DATRON SYSTEMS INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FRIDAY, AUGUST 4, 2000 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
Westgate Hotel, Coronet Room, 1055 Second Avenue, San Diego,
California on August 4, 2000 at 11:00 A.M. for the following
purposes:
1. To elect six 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
19, 2000 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
Vista, California
July 6, 2000
_______________________________________________________________
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 Friday, August 4, 2000, at the Westgate Hotel, Coronet
Room, 1055 Second Avenue, San Diego, California 92101. The
Company's principal executive offices are located at 3030
Enterprise Court, Vista, California 92083; the Company's
telephone number is (760) 734-5454.
Only stockholders of record as of the close of business on
June 19, 2000 are entitled to notice of, and to vote at, the
Annual Meeting. At the close of business on that date,
2,722,261 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 6, 2000. 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
Six 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 six incumbent directors. All of these directors were elected
at the Company's last annual meeting except for Mr. Don Lyle, who
was appointed as a director by the Board on May 15, 2000. 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, six
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 six 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 19, 2000.
<TABLE>
<CAPTION>
Positions Common Stock
with Beneficially Percentage
Name Age the Company Owned<F1><F2> Ownership
<S> <C> <C> <C> <C>
David A. Derby 58 Chairman of the 104,066 3.8%
Board, President,
Chief Executive
Officer;
Director
Kent P. Ainsworth 54 Director 12,875 0.5%
Michael F. Bigham 42 Director 7,475 0.3%
Don M. Lyle 60 Director 4,500 0.2%
William A. Preston 64 Director 6,775 0.3%
Robert D. Sherer 64 Director 7,875 0.3%
</TABLE>
[FN]
<F1> Assumes the exercise of all outstanding options held by such
person to the extent exercisable on or before August 4, 2000
and that no other person has exercised any outstanding
options. Includes 28,300, 7,475, 7,475, 5,775 and 7,475
shares subject to options held by Messrs. Derby, Ainsworth,
Bigham, Preston 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.
</FN>
Business Experience of the Nominees
David A. Derby has been a director, President and Chief
Executive Officer of the Company since May 1982. Mr. Derby was
elected Chairman of the Board effective April 1, 1998. 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 and was
President of its other wholly owned subsidiary, Datron/Transco
Inc., from August 1997 until March 1998. 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. Since April 1996, he has been Executive Vice President
and Chief Financial Officer of U.R.S. Corporation. From January
1991 until April 1996 he was Vice President and Chief Financial
Officer of U.R.S. Corporation. From October 1987 through
February 1990, he was Chief Financial Officer of Di Giorgio
Corporation.
<PAGE>3
Michael F. Bigham has been a director of the Company since
May 1996. Since July 1, 1996, he has been President and Chief
Executive Officer of Coulter Pharmaceutical Inc. He served as
Executive Vice President of Operations from April 1994 to June
1996 and Chief Financial Officer from April 1989 to June 1996 at
Gilead Sciences, Inc., a biotechnology company. While at Gilead,
he also served as Vice President of Corporate Development from
July 1988 to March 1992. He was Co-head of Healthcare Investment
Banking for Hambrecht & Quist LLC, an investment banking firm,
where he was employed from 1984 to 1988. He has been a director
of LJL Biosystems, Inc. since April 1997, a director of Coulter
Pharmaceutical Inc. since June 1996 and a director of
Intrabiotics, Inc. since October 1996.
Don M. Lyle has been a director of the Company since May
2000. He is the President and owner of Technology Management
Company, which he founded in 1983. He has provided technology
management assistance to many clients, including SAIC, Tandem
Computers, McKinsey & Company, HP and Unisys. He has been a
director of Emulex Network Systems, Inc. since February 1994.
William A. Preston has been a director of the Company since
February 1998. Since 1977, he has been Chairman and Chief
Executive Officer of APM, Inc. He was a director of Pacific
Scientific Corporation from 1979 to January 1998, and has been a
director of MATSI Inc. since 1988.
Robert D. Sherer has been a director of the Company since
May 1989. He is the President and owner of Quality Concepts,
Inc., which he founded in 1986. From 1959 to 1984 he was
employed by A.M. International, where his last position was
National Vice President of Sales.
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 neces
sary. The Board held six meetings during the fiscal year ended
March 31, 2000 ("Fiscal 2000"). During Fiscal 2000, each
nominated incumbent director attended 75% or more of the meetings
of the Board and of Board committees on which such director
served with the exception of Mr. Bigham, who attended 71% of such
meetings. Each director who is not an employee of the Company
received 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 $10,250.
The Board presently has two standing committees, the Audit
Committee and the Compensation Committee.
Audit Committee
During the first quarter Fiscal 2000, the Audit Committee
consisted of Messrs. Ainsworth, Sherer and Peter F. Scott, who
retired from the Board on August 9, 1999. For the remainder of
Fiscal 2000, the Audit Committee consisted of Messrs. Bigham,
Preston 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 2000.
Compensation Committee
During the first quarter Fiscal 2000, the Compensation
Committee consisted of Messrs. Ainsworth, Scott and Adrian C.
Cassidy, who retired from the Board on August 9, 1999. For the
remainder of Fiscal 2000, the Compensation Committee consisted of
Messrs. Ainsworth, Preston and Sherer. 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 and to administer the Company's 1985 Stock Option Plan,
the Company's 1995 Stock Option Plan (collectively, the "Stock
Option Plans") and the Employee Stock Purchase Plan. This
committee met four (4) times during Fiscal 2000.
<PAGE>4
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 Chief Financial Officer of
the Company. No other executive officer of the Company received
salary and bonus of more than $100,000 during Fiscal 2000.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
Awards
Securities
Fiscal Other Underlying
Year Annual Options/ All Other
Name and Principal Ended Salary Bonus Compensation<F1> SARs<F2> Compensation<F3>
Position March 31, ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
David A. Derby 2000 275,962 113,796 4,839 10,000 43,257
Chairman, President
and Chief Executive 1999 250,000 58,406 5,316 0 20,775
Officer
1998 249,999 0 2,269 25,000 10,111
William L. Stephan 2000 178,364 56,898 3,039 10,000 23,887
Vice President,
Chief Financial 1999 162,014 29,203 3,138 0 19,746
Officer and
Treasurer 1998 138,307 0 564 30,000 8,097
</TABLE>
[FN]
<F1> Amounts paid under an arrangement by which the Company
reimburses officers of the Company for medical expenses and
life insurance not paid under the Company's regular health
insurance plan.
<F2> Options granted in Fiscal 2000 were non-qualified options
("NQOs") for Mr. Derby and incentive stock options ("ISOs")
for Mr. Stephan, both with terms of ten years. Options
granted in Fiscal 1998 for both Mr. Derby and Mr. Stephan
were ISOs with terms of ten years. The options vest in
substantially equal portions at the end of the first, second
and third years following the date of grant. The exercise
price for each NQO was set at 85% of the fair market value
of the Company's Common Stock at the date of grant and the
exercise price for each ISO was set at 100% of the fair
market value of the Company's Common Stock at the date of
grant.
<F3> Represents contributions to the Company's Qualified Employee
Profit Sharing Plan and contributions to the Company's Non-
Qualified Supplemental Executive Profit Sharing Plan and
earnings accrual under that plan.
</FN>
Fiscal 2000 Option Grants
The following table sets forth information relating to
options granted during Fiscal 2000 to the Company's Chief
Executive Officer and the Chief Financial Officer named in the
Summary Compensation Table. In addition, and in accordance with
the rules of the Securities and Exchange Commission, the table
shows hypothetical gains or "option spreads" that would exist for
such options based on assumed rates of annual compound stock
price appreciation of 5% and 10% per year from the date the
options were granted over the full option term.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Individual Grants Term<F1>
Number of Percent of
Securities Total Options
Underlying Granted to Exercise Expiration
Options/SARs Employees in or Base Date 5% per 10% per
Name Granted<F2> Fiscal Year<F3> Price of Option year year
<S> <C> <C> <C> <C> <C> <C>
David A. Derby, CEO 10,000 8% $5.10 May 26, 2009 $32,074 $81,281
William L. Stephan 10,000 8% $l3.50 Feb.22, 2010 $84,901 $215,155
</TABLE>
[FN]
<F1> The amounts represent certain assumed rate of appreciation
over the exercise price per share. Actual gains, if any, on
stock option exercises and Common Stock holdings are
dependent on future performance of the Common Stock. There
can be no assurance that any of the values reflected in the
table will be achieved.
<F2> For a description of the material terms of the options, see
footnote (2) to the Summary Compensation Table.
<F3> Based on the total number of options granted during Fiscal
2000.
</FN>
Fiscal Year 2000 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 2000 by the Company's Chief
Executive Officer and the Chief Financial Officer named in the
Summary Compensation Table.
<TABLE>
<CAPTION> Value of Unexercised
Number of Unexercised In-the-Money Options/SARs at
Shares Value Options/SARs 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 0 0 39,000 18,500 $133,688 $92,375
William L. Stephan 0 0 39,800 20,200 $129,300 $35,700
</TABLE>
[FN]
<F1> Market value of the underlying securities at fiscal year-end
minus the exercise price of "in the money" options.
</FN>
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 an annual salary of $275,000, with vacation,
holidays, insurance and other benefits permitted under policies
established by the Board. Should Mr. Derby be involuntarily
terminated from the Company for any reason other than cause, he
will receive a lump sum equal to three times his then current
annual salary. 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 upon notice not less than two
years from its next anniversary date, unless sooner terminated
under 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.
<PAGE>5
The Company has a severance agreement with Mr. Stephan that
provides twelve months of severance pay through salary
continuance in the event Mr. Stephan is involuntarily terminated
from the Company for any reason other than cause. If within the
twelve-month period following involuntary termination, Mr.
Stephan engages in activities directly competing with the
Company, severance benefits would cease.
Indemnification Agreements
Mr. Derby and Mr. Stephan (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.
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. Mr. Derby has outstanding a full recourse
promissory note in the original principal amount of $164,000
payable to the Company on April 10, 2002, 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. Mr. Derby paid this note in full during
Fiscal 2000.
Compensation Committee Report on Executive Compensation
Set forth below is a report of the Compensation Committee
with respect to the Company's compensation policies during Fiscal
2000 as they affect the Company's Chief Executive Officer and the
Company's Chief Financial Officer.
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, thereby
permitting 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 executive officers to
meet the Company's annual and long-range business objectives,
thereby enhancing 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.
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 those of the Company, the degree to
which the executive can help the Company achieve its goals, and
direct negotiation with the executive.
An important element of the Company's compensation for
executive officers are bonuses 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. Fiscal 2000 contributions were $13,849 each for Mr.
Derby and Mr. Stephan. Participant accounts in the Qualified
Plan vest over a seven-year period beginning after three years of
service.
<PAGE>6
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 believes 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. Fiscal 2000 contributions and earnings
accruals were $29,408 for Mr. Derby and $10,038 for Mr. Stephan.
Participant accounts in the Non-Qualified Plan vest over a seven-
year period beginning after three years of service.
The third bonus plan is 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 cash 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. Income and profit
goals for the Key Employee Plan, and associated contributions to
the bonus pool, are determined annually by the Board. Fiscal
2000 contributions were $113,796 for Mr. Derby and $56,898 for
Mr. Stephan.
The fourth element in the Company's executive officer
compensation package is equity-based compensation. The
Compensation Committee believes 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. Under the 1995 Stock Option
Plan, options vest over a three-year period and are designed to
encourage officers to continue in the employ of the Company. As
such, they provide a longer term incentive than do the annual
bonus plans. During Fiscal 2000, Mr. Derby and Mr. Stephan each
received a grant of 10,000 stock options.
CEO Compensation
Mr. Derby has been President and Chief Executive Officer of
the Company since 1982 and Chairman since April 1998. Mr.
Derby's base salary for Fiscal 2000, pursuant to his employment
agreement, was increased from $250,000 to $275,000 in May 1999.
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 75,766 shares of Common Stock and
options to purchase 75,000 shares of Common Stock, and his
participation in the Employee Stock Purchase Plan, 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
Kent P. Ainsworth
William A. Preston
Robert D. Sherer
Compensation Committee and Insider Participation
As noted above, during Fiscal 2000 executive compensation
policy was set by the Compensation Committee. Each member of the
Compensation Committee is a non-employee director of the Company.
<PAGE>7
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, 1995 through March 31, 2000 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 - U.S. 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 - U.S. Communications Equipment Companies
on March 31, 1995 and that all dividends, if any, were
reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
AMONG DATRON SYSTEMS INCORPORATED, CRSP NASDAQ-U.S. COMPANIES AND
CRSP NASDAQ - U.S. COMMUNICATIONS EQUIPMENT COMPANIES
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered)
--------------------
CRSP Nasdaq- Communications
Measurement Datron Systems U.S. Equipment
Point Incorporated Companies Companies
<S> <C> <C> <C>
FYE 3/31/95 $100 $100 $100
FYE 3/31/96 $100 $136 $146
FYE 3/31/97 $ 77 $151 $133
FYE 3/31/98 $ 70 $229 $174
FYE 3/31/99 $ 53 $309 $204
FYE 3/31/00 $101 $574 $787
</TABLE>
<PAGE>8
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 19, 2000, unless
otherwise noted in the footnotes, 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 of Shares of
Beneficial Owner Common Stock<F1> % of Class
<S> <C> <C>
Heartland Advisors, Inc. 382,400<F2> 14.1%
789 North Water Street
Milwaukee, WI 53202
J.B. Greenwell 8.8 %
318 South Maple 238,180
Carroll, IA 51401
Dimensional Fund Advisors 206,104<F3> 7.6%
1299 Ocean Avenue,
11th Floor
Santa Monica, CA 90401
David A. Derby 104,066<F4> 3.8%
William L. Stephan 47,806<F4> 1.7%
All directors and 191,372<F4> 6.6%
executive officers
as a group (7 persons)
</TABLE>
---------------
[FN]
<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> As of June 6, 2000, the shares of common stock are held of
record in various investment advisory accounts of Heartland
Advisors, Inc. ("Heartland"). Heartland has sole voting and
dispositive power as to 326,000 shares and sole dispositive,
but no voting power as to 56,400 shares.
<F3> Dimensional Fund Advisors Inc. ("Dimensional"), an
investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, furnishes investment advice
to four investment companies registered under the Investment
Company Act of 1940, and serves as investment manager to
certain other investment vehicles, including commingled
group trusts. (These investment companies and investment
vehicles are the "Portfolios.") In its role as investment
advisor and investment manager, Dimensional possesses both
voting and investment power over 206,104 shares of Datron
Systems Incorporated stock as of March 31, 2000. The
Portfolios own all securities reported in this statement,
and Dimensional disclaims beneficial ownership of such
securities.
<F4> Includes 28,300 and 43,200 shares obtainable upon the
exercise of stock options held by Messrs. Derby and Stephan,
respectively.
</FN>
<PAGE>9
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.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report to Stockholders for the year
ended March 31, 2000, containing the audited consolidated balance
sheets as of March 31, 2000 and March 31, 1999 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 2001, the proposal
must be received in writing by the Secretary of the Company no
later than March 10, 2001.
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
Vista, California
July 6, 2000
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.
<PAGE>
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 4, 2000, and at any
adjournments or postponements thereof.
(Continued, and to be marked, dated and signed, on the other side)
-----------------------------------------------------------
<PAGE>
Please mark your votes as indicated in this example [X]
1. To elect as director, David A. Derby, Kent P. Ainsworth,
Michael F. Bigham, Don M. Lyle, William A. Preston and Robert
D. Sherer.
FOR all nominees listed (except as indicated below) [ ]
WITHHOLD AUTHORITY to vote (as to all 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)_____________(Signature)___________Date___________, 2000
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.
