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                             Watkins-Johnson Company
                ------------------------------------------------
                (Name of Registrant as Specified In Its Charter)


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Media Contact:                                                Investor Contact:
George Sard/Judy Brennan                                      Frank E. Emery
Sard Verbinnen & Co.                                          Watkins-Johnson
212/687-8080                                                  650/813-2752


                   WATKINS-JOHNSON TO PURSUE SALE OF COMPANY;
             OPPOSES BOARD NOMINATIONS OF DISSIDENT 2.5% SHAREHOLDER

PALO ALTO, CALIF., March 1, 1999 - Watkins-Johnson (NYSE: WJ), a high technology
company in wireless communications and semiconductor equipment,  announced today
that its Board of  Directors  has decided to pursue a sale of the  company.  The
decision was based on a strategic review  conducted with CIBC Oppenheimer  Corp.
(CIBC  Oppenheimer),  an investment bank that helped the Board evaluate the full
range of strategic alternatives. There can be no assurance that the sale process
will be successfully completed.

"The Board is committed to maximizing value for all of our shareowners," said W.
Keith Kennedy,  president and chief executive  officer of  Watkins-Johnson.  "We
asked CIBC Oppenheimer to review all of the potential strategic  alternatives to
pursuing  our own  long-term  business  plan.  In  light  of CIBC  Oppenheimer's
analysis,  we have  now  concluded  that  the  best  course  of  action  for our
shareowners  is to pursue  the sale of  Watkins-Johnson  in its  entirety  or as
separate businesses."

The Board also said it will  oppose the three  Board  nominations  of  dissident
shareholder Sandera Partners, a Texas private investment firm which owns 2.5% of
Watkins-Johnson, at the 1999 Annual Meeting of Shareowners. Kennedy stated, "The
election of three Sandera  nominees to the Board would jeopardize our ability to
maximize shareowner value through a sale of all or part of the company.  Sandera
would have a blocking  position  under our current  bylaws,  which require a 75%
vote of  directors  to sell the  company or make  certain  other key  decisions.
Furthermore, we firmly believe that Board representation is not warranted by the
size of Sandera's investment in the company."

                                    - more -



                                       2

Watkins-Johnson is filing today with the Securities and Exchange  Commission its
preliminary  proxy  materials  for the 1999 Annual  Meeting.  These  preliminary
materials include two proposals that would facilitate the company's  strategy of
maximizing value for all shareowners by abolishing certain  supermajority voting
provisions in its charter and bylaws  relating to decisions by  shareowners  and
directors.  Under the company  proposals,  a simple  majority of shareowners and
directors would now be able to approve certain key decisions,  including merging
or selling the company or major asset sales.

For more  information,  attached  is the  text of a letter  that the WJ Board of
Directors is sending to all company shareowners.

Forward-looking Statements

This news release, other than the historical financial information,  consists of
forward-looking  statements that involve risks and uncertainties,  including the
risks of  consummation  of the sale of the company or its component  businesses,
quarterly  fluctuations in results, the timely availability of new products, the
impact of  competitive  products and pricing,  and the other risks detailed from
time to time in the company's SEC reports, including the report on Form 10-K for
the year ended December 31, 1998. Actual results may vary materially.

Watkins-Johnson  Co.  specializes in two  high-technology  business areas.  WJ's
wireless-communications units produce radio-frequency components,  subassemblies
and  equipment  for  fixed  and  mobile   networks   worldwide.   The  company's
Semiconductor   Equipment   Group   produces   APCVD  systems  for   high-volume
integrated-circuit manufacturing.

                                      # # #



                                       3

March 1, 1999

Dear Shareowner:

As we prepare for the company's Annual Meeting  scheduled for April 29, 1999, we
would  like to  bring  to  your  attention  several  key  issues  that  you,  as
Watkins-Johnson  shareowners,  will be asked to consider  in this year's  voting
process.

We made significant  headway in 1998 to continue  refocusing and realigning WJ's
business to improve  performance and create  shareowner  value.  Building on the
realignment process we began in 1997 by exiting the defense contracting business
by disposing of our Palo Alto defense  unit,  we took several steps this year to
adapt to changing market conditions. We are encouraged that the remainder of our
Palo Alto operations, the Wireless Products Group, doubled its revenues in 1998,
now  representing  more than half of our Wireless  Segment.  We discontinued two
major product  introductions that did not meet our sales and market-share goals,
and we reallocated resources to our core growth businesses.  Separately, we also
repurchased 22% of our stock.

We retained CIBC Oppenheimer  Corp.  (CIBC  Oppenheimer) to help us identify and
evaluate all of the potential  strategic  alternatives to pursuing our long-term
business plan. The scope of CIBC  Oppenheimer's  analysis was  unrestricted  and
comprehensive.  In light of CIBC Oppenheimer's  analysis, we have concluded that
the best  course  of  action is to  pursue  the sale of  Watkins-Johnson  in its
entirety or as separate  businesses.  We  recognize  that  selling  only certain
segments of the businesses may not maximize shareowner value.

This was not an easy decision. Watkins-Johnson has been in business for 41 years
with a wonderfully dedicated and skilled workforce.  We are proud of our history
of  excellent  products  and services in  sophisticated,  technical  industries.
Nevertheless,  your Board is convinced that the decision is correct,  and we are
dedicated to doing  everything we can, with the help of our financial  advisors,
to maximize value for all shareowners.

Of course,  we cannot assure you that we will be successful in implementing this
strategy.  Until we have had a chance to solicit  and  evaluate  expressions  of
interest,  we cannot  determine  whether full value can be realized at this time
either for the entire company or for its component  businesses.  However, we are
confident  that,  whatever  the outcome of this  process,  Watkins-Johnson  is a
stronger  and  healthier  company  than it was a year  ago  due to the  decisive
measures  we have taken with  respect to the  business  operations.  During this
process, we will continue to make the significant  decisions necessary to remain
competitive and efficient.




                                       4

We strongly  oppose  Sandera  Partners'  attempt to elect three  nominees to the
Watkins-Johnson  Board,  and we  propose  the  reelection  of all eight  current
directors.  As you may have learned,  Sandera  Partners L.P. has nominated three
candidates  for election to the  Watkins-Johnson  Board of Directors at the 1999
Annual  Meeting  of  Shareowners.  Sandera  Partners  is a  Texas-based  private
investment  firm  that has  advised  us it owns 2.5% of  Watkins-Johnson  common
stock.

We intend to strongly campaign against the election of Sandera's  nominees,  two
of whom are  executives  of Sandera and the third an executive of an  investment
management and acquisition firm at the same address. The current Watkins-Johnson
Board is  highly  knowledgeable  about the  company  and has  overseen  decisive
actions to  reposition  the  company for a return to  profitability.  We believe
these  directors  should be allowed to  continue  implementing  the  strategy of
maximizing  shareowner value through a potential sale of the company without the
burden of a potentially divided Board. Furthermore, we firmly believe that Board
representation  is not  warranted  by the size of  Sandera's  investment  in the
company.  We regret that  Sandera's  pursuit of three seats on our  eight-member
Board has precipitated the first contested election in our 41-year history.

We are convinced that the election of the Sandera  nominees would jeopardize our
strategy to maximize shareowner value through a potential sale of the company. A
potentially  divided Board is never  helpful  during the tough task of executing
major  strategic  initiatives.  In  this  particular  case,  we  are  especially
disturbed by the fact that Sandera - whose original  request for two Board seats
was rejected in light of Sandera's relatively modest investment in the company -
consciously  adopted a  confrontational  posture.  Sandera has  nominated  three
candidates  with the avowed  purpose  of  seeking to obtain a blocking  position
under our bylaws,  which  require a 75% vote of directors to sell the company or
make other certain key decisions. These decisions include merging or selling the
company,  disposing of major assets, and declaring dividends. If Sandera were to
obtain  three  Board  seats,  it  would  have  veto  power  over  many  types of
transactions  that a majority  of the Board  might  wish to  pursue.  This could
thwart our ability to maximize value for all shareowners,  including the holders
of the other 97.5% of our stock.

At the 1999 Annual  Meeting,  we will be submitting  two proposals to facilitate
our strategy and reduce the risk that it will be thwarted by minority interests.
These  proposals  will call for the abolition of the bylaw  requirement  for 75%
Board  approval  for  certain  key  decisions  as well as repeal of the  charter
requirement  for  supermajority   (80%)  shareowner  approval  for  certain  key
decisions,   including   merging  or  selling  the  company  or   disposing   of
substantially all our assets. These requirements have the dangerous potential of
creating  deadlock and  frustrating  the wishes of a majority of the shareowners
and their elected representatives on the Board. Whether or not we are successful
in  finding  one or  more  buyers  for  the  entire  company  or  its  component
businesses,  we  believe  the  interests  of all  shareowners  will be served by
adopting these proposals as well as by the reelection of the current directors.

Within  the next few  weeks,  you will  receive  additional  detailed  materials
regarding  all of the matters  discussed  in this  letter,  including  our proxy
statement and 1998 Annual Report. We urge you to give this material your careful
attention.  Attached you will find a press  release on these matters that we are
distributing today.




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In the meantime,  if you receive any materials from Sandera Partners,  L. P., we
urge you not to make any  decisions at this time.  With the 1999 Annual  Meeting
planned for late April,  there is no reason to rush to judgment.  In particular,
we strongly recommend that you do not sign any proxy card from Sandera until you
hear further from us.

Your Board of Directors is committed to maximizing the value of your  investment
in  Watkins-Johnson.  We have taken decisive  actions to fulfill that commitment
and we will continue to do so. We thank you for continued support.


                                  Sincerely yours,

                                  /s/ Dean A. Watkins
                                  Dean A. Watkins

                                  H. Richard Johnson
                                  /s/ H. Richard Johnson

                                  W. Keith Kennedy
                                  /s/ W. Keith Kennedy


                   CERTAIN INFORMATION CONCERNING PARTICIPANTS

The following  individuals,  all of whom are directors or executive  officers of
Watkins-Johnson  Company,  may be deemed  participants  in the  solicitation  of
proxies  on behalf of  Watkins-Johnson's  Board of  Directors:  Dean A.  Watkins
(Chairman  of the Board of  Directors of  Watkins-Johnson);  H. Richard  Johnson
(Vice Chairman of the Board of Directors of Watkins-Johnson);  W. Keith Kennedy,
Jr. (President and Chief Executive Officer of Watkins-Johnson); John J. Hartmann
(Financial  Consultant);  Raymond F. O'Brien (Business  Consultant);  William R.
Graham (Chairman of the Board and President,  National Security Research, Inc.);
Gary M. Cusumano  (President,  The Newhall Land and Farming Company);  Robert L.
Prestel (Business and Management Consultant); Scott G. Buchanan (Vice President,
Chief Financial  Officer and Treasurer of  Watkins-Johnson);  and Frank E. Emery
(Vice President, Corporate Planning and Communications of Watkins-Johnson).

Dr.  Watkins  is the  beneficial  owner of 258,020  shares of  Watkins-Johnson's
Common Stock  individually and through the Watkins Trust (including 9,000 shares
subject to stock options  exercisable  within 60 days of December 31, 1998). Dr.
Johnson is the beneficial  owner of 39,259 shares of Common Stock,  individually
and through the Johnson  Family Trust  (including  9,000 shares subject to stock
options  exercisable  within 60 days of December 31, 1998).  Dr.  Kennedy is the
beneficial  owner of 353,091 shares  (including  282,200 shares subject to stock
options  exercisable  within 60 days of December 31, 1998).  Mr. Hartmann is the
direct  beneficial  owner of 20,120 shares  (including  19,520 shares subject to
stock options  exercisable  within 60 days of December 31, 1998). Mr. O'Brien is
the direct beneficial owner of 22,420 shares (including 16,420 shares subject to
stock options  exercisable  within 60 days of December 31, 1998).  Dr. Graham is
the  beneficial  owner of 26,950  shares,  individually  and  through his spouse
(including 26,650 shares subject to stock options  exercisable within 60 days of
December 31, 1998). Mr. Cusumano is the direct beneficial owner of 12,993 shares
(including 12,493 shares subject to stock options  exercisable within 60 days of
December 31, 1998). Mr. Prestel is the direct  beneficial





                                       6

owner of  12,793  shares  (including  12,493  shares  subject  to stock  options
exercisable within 60 days of December 31, 1998). Mr. Buchanan is the beneficial
owner of 63,224 shares (including  50,590 shares subject to options  exercisable
within 60 days of December  31,  1998).  Dr.  Emery is the  beneficial  owner of
24,946 shares (including 12,833 shares issuable upon options  exercisable within
60 days of December 31, 1998).  The foregoing share ownership  numbers are as of
December 31, 1998.

Dr.  Kennedy is a party to an employment  agreement with  Watkins-Johnson  which
provides for employment until March 2001. The employment agreement provides for,
among other things,  certain  payments and the  continuation of certain benefits
upon a "change in control" of Watkins-Johnson as defined in such agreement.

Mr.   Buchanan  and  Dr.  Emery  are  parties  to  employment   agreements  with
Watkins-Johnson  which provide for,  among other things,  certain  payments upon
termination  of employment  without cause.  Mr.  Buchanan and Dr. Emery are also
parties to severance  agreements with  Watkins-Johnson  which provide for, among
other things,  certain  payments and the continuation of certain benefits upon a
"change  in  control"  of   Watkins-Johnson   as  defined  in  their  respective
agreements.  In addition,  under the company-wide  retention  program adopted by
Watkins-Johnson  in connection with the Board's decision to pursue a sale of the
Company,  Mr.  Buchanan  and Dr. Emery would be entitled to receive (i) enhanced
profit sharing and bonus payments if they are employed by Watkins-Johnson at the
time  it is sold  and  (ii)  transfer  bonuses  if  their  employment  continues
following the sale.

Drs. Watkins and Johnson are parties to consulting  agreements with the Company.
Under the agreements,  Drs.  Watkins and Johnson receive annual fees of $265,000
and  $125,000,  respectively,  in  addition  to their  regular  directors'  fees
described below.

Each Watkins-Johnson  nonemployee director receives an annual fee of $21,600 and
a fee of $300 for attending  each meeting of the Board of Directors or Committee
of the Board of Directors.

Each  nonemployee  director also  participates in  Watkins-Johnson's  1989 Stock
Option Plan for Nonemployee  Directors (the "Nonemployee  Directors Plan").  The
Nonemployee  Directors Plan provides for each nonemployee  director to receive a
stock option to purchase 3,000 shares of Common Stock annually. In addition, the
Nonemployee  Directors Plan provides that new directors  will,  upon election by
the shareowners,  receive an automatic,  one-time option grant to purchase 3,000
shares of Common Stock.

Watkins-Johnson's directors' retirement plan provides that each director who has
completed at least five years of active service as a director,  upon  retirement
from the Board,  will receive  one-half of his or her  quarterly fee as director
for a period of years  not to  exceed  one-half  of the  years of  service  as a
director after April 8, 1995.

Watkins-Johnson  has engaged CIBC Oppenheimer Corp. ("CIBC  Oppenheimer") to act
as its financial  advisor in  connection  with certain  extraordinary  corporate
transactions involving Watkins-Johnson,  for which Watkins-Johnson has agreed to
pay  CIBC  Oppenheimer  certain  fees  and to  reimburse  CIBC  Oppenheimer  for
out-of-pocket expenses related to its services. In addition, Watkins-Johnson has
agreed to indemnify CIBC  Oppenheimer  and certain  related persons and entities
against certain liabilities,  including liabilities under the federal securities
laws,  arising out of its engagement.  CIBC Oppenheimer is an investment banking
firm that  provides a full range of  financial  services for  institutional  and
individual  clients.  In connection  with CIBC  Oppenheimer's  role as financial
advisor  to   Watkins-Johnson,   certain   employees  of  CIBC  Oppenheimer  may
communicate  in person,  by  telephone  or  otherwise  with a limited  number of
institutions,  brokers or other persons who are stockholders of





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Watkins-Johnson.  CIBC  Oppenheimer  does  not  admit  that  it or  any  of  its
directors,  officers or employees is a "participant"  as defined in Schedule 14A
promulgated  under the Securities Act of 1934, as amended,  in the solicitation,
or that Schedule 14A requires the disclosure of certain  information  concerning
CIBC Oppenheimer.  In the ordinary course of business,  CIBC Oppenheimer and its
affiliates   regularly  buy  and  sell  securities,   including   securities  of
Watkins-Johnson,  for their own account and for the accounts of customers, which
transactions may result from time to time in CIBC Oppenheimer  having a net long
or net short position in the securities of  Watkins-Johnson  or option contracts
or other derivatives in or relating to such securities. As of February 23, 1999,
CIBC  Oppenheimer   beneficially   owned  less  than  1%  of   Watkins-Johnson's
outstanding common stock.