<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>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission Only
/ / Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2)
/ / 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
DATUM INC.
[LOGO]
9975 TOLEDO WAY
IRVINE, CALIFORNIA 92718
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 1996
_______________
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
9975 Toledo Way, Irvine, California 92718, on Thursday, June 6, 1996, at 1:30
p.m. local time, for the following purposes:
1. To elect three directors to Class III of the
Company's Board of Directors to serve until the 1999 Annual Meeting of
Stockholders;
2. To consider and vote upon a proposal to approve and
adopt an amendment to the Certificate of Incorporation to authorize 1 million
shares of Preferred Stock, with such designations, preferences, limitations and
relative rights as the Board of Directors shall determine;
3. To consider and vote upon a proposal to approve and
adopt an amendment to the Certificate of Incorporation to increase the
authorized number of shares of Common Stock issuable thereunder from 8 million
to 10 million shares; and
4. 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 G.
Tilton Gardner, Donovan B. Hicks and Michael M. Mann 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 19, 1996 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.
David A. Young
Secretary
Irvine, California
April ___, 1996
<PAGE> 3
DATUM INC.
[LOGO]
9975 TOLEDO WAY
IRVINE, CALIFORNIA 92718
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 1996
_______________
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 9975 Toledo Way, Irvine,
California 92718, on Thursday, June 6, 1996 at 1:30 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,
FOR the proposal to approve an amendment to the Certificate of Incorporation to
authorize 1 million shares of Preferred Stock, with such designations,
preferences, limitations and relative rights as the Board of Directors shall
determine, and FOR the proposal to approve an amendment to the Certificate of
Incorporation to increase the number of authorized shares of Common Stock from
8 million to 10 million shares. 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.
If any other matters are properly presented at the Annual Meeting for
action, the persons named in the enclosed form of proxy will have discretion to
vote on such matters in accordance with their best judgment. The Company does
not know of any matters other than the matters set forth on the enclosed form
of proxy that will be presented at the Annual Meeting.
This Proxy Statement is being mailed to the Company's stockholders on
or about April __, 1996. 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.
1
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
Only holders of record of the _________ shares of the Company's Common
Stock outstanding at the close of business on April 19, 1996 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 19, 1996.
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 is tabulated separately.
With regard to the election of directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. In determining whether the proposal to
amend the Certificate of Incorporation to authorize Preferred Stock or the
proposal to amend the Certificate of Incorporation to increase the number of
authorized shares of Common Stock has been approved, abstentions and broker
non-votes will have the same effect as votes against 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 March 31, 1996 as to
(a) all directors and nominees for election as directors, (b) the four (4) 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 31.6%
10 Longs Peak Drive
Broomfield, Colorado 80021
Robert F. Ellis, Vice President 19,120(3) *
G. Tilton Gardner, Director 40,000 *
Donovan B. Hicks, Director 500(4) *
R. David Hoover, Director 500(5) *
Louis B. Horwitz, Chief Executive Officer, 203,525(6) 5.0%
President and Director
9975 Toledo Way
Irvine, CA 92718
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C> <C>
Michael M. Mann, Director 49,000(7) 1.2%
Dan L. McGurk, Director 36,000 *
Edward A. Money, Director 34,000 *
Thomas J. O'Rourke, Director 88,000(8) 2.2%
John (Jack) R. Rice, Vice President 7,962(9) *
David C. Robinson, Vice President 18,376(10) *
David A. Young, Vice President and 11,445(11) *
Chief Financial Officers
All Officers and Directors 534,465(12) 12.7%
as a Group (15 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 32,500 shares for
Mr. Horwitz, 16,000 shares for each of Messrs. Gardner, Mann, McGurk,
Money and O'Rourke, 16,563 shares for Mr. Ellis, 7,500 shares for Mr.
Rice, 13,188 shares for Mr. Robinson and 10,000 shares for Mr. Young,
which may be acquired within sixty days of April 19, 1996 upon
exercise of outstanding options.
(3) Includes 2,557 shares held for the account of Mr. Ellis in the
Company's Savings and Retirement Plan.
(4) 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.
(5) 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.
(6) Includes 4,260 shares held for the account of Mr. Horwitz in the
Company's Savings and Retirement Plan. Does not include 16,000 shares
owned by adult children of Mr. Horwitz.
(7) 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.
3
<PAGE> 6
(8) 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.
(9) Includes 462 shares held for the account of Mr. Rice in the Company's
Savings and Retirement Plan.
(10) Includes 2,071 shares held for the account of Mr. Robinson in the
Company's Savings and Retirement Plan.
(11) Includes 397 shares held for the account of Mr. Young in the Company's
Savings and Retirement Plan. Also includes 548 shares as to which Mr.
Young has shared voting or investment powers.
(12) Includes 180,539 shares which may be acquired within sixty days after
April 19, 1996 upon exercise of outstanding options. Also includes
12,496 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 (4) and (5).
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 III
expires at this Annual Meeting and, consequently, the nominees listed below
under the heading "Class III" are being presented for election as directors to
hold office until the Annual Meeting of Stockholders in 1999. The term of
office of each director included in Class I will continue until the Annual
Meeting of Stockholders in 1997. The term of office of each director in Class
II will continue until the Annual Meeting of Stockholders in 1998.
Messrs. Gardner, Hicks and Mann are being presented by the Board for
election as directors to serve as members of Class III until the Annual Meeting
of Stockholders in 1999. Messrs. Gardner, Hicks and Mann 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.
Gardner, Hicks and Mann as directors. Although it is anticipated that each
nominee will be able to serve as a director, should any 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.
Certain information as of March 31, 1996 with respect to the three
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 50 Director
Edward A. Money 65 Director
Thomas J. O'Rourke 72 Director
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C> <C>
CLASS II
Louis B. Horwitz 68 President and Chairman of the Board of Directors
Dan L. McGurk 69 Director
CLASS III
G. Tilton Gardner 60 Director
Donovan B. Hicks 58 Director
Michael M. Mann 56 Director
</TABLE>
Mr. Hoover has been a director of the Company since March 17, 1995.
Mr. Hoover is currently an Executive Vice President and the Chief Financial
Officer of Ball Corporation. From 1993 to 1995, Mr. Hoover was Senior Vice
President and Chief Financial Officer, and from 1988 to 1992 he was Vice
President and Treasurer, of Ball Corporation. Mr. Hoover is currently a
director of ANB Corp., the corporate parent of 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.
5
<PAGE> 8
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 four meetings during the fiscal year ended
December 31, 1995. 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 $1,000 per month during the fiscal
year ended December 31, 1995 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, 1995.
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 one meeting during the fiscal year ended December
31, 1995. The Compensation Committee is comprised of Messrs. O'Rourke, McGurk,
Gardner and Hicks.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth summary information concerning
compensation of the Company's Chief Executive Officer and the four most highly
compensated other executive officers for services rendered to the Company
during the three fiscal years ended December 31, 1995.
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 1995 $222,000 $ 75,000 $-0- -0- $5,006
President and Chairman 1994 210,848 110,000 -0- 25,000 5,005
of the Board 1993 188,500 -0- -0- -0- 4,481
Robert F. Ellis 1995 130,535 20,000 -0- 3,750 3,263
Vice President of Datum Inc. 1994 117,910 100,000 -0- 8,750 2,948
1993 104,937 -0- -0- -0- 2,623
John (Jack) R. Rice 1995 151,419 30,000 -0- -0- 2,452
Vice President of Datum Inc. 1994(3) 81,979 20,000 -0- 15,000 1,477
and President of Austron, Inc.
David C. Robinson 1995 105,000 30,000 -0- -0- 2,319
Vice President of Datum Inc. 1994 95,142 42,000 -0- 13,625 2,379
and President of Bancomm 1993 89,865 10,000 -0- -0- 2,247
Division
David A. Young 1995 120,000 30,000 -0- -0- 3,490
Vice President of Datum Inc. 1994(4) 48,654 20,000 -0- 15,000 423
and Chief Financial Officer
</TABLE>
- -------------
(1) Includes director's fees for Mr. Horwitz in the amounts of $12,000,
$10,667, and $9,250 for the years 1995, 1994, and 1993, respectively.
(2) Amounts shown represent Company contributions under the Company's Savings
and Retirement Plan for the listed executives.
(3) Mr. Rice joined the Company in April 1994.
(4) Mr. Young joined the Company in July 1994.
OPTION MATTERS
Option Grants. The following table sets forth certain information
concerning grants of options to each of the Company's executive officers named
in the Summary Compensation Table during the fiscal year ended December 31,
1995. In addition, in accordance with the rules and regulations of the
Securities and Exchange Commission, the following table sets forth the
hypothetical gains or "option spreads" that would exist for the options. Such
gains are based on assumed rates of annual compound stock appreciation of 5%
and 10% from the date on which the options were granted over the full term of
the options. The rates do not represent the Company's estimate or projection
of future Common Stock prices and no assurance can be given that the rates of
annual compound stock appreciation assumed for the purposes of the following
table will be achieved.
7
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- ------------------------------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN OR BASE EXPIRATION --------------------
NAME GRANTED(#) FISCAL YEAR(1) PRICE($/SH) DATE(2) 5%($) 10%($)
- ---- ---------- -------------- ----------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Louis B. Horwitz . . . . . -0- 0% -- -- -0- -0-
Robert F. Ellis(3) . . . . 3,750 1.7% $10.75 6/17/05 $26,174 $66,863
John (Jack) R. Rice . . . . -0- 0% -- -- -0- -0-
David C. Robinson . . . . . -0- 0% -- -- -0- -0-
David A. Young . . . . . . -0- 0% -- -- -0- -0-
</TABLE>
- -----------
(1) Options to purchase an aggregate of 219,250 shares of Common Stock were
granted to employees, including the executive officers named in the table,
during the fiscal year ended December 31, 1995.
(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 17,
1996, 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, 1995, 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, 1995. 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
(MARKET PRICE NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY
SHARES LESS OPTIONS AT FISCAL YEAR END OPTIONS 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 26,250 18,750 $156,094 $100,781
Robert F. Ellis . . . . -0- 0 13,437 10,313 93,318 35,276
John (Jack) R. Rice . . -0- 0 3,750 11,250 22,500 67,500
David C. Robinson . . . -0- 0 9,781 10,219 64,526 54,927
David A. Young . . . . -0- 0 7,500 7,500 39,375 39,375
</TABLE>
8
<PAGE> 11
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 four
independent, nonemployee directors.
The Company's executive compensation program is based upon the following
principles:
. 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.
. There must be an appropriate correlation that provides a direct tie
between each executive's compensation and long-term stockholder
value.
. There must be a balance between fixed incentive and equity
compensation.
. 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 11 of this
Proxy statement.
. 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).
For the 1995 year, the Committee took into consideration two events which had a
significant impact upon the long term strategic position of the Company. The
first of these events was the acquisition of Efratom Time and Frequency
Products, Inc., on March 17, 1995, which heavily involved the efforts of the
Chief Executive Officer, the Chief Financial Officer, and certain other
officers and executives of the Company throughout the year. Second, in
November 1995, the Board of Directors, upon recommendation of the Company's
management, approved a plan to combine the product lines of the Timing
Division, located in Anaheim, California with the product lines of the Bancomm
Division, located in San Jose, California. As a result of this action, a
reserve was established which adversely impacted the financial results of the
Company for the fourth quarter of 1995 and for the year, overriding the
positive results in certain of the Company's other operations.
The process of determining executive officer compensation for 1995 was based
upon both the Company's 1995 results after consideration of the factors
described above, and may be summarized as follows:
9
<PAGE> 12
. In February 1996, the Company's chief executive officer prepared a
detailed written analysis of the Company's performance for 1995
including a review of each of the operating divisions, and an
analysis of each executive officer's performance in affecting the
overall results. Consideration was given to net operating income,
return on assets, growth, and development of new products.
. Using this information as a basis of performance, and considering the
available comparable compensation information in the Surveys, the
chief executive officer prepared recommendations for modification to
each subordinate executive officer's compensation package.
. On February 29, 1996, 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.
. After in depth discussion and consideration of the information, the
Committee examined 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.
. After review of the available data and comparable incentive packages,
the Compensation Committee awarded salary increases to each of the
Company's officers, with a bonus based upon individual performance to
certain officers, and with additional stock options to certain
officers, also based upon individual performance. Each award was
individually considered, and varied in percentage of salary depending
upon the Compensation Committee's view of that individual officer's
performance.
. The Committee then considered these matters for the chief executive
officer, and after discussion and consideration of the Company's
performance, awarded an increase in salary, a bonus, and an
additional stock option. In addition, the Committee prepared a
recommendation to the Board of Directors that the Consulting
Agreement for the Chief Executive Officer be modified such that his
per diem payment would be increased under the Consulting Agreement
from $5,833.33 to $8,333.33.
. The Committee then discussed the requirement to establish clear and
defined objectives for 1996 for each of the Company's officers. The
Chairman was directed to establish these objectives in written form
for review by the Compensation Committee.
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
Donovan B. Hicks
Thomas J. O'Rourke
10
<PAGE> 13
PERFORMANCE GRAPH
This graph compares the Company's cumulative total return to
stockholders during the past five years with that of (i) the NASDAQ Market
Index, (ii) the SIC Code 3679 Index (electronic components, not elsewhere
classified), and (iii) the SIC Code 3825 Index (instruments for measuring and
testing of electricity), each published by Media General Financial Services,
Inc. (a list of the companies comprising SIC Code 3679 Index and SIC Code 3825
Index will be sent to any shareholder upon request). The Performance Graph in
the Proxy Statement for the Annual Meeting held June 1, 1995 compared the
Company's cumulative return with that of the NASDAQ Market Index and SIC Code
3825 Index. As a result of the Company's acquisition of Efratom Time and
Frequency Products, Inc. in March 1995, the Company now derives a material
portion of its revenues from products classified under SIC Code 3697.
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Datum Inc. 100 155.56 138.85 183.33 455.56 455.56
SIC Code Index 3679 100 201.55 226.54 189.51 215.62 281.37
SIC Code Index 3825 100 144.25 164.64 213.94 281.09 360.25
Nasdaq Market Index 100 128.38 129.64 155.50 163.26 211.77
</TABLE>
[Graph]
Assumes $100 invested on January 1, 1991 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
11
<PAGE> 14
to Mr. Horwitz during the five calendar years preceding the change in control
of the Company, (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, 1995, Mr. Horwitz would have received $757,957.
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, 1997.
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 was amended on March 1, 1996 to increase the per diem amount from
$5,833.33 to the amount set forth below.
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 $8,333.33 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.
12
<PAGE> 15
PROPOSAL 2
AMENDMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION TO AUTHORIZE PREFERRED STOCK
The Board of Directors has directed that there be submitted to the
stockholders of the Company at the Annual Meeting a proposed amendment to
Article Fourth of the Company's Certificate of Incorporation. The proposed
amendment can be used to make more difficult a change in control of the
Company.
Currently, Article Fourth authorizes the Company to issue up to
8,000,000 shares of Common Stock, $.25 per share par value (stockholders are
being asked to vote on a separate proposal to increase the number of authorized
shares of Common Stock). The proposed amendment, which was unanimously approved
by the Company's Board of Directors, will authorize the Company to issue up to
one million shares of Preferred Stock, $.25 per share par value (the "Preferred
Stock"), and will expressly authorize the Board of Directors to provide for the
issuance of the Preferred Stock in one or more series, to establish the number
of shares to be included in each such series and to fix the designations,
powers, preferences and relative, participating, optional or other special
rights of such series, along with any other qualifications, limitations and
restrictions thereon. Holders of Common Stock have no pre-emptive rights to
purchase or otherwise acquire any Preferred Stock that may be issued in the
future.
It is not possible to state the effects of the proposed amendment upon
the rights of holders of Common Stock until the Board of Directors determines
the respective rights, including any dividend rates, conversion prices or
voting rights, of the holders of one or more series of Preferred Stock. The
effects of such issuance could include, however (i) reduction of the amount
otherwise available for payment of dividends on Common Stock, if dividends are
payable on the Preferred Stock, (ii) restrictions on dividends on Common Stock,
if any dividends on the Preferred Stock are in arrears; (iii) dilution of the
voting power of Common Stock, if the Preferred Stock has voting rights, and
(iv) restrictions of the rights of holders of Common Stock to share in the
Company's assets on liquidation until satisfaction of any liquidation
preference granted to the holders of Preferred Stock.
The proposed amendment will give the Company increased financial
flexibility as it will allow Preferred Stock to be available for issuance from
time to time as determined by the Board for any proper corporate purpose. Such
purposes could include, without limitation, issuance for cash as a means of
obtaining capital for use by the Company, issuance as part or all of the
consideration required to be paid by the Company for acquisitions of other
businesses or properties, and issuance under employee benefit plans.
The Company does not presently have any plans, agreements,
understandings or arrangements that will or could result in the issuance of any
Preferred Stock.
For a discussion of certain anti-takeover aspects of the Proposal and
existing anti-takeover measures currently affecting stockholders of the
Company, see "Certain Anti-takeover Matters" below.
While the amendment may have anti-takeover ramifications, the Board of
Directors believes that financial flexibility offered by the amendment
outweighs any disadvantages. To the extent that it may have anti-takeover
effects, the amendment may encourage persons seeking to acquire the Company to
negotiate directly with the Board of Directors, enabling the Board to consider
the proposed transaction in a nondisruptive atmosphere and to discharge
effectively its obligation to act on the proposed transaction in a manner that
best serves the stockholders' interests.
The affirmative vote of the holders of the majority of the outstanding
shares of Common Stock is required to authorize the proposed amendment
regarding the issuance of Preferred Stock.
13
<PAGE> 16
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
AUTHORIZE THE ISSUANCE OF PREFERRED STOCK.
PROPOSAL 3
AMENDMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has directed that there be submitted to the
stockholders of the Company a proposed amendment to Article Fourth of the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock of the Company from 8,000,000 shares to 10,000,000
shares (stockholders are being asked separately to vote on a proposal to
authorize a new class of Preferred Stock). The proposed amendment can be used
to make more difficult a change in control of the Company.
As of the close of business on March 31, 1996, 4,040,165 shares of
Common Stock of the Company were issued and outstanding, and 579,187 shares of
Common Stock were committed for issuance pursuant to outstanding stock options,
leaving 3,380,648 shares of Common Stock unreserved.
The proposed amendment will give the Company increased financial
flexibility as it will allow additional shares of Common Stock to be available
for issuance from time to time as determined by the Board for any proper
corporate purpose. Such purposes could include, without limitation, issuance
for cash as a means of obtaining capital for use by the Company, issuance as
part or all of the consideration required to be paid by the Company for
acquisitions of other businesses or properties, and issuance under employee
benefit plans.
The Company does not presently have any plans, agreements,
understandings or arrangements that will or could result in the issuance of any
Common Stock, other than under the Company's employee benefit plans.
For a discussion of anti-takeover aspects of the Proposal and existing
anti-takeover measures currently affecting stockholders of the Company, see
"Certain Anti-takeover Matters" below.
While the amendment may have anti-takeover ramifications, the Board of
Directors believes that financial flexibility offered by the amendment
outweighs any disadvantages. To the extent that it may have anti-takeover
effects, the amendment may encourage persons seeking to acquire the Company to
negotiate directly with the Board of Directors, enabling the Board to consider
the proposed transaction in a nondisruptive atmosphere and to discharge
effectively its obligation to act on the proposed transaction in a manner that
best serves the stockholders' interests.
The affirmative vote of the holders of the majority of the outstanding
shares of Common Stock is required to authorize the proposed amendment
regarding the increase in number of shares of authorized Common Stock.
14
<PAGE> 17
The additional shares of Common Stock for which authorization is
sought would be identical to the shares of Common Stock of the Company now
authorized. Holders of Common Stock do not have preemptive rights to subscribe
for additional securities which may be issued by the Company, which means that
current stockholders do not have a prior right to purchase any new issue of
capital stock of the Company in order to maintain their proportionate ownership
thereof.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.
CERTAIN ANTI-TAKEOVER MATTERS
In deciding how to vote on Proposal 2 to authorize Preferred Stock and
Proposal 3 to increase the number of authorized shares of Common Stock,
stockholders should consider the following potential impediments to an
acquisition of the Company which may be adopted in the future by the Board of
Directors or which currently exist.
Shares of voting or convertible Preferred Stock could be issued, or
rights to purchase such shares could be issued, to create voting impediments or
to frustrate persons seeking to effect a takeover or otherwise gain control of
the Company. The Delaware General Corporation Law permits the issuance of
classes of shares with voting rights under which a majority vote of the holders
of each class, voting separately, is required to approve a merger. Preferred
shares could be issued with such rights to make approval of a merger more
difficult. Issuance of shares of Preferred Stock or Common Stock could also
increase the absolute cost of a merger or other takeover transaction if the
price to be paid in such transaction for such additional shares, pursuant to
their terms or otherwise, exceeds the consideration received by the Company
upon issuance of such shares. The ability of the Board of Directors to issue
Preferred Stock, with rights and preferences which it deems advisable, or its
ability to issue additional shares of Common Stock, could discourage an attempt
by a person to acquire control of the Company by tender offer or other means.
Such issuances could therefore deprive stockholders of benefits that could
result from such an attempt, such as the realization of a premium over the
market price for their shares in a tender offer or the temporary increase in
market price that such an attempt could cause. Moreover, the issuance of
Common Stock or voting Preferred Stock to persons friendly to the Board of
Directors could make it more difficult to remove incumbent managers and
directors from office even if such change were to be favorable to stockholders
generally.
15
<PAGE> 18
Under the Company's Certificate of Incorporation, only one-third of
its Board of Directors are elected each year. By staggering the terms of its
directors, it makes it more difficult to remove the board, or a majority of the
board, in a proxy contest or otherwise. This provision of the Certificate of
Incorporation might have the effect of discouraging any attempt by any person
or entity to conduct a proxy fight against the Board of Directors.
Under Section 203 of the Delaware General Corporate Law (the "DGCL"),
certain "business combinations" with "interested stockholders" of Delaware
corporations are subject to a three-year moratorium unless specified conditions
are satisfied. With certain exceptions, an interested stockholder is a person
or group who or which owns 15% or more of the corporation's outstanding voting
stock (including rights to acquire stock pursuant to an option, warrant,
agreement, arrangement or understanding, or upon the exercise of conversion or
exchange rights, and stock with respect to which the person has voting rights
only).
The Company and its largest stockholder, Efratom Holding, Inc., a
Colorado corporation and the owner of approximately 31.6% of the outstanding
shares of the Company ("Holding"), are parties to a Stockholder's Agreement
pursuant to which Holding is restricted, subject to certain limitations, from
purchasing additional shares of the Company's Common Stock or participating in
a proxy solicitation against the Company's Board of Directors.
The Company and its President, Louis B. Horwitz, who serves on the
Board of Directors, are parties to an Executive Agreement, dated March 7, 1986,
and a consulting agreement, dated October 9, 1992, pursuant to which Mr.
Horwitz is entitled to certain benefits upon the occurrence of change of
control of the Company. See "Executive Compensation -- Executive Agreement"
and "-- Consulting Agreement." These agreements may have the effect of
discouraging any attempt by a person or entity, through the acquisition of a
substantial number of shares of Common Stock, to acquire control of the
Company. These agreements may adversely impact stockholders who desire a
change in management or to participate in any tender offer or other sale
transaction involving a change in control of the Company.
Other potential anti-takeover measures are available to management and
the Board of Directors under the DGCL. Although the DGCL may protect
stockholders against partial takeovers and abusive takeover tactics, the
effects thereof may negatively impact stockholders desiring a change of control
in the ways set forth above.
AMENDED CERTIFICATE OF INCORPORATION
If Proposal 2 and Proposal 3 are approved, the text of Article Fourth
of the Company's Certificate of Incorporation will be as follows:
FOURTH: The total number of shares of stock which the Corporation
shall have the authority to issue is eleven million (11,000,000)
shares, consisting of a class of one million (1,000,000) shares of
Preferred Stock par value $.25 per share, and a class of ten million
(10,000,000) shares of Common Stock par value $.25 per share, (the
Preferred Stock, par value $.25 per share, being herein referred to as
"Preferred Stock"; and the Common Stock, par value $.25 per share,
being herein referred to as "Common Stock"). The Board of Directors
is expressly authorized to provide for the issuance of the shares of
Preferred Stock in one or more series and, by filing a
16
<PAGE> 19
Certificate pursuant to the applicable law of the State of Delaware,
to establish from time to time the number of shares to be included in
each series, and to fix the designations, powers, preferences and
relative, participation, optional or other special rights, if any, of
the shares of each such series and the qualifications, limitations and
restrictions thereof, if any, with respect to each such series of
Preferred Stock.
If Proposal 2 is approved but Proposal 3 is not approved, the text of
Article Fourth of the Company's Certificate of Incorporation will be as
follows:
FOURTH: The total number of shares of stock which the Corporation
shall have the authority to issue is nine million (9,000,000) shares,
consisting of a class of one million (1,000,000) shares of Preferred
Stock par value $.25 per share, and a class of eight million
(8,000,000) shares of Common Stock par value $.25 per share, (the
Preferred Stock, par value $.25 per share, being herein referred to as
"Preferred Stock"; and the Common Stock, par value $.25 per share,
being herein referred to as "Common Stock"). The Board of Directors
is expressly authorized to provide for the issuance of the shares of
Preferred Stock in one or more series and, by filing a Certificate
pursuant to the applicable law of the State of Delaware, to establish
from time to time the number of shares to be included in each series,
and to fix the designations, powers, preferences and relative,
participation, optional or other special rights, if any, of the shares
of each such series and the qualifications, limitations and
restrictions thereof, if any, with respect to each such series of
Preferred Stock.
If Proposal 3 is approved but Proposal 2 is not approved, the text of
Article Fourth of the Company's Certificate of Incorporation will be as
follows:
The Corporation is authorized to issue one class of shares of stock to
be designated "Common." The total number of shares that the
Corporation is authorized to issue is ten million (10,000,000) shares.
The common shares shall each have a twenty-five cents ($.25) par value.
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, 1995, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were satisfied.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse LLP, the Company's independent
accountants for the fiscal year ended December 31, 1995, 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,
1996.
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.
17
<PAGE> 20
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
All proposals of stockholders intended to be presented at the
Company's 1997 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 __, 1997, 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, 1995, 1994, and 1993 and audited statements of
operations and changes of cash flows for the three years ended December 31,
1995, 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, 1995, 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) 380-8880.
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
Irvine, California
April ___, 1996
18
<PAGE> 21
[FRONT OF PROXY CARD]
PROXY
DATUM INC.
9975 TOLEDO WAY
IRVINE, CALIFORNIA 92718
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 19, 1996, at the Annual Meeting of Stockholders to be held on June 6,
1996 and at any adjournment or postponement thereof.
<PAGE> 22
[BACK OF PROXY CARD]
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 (1) ELECTION OF ALL NOMINEES LISTED BELOW, (2) FOR THE PROPOSAL
TO AUTHORIZE PREFERRED STOCK, AND (3) FOR THE PROPOSAL TO INCREASE THE NUMBER
OF AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.
______________
COMMON STOCK
- --------------------------------------------------------------------------------
(1) Election of Directors to Class III: G. Tilton Gardner, Donovan B. Hicks
and Michael M. Mann
FOR ALL
nominees listed WITHHOLD AUTHORITY
(except as indicated to to vote
the contrary hereon) for all nominees listed
[ ] [ ]
INSTRUCTION: To withhold authority to vote for an individual nominee, write
that nominee's name in the space provided below:
------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2) Approval of the Amendment to the Certificate of Incorporation to
authorize 1 million shares of Preferred Stock, with such designations,
preferences, limitations and relative rights as the Board of Directors
shall determine:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
(3) Approval of the amendment to the certificate of incorporation to
increase the authorized number of shares of Common Stock issuable
thereunder from 8 million to 10 million:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
(4) 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.
- --------------------------------------------------------------------------------
==================================
==================================
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
IF YOUR ADDRESS IS INCORRECTLY
SHOWN, PLEASE PRINT CHANGES.
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: ,1996
--------------------------
- -------------------------------------
Signature
- -------------------------------------
Signature if held jointly
