<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
DATUM INC.
- --------------------------------------------------------------------------------
(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), or 14a-6(i)(1), or 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:
(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:
<PAGE> 2
[logo]
1363 SOUTH STATE COLLEGE BOULEVARD
ANAHEIM, CALIFORNIA 92806
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 1995
------------------------
To the Stockholders of Datum Inc.:
Please take notice that the Annual Meeting of Stockholders of Datum Inc.
(the "Company") will be held at the Company's corporate offices located at 1363
South State College Boulevard, Anaheim, California, on Thursday, June 1, 1995,
at 2:00 p.m. local time, for the following purposes:
1. To elect two directors to Class II of the Company's Board of
Directors to serve until the 1998 Annual Meeting of Stockholders; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
At the Annual Meeting, the Board of Directors intends to present Louis B.
Horwitz and Dan L. McGurk as the nominees for election to the Board of
Directors.
Only stockholders of record on the books of the Company at the close of
business on April 14, 1995 will be entitled to notice of and to vote at the
Annual Meeting or any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. A majority of the outstanding shares must be represented at the Annual
Meeting in order to transact business. Consequently, if you are unable to attend
in person, please execute the enclosed proxy and return it in the enclosed
addressed envelope. Your promptness in returning the proxy will assist in the
expeditious and orderly processing of the proxies.
If you return your proxy, you may nevertheless attend the Annual Meeting
and, if you wish, vote your shares in person.
By Order of the Board of Directors,
DATUM INC.
(SIG)
DAVID A. YOUNG
Secretary
Anaheim, California
April 28, 1995
<PAGE> 3
[logo]
1363 SOUTH STATE COLLEGE BOULEVARD
ANAHEIM, CALIFORNIA 92806
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 1995
------------------------
PROXY STATEMENT
------------------------
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Datum Inc.
(the "Company") for use at the Company's Annual Meeting of Stockholders to be
held at the Company's executive offices located at 1363 South State College
Boulevard, Anaheim, California, on Thursday, June 1, 1995 at 2:00 p.m. local
time, and at any and all adjournments or postponements thereof. All shares
represented by each properly executed, unrevoked proxy received in time for the
Annual Meeting will be voted in the manner specified therein. If the manner of
voting is not specified in an executed proxy received by the Company, the proxy
will be voted FOR the election of the nominees to the Board of Directors listed
in the proxy. Any stockholder has the power to revoke his proxy at any time
before it is voted. A proxy may be revoked by delivering a written notice of
revocation to the Secretary of the Company, by presenting at the Annual Meeting
a later-dated proxy executed by the person who executed the prior proxy, or by
attendance at the Annual Meeting and voting in person by the person who executed
the proxy.
This Proxy Statement is being mailed to the Company's stockholders on or
about April 28, 1995. The solicitation will be by mail and the cost will be
borne by the Company. Expenses will also include reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. Further solicitation of proxies may be made by telephone
or oral communication with some stockholders by the Company's regular employees
who will not receive additional compensation for the solicitation.
OUTSTANDING SHARES AND VOTING RIGHTS
Only holders of record of the 3,965,301 shares of the Company's Common
Stock outstanding at the close of business on April 14, 1995 will be entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof. On each matter to be considered at the Annual Meeting, stockholders
will be entitled to cast one vote for each share held of record on April 14,
1995.
An automated system administered by the Company's transfer agent will
tabulate votes cast at the Annual Meeting. A majority of the shares entitled to
vote, represented in person or by proxy, will constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are each included in the determination
of the number of shares present and voting for the purpose of determining
whether a quorum is present, and each
1
<PAGE> 4
is tabulated separately. In determining whether a proposal has been approved,
abstentions are counted as votes against a proposal and broker non-votes are not
counted as votes for or against a proposal or as votes present and voting on the
proposal.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock of the Company as of April 14, 1995, as to (a) all
directors and nominees for election as directors, (b) the three (3) most
highly-compensated executive officers who do not serve as directors, (c) all
directors and executive officers as a group, and (d) each person known by the
Company to be the beneficial owner of more than 5% of the Company's outstanding
Common Stock.
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING SHARES OF
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS(1) OWNED(2) OWNED
-------------------------------------------- ------------ ------------
<S> <C> <C>
Efratom Holding, Inc........................ 1,277,778 32.2%
10 Longs Peak Drive
Broomfield, Colorado 80021
G. Tilton Gardner, Director................. 35,000 *
Donovan B. Hicks, Director.................. -0-(3) *
R. David Hoover, Director................... -0-(4) *
Louis B. Horwitz............................ 197,133(5) 5.0%
Chief Executive Officer,
President and Director
1363 South State College Blvd.
Anaheim, CA 92806
Michael M. Mann, Director................... 46,000(6) 1.2%
Dan L. McGurk, Director..................... 31,000 *
Edward A. Money, Director................... 29,000 *
Thomas J. O'Rourke, Director................ 83,000(7) 2.1%
Robert F. Ellis, Vice President............. 15,742(8) *
David C. Robinson, Vice President........... 14,932(9) *
Raymond L. Waguespack, Vice President....... 17,566(10) *
All Officers and Directors.................. 499,556(11) 12.6%
as a Group (14 persons)
</TABLE>
- ---------------
* Less than 1%
(1) Except as set forth in the footnotes to this table, the persons named in
the table have the sole voting and investment powers with respect to all
shares shown beneficially owned by them, subject to community property laws
where applicable. Information with respect to beneficial ownership is based
upon the Company's stock records and data supplied to the Company by the
holders.
(2) Included in the total number of shares listed are 26,250 shares for Mr.
Horwitz, 11,000 shares for each of Messrs. Gardner, McGurk, Money and
O'Rourke, 13,438 shares for each of Mr. Ellis and Mr. Waguespack, 13,000
shares for Mr. Mann and 9,781 shares for Mr. Robinson which may be acquired
within sixty days of April 14, 1995 upon exercise of outstanding options.
(3) Does not include 1,277,778 shares held by Efratom Holding, Inc. Mr. Hicks
is the President of Efratom Holding, Inc. and disclaims beneficial
ownership of all such shares.
(4) Does not include 1,277,778 shares held by Efratom Holding, Inc. Mr. Hoover
is the Chief Financial Officer of Ball Corporation, the corporate parent of
Efratom Holding, Inc. and disclaims beneficial ownership of all such
shares.
2
<PAGE> 5
(5) Includes 4,118 shares held for the account of Mr. Horwitz in the Company's
Savings and Retirement Plan. Does not include 9,000 shares owned by adult
children of Mr. Horwitz.
(6) Includes 33,000 shares that are subject to shared voting and investment
powers. These shares are owned by Blue Marble Development Group, Inc.
Defined Benefit Pension Plan and Trust, of which Mr. Mann and his spouse
are co-trustees.
(7) Includes 33,000 shares as to which Mr. O'Rourke has shared voting and
investment powers. These shares are owned by O'Rourke Investment Corp., of
which Mr. O'Rourke is president and chairman.
(8) Includes 2,304 shares held for the account of Mr. Ellis in the Company's
Savings and Retirement Plan.
(9) Includes 5,151 shares held for the account of Mr. Robinson in the Company's
Savings and Retirement Plan.
(10) Includes 2,128 shares held for the account of Mr. Waguespack in the
Company's Savings and Retirement Plan.
(11) Includes 131,157 shares which may be acquired within sixty days after April
14, 1995 upon exercise of outstanding options. Also includes 13,701 shares
held for the account of officers and directors in the Company's Savings and
Retirement Plan. Excludes 1,277,778 shares held by Efratom Holding, Inc. --
see footnotes (3) and (4).
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for a classified Board
of Directors. The Board is divided into three classes designated Class I, Class
II and Class III. The term of each director included in Class II expires at this
Annual Meeting and, consequently, the nominees listed below under the heading
"Class II" are being presented for election as directors to hold office until
the Annual Meeting of Stockholders in 1998. The term of office of each director
included in Class III will continue until the Annual Meeting of Stockholders in
1996. The term of office of each director in Class I will continue until the
Annual Meeting of Stockholders in 1997.
Messrs. Horwitz and McGurk are being presented by the Board for election as
directors to serve as members of Class II until the Annual Meeting of
Stockholders in 1998. Messrs. Horwitz and McGurk are presently serving as
directors of the Company. Unless instructed to the contrary, the shares
represented by the proxies will be voted in favor of the election of Messrs.
Horwitz and McGurk as directors. Although it is anticipated that each nominee
will be able to serve as a director, should either nominee become unavailable to
serve, the proxies will be voted for such other person or persons as may be
designated by the Company's Board of Directors. The persons receiving the
highest number of votes will be elected as directors. Stockholders do not have
the right to cumulate votes in the election of directors.
3
<PAGE> 6
Certain information as of April 14, 1995 with respect to the two nominees
for election as directors and with respect to each director whose term of office
continues is set forth below.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL AGE POSITIONS HELD
- -------------------- --- ----------------------------------------------
<S> <C> <C>
CLASS I
R. David Hoover 49 Director
Edward A. Money 64 Director
Thomas J. O'Rourke 71 Director
CLASS II
Louis B. Horwitz 67 President and Chairman of the Board of
Directors
Dan L. McGurk 68 Director
CLASS III
G. Tilton Gardner 59 Director
Donovan B. Hicks 57 Director
Michael M. Mann 55 Director
</TABLE>
Mr. Hoover has been a director of the Company since March 17, 1995. Mr.
Hoover is currently a Senior Vice President and the Chief Financial Officer of
Ball Corporation. From 1988 to 1992 he was Vice President and Treasurer of Ball
Corporation. Mr. Hoover is currently a director of American National Bank, a
national banking association. Mr. Hoover was appointed to the Board of Directors
of the Company in connection with the Company's acquisition of Efratom Time and
Frequency Products, Inc. and Efratom Elektronik GmbH from Efratom Holding, Inc.,
a wholly-owned subsidiary of Ball Corporation, pursuant to the terms of a
Stockholder's Agreement, dated March 17, 1995, between the Company and Efratom
Holding, Inc.
Mr. Money has been a director of the Company since May 1980 and has been
the President of The Edward A. Money Corporation, a company supplying specialty
automotive parts, since February 1982. He was Vice President-Finance, Treasurer
and Secretary of the Company from February 1977 to February 1982.
Mr. O'Rourke has been a director of the Company since May 1979 and was a
General Partner of Hambrecht and Quist Venture Partners, a venture capital firm,
from January 1985 to April 1988. He is currently the President and Chairman of
the Board of O'Rourke Investment Corp., an investment company. From 1966 to 1985
he was the President and Chairman of the Board of Tymshare, Inc., a computer
services company.
Mr. Horwitz has been the President and Chairman of the Board of Directors
of the Company since October 1976. He became a member of the Board of Directors
of the Company in May 1975. Prior to joining the Company, Mr. Horwitz was an
independent management consultant, and an Executive Vice President of Xerox Data
Systems, a manufacturer of computers. Mr. Horwitz is currently a director of
Newport Corporation, a manufacturer of electro-optical components.
Mr. McGurk has been a director of the Company since May 1977 and has been a
private investor and consultant since 1970. Mr. McGurk is Treasurer of Southland
Title Corporation. Prior to 1970, he was President of Xerox Data Systems, a
manufacturer of computers, and from May 1976 to January 1977 he served as
Associate Director of the Office of Management and Budget, Executive Office of
the President of the United States. He is currently a director of Bowmar
Instruments Corporation, a manufacturer of electrical and electro-mechanical
parts and Newport Corporation, a manufacturer of electro-optical components.
Mr. Gardner has been a director of the Company since 1976. Mr. Gardner is
currently Executive Vice President of Van Kasper & Company, an investment
banking firm. From 1965 until 1988 he was associated with Morgan, Olmstead,
Kennedy & Gardner Incorporated, an investment banking firm, serving as Chief
Executive Officer and Chairman of the Board from 1976. In 1988, that company was
combined with Wedbush Securities to form Wedbush Morgan Securities, of which Mr.
Gardner served as Executive Vice President until February 1993.
4
<PAGE> 7
Mr. Hicks has been a director of the Company since March 17, 1995. Since
1981, Mr. Hicks has been the Group Vice President of the Ball Aerospace and
Communications Group of Ball Corporation. Mr. Hicks was appointed to the Board
of Directors of the Company in connection with the Company's acquisition of
Efratom Time and Frequency Products, Inc. and Efratom Elektronik GmbH from
Efratom Holding, Inc., a wholly-owned subsidiary of Ball Corporation, pursuant
to the terms of a Stockholder's Agreement, dated March 17, 1995, between the
Company and Efratom Holding, Inc.
Mr. Mann has been a director of the Company since May 1989 and has been a
director and President of the Blue Marble Development Group, Inc., an
international corporate development and consulting group, since its formation in
1988. Mr. Mann is also currently serving as Chairman of the Board of Management
Technology, Inc., a developer of management systems software and as a director
of Safeguard Health Enterprises, a corporation engaged in providing dental and
vision plans. Mr. Mann also provides consulting services to state and federal
governmental agencies and multi-national corporations and has served as a member
of the Army Science Board. From mid-1987 to 1988 Mr. Mann was a senior
consultant and director of Aerospace Industries Centre with Arthur D. Little
Inc.
The Board of Directors held eight meetings during the fiscal year ended
December 31, 1994. Each director attended at least 75% of all meetings of the
Board of Directors and each committee on which that director served. Each member
of the Board of Directors received $833.33 per month from January 1, 1994
through August 30, 1994 and $1,000 per month from September 1, 1994 through
December 1994 for his services as a director. In addition, each nonemployee
member of the Board of Directors received $500 for each meeting of the Board of
Directors attended by that director and $250 for each meeting of a committee of
the Board attended by that director, other than committee meetings held in
conjunction with meetings of the Board of Directors. Mr. Hoover and Mr. Hicks,
who were appointed to the Board of Directors pursuant to the Stockholder's
Agreement between the Company and Efratom Holding, Inc., have agreed to waive
their fees as directors.
The Board of Directors has an Audit Committee and a Compensation Committee.
The Board of Directors does not have a standing nominating committee.
The principal duties of the Audit Committee are (i) to recommend to the
Board of Directors the selection of the Company's independent accountants, (ii)
to discuss and review with the Company's independent accountants the audit plan,
the auditors' report and management letter and the Company's accounting policies
and (iii) to review the accounting procedures and internal control procedures
recommended by the Company's independent accountants. The Audit Committee held
two meetings during the fiscal year ended December 31, 1994. The Audit Committee
is comprised of Messrs. Gardner, McGurk, Money, and Mann.
The principal duties of the Compensation Committee are (i) to administer
and approve the annual compensation rates of all officers and key employees of
the Company, (ii) to administer the incentive compensation, stock award, stock
option and other compensation plans of the Company and (iii) to make
recommendations to the Board in connection with such plans. The Compensation
Committee held two meetings during the fiscal year ended December 31, 1994. The
Compensation Committee is comprised of Messrs. O'Rourke, McGurk and Gardner.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth summary information concerning compensation
paid or accrued by the Company for services rendered during the three fiscal
years ended December 31, 1994, to the Company's Chief Executive Officer and the
Company's other executive officers receiving compensation in excess of $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
ANNUAL COMPENSATION -----------------------------
----------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION OPTIONS(#) COMPENSATION(2)
--------------------------- ----- --------- --------- ------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Louis B. Horwitz 1994 $210,848 $110,000 $ -0- 25,000 $5,005
President and Chairman 1993 188,500 -0- -0- -0- 4,481
of the Board 1992 193,125 -0- -0- -0- 4,594
Robert F. Ellis 1994 117,910 100,000 -0- 8,750 2,948
Vice President of Datum Inc. 1993 104,937 -0- -0- -0- 2,623
and President of Austron, Inc. 1992 108,625 -0- -0- -0- 2,716
David C. Robinson 1994 95,142 42,000 -0- 13,625 2,379
Vice President of Datum Inc. 1993 89,865 10,000 -0- -0- 2,247
and President of Bancomm 1992 87,298 -0- -0- -0- 2,182
Division
Raymond L. Waguespack 1994 110,037 4,284 -0- 8,750 2,751
Vice President of Datum Inc. 1993 93,462 -0- -0- -0- 2,370
and President of Timing 1992 98,601 -0- -0- -0- 2,565
Division
</TABLE>
- ---------------
(1) Includes director's fees for Mr. Horwitz in the amounts of $10,667, $9,250
and $9,375 for the years 1994, 1993 and 1992, respectively.
(2) Amounts shown represent Company contributions under the Company's Savings
and Retirement Plan for the listed executives.
6
<PAGE> 9
OPTION MATTERS
Option Grants. The following table sets forth certain information
concerning grants of options to each of the Company's executive officers named
in the Summary Compensation Table during the fiscal year ended December 31,
1994. In addition, in accordance with the rules and regulations of the
Securities and Exchange Commission, the following table sets forth the
hypothetical gains or "option spreads" that would exist for the options. Such
gains are based on assumed rates of annual compound stock appreciation of 5% and
10% from the date on which the options were granted over the full term of the
options. The rates do not represent the Company's estimate or projection of
future Common Stock prices and no assurance can be given that the rates of
annual compound stock appreciation assumed for the purposes of the following
table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL
- ----------------------------------------------------------------------------------------- RATES OF STOCK
NUMBER OF % OF TOTAL PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN OR BASE EXPIRATION -----------------
NAME GRANTED(#) FISCAL YEAR(1) PRICE($/SH) DATE(2) 5%($) 10%($)
---- ---------- -------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Louis B. Horwitz(3).............. 25,000 12.0% 4.87 6/11/04 76,500 194,000
Robert F. Ellis(3)............... 8,750 4.2% 4.87 6/11/04 26,775 67,900
David C. Robinson(3)............. 13,625 6.5% 4.87 6/11/04 41,692 105,730
Raymond L. Waguespack(3)......... 8,750 4.2% 4.87 6/11/04 26,775 67,900
</TABLE>
- ---------------
(1) Options to purchase an aggregate of 208,325 shares of Common Stock were
granted to employees, including the executive officers named in the table,
during the fiscal year ended December 31, 1994.
(2) Options granted have a term of 10 years, subject to earlier termination in
certain events related to termination of employment.
(3) Options became exercisable with respect to 25% of the shares on March 11,
1995, and the balance becomes exercisable in equal yearly installments over
the 3 year period thereafter.
Option Exercises. The following table sets forth certain information
concerning the exercise of options by each of the Company's executive officers
named in the Summary Compensation Table during the fiscal year ended December
31, 1994, including the aggregate value of gains on the date of exercise. In
addition, the table includes the number of shares covered by both exercisable
and unexercisable stock options as of December 31, 1994. Also reported are the
values for "in the money" options which represent the positive spread between
the exercise prices of any such existing stock options and the fiscal year end
price of common stock.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE REALIZED VALUE OF UNEXERCISED
(MARKET PRICE NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES LESS OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED EXERCISE PRICE --------------------------- ---------------------------
NAME ON EXERCISE AT EXERCISE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Louis B. Horwitz.......... 0 $0 20,000 25,000 $122,500 $121,875
Robert F. Ellis........... 0 0 11,250 8,750 81,562 47,031
David C. Robinson......... 0 0 6,375 13,625 46,219 73,234
Raymond L. Waguespack..... 0 0 11,250 8,750 81,562 47,031
</TABLE>
7
<PAGE> 10
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has the responsibility
for administering and approving compensation programs involving the Company's
executives. Compensation may include a base salary, a variable incentive bonus,
stock options and/or stock grants. The Committee is composed of three
independent, outside directors.
The Company's executive compensation program is based upon the following
principles:
o Compensation in all forms must be related to both the Company's overall
results and the individual's performance in the execution of his or her
responsibilities.
o There must be an appropriate correlation that provides a direct tie
between each executive's compensation and long-term stockholder value.
o There must be a balance between fixed incentive and equity compensation.
o Compensation is designed to fall in the median to high range of that paid
to comparable executives in other similarly-sized corporations, with
particular dependence placed upon salaries listed in the surveys annually
published by the American Electronics Association (the "Surveys"). Some,
but not all, of the Companies included in the Surveys are included in the
Performance Graph on Page 10 of this Proxy Statement.
o Each compensation package must be designed to attract, retain and
motivate appropriate executives.
In applying the above principles to its review of an executive officer's
compensation, the Committee subjectively reviews the principles and does not
assign relative weights to any of the principles.
The Company has not, and does not expect to, pay any compensation covered
by Section 162(m) of the Internal Revenue Code of 1986, as amended, relating to
the limitation of the deduction of compensation in excess of $1,000,000 to
certain executive officers of publicly held companies. Any award under the
Company's 1994 Stock Incentive Plan should not be included in the calculation of
an executive officer's compensation in determining the applicability of Section
162(m).
The process of determining executive officer compensation for 1994 was
based upon both the Company's 1993 results and quarterly results throughout
1994, and may be summarized as follows:
o In February 1994, the Company's chief executive officer prepared a
detailed written analysis of the Company's performance for 1993 including
a review of each of the constituent parts, and an analysis of each
executive officer's performance in affecting the overall results.
o Using this information as a base, and considering the available
compensation information in the Surveys, the chief executive officer
prepared recommendations and modifications, if any, to each subordinate
executive officer's compensation package.
o On March 2, 1994, the Compensation Committee met to analyze the
information prepared for its review and considered the recommendations of
the chief executive officer with regard to all executive officer
salaries, except that of the chief executive officer.
o The Committee concerned itself with three aspects of each executive
officer's compensation:
-- Base pay and modification, if any.
-- Incentive consideration, if any.
-- Stock options and stock awards, if any.
o After considerable discussion, the Compensation Committee determined
there would be no immediate salary increase or incentive payments to any
of the executive officers, including the chief executive officer.
8
<PAGE> 11
o It was decided, however, that a special salary and incentive plan would
be placed into effect for 1994, as follows:
-- Based upon the already approved divisional business plans (each, a
"Divisional Business Plan"), each executive officer would be
granted a certain percentage salary increase effective the first
day following a quarter in which the applicable Divisional
Business Plan's earnings objective had been met.
-- Similarly, each executive officer would be granted a certain
percentage incentive payment, also effective the first day
following a quarter in which the applicable Divisional Business
Plan's earnings objective had been met.
o The Committee then considered these matters for the chief executive
officer, and after discussion, approved the salary and incentive plan
described above, with the basis of any salary change or incentive payment
being the Company's ability to achieve its earning objective per the
already approved business plan of the Company.
o The Committee then discussed equity incentives and approved new awards
under the 1984 Incentive Stock Option Plan.
o Based upon the realization of a modest net profit for 1993, only $10,000
of incentive compensation was approved at the March 1994 meeting. These
funds were distributed to one employee who was subsequently made an
executive officer of the Company.
o In November 1994, the Compensation Committee held a special meeting, all
members in attendance. Prior to this meeting the Company had entered into
an agreement to purchase Efratom Time and Frequency Products, Inc. and
Efratom Elektronik GmbH (collectively "Efratom") from Ball Corporation.
At this meeting, the Company's chief executive officer presented a
package consisting of salary, incentive bonus potential and a stock
option award for Mr. Hugo Fruehauf, President of Efratom Time and
Frequency Products, Inc., who was expected to, and did, become an
executive officer of the Company. The Committee, after some discussion,
agreed upon a compensation package for Mr. Fruehauf, to become effective
upon the closing of the acquisition of Efratom.
The members of the Compensation Committee believe the Company's
compensation programs are consistent with the Company goals and have been
applied in a fair and even-handed manner in the best interests of the Company
and its stockholders.
Members of the Compensation Committee:
Dan L. McGurk, Chairman
G. Tilton Gardner
Thomas J. O'Rourke
9
<PAGE> 12
PERFORMANCE GRAPH
This graph compares the Company's cumulative total return to stockholders
during the past five years with that of the NASDAQ Market Index and the SIC Code
3825 Index (instruments for measuring and testing of electricity) published by
Media General Financial Services, Inc. (a list of the companies comprising this
SIC Code 3825 Index will be sent to any shareholder upon request).
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
DATUM INC., NASDAQ MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SIC CODE NASDAQ MARKET
(FISCAL YEAR COVERED) DATUM INC. INDEX INDEX
<S> <C> <C> <C>
1989 100 100 100
1990 48.65 80.03 81.12
1991 75.68 115.45 104.14
1992 67.57 131.76 105.16
1993 89.19 171.22 126.14
1994 221.62 224.97 132.44
</TABLE>
Assumes $100 invested on January 1, 1990 and assumes dividends reinvested.
EXECUTIVE AGREEMENT
Effective as of March 7, 1986, the Company entered into an agreement (the
"Executive Agreement") with Mr. Horwitz. The Executive Agreement provides for
the payment of benefits in the event that Mr. Horwitz' employment is terminated
within three years subsequent to a "change in control" of the Company under
certain circumstances. In general, a "change in control" occurs if (i) any
person acquires 30% or more of the Company's outstanding shares, (ii) the
directors of the Company immediately prior to any merger, consolidation, sale of
assets or contested election cease to constitute a majority of the Board of
Directors as a result of such merger, consolidation, sale or contest or (iii)
the directors of the Company immediately prior to a tender offer or exchange
offer for shares of the Company cease to constitute a majority of the Board of
Directors within two years after such tender or exchange offer; provided that no
"change in control" shall occur if (a) the transaction or election causing such
"change in control" was approved by at least two-thirds of the directors of the
Company and (b) the Board of Directors specifically resolves that such
transaction or election does not constitute a "change in control." The benefits
payable under the Executive Agreement are (i) an amount equal to three times the
average of the aggregate annual compensation paid by the Company to Mr. Horwitz
during the five calendar years preceding the change in control of the Company,
10
<PAGE> 13
(ii) the right for a period of three months following the employment termination
to exercise all unexercised stock options and (iii) the automatic vesting of all
restricted stock awarded to Mr. Horwitz. The foregoing benefits are to be
reduced to the extent necessary so that no portion thereof shall be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended. The benefits are payable on the date of termination of Mr. Horwitz'
employment. Under the Executive Agreement, if such termination had occurred at
the end of the fiscal year ended December 31, 1994, Mr. Horwitz would have
received $676,299.
The Executive Agreement had a term expiring on March 7, 1989 which was to
be automatically extended for successive periods of one year unless either party
gives notice of its or his intention not to extend the Executive Agreement at
least six months prior to the end of the initial three year period or any
subsequent renewal period. As no such notice has been given or received in
respect of the Executive Agreement pertaining to Mr. Horwitz, the term of his
Executive Agreement has been automatically extended to March 7, 1996.
On October 19, 1994, Mr. Horwitz agreed that the issuance to Efratom
Holding, Inc. of more than 30% of the Company's outstanding shares in connection
with the Company's acquisition of Efratom Time and Frequency Products, Inc. and
Efratom Elektronik GmbH would not constitute a "change in control" under the
Executive Agreement.
CONSULTING AGREEMENT
On October 9, 1992, the Company entered into a consulting agreement with
Mr. Horwitz (the "Consulting Agreement"). The Consulting Agreement provides for
consulting services to be provided commencing on the retirement of Mr. Horwitz
as an officer and employee of the Company.
The Consulting Agreement commences on Mr. Horwitz' retirement and continues
for twelve months thereafter and may be renewed at the Company's option for
successive additional twelve month periods or any portion thereof. In the event
of a "change of control" of the Company (as defined in the Consulting Agreement)
while the Consulting Agreement is in force, the term will be extended for a
period of ten years from commencement. Under the Consulting Agreement, Mr.
Horwitz is to provide such advice and consultation as the Company requests,
including with respect to strategic planning, management, financial analysis,
product planning and other corporate matters. As compensation, Mr. Horwitz will
be paid $5,833.33 per day, plus travel expenses, and will be guaranteed a
minimum of twelve days of service per year. In the event of death or disability
prior to the end of term of the Consulting Agreement, or any renewal term, and
prior to a change of control of the Company, Mr. Horwitz, or his estate, shall
be entitled to an amount equal to the fee for twelve days of consulting. In the
event of death or disability after a change of control which results in an
extension of the term, Mr. Horwitz, or his estate, will be entitled to the
minimum annual payments for the balance of the term. The Consulting Agreement
provides that it will be binding on successors to the Company's business.
On October 19, 1994, Mr. Horwitz agreed that the issuance to Efratom
Holding, Inc. of more than 30% of the Company's outstanding shares in connection
with the Company's acquisition of Efratom Time and Frequency Products, Inc. and
Efratom Elektronik GmbH would not constitute a "change of control" under the
Consulting Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On March 17, 1995, the Company acquired all of the outstanding capital
stock of Efratom Time and Frequency Products, Inc., a Colorado corporation, and
Efratom Elektronik GmbH, a corporation organized under the laws of the Republic
of Germany (collectively "Efratom"), from Efratom Holding, Inc., a wholly-owned
subsidiary of Ball Corporation ("Ball"). As part of the consideration for the
acquisition of Efratom, the Company issued 1,277,778 shares of its Common Stock
to Efratom Holding, Inc. As a result of the transaction, Ball, through Efratom
Holding, Inc., became the owner of more than five percent 5% of the Company's
outstanding Common Stock. In connection with the acquisition, the Company
entered into a Stockholder's Agreement with Efratom Holding, Inc. pursuant to
which the Board of Directors of the Company appointed two persons selected by
Efratom Holding, Inc., R. David Hoover and Donovan B. Hicks, to two newly
created positions on the Company's Board of Directors.
11
<PAGE> 14
In October 1994, the Company retained Van Kasper & Company to render an
opinion with respect to its acquisition of Efratom. G. Tilton Gardner, a
director of the Company, is an Executive Vice President of Van Kasper & Company.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
To the Company's knowledge, based solely on review of copies of reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 1994, all Section 16(a)
filing requirements applicable to its officers, directors and greater than
ten-percent beneficial owners were satisfied, except that David Young filed late
one Form 4 reflecting one transaction and Michael Mann filed late his Form 5 for
the fiscal year ended December 31, 1994.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse LLP, the Company's independent accountants for
the fiscal year ended December 31, 1994, was selected by the Board of Directors,
upon recommendation of the Audit Committee of the Board of Directors, to act in
the same capacity for the fiscal year ending December 31, 1995.
Representatives of Price Waterhouse LLP are expected to be present at the
Annual Meeting and they will be given an opportunity to make a statement if they
so desire and respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
All proposals of stockholders intended to be presented at the Company's
1996 Annual Meeting of Stockholders must be directed to the attention of the
Secretary of the Company, at the address of the Company set forth on the first
page of this Proxy Statement before January 1, 1996, if they are to be
considered for possible inclusion in the Proxy Statement and form of proxy used
in connection with the meeting.
ANNUAL REPORT
The Company's Annual Report containing audited balance sheets as of the
years ended December 31, 1994, 1993, and 1992 and audited statements of
operations and changes of cash flows for the three years ended December 31,
1994, accompanies this Proxy Statement. Upon a stockholder's written or oral
request, the Company will send, by first class mail within one business day of
receipt of such request, without charge, a copy of the Annual Report on Form
10-K (without exhibits) for the year ended December 31, 1994, including
financial statements and schedules thereto, which the Company has filed with the
Securities and Exchange Commission. The request must be directed to the
attention of David A. Young, Secretary, at the address of the Company set forth
on the first page of this Proxy Statement or at the following telephone number:
(714) 533-6333.
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<PAGE> 15
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the Board of
Directors knows of no other matter which will be acted upon at the Annual
Meeting. If any other matters are properly presented properly for action at the
Annual Meeting or at any adjournment or postponement thereof, the persons named
in the enclosed form of proxy will have discretion to vote on such matters in
accordance with their best judgment.
By Order of the Board of Directors,
DATUM INC.
DAVID A. YOUNG
Secretary
Anaheim, California
April 28, 1995
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<PAGE> 16
PROXY
[LOGO] DATUM INC.
1363 South State College Boulevard
Anaheim, California 92806
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints LOUIS B. HORWITZ and DAVID A. YOUNG as Proxies,
each with the power to appoint his substitute, and hereby authorizes each of
them to represent and to vote, as designated on the reverse side, all the
shares of Common Stock of Datum Inc. held of record by the undersigned on
April 14, 1995, at the Annual Meeting of Stockholders to be held on June 1,
1995 and at any adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES LISTED BELOW.
(Continued and to be signed on reverse side.)
Please mark
[X] your votes
as this
------------
COMMON STOCK
(1) Election of Directors to Class II:
Louis B. Horwitz and Dan L. McGurk
FOR ALL WITHHOLD AUTHORITY
nominees listed (except to vote for all
as indicated to the contrary hereon) nominees listed
[ ] [ ]
INSTRUCITON: To withhold authority to vote for an individual nominee, write
that nominee's name in the space provided below:
-------------------------------
(2) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
I PLAN TO ATTEND MEETING [ ]
Please date this Proxy and sign it exactly as
your name or names appear below. When shares are
held by joint tenants, both should sign. When
signing as an attorney, executor, administrator,
trustee or guardian, please give full title as
such. If shares are held by a corporation, please
sign in full corporate name by the President or
other authorized director. If shares are held by a
partnership, please sign in partnership name by an
authorized person.
All other proxies heretofore given by the
undersigned to vote shares of stock of Datum Inc.,
which the undersigned would be entitled to vote if
personally present at the Annual Meeting or any
adjournment or postponement thereof, are hereby
expressly revoked.
Dated: 1995
--------------------------------------
-------------------------------------------------
Signature
-------------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. IF YOUR ADDRESS IS INCORRECTLY SHOWN, PLEASE PRINT CHANGES.
