EXHIBIT 99.1
ANNUAL REPORT OF THE DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
ANNUAL REPORT
For the fiscal year ended March 31, 1998
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
Datron Systems Incorporated
304 Enterprise Street, Escondido, California 92029-1297
(Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office)
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
F-1
Index To Financial Statements
Page
Independent Auditors' Report F-2
Financial Statements:
Statement of Net Assets Available for Benefits F-3
Statement of Changes in Net Assets Available
for Benefits F-4
Notes to Financial Statements F-5
Schedules:
None
All schedules are omitted because they are not applicable or the
required information is shown in the Financial Statements or the
notes thereto.
F-2
INDEPENDENT AUDITORS' REPORT
Datron Systems Incorporated
Employee Stock Purchase Plan
We have audited the accompanying statements of net assets available
for benefits of Datron Systems Incorporated Employee Stock Purchase
Plan (the "Plan") as of March 31, 1998 and the related statements of
changes in net assets available for benefits for the nine months ended
March 31, 1998. These financial statements are the responsibility of
the Plan's management Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, information regarding the Plan's net
assets available for benefits as of March 31, 1998 and the changes in
net assets available for benefits of the Plan for the nine months
ended March 31, 1998 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
San Diego, California
June 22, 1998
F-3
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
March 31,
1998
Cash $25,220
Participant contributions receivable 2,313
-------
Net assets available for benefits $27,532
=======
See accompanying notes to financial statements
F-4
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Nine Months
Ended
March 31, 1998
Participant contributions $94,937
Benefits paid (44,911)
Cash disbursements to employees
withdrawing from the plan (22,493)
--------
Net increase $27,532
Net assets available for benefits:
Beginning of period 0
-------
End of period $27,532
=======
See accompanying notes to financial statements
F-5
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1. Plan Description
In August 1997, the stockholders adopted, effective July 1, 1997,
the Datron Systems Incorporated Employee Stock Purchase Plan (the
"Stock Purchase Plan") under Section 423 of the Internal Revenue Code.
The Stock Purchase Plan is intended to provide eligible employees with
the opportunity to acquire an equity interest in Datron Systems
Incorporated (the "Company") through the acquisition of purchase
rights.
Employees are eligible to participate in the plan if they have
been employed a minimum of six months and work at least 20 hours per
week. Eligible employees may use funds from accumulated payroll
deductions to purchase shares of Company common stock at the end of
six-month offering periods. They may contribute up to 10% of gross
earnings toward such purchases, not to exceed $12,500 per offering
period, and may purchase a maximum of 1,000 shares per offering
period. The purchase price for the shares is 85% of the lesser of the
fair market value of the common stock at the beginning of the offering
period or at the end of the offering period. Shares purchased must be
held for a minimum of three months before they can be sold. At the
end of the first offering period on December 31, 1997, the Company
issued 6,126 shares of common stock to employees at a purchase price
of $7.33 per share. A total of 200,000 shares has been authorized for
issuance under the Employee Stock Purchase Plan.
Note 2. Summary of Significant Accounting Policies
Basis of Accounting
The Stock Purchase Plan's financial statements are prepared on the
accrual basis of accounting.
Administrative Expenses of the Plan
All expenses incurred in the administration of the Stock Purchase Plan
are paid by the Company.
F-6
Contributions
Contributions to the Stock Purchase plan are recorded as compensation
is earned by participants. Such contributions originate from after-
tax payroll deductions of participants.
Income Taxes
The Stock Purchase Plan was established under Section 423 of the
Internal Revenue Code and is, therefore, exempt from income taxes.
F-7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Compensation Committee of the Datron Systems Incorporated Employee
Stock Purchase Plan has duly caused this annual report to be signed by
the undersigned thereunto duly authorized.
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
By:/s/ WILLIAM L. STEPHAN Date: June 25, 1998
William L. Stephan
Datron Systems Incorporated
Employee Stock Purchase
Plan Compensation Committee