SCHEDULE 14A

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION

           Proxy Statement Pursuant to Section 14(a) of the Securities
                              Exchange Act of 1934

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     14a-6(e)(2))


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


    ------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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               Watkins-Johnson Company Employee Retention Program

As WJ has  announced  its  intention to sell itself either in its entirety or as
separate business  segments,  we want to assure you of the continued  importance
you each have to WJ, the products we produce,  and the customers we support.  We
hope that the bonus  programs  described  below will ensure that every  employee
will have an incentive to stay with WJ during these difficult times.

To participate in the following programs,  or any other severance payments,  you
will be  required  to waive any claims  against WJ. This waiver will be given to
you at the time the entire company or your business unit is sold.

Enhanced Profit Sharing Package

Currently,  every employee of Watkins-Johnson Company shares in a profit sharing
bonus  that pays a  percentage  of salary  based on  either  group  profit or WJ
profit. Realizing that strong profitability is a large factor in creating value,
WJ will double and annualize the profit  sharing for each  employee.  This means
that when the divestiture  transaction for each employees'  group closes or when
the sale of all of WJ is  complete,  whichever  comes  first,  using the regular
profit sharing  formula,  WJ will compute the profit  sharing  percentage at the
close of the  transaction  and then double and extend that percentage for all of
1999.

Transfer Bonus

We want to further  reward  those  people who choose to stay with WJ until their
group's  transaction closes or until the sale of the entire company is complete,
whichever comes first, and who then accept and begin employment with the company
that purchases  their group or the entire  company.  These people will receive a
transfer  bonus of two weeks base  salary to be paid by WJ. The  Transfer  Bonus
will  require the  confirmation  to WJ that you have begun  employment  with the
buyer of your group or the entire company.

RIF Protection

With the  uncertainties of this period,  we recognize the concern  employees may
have about the  possible  necessity  for a reduction  in force in  selected  job
areas.  To address  this  concern,  in  addition  to the WJ  Enhanced  Severance
package,  any WJ employee  not  transferred  to the new employer and RIF'd by WJ
during the balance of 1999 will  receive the  doubled  and  annualized  Enhanced
Profit Sharing Bonus described above. This RIF protection will not be applicable
in circumstances in which the transfer bonus would apply.

           The purpose of this document is to summarize the retention
                       program and is informational only.
              Formal documents will be distributed at a later date.





                   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 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 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.