company to own
beneficially more than 5% of the Common Stock, (b) each of the executive
officers named in the Summary Compensation Table, and (c) all directors
and executive officers as a group.
<TABLE>
<CAPTION>
Name/Address Shares of
of Beneficial Owner Common Stock<F1> % of Class
- -------------------------------- --------------- ----------
<S> <C> <C>
Denise Hale
835 Market Street, Room 300
San Francisco, CA 94103 224,740<F2> 8.5%
Shufro, Rose & Ehrman
745 Fifth Avenue
New York, NY 10151-0108 165,000 6.3%
Kennedy Capital Management, Inc.
10829 Olive
St. Louis, MO 63141 142,500 5.4%
Dimensional Fund Advisors
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 142,304<F3> 5.4%
David A. Derby 93,128<F4> 3.5%
Richard W. Pershing 38,687<F4> 1.5%
William L. Stephan 14,200<F4> 0.5%
All directors and executive officers
as a group (8 persons) 193,537<F4> 7.1%
</TABLE>
- -----------------
<F1>Information with respect to beneficial ownership is based upon
information furnished by each stockholder or contained in filings made
with the Securities and Exchange Commission.
<F2>Includes 160,649 shares owned of record by a revocable trust of which
Mrs. Hale is the sole trustee, 54,091 shares owned of record by Mrs. Hale
(which shares were acquired by Mrs. Hale on March 18,1996 pursuant to the
terms of the will of Prentis C. Hale, her husband) and 10,000 shares
obtainable upon the exercise of stock options held by Mrs. Hale (which
options were transferred to Mrs. Hale upon Mr. Hale's death on February
16, 1996, pursuant to the Company's 1985 Stock Option Plan).
<F3>Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 142,304
shares of the Company's Common Stock as of March 31, 1996, all of which
shares are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of The DFA Investment
Trust Company, a Delaware business trust, or the DFA Group Trust and the
DFA Participating Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
<F4>Includes 37,500, 11,000 and 13,200 shares obtainable upon the exercise
of stock options held by Messrs. Derby, Pershing and Stephan,
respectively.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has acted as the Company's independent auditors
since March 1983. A representative of Deloitte & Touche LLP will be
present at the Annual Meeting, will have an opportunity to make a
statement if he or she desires to do so, and will be available to respond
to appropriate questions.
<PAGE>11
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report to Stockholders for the year ended March
31, 1996, containing the audited consolidated balance sheets as of March
31, 1996 and March 31, 1995 and the related consolidated statements of
income, stockholders' equity and cash flows for each of the past three
fiscal years, is being mailed with this Proxy Statement to stockholders
entitled to notice of the Annual Meeting.
STOCKHOLDER PROPOSALS
The Company will, in future proxy statements of the Board, include
stockholder proposals complying with the applicable rules of the
Securities and Exchange Commission and any applicable state laws. In order
for a proposal by a stockholder to be included in the proxy statement of
the Board relating to the Annual Meeting of Stockholders to be held in
1997, the proposal must be received in writing by the Secretary of the
Company no later than March 10, 1997.
OTHER MATTERS
The Board knows of no other matters that will be presented at the
Annual Meeting. If, however, any matter is properly presented at the
Annual Meeting, the proxy solicited hereby will be voted in accordance
with the judgment of the proxyholders.
By Order of the Board of Directors,
Victor A. Hebert
Secretary
Escondido, California
July 8, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN
AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTPAID
ENVELOPE.
PROXY
DATRON SYSTEMS INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) DAVID A. DERBY and
WILLIAM L. STEPHAN, or either one of them, each with full power
of substitution, the lawful attorneys and proxies of the
undersigned to vote as designated below, and, in their
discretion, upon such other business as may properly be presented
to the meeting, all of the shares of DATRON SYSTEMS INCORPORATED
which the undersigned shall be entitled to vote at the Annual
Meeting of Stockholders to be held on August 14, 1996, and at any
adjournments or postponements thereof.
(Continued and to be signed on reverse side.)
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Please mark your
votes as indicated / X /
in this example.
1. To elect as director, Richard W. Pershing,
David A. Derby, Kent P. Ainsworth,
Michael F. Bigham, Adrian C. Cassidy,
Peter F. Scott and Robert D. Sherer.
/ / FOR all nominees listed / / WITHHOLD AUTHORITY to
(except as indicated vote (as to all
below) nominees)
To withhold authority to vote for one or more individual
nominees, write such name(s) on the line provided below:
___________________________________________________________
This proxy, when properly executed, will be voted in
the manner directed by the undersigned stockholder. WHEN NO
CHOICE IS INDICATED, THIS PROXY WILL BE VOTED FOR THE NOMINEES OR
PROPOSALS LISTED ABOVE. This proxy may be revoked at any time
prior to the time it is voted by any means described in the
accompanying Proxy Statement.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTPAID ENVELOPE.
Signature(s) Date , 1996
Please date and sign exactly as name(s) appear(s) hereon. If shares
are held jointly, each holder must sign. Please give full title and
capacity in which signing if not signing as an individual.
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