SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Datum Inc.
(Name of Issuer)
Common Stock, par value $0.25 per share
(Title of Class of Securities)
23820810
(CUSIP Number)
Dennis J. Block, Esq.
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, NY 10038
(212) 504-6000
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 16, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Frequency Electronics, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(A)[ ](B)[X]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
296,550
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 296,550
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
296,550
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions)[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
14 TYPE OF REPORTING PERSON (See Instructions)
CO
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ITEM 1. SECURITY AND ISSUER
This statement relates to shares of common stock, $0.25 par value
per share (the "Common Stock"), of Datum Inc. ("Datum" or the "Corporation").
The Corporation's principal executive office is located at 9975 Toledo Way,
Irvine, CA 92618-1819.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed by Frequency Electronics, Inc., a
Delaware corporation ("Frequency" or the "Reporting Person"). The information
required to be disclosed under Items 2 through 6 of Schedule 13D is provided in
Exhibit 1 hereto for each director and executive officer of Frequency. Frequency
is a publicly-traded company, and Frequency's management is not aware of any
person that controls Frequency.
(b) The principal business address of Frequency is 55 Charles
Lindbergh Boulevard, Mitchel Field, NY 11553.
(c) Frequency designs, develops, manufactures and markets precision
time and frequency control products and systems.
(d) During the past five years, Frequency has not been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors).
On June 19, 1998, Frequency and the U.S. Government entered into a
Plea Agreement, Civil Settlement Agreement and related documents ("Settlement
Agreement") thereby concluding a global disposition of certain previously
reported pending litigations and matters. All criminal charges brought by the
U.S. Government against certain officers, employees and former employees of
Frequency were dismissed, with prejudice. The criminal charges brought by the
U.S. Government against Frequency were dismissed, with prejudice, with the
exception of a single charge of submitting a false statement which failed to
disclose the full explanation of Frequency's costs on a highly classified
government project, as to which Frequency pled guilty and paid the U.S.
Government a fine of $400,000 and $1.1 million as reimbursement for costs of its
investigation, with all known criminal investigations of Frequency having been
resolved. Reference is made to "Item 3 - Legal Proceedings" of Frequency's
Annual Report on Form 10-K for the year ended April 30, 1999 on file with the
Securities and Exchange Commission.
(e) During the past five years, Frequency has not been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction,
as a result of which it was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) The Reporting Person is a Delaware corporation.
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The amount of funds used to purchase the shares of Common Stock
described in Item 5 below was approximately $2,387,000. All of such funds came
from Frequency's working capital.
ITEM 4. PURPOSE OF TRANSACTION.
Over the past several years, Frequency and Datum have discussed a
possible business combination of the two companies. Frequency has also acquired
and disposed of shares of the Common Stock from time to time.
Frequency's board of directors has recently determined that a merger
of Frequency and Datum would be in the best interest of the shareholders,
customers and employees of both companies.
On November 2, 1999, Frequency offered to acquire Datum for $10 per
share in cash. Frequency's offer represented a substantial premium of 41.5% over
the average closing price of Datum's common stock for the preceding 20 business
days. A copy of Frequency's November 2, 1999 letter is attached as Exhibit 2
hereto and is incorporated herein by reference.
On November 8, 1999, Datum advised Frequency that it had considered
Frequency's November 2, 1999 proposal and concluded that there was no merit in
pursuing a merger between Frequency and Datum.
On November 9, 1999, Frequency modified its proposal and advised
Datum that it was prepared to offer either $10.00 in cash or 1.0596 shares of
Frequency common stock for each outstanding share of Datum common stock, or a
combination of both cash and stock. Frequency stated that a stock transaction
would be structured to be tax-free to Datum's shareholders. As of November 8,
1999, Frequency's proposed exchange ratio was valued at $10.00 per share.
Frequency's proposal represented a premium of 41.2% over the average closing
price for Datum common stock for the preceding 30 business days. A copy of
Frequency's November 9, 1999 letter is attached as Exhibit 3 hereto and is
incorporated herein by reference.
On November 10, 1999, Datum announced publicly that it had received
Frequency's November 9, 1999 proposal and anticipated that it would make a
formal announcement with respect to the proposal "within the next few days."
Datum also announced that it had adopted a stockholder rights plan. On November
11, 1999, Datum rejected Frequency's proposal.
Frequency continues to believe that a merger of Datum and Frequency
is in the best interest of the shareholders, customers and employees of both
companies.
Frequency intends to pursue the alternatives available in order to
effect a business combination with Datum on the terms set forth in its November
9, 1999 proposal. Such alternatives could include, without limitation, (i) the
purchase of additional Common Stock in
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the open market, in privately negotiated transactions or otherwise, (ii) the
sale of all or a portion of the Common Stock now owned or hereafter acquired by
it to one or more purchasers, (iii) negotiation of a business combination with
Datum, (iv) commencement of a tender or exchange offer for the Common Stock, (v)
initiation of shareholder proposals in favor of a sale of Datum and redemption
of Datum's poison pill, and (vi) conducting a proxy contest or written consent
solicitation to elect individuals to the Datum board of directors who would
pursue a sale of Datum. Frequency may also contact and consult with other
shareholders of Datum concerning Datum, its prospects, and any or all of the
foregoing matters. Frequency intends to review its investment in Datum on a
continuing basis and depending on various factors, including Datum's business,
affairs and financial position, other developments concerning Datum, the price
level of the Common Stock, conditions in the securities markets and general
economic and industry conditions, as well as other investment opportunities
available to it, may in the future take such actions with respect to its
investment in Datum as it deems appropriate in light of the circumstances
existing from time to time.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) According to Datum's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999, as of November 10, 1999, Datum had issued and
outstanding 5,839,940 shares of Common Stock.
(b) Frequency is the beneficial owner of 296,550 shares of Common
Stock or 5.1% of the outstanding Common Stock. Frequency has the sole power to
vote, or to direct the vote of, all of such shares.
(c) Frequency acquired its shares of Common Stock in open market
transactions. The trading dates, number of shares purchased, price per share,
and total price paid by Frequency during the past sixty days is as follows:
DATE PURCHASE/SALE NO. OF SHARES PRICE PER SHARE TOTAL PRICE
---- ------------- ------------- --------------- -----------
10/15/99 Purchase 1,000 $6.62500 $6,625.000
10/18/99 Purchase 14,000 6.62500 92,750.000
10/19/99 Purchase 2,000 6.71875 13,437.500
11/8/99 Purchase 5,000 7.25000 36,250.000
11/10/99 Purchase 17,600 8.96875 157,850.000
11/12/99 Purchase 8,000 8.56250 68,500.000
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11/15/99 Purchase 2,700 9.09375 24,553.125
11/16/99 Purchase 10,500 9.46875 99,421.875
11/19/99 Purchase 600 9.00000 5,400.000
(d) Frequency is not aware of any other person that has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares of Common Stock disclosed in Item 5 hereof.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Frequency does not have any contracts, arrangements, understandings
or relationships (legal or otherwise) with any person with respect to any
securities of Datum.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Certain information concerning the directors and executive officers
of Frequency.
Exhibit 2 - Letter dated November 2, 1999 from Martin B. Bloch and Joseph P.
Franklin to Erik van der Kaay.
Exhibit 3 - Letter dated November 9, 1999 from Martin B. Bloch and Joseph P.
Franklin to Erik van der Kaay.
Exhibit 4 - Press Release dated November 9, 1999 issued by Frequency.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Date: November 22, 1999.
FREQUENCY ELECTRONICS, INC.
By: /s/ Joseph P. Franklin
------------------------------------
Name: Joseph P. Franklin
Title: Chairman of the Board
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
1 Certain information concerning the directors and executive officers
of Frequency.
2 Letter dated November 2, 1999 from Martin B. Bloch and Joseph P.
Franklin to Erik van der Kaay.
3 Letter dated November 9, 1999 from Martin B. Bloch and Joseph P.
Franklin to Erik van der Kaay.
4 Press Release dated November 9, 1999 issued by Frequency.
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Exhibit 1
CERTAIN INFORMATION REGARDING
THE DIRECTORS AND EXECUTIVE OFFICERS OF FREQUENCY ELECTRONICS, INC.
The following table sets forth the name, business address and
principal occupation of the directors and executive officers of Frequency
Electronics, Inc. ("Frequency").
DIRECTORS
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION
Joseph P. Franklin Chairman of the Board, Frequency
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
Martin B. Bloch President and Chief Executive Officer,
55 Charles Lindbergh Blvd. Frequency
Mitchel Field, NY 11553
Joel Girsky President, Jaco Electronics, Inc.
c/o Jaco Electronics, Inc.
145 Oser Avenue
Hauppauge, NY 11788
John C. Ho Director and Consultant to Frequency
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
E. Donald Shapiro Joseph Solomon Distinguished Professor
New York Law School of Law, New York Law School
57 Worth Street
New York, NY 10013-2960
Marvin Meirs Director and Consultant to Frequency
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
S. Robert Foley, Jr. Senior Advisor, Raytheon Company
c/o Raytheon Company
141 Spring Street
Lexington, MA 02421
EXECUTIVE OFFICERS
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION
Joseph P. Franklin Chairman of the Board of Directors
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
Martin B. Bloch President, Chief Executive Officer and
55 Charles Lindbergh Blvd. Director
Mitchel Field, NY 11553
Markus Hechler Executive Vice President and Assistant
55 Charles Lindbergh Blvd. Secretary
Mitchel Field, NY 11553
Alfred Vulcan Vice President, Systems Engineering
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
Charles S. Stone Vice President, Low Noise Development
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
Leonard Martire Vice President, Space Systems and
55 Charles Lindbergh Blvd. Business Development
Mitchel Field, NY 11553
Thomas McClelland Vice President, Commercial Products
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
Alan Miller Treasurer and Chief Financial Officer
55 Charles Lindbergh Blvd.
Mitchel Field, NY 11553
Harry Newman Secretary and Assistant to the
55 Charles Lindbergh Blvd. Executive Vice President
Mitchel Field, NY 11553
None of the persons identified in this Exhibit 1:
(i) during the last five years, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors);
(ii) during the last five years, has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws
or finding any violation with respect to such laws;
(iii) is presently the beneficial owner of any shares of the common stock
of Datum Inc.;
(iv) has effected any transactions in the common stock of Datum Inc.
during the last 60 days;
(v) other than Frequency, knows of any person who has the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, such securities; or
(vi) is a party to any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to
any securities of Datum Inc.
Exhibit 2
[Frequency Electronics, Inc. Letterhead]
PERSONAL & CONFIDENTIAL
November 2, 1999
Mr. Erik van der Kaay
Chief Executive Officer
Datum Inc.
9975 Toledo Way
Irvine, CA 92618-1819
Dear Erik:
As you know, we have been discussing with you the possibility of a
business combination of our companies for some time now. We strongly believe
that a merger of Frequency Electronics, Inc. ("Frequency") with Datum Inc.
("Datum") will benefit our respective shareholders, customers and employees.
Frequency is hereby pleased to offer to acquire all of the common
stock of Datum for a price of $10.00 per share in cash. This price is a
substantial premium of 41.5% over the average closing price of Datum for the
past 20 business days, and we believe it provides exceptional value to the Datum
shareholders. We are also open to structuring the consideration either in the
form of common stock of Frequency or in a combination of cash and stock.
We strongly believe that the combination of our companies will form
a global leader in time and frequency products and systems for wireless,
wireline, Internet and space applications. A combination would form the basis to
leverage each company's well respected name and position, technical and
manufacturing expertise, and product offerings. It is clear that such a
combination would enable us to be more competitive and would allow us to address
the needs of our customers more efficiently.
As you know, Frequency has been a leader in designing, developing,
manufacturing and marketing of precision, time and frequency control products
and systems for many years. We currently have approximately $40 million in cash
and marketable securities, total assets of approximately $80 million, no debt
and a market capitalization of approximately $70 million.
Mr. Erik van der Kaay
November 2, 1999
Page 2
We believe that you, your executive team, and your employees will be
able to assist in the expansion and diversification of the combined
Datum/Frequency enterprise. Assuring continuity in this regard is important to
us.
Our proposal is subject to Frequency being afforded the opportunity
to, and our being satisfied with the results of, a due diligence review of
Datum. We and our advisors are prepared to commence such a review promptly.
We have retained TM Capital Corp., a New York investment banking
firm, as our financial advisor in connection with this transaction. Our legal
advisor is Mr. Dennis Block of Cadwalader, Wickersham & Taft. We are fully
prepared to move forward expeditiously to complete this transaction.
If you have any questions about our offer, please feel free to call
us at (516) 794-4500, Paul Smolevitz of TM Capital Corp. at (212) 809-1416, or
Dennis Block at (212) 504-5555. We would appreciate your prompt response to this
offer.
Very truly yours,
/s/ Martin B. Bloch
Martin B. Bloch
President and Chief Executive Officer
/s/ Joseph P. Franklin
Joseph P. Franklin
Chairman of the Board
cc: Board of Directors, Datum Inc., copies provided
Exhibit 3
[Frequency Electronics, Inc. Letterhead]
November 9, 1999
Mr. Erik van der Kay
Chief Executive Officer
Datum Inc.
9975 Toledo Way
Irvine, CA 92618-1819
Dear Erik:
I was disappointed by our telephone conversation late yesterday in
which you stated that your board had reviewed our November 2, 1999 letter and
concluded that it was not interested in our proposal to acquire Datum Inc. for a
price of $10.00 per share in cash. We firmly believe that a merger of Datum and
Frequency is in the best interest of your shareholders. Therefore, we have
modified our proposal and are now prepared to offer either $10.00 in cash or
1.0596 shares of Frequency common stock for each outstanding share of Datum
common stock, or a combination of both cash and stock. A stock transaction would
be structured to be tax-free to your shareholders. Based on yesterday's closing
price of Frequency's common stock, our proposed exchange ratio is valued at
$10.00 per share. Our proposal therefore represents a premium of 41.2% over the
average closing price for Datum for the past 30 business days.
We appreciate your offer to consider acquiring Datum's Efratom
subsidiary. Frequency's Board of Directors and I continue to believe that a
merger of our two companies will benefit our respective shareholders, customers
and employees. Among the advantages of a business combination between Frequency
and Datum are:
o A premium price for your shareholders.
o Increased leverage of each company's well-respected name, technical and
manufacturing expertise and product offerings.
o Our combined companies will form a global leader in time and frequency
products and systems for wireless, wireline, Internet and space applications.
o Our combined financial and technical resources will enhance our ability to
compete.
Mr. Erik van der Kaay
November 9, 1999
Page 2
We believe that you, your executive team, and your employees will
contribute significantly to the expansion and diversification of the combined
Datum/Frequency enterprise. It is our preference to work with you toward a
negotiated transaction. To that end, we ask that you and the other members of
your board, who are entrusted with the fiduciary duty of acting in the
shareholders' best interests, meet with us at your earliest convenience to
discuss the merits of our interest and our ideas.
Although we do not consider our interest in Datum as anything other
than "friendly," we reserve the right to initiate a tender or exchange offer for
Datum stock or to pursue other alternatives to maximize shareholder value.
Please be advised that we have issued a press release which disseminates the
information in this letter.
We look forward to your prompt response.
Very truly yours,
/s/ Martin B. Bloch
Martin B. Bloch
President and Chief Executive Officer
/s/ Joseph P. Franklin
Joseph P. Franklin
Chairman of the Board
cc: Datum Board of Directors
Exhibit 4
General Joseph P. Franklin
55 Charles Lindbergh Boulevard
Mitchel Field, NY 11553
Telephone: (516) 794-4500
9 November, 1999
PRESS RELEASE
FREQUENCY ELECTRONICS ANNOUNCES PROPOSAL TO MERGE WITH DATUM, INC.
Frequency Electronics, Inc. (AMEX-FEI) today announced that it has made a
proposal to the board of directors of Datum, Inc. (Datum) to merge the two
companies. Frequency is prepared to offer either $10.00 in cash or 1.0596 shares
of Frequency common stock for each outstanding share of Datum common stock, or a
combination of both cash and stock. A stock transaction would be structured to
be tax-free to Datum's stockholders. Based on yesterday's closing price of
Frequency common stock, the proposed transaction is valued at $58 million and
the proposed exchange ratio is valued at $10.00 per share. Frequency's proposal
represents a premium of 41.2% over the average closing price for Datum for the
past 30 business days. The transaction would be subject to Frequency's
satisfactory due diligence review of Datum as well as other customary
conditions.
Martin B. Bloch, President and Chief Executive Officer of Frequency, said, "We
strongly believe that the combination of Frequency and Datum will form a global
leader in time and frequency products and systems for wireless, wireline,
internet and space applications. This business combination would form the basis
to leverage each company's well-respected name and position, technical and
manufacturing expertise and product offerings."
Frequency Electronics has been a leader in designing, developing, manufacturing
and marketing of precision time and frequency control products and systems for
many years. The company currently has approximately $40 million in cash and
marketable securities, total assets of approximately $80 million, no long-term
debt and a market capitalization of approximately $70 million.
Datum, based in Irvine, CA, designs, manufactures and markets a wide variety of
high-performance time and frequency products used to synchronize the flow of
information in telecommunications networks. The company is also a leading
supplier of precise timing products for computing networks, satellite systems,
electronic commerce and test and measurement applications.
Frequency has retained TM Capital Corp. as its financial advisor and Cadwalader,
Wickersham & Taft as special counsel.
This press release is not an offer to purchase shares of Datum.