<PAGE>
===============================================================================
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:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CRAIG CORPORATION
- --------------------------------------------------------------------------------
(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] No fee required.
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
CRAIG CORPORATION
550 SOUTH HOPE STREET, SUITE 1825
LOS ANGELES, CA 9007L
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 1998
----------------
The Annual Meeting of Stockholders of Craig Corporation, a Delaware
corporation ("Craig"), will be held at the Regal Biltmore Hotel, 506 South
Grand Avenue, Los Angeles, California on Tuesday, December 15, 1998 at 10:00
a.m., Los Angeles time, subject to adjournment or postponement for the
following purposes:
(1) To elect six directors to the Board of Directors for the ensuing
year; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
A copy of the Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 1997 and a Quarterly Report on Form 10-Q for the three and nine
month periods ended September 30, 1998 are enclosed. Only stockholders of
record at the close of business on November 18, 1998 will be entitled to
notice of and to vote at the meeting and any adjournment or postponement
thereof. Prior to the voting thereof, a proxy may be revoked by the person
executing such proxy by (i) filing with the Corporate Secretary of Craig
Corporation, prior to the commencement of the Annual Meeting, either a written
notice of revocation or a duly executed proxy bearing a later date or (ii) by
voting in person at the Annual Meeting. Craig shall make available for
examination at its principal executive offices located at 550 S. Hope St.,
Suite 1825, Los Angeles, California 90071, at least ten days prior to the date
of the Annual Meeting, a list of the stockholders entitled to vote at the
Annual Meeting.
Whether or not you expect to attend the Annual Meeting in person, please
fill in, sign, date and complete the enclosed proxy card and return it
promptly in the accompanying postage prepaid, pre-addressed envelope, to
assure that your shares will be represented.
By Order of the Board of Directors
/s/ Robin W. Skophammer
Robin W. Skophammer
Secretary
November 25, 1998
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE TO ENSURE THAT YOUR VOTES ARE COUNTED.
<PAGE>
CRAIG CORPORATION
550 SOUTH HOPE STREET, SUITE L825
LOS ANGELES, CA 9007L
(2L3) 239-0555
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 15, 1998
PERSONS MAKING THE SOLICITATION
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Craig Corporation (the "Company") of proxies for use at
the Annual Meeting of Stockholders to be held on Tuesday, December 15, 1998,
and at any adjournment or postponement thereof at the Regal Biltmore Hotel,
506 South Grand Avenue, in Los Angeles, California. This proxy statement is
first being mailed to stockholders on or about November 25, 1998. You are
requested to sign, date and return the enclosed proxy card in order to ensure
that your shares are represented at the meeting.
Shares represented by properly executed proxies received by Citadel will be
voted at the Annual Meeting in the manner specified therein or, if no
instructions are marked on the enclosed proxy card, FOR each of the nominees
for director as identified on such card and FOR each of the other proposals on
such card. Although management does not know of any other matter to be acted
upon at the Annual Meeting, shares represented by valid proxies will be voted
by the persons named on the accompanying proxy card in accordance with their
respective best judgments with respect to any other matters that may properly
come before the Annual Meeting.
Execution of a proxy will not in any way affect a stockholder's right to
attend the Annual Meeting and vote in person, and any person giving a proxy
has the right to revoke it at any time before it is exercised by (i) filing
with the Corporate Secretary of Citadel, prior to the commencement of the
Annual Meeting, a duly executed instrument dated subsequent to such proxy
revoking the same or a duly executed proxy bearing a later date or
(ii) attending the Annual Meeting and voting in person.
In addition to the solicitation by mail, regular employees of the Company
and its Transfer Agent may solicit proxies in person or by telephone without
additional compensation. The Company also will pay persons holding shares in
their own names or in the names of their nominees, but not owning such shares
beneficially, for the expenses of forwarding soliciting materials to the
beneficial owners. The Company will bear all expenses incurred in soliciting
its stockholders.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only holders of record of Common Stock and Class A Common Preference Stock
of the Company at the close of business on November 18, 1998 are entitled to
notice of and to vote at the meeting or any adjournment thereof. The
outstanding voting securities of the Company on that date consisted of
3,628,608 shares of Common Stock, $.25 par value and 7,058,408 shares of Class
A Common Preference Stock, $.01 par value. Stockholders are entitled to 30
votes for each share of Common Stock and 1 vote for each share of Class A
Common Preference Stock held of record.
The presence, in person or by proxy, of the holders of shares of stock
entitling them to cast a majority of the votes entitled to be cast at the
Annual Meeting will constitute a quorum. Abstentions and broker non-votes will
be counted for purposes of determining the presence of a quorum. Abstentions
and broker non-votes will not be counted either for or against the proposal
when determining whether a particular proposal has been approved.
<PAGE>
The following table sets forth information as of November 18, 1998 with
respect to persons known by the Company to own beneficially more than 5% of
the outstanding shares of Common Stock or Class A Common Preference Stock of
the Company and as to the number of shares beneficially owned by each director
and nominee, each of the Company's directors and most highly compensated
executive officers and all the officers and directors as a group. All persons
listed, unless otherwise stated, have sole voting and investment power with
respect to Common Stock and Class A Common Preference Stock beneficially owned
by them.
<TABLE>
<CAPTION>
CLASS A COMMON
COMMON STOCK PREFERENCE STOCK
----------------------- -----------------------
PERCENTAGE
AMOUNT PERCENTAGE AMOUNT OF CLASS A
NAME AND ADDRESS OF BENEFICIAL BENEFICIALLY COMMON BENEFICIALLY COMMON
OWNER OWNED STOCK(11) OWNED STOCK(11)
- ------------------------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
James J. Cotter(1)............ 2,358,242 55.6% 2,021,702 28.4%
120 N. Robertson Blvd.
Los Angeles, CA 90048
Hecco Ventures(1)............. 617,438 14.6% 720,838 10.1%
120 N. Robertson Blvd.
Los Angeles, CA 90048
Dimensional Fund Advisors,
Inc.(2)...................... 242,300 5.7% 242,300 3.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
First Pacific Advisors,
Inc.(3)...................... 910,400 12.8%
11400 West Olympic Blvd.
Suite 1200
Los Angeles, CA 90064
Lawndale Capital Management,
Inc.(4)...................... * 444,300 6.2%
One Sansome St. Ste. 3900
San Francisco, CA 94104
Margaret Cotter(5)(6)......... 17,000 * 17,000 *
S. Craig Tompkins(5)(7)....... * 37,000 *
William D. Gould(5)(8)........ 17,000 * 19,400 *
Gerard P. Laheney(5)(7)....... 15,000 * 15,000
Ralph B. Perry III(5)(9)...... 2,600 * 24,600 *
Robin W. Skophammer(5)(6) 30,000 *
Ellen M. Cotter(5)............ 1,000 * 1,000
Officers and Directors as a
group (8 persons)(10)........ 2,399,592 56.6% 2,124,452 29.9%
</TABLE>
- --------
*Percentages less than 1% have not been indicated.
(1) Includes the Common Stock and Class A Common Preference Stock owned by
Hecco Ventures I ("HVI"), which is a California general partnership.
James J. Cotter is a general partner of a limited partnership which is
the general partner of HVI and, accordingly, has shared voting and
dispositive power with respect to such shares held by HVI. With respect
to the Common Stock held by Mr. Cotter, the shares also include
exercisable options to acquire 594,940 shares held by Mr. Cotter.
Margaret Cotter, a director, and Ellen Cotter, Vice President of Business
Affairs for the Company, are the daughters of James J. Cotter, and each
are limited partners in the above referenced partnership.
(2) According to filings made with the SEC, Dimensional Fund Advisors Inc.
("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of 242,300 shares of Craig Corporation Stock as of
December 31, 1997, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors Inc. serves as investment
2
<PAGE>
manager. Dimensional disclaims beneficial ownership of all such shares. On
February 5, 1998 all shareholders of record received one share of Class A
Common Preference for each share of Common or Class A Common Preference
Stock held by such shareholder. The 242,300 shares of Class A Common
Preference indicated as owned by Dimensional assumes such Class A Common
Preference Stock distribution was received by Dimensional with respect to
the 242,300 Common shares held by Dimensional at December 31, 1997, and
that no subsequent disposition by Dimensional has occurred.
(3) According to filings made with the SEC, includes 320,000 shares which are
owned by FPA Capital Fund, Inc. over which First Pacific Advisors, Inc.
has shared dispositive power.
(4) According to report on Schedule 13D dated September 17, 1998, includes
376,600 Class A Common Preference Shares which are owned by Diamond A
Partners, L.P. ("DAP") and 67,700 Class A Common Preference Shares and
which are owned by Diamond A Investors L.P. ("DAI") but have shared
voting and dispositive power with Lawndale Capital Management, Inc. and
Andrew E. Shapiro. Lawndale Capital Management, Inc., is the investment
advisor to DAP and DAI, which are investment limited partnerships.
(5) Addresses are c/o Craig Corporation, 550 South Hope Street, Suite 1825,
Los Angeles, California 9007l.
(6) Includes 41,250 and 11,250 shares not currently vested to purchase Common
Stock and Class A Common Preference stock, respectively. With regard to
shares held by Ms. Cotter, amounts include 2,000 shares of Common Stock
and 2,000 shares of Class A Common Preference Stock held directly and
3,750 shares of both Common and Class A Common Preference Stock subject
to a vested stock option.
(7) Represents shares subject to an exercisable option to purchase Common
Stock and/or Class A Common Preference Stock. With respect to shares held
by Mr. Tompkins, amount includes 2,000 shares held directly.
(8) Includes 2,000 shares of Common Stock and 4,400 shares of Class A Common
Preference Stock owned by a trust for the benefit of Mr. Gould's
children, of which he is co-trustee; Mr. Gould disclaims beneficial
ownership of the shares held in the trust.
(9) Includes 600 shares of Common Stock and 600 shares of Class A Common
Preference Stock owned by Mr. Perry's wife, as to which Mr. Perry
disclaims beneficial ownership.
(10) The common shares beneficially owned by officers and directors as a group
exclude 41,250 shares of non-vested options, 30,000 held by Ms.
Skophammer and 11,250 held by Ms. Margaret Cotter. The Class A Common
Preference shares beneficially owned exclude 11,250 shares of non-vested
stock options held by Ms. Margaret Cotter.
(11) All shares subject to stock options currently exercisable, or which
become exercisable within 60 days of November 18, 1998, are deemed to be
outstanding for the purpose of determining the percentage of each class
held by such person. Such vested option shares, together with shares
outstanding, totaled 4,242,298 shares of Common Stock and 7,112,158
shares of Class A Common Preference Stock.
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting. The term of office
for all nominees listed below will expire at the next Annual Meeting to be
held in 1999 or when their successors are elected and qualified. Unless
otherwise instructed, proxy holders will vote the proxies received by them for
the election of the nominees below, whom are currently directors of the
Company. If any nominee becomes unavailable for any reason, it is intended
that the proxies will be voted for a substitute nominee designated by the
Board of Directors. The Board of Directors has no reason to believe the
nominees named will be unable to serve if elected. Any vacancy occurring on
the Board of Directors for any reason may be filled by a majority of the
directors then in office until the next Annual Meeting of Stockholders.
3
<PAGE>
The names of the nominees for director, together with certain information
regarding them, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
James J. Cotter.................. 60 Chairman of the Board
S. Craig Tompkins................ 47 President and a Director
William D. Gould................. 60 Director(1)(2)
Gerard P. Laheney................ 60 Director(1)
Ralph B. Perry III............... 62 Director(2)
Margaret Cotter.................. 31 Director
</TABLE>
- --------
(1) Member of the Compensation Committee. The Compensation Committee's
functions include the review of all compensation and employment agreements
with the Company's officers and directors. The Compensation Committee held
one meeting during the year ended December 31, 1997.
(2) Member of the Audit Committee. The Audit Committee held one meeting during
the fiscal year ended December 31, 1997. The Audit Committee's functions
include the recommendation of independent auditors to the Board and
approval of the scope of their services and proposed fees for such
services.
During the year ended December 31, 1997, the Board of Directors held five
meetings. Each director attended at least 80% of the meetings of the Board of
Directors and all committees on which he served.
Mr. Cotter has been a Director of Craig since 1985 and the Chairman of the
Board of Directors since 1988. Mr. Cotter has been Chairman of the Board of
Reading Entertainment, Inc. ("REI," and collectively with its predecessor,
Reading Company, "Reading") since its formation and of Reading since December
1991 and a director since September 1990. Between 1987 and September 1997, Mr.
Cotter served as a director of Stater Bros. Holdings Inc. ("SBH") and its
predecessors (a retail grocery chain). Mr. Cotter has been a director and the
Chairman of the Board of Citadel Holding Corporation ("Citadel") since 1991.
From October 1991 to June 1992, Mr. Cotter also served as the acting Chairman
of Citadel's then wholly-owned subsidiary, Fidelity Federal Bank, FSB
("Fidelity"), and served as a director of Fidelity until December 1993. Mr.
Cotter is the Chairman and director of Citadel Agriculture, Inc., a wholly
owned subsidiary of Citadel ("CAI"); the Chairman and member of the Management
Committees of each of three agricultural partnerships (the "Agricultural
Partnerships") which constitute the principal assets of CAI, and the Chairman
and a member of the Management Committee of Big 4 Farming, LLC, a farm
management company, 80% owned by Citadel and 20% by Visalia LLC and formed to
manage the properties owned by the Agricultural Partnerships. From 1988
through January 1993, Mr. Cotter also served as the President and a director
of Cecelia Packing Corporation (a citrus grower and packer), a company wholly
owned by Mr. Cotter, and is the Managing Director of Visalia, LLC, which holds
a 20% interest in each of the Agricultural Partnerships. Mr. Cotter has been a
director and Chief Executive Officer of Townhouse Cinemas Corporation (motion
picture exhibition) since 1987, the parent of City Cinemas. Mr. Cotter is also
an Executive Vice President and a director of the Decurion Corporation (motion
picture exhibition) since 1969 and of Pacific Theatres, Inc., a wholly-owned
subsidiary of Decurion Corporation.
Mr. Tompkins has been President and a director of Craig and a director of
Reading since March 1993 and served as the President of Reading between March
1993 and January 1997. Since January 1997 he has served as the Vice Chairman
of REI. Prior thereto, Mr. Tompkins was a partner in the law firm of Gibson,
Dunn & Crutcher for more than five years. Mr. Tompkins has been a director of
Citadel since May 1993, became Vice Chairman in August 1994 and Secretary,
Treasurer and Principal Accounting Officer in September 1994. In 1997, Mr.
Tompkins became the Vice Chairman and President of Citadel Agriculture, Inc.,
and a member of the Management Committee of Big 4 Farming, LLC and of each of
the Agricultural Partnerships. For administrative convenience, Mr. Tompkins
also serves as an Assistant Secretary of Big 4 Ranch, Inc. and Visalia LLC. He
has been a director of G&L Realty Corp., a New York Stock Exchange listed
REIT, since December 1993 and serves as the Chairman of the Audit Committee
and the Strategic Planning Committee of that company.
Ms. Margaret Cotter is a member of the New York State Bar and, since
September 1997, has been Vice President of Cecelia Packing Corporation, a
Company wholly owned by Mr. James J. Cotter engaged in the citrus
4
<PAGE>
packing and marketing business in Fresno, California. From February 1994 until
September 1997, Ms. Cotter was an Assistant District Attorney for King's
County in Brooklyn, New York. Ms. Cotter graduated from Georgetown University
Law Center in 1993 and is the daughter of Mr. James J. Cotter. Ms. Cotter, is
a limited partner in James J. Cotter, Ltd. (Mr. Cotter is the general
partner), which is a general partner of Hecco Ventures I. James J. Cotter has
shared voting power with respect to the Company's equity shares held by Hecco
Ventures I. Ms. Cotter serves as a director of Big 4 Ranch, Inc. and is a
member of Visalia LLC.
Mr. Gould has been a director of the Company since 1985, and is Chairman of
the Compensation Committee. Mr. Gould served as a director of Citadel between
June 1995 and June 1996 and in December 1997 became a director of Big 4 Ranch,
Inc.. Since July 1986, Mr. Gould has been a member of Troy & Gould
Professional Corporation, a law firm that the Company has retained during its
last fiscal year.
Mr. Laheney has been a director of the Company since 1990. Mr. Laheney
served as a director of Reading Company between November 1993 and June 1996.
In November 1998, Mr. Laheney became Chairman and President of Big 4 Ranch,
Inc. and a member of the management committee of each of the Agricultural
Partnerships. Between July 1995 and July 1996, Mr. Laheney was a consultant
for Portfolio Resources Group overseeing global equities, fixed income and
foreign exchange investments. Mr. Laheney has been President of Aegis
Investment Management Company, an investment advisory firm specializing in
global investment portfolio management since August 1993. Mr. Laheney was Vice
President of The Partners Financial Group, Inc., between December 1993 through
June 1995 and a Vice President of Dean Witter Reynolds from April 1990 until
December 1993.
Mr. Perry has been a director of the Company since 1985 and is Chairman of
the Audit Committee. Mr. Perry has been a member in the Los Angeles,
California law firm of Graven Perry Block Brody & Qualls, a professional
corporation, since 1968. He served as a director of Citadel Holding
Corporation from August 1985 through April 1993 and has served as a director
of Fidelity Federal Bank (a subsidiary of Bank Plus since May 1996) since
August 1985 and of Reading Company between December 1988 and June 1996.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's officers, directors and persons who own more than 10%
of the Company's Common Stock or Class A Common Preference Stock to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). The Commission's rules also require such
reporting persons to furnish the Company with a copy of all Section 16(a)
forms they file.
Based solely on a review of the copies of the forms which the Company
received and written representations from certain reporting persons, the
Company believes that, during the year ended December 31, 1997 all filing
requirements applicable to reporting persons were fulfilled except for Ms.
Margaret Cotter, who did not make a timely filing on Form 3 upon her election
to the Board of Directors.
DIRECTOR COMPENSATION
Directors who are not officers or employees of the Company receive for
services as a Director a fee of $25,000 per annum. Mr. Laheney received
$24,000 as additional fees in 1997 for his participation in consulting the
Company concerning certain retirement benefit matters. In addition, Mr. Gould
and Ms. Margaret Cotter, who serve as directors of Big 4 Ranch, Inc., receive
$2,000 annually from that Company and Mr. Laheney who serves as the President
and Chairman of the Board of Big 4 Ranch, Inc. earns $1,000 monthly for such
services.
THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES.
5
<PAGE>
EXECUTIVE OFFICERS
The names of the executive officers of the Company, other than the nominees
for director, together with certain information regarding them, are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Robin W. Skophammer..... 43 Chief Financial Officer, Treasurer and Secretary
Ellen M. Cotter......... 32 Vice President--Business Affairs
</TABLE>
Ms. Skophammer has been the Chief Financial Officer and Treasurer of Craig
since October 1991 and Secretary between September 1992 and June 1997. She
served as a Director of Stater Bros. Holdings Inc. between February 1993 and
March 1994. Prior to October 1991, Ms. Skophammer was a partner with KPMG Peat
Marwick.
Ms. Ellen Cotter has been the Vice President of Business Affairs of Craig
since August 1996 and since March 1998 is Vice President of Business Affairs
of Reading and Vice President of Angelika Cinemas, Inc. since May 1997. Prior
thereto, she was an attorney specializing in corporate law with White & Case,
a New York law firm. Ms. Cotter is the daughter of Mr. James J. Cotter. Ms.
Cotter is a member of Visalia LLC and a limited partner in James J. Cotter,
Ltd. (Mr. Cotter is the general partner), which is a general partner of Hecco
Ventures I. James J. Cotter has shared voting power with respect to the
Company's equity shares held by Hecco Ventures I.
In addition to Mr. Cotter, Mr. Tompkins and Ms. Ellen Cotter, who are also
officers of Craig, certain principal executive officers of Reading, the
Company's majority owned subsidiary, are as follows:
Mr. Robert F. Smerling has been President of Reading Entertainment since
January 1997 and has served as President of Reading Cinemas, Inc. since
November 1994. Mr. Smerling also serves as the President of CineVista. Mr.
Smerling served as president of Loews Theater Management Corporation, a
subsidiary of Sony Corporation, from May 1990 until November 1994. Mr.
Smerling also serves as President and Chief Executive Officer of City Cinemas,
a motion picture exhibitor located in New York City, New York which provides
management services to Reading. City Cinemas is an affiliate of James J.
Cotter and has entered into an Executive Sharing Agreement with Reading with
respect to the services of Mr. Smerling.
Mr. John Rochester has been Chief Executive Officer of Reading Australia
since November 1995. From 1990 through 1995, Mr. Rochester was the Managing
Director of Television & Media Services Ltd. (formerly Hoyts Entertainment
Ltd.). He also served in several other executive offices for that organization
since 1987.
Mr. James Wunderle has been Chief Financial Officer since January 1987 and
Executive Vice President, Treasurer and Chief Financial Officer since December
1988. He has been Treasurer since March 1986.
In addition, Reading has contractual arrangements with certain other
individuals and/or certain affiliated companies which make available to
Reading consulting services including Mr. Steve Wesson.
Mr. Steve Wesson has been the President and Chief Financial Officer of
Citadel since August 1994. Prior to his employment by Citadel in 1993, Mr.
Wesson was the Chief Executive Officer of Burton Properties Trust, Inc., the
U.S. real estate subsidiary of The Burton Group PLC, from 1989. The Company
owns approximately 48% of the outstanding common stock of Citadel on a
consolidated basis with Reading and Reading receives real estate consulting
services from Citadel pursuant to an agreement. Mr. Wesson also serves as an
officer of a wholly-owned subsidiary of REI and during 1997 received an option
to acquire 20,000 shares of REI Common Stock at an exercise price of $12.875
per share.
6
<PAGE>
EXECUTIVE COMPENSATION
I. Summary Compensation Table
The following table shows, for the designated periods, the cash compensation
paid by the Company, as well as certain other compensation paid or accrued for
those years, to the Chairman of the Board and each of the most highly
compensated executive officers of Craig whose compensation exceeded $100,000
in all capacities in which they served. Information is included for the three
month period ended December 31, 1995 due to the fact that in September 1996
the Company changed its fiscal year end from September 30 to December 31 for
the year 1996 and years subsequent thereto. As a result of Craig increasing
its ownership in Reading, to greater than 50% in Fiscal 1996, Craig reports
its ownership interest on a consolidated basis. Accordingly, the officers
listed below for the years ended December 31, 1997 and 1996 include certain
officers of Reading.
<TABLE>
<CAPTION>
LONG
TERM
ANNUAL COMPENSATION AWARDS
----------------------------------------- --------
OTHER ANNUAL
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS
POSITION PERIOD ($) ($) (1)($) (#)
- ------------------ ---------- -------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
EXECUTIVE OFFICERS OF
CRAIG:
JAMES J. COTTER:
Chairman of the Board
Craig................ Dec. 1997 $350,000(2)
Dec. 1996 350,000(2)
Dec. 1995 87,500(2)
Sept. 1995 350,000(2) 300,000 (6)
(175,000)(6)
Chairman of the Board
Reading(3)........... Dec. 1997 $475,000 $150,000 460,000 (9)
Dec. 1996 150,000
Dec. 1995 37,500
Sept. 1995 150,000
Director of SBH(3).... Dec. 1996 $ 25,550
Dec. 1995 6,250
Dec. 1995 25,000
Chairman of the Board
Citadel(3)........... Dec. 1997 $ 45,000
Dec. 1996 45,000
Dec. 1995 11,250
Sept. 1995 $192,500 52,243
S. CRAIG TOMPKINS(4):
President, Craig...... Dec. 1997 $180,000
Dec. 1996 180,000
Dec. 1995 45,000
Sept. 1995 180,000 $ 80,000
Vice Chairman of the
Board, Reading(3).... Dec. 1997 $180,000 20,000 (9)
Dec. 1996 180,000
Dec. 1995 45,000
Sept. 1995 180,000
Vice Chairman of the
Board, Citadel(3).... Dec. 1997 $ 40,000
Dec. 1996 35,000
Dec. 1995 8,750
Sept. 1995 $ 60,000 41,184
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
LONG
TERM
ANNUAL COMPENSATION AWARDS
---------------------------------------- -------
OTHER ANNUAL
SALARY BONUS COMPENSATION OPTIONS
NAME AND PRINCIPAL POSITION PERIOD ($) ($) (1)($) (#)
- --------------------------- ---------- -------- ------- ------------ -------
<S> <C> <C> <C> <C> <C>
ROBIN SKOPHAMMER(5):
Chief Financial Officer
Craig.................... Dec. 1997 $165,000 $30,000
Dec. 1996 165,000
Dec. 1995 41,200
Sept. 1995 15,000 $15,000
EXECUTIVE OFFICERS OF READ-
ING
ROBERT F. SMERLING(8)
President, Reading Enter-
tainment Inc. ........... Dec. 1997 $175,000
Dec. 1996 175,000 $60,000 35,000(9)
B. JOHN ROCHESTER(7)
President and Chief Execu-
tive Officer,
Reading Australia Pty
Ltd. .................... Dec. 1997 $130,000
Dec. 1996 156,620
JAMES A. WUNDERLE(8)
Chief Financial Officer
and Treasurer of REI...... Dec. 1997 $170,000 $ 5,000 17,000(9)
Dec. 1996 130,000 70,000
</TABLE>
- --------
(1) Excludes perquisites if the aggregate amount of such annual compensation
to the executive did not exceed the lesser of $50,000 or 10% of the annual
salary plus bonus, if less.
(2) Amount is paid pursuant to a consulting agreement between the Company and
Mr. James J. Cotter which expired on September 30, 1997. The Company and
Mr. Cotter have agreed to continue the consulting arrangement on a month-
to-month basis for a monthly fee of approximately $29,166. The Company
owns a condominium in a high-rise building, located in Hollywood,
California, which the Company uses as an executive office, and which is
personally used from time to time by the Chairman of the Board. Since the
incremental cost to the Company of Mr. Cotter's personal use of these
facilities does not exceed $50,000 or 10% of his annual consulting fee,
the cost has not been included as compensation in the table.
(3) Reading Entertainment, Inc., is a majority owned subsidiary of Craig.
Stater Bros. Holdings Inc. ("SBH") and Citadel Holding Corporation
("Citadel") are considered affiliates of Craig, and accordingly, amounts
paid to or earned, by the listed executives with respect to their services
to these companies are included in this schedule. As of December 31, 1997,
Craig has no liability to the individuals for these amounts. All amounts
reported are liabilities or have been paid directly by the respective
company to the individuals involved for services rendered in the
capacities outlined. Any shares listed as option awards refer to that
company's securities. In January 1998, Mr. Cotter and Mr. Tompkins were
granted bonuses of $200,000 and $50,000, respectively, from Citadel.
(4) Mr. Tompkins was elected as the President of the Company and was appointed
to the Board of Directors of the Company on February 26, 1993. On that
same date, he was elected by the Directors of Reading Company as the
President and as a member of the Board of Directors of that corporation.
Effective January 17, 1997, Mr. Tompkins was appointed Vice Chairman of
the Board of Directors of REI and Mr. Smerling was appointed President of
REI. While no formal written agreement exists as to the terms of Mr.
Tompkins employment in the case of his employment by Craig and Reading,
Mr. Tompkins is entitled to his annual base salary from each respective
company for a period of a year in the event that his employment is
voluntarily terminated and no change of control has occurred. Mr. Tompkins
is entitled to a severance payment equal to two years his base salary in
the event of a change of control of Craig, and to a two year severance
payment in the case of a change of control of Reading.
(5) Ms. Skophammer and Craig entered into an employment agreement which
provides for pension benefits recognizing that the Company does not
currently have a pension plan. Craig agreed to create a plan in which
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<PAGE>
Ms. Skophammer will be provided with a pension benefit commensurate with
her salary and position. In addition, the agreement provides that in the
event of termination by Craig given for any reason other than death,
Ms. Skophammer would be entitled to receive on the date of termination her
annual base compensation or in the event of a merger, acquisition or any
restructuring of Craig in which there is a change of control, as defined, a
severance payment equal to two years base compensation. In consideration of
Ms. Skophammer's agreement to not exercise an option to purchase 15,000
Common Shares, the Company paid to Ms. Skophammer $30,000 in January 1997.
(6) In June 1995, in consideration of, among other things, Mr. Cotter's
agreement to cancel his previously vested option rights and to extend his
consulting agreement with Craig for an additional year with no increase in
compensation, the Board canceled an option to purchase 175,000 shares of
Class A Common Preference Stock and approved the grant of an option to
acquire 300,000 shares of Craig's Common Stock at an exercise price of
$11.75 per share. As a result of the stock distribution in February 1998,
such option to purchase 300,000 Common Shares at $11.75 per share was
adjusted to 594,940 Common shares at an average exercise price of $5.92
per share.
(7) Mr. Rochester is employed under the terms of an employment contract with
an initial term of two years beginning January 1, 1996, with automatic
renewal terms of one year each. Mr. Rochester's base salary is A$200,0000,
which amount is included in the table based on the U.S. dollar conversion
rate. The agreement provides for a one-time incentive payment to Mr.
Rochester after the fourth anniversary of the agreement, based, subject to
certain adjustments, on a percentage of a multiple of the cash flow
achieved by the Company's Australian theater operations. Under the
agreement, in the event Mr. Rochester's employment is terminated by the
Company without cause, he will be entitled to receive such incentive
payment plus 17 payments, each equal to his monthly remuneration, if such
termination is during the initial term, or 11 such monthly payments if
such termination occurs thereafter. Mr. Rochester is entitled to receive a
lump sum distribution of such amounts, as applicable, if Reading withdraws
from Australia and he is not granted employment under comparable terms by
any successor to Reading's operations in Australia.
(8) Mr. Smerling was appointed President of REI effective January 17, 1997.
Mr. Smerling also serves as President of City Cinemas from which he is
paid separately. City Cinemas provides management services to Reading for
a fee. Messrs. Smerling and Wunderle are entitled to receive a payment
equal to a year's annual base salary in the event their individual
employment with Reading is involuntarily terminated.
(9) In September 1997, the shareholders of REI approved the grant of an option
to Mr. Cotter to purchase, subject to various conditions and certain
contingencies, up to 460,000 shares of REI Common Stock at $12.80 per
share. In addition, the shareholders of REI approved a 1997 Equity
Incentive Plan under which Messrs. Smerling, Wunderle and Tompkins as
employees of Reading were granted incentive stock options to exercise REI
common stock, subject to vesting conditions, at $12.80 per share in
amounts as detailed in the table. Messrs. Tompkins, Smerling and Wunderle
surrendered non-qualified options to purchase 17,500, 15,000 and 5,000
shares, respectively of REI stock in connection to such grant.
II. Option Grant Table
The following table contains information concerning the grant of stock
options by the Company during 1997.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE
% OF TOTAL APPRECIATION
OPTIONS OPTIONS EXERCISE FOR OPTION TERM
GRANTED GRANTED IN PRICE EXPIRATION ---------------
NAME (#) FISCAL YEAR ($ /SH) DATE 5% 10%
- ---- ------- ----------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Margaret Cotter...... 15,000(1) 100% $19.8125 12/15/2008 186,900 523,650
</TABLE>
- --------
(1) Represents an option to acquire shares of the Company's Common Stock
granted upon election to the Board of Directors in December 1997. On
February 5, 1998, the Company distributed a stock dividend of one share of
Class A Common Preference Stock to all shareholders of record on Such
grant was made prior to January 5, 1998. Ms. Cotter's grant to purchase
15,000 shares of Common Stock at $19.8125 was adjusted to reflect such
distribution by increasing the number of shares available to 15,000 Common
shares at $10.07 per share and 15,000 shares of Class A Common Preference
shares at $9.74 per share.
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<PAGE>
During Fiscal 1997, the expiration date of Mr. Laheney's options to purchase
15,000 shares of Common Stock at $13.875 per share were extended to October
1999. The stock dividend of February 5, 1998 described above resulted in an
adjustment to Mr. Laheney's grant to purchase 15,000 shares of Common Stock by
increasing the number of shares available to 15,000 Common Shares at $7.05 per
share, respectively, and 15,000 shares of Class A Common Preference shares at
$6.82 per share, respectively.
In February of 1998, Ms. Skophammer was granted an option to acquire 30,000
shares of Common Stock at an exercise price of $9.50 per share.
III. Option Exercises and Year-end Table
The following sets forth information with respect to the executives named in
the Summary Compensation Table, concerning the exercise of options during the
year ended December 31, 1997 and the and unexercised options as of December
31, 1997:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTION AT IN-THE-MONEY AT
DECEMBER 31, 1997 DECEMBER 31, 1997
SHARES EXERCISABLE/ EXERCISABLE/
NAME SECURITY EXERCISED UNEXERCISABLE(1) UNEXERCISABLE(1)
---- -------- --------- ----------------- -----------------
<S> <C> <C> <C> <C>
James J. Cotter......... Common Stock 0 300,000/0 $2,587,500/$0
S. Craig Tompkins....... Class A Common Preference Stock 0 17,500/0 $ 146,562/$0
</TABLE>
- --------
(1) Represents the amount by which the aggregate market price on December 31,
1997 of the shares subject to such options exceeded the exercise price of
such options. The Class A Common Preference Stock distribution on February
5, 1998 had the effect of increasing the number of shares exercisable by
Mr. Cotter and Mr. Tompkins to 594,940 common shares (at an adjusted
average exercise price of $5.92 per share), and 35,000 Class A Common
Preference shares, (at an adjusted exercise prices of $5.25 per share),
respectively.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently is composed of two directors, William
D. Gould and Gerard P. Laheney. Mr. Gould is a member of Troy & Gould
Professional Corporation, a law firm that Craig retained and paid
approximately $16,000 in Fiscal 1997. Messrs. Cotter and Tompkins serve as
members of REI's Board of Directors and, as directors, approve decisions of
REI's Compensation Committee with respect to compensation of REI's officers
and directors. Messrs. Cotter and Tompkins serve as members of Citadel Holding
Corporation's Board of Directors, and, as directors, approve decisions of
Citadel's Compensation Committee with respect to compensation of Citadel's
officers and directors. Mr. Cotter is a member of Citadel's Compensation
Committee.
The Company, together with Reading, owns a 49% interest in BRI and
Mr. Cotter and Mr. Tompkins each have a 1.6% beneficial interest in BRI.
Directors Messrs. Gould and Laheney and Ms. Margaret Cotter also serve as
directors and employees of BRI, from whom they receive compensation as
detailed under the caption "Director Compensation."
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS
In December 1997, Citadel capitalized a wholly owned subsidiary, Big 4
Ranch, Inc. ("BRI"), with a cash contribution of $1,200,000 and then
distributed 100% of the shares of Big 4 Ranch, Inc., to Citadel's common
shareholders of record as of the close of business on December 23, 1997, as a
spin-off dividend. The Consolidated Company received 2,213,043 shares or 33.4%
of BRI. In 1998, the Company increased such holdings to approximately 49%.
Also in 1998, Cecilia Packing owned by Mr. Cotter, and a trust of which
Mr. Tompkins is the Trustee and which is for the benefit of one of his
children, each acquired from a single seller shares representing an additional
1.6% of the outstanding shares of BRI, or 3.2% in the aggregate of such share.
Also, in December 1997, BRI (owning 40%), Citadel (owning 40%) and Visalia
LLC (owning 20%) entered into three general partnerships, which partnerships
acquired on December 31, 1997 certain agricultural properties located in Kern
County, California (purchase price amounting to approximately $7,600,000). The
acquisition was
10
<PAGE>
financed by a 10-year purchase money mortgage in the amount of $4,050,000, a
line of credit from Citadel and pro rata contributions from the partners.
Through its holdings in BRI, and Citadel, the Company owned approximately
26.7% of such partnerships at December 31, 1997 on a consolidated basis.
During 1998, the Company and REI, through additional purchases of Citadel and
BRI, increased such holdings to 38.8%. Visalia LLC is a limited liability
company controlled by Mr. James J. Cotter, the Chairman of the Board of Craig,
REI and Citadel, and owned by Mr. Cotter and certain members of his family.
The Partnerships have each retained Big 4 Farming LLC (owned 80% by Citadel
and 20% by Visalia LLC) to farm their properties. Certain officers and
directors of Craig and Reading are officers, directors or management committee
members of Citadel, BRI, Farming and/or the Agricultural Partnerships. Mr.
James J. Cotter is the Chairman and a Director of each of Citadel, Craig and
REI, and is also Chairman of the management committees of Farming and of each
of the Agricultural Partnerships. Mr. S. Craig Tompkins is the Vice Chairman
and a Director of each of Citadel and REI, the President and a Director of
Craig, the Principal Accounting Officer of Citadel, and a member of the
management committees of Farming and of each of the Agricultural Partnerships.
Mr. Gerard P. Laheney, a director, is the Chairman and President of BRI, and a
member of the management committee of each of the Agricultural Partnerships.
Mr. William Gould, a Director of Craig, is also a Director of BRI. Ms.
Margaret Cotter, a Director of Craig and the daughter of James J. Cotter, is
also the Secretary, Treasurer and Principal Accounting Officer and a Director
of BRI, a member of Visalia LLC and the Vice President of Cecelia. Ms. Cotter,
Mr. Gould and Mr. Laheney receive $4,000, $2,000 and $10,000, respectively, on
an annual basis for their services to BRI. As an administrative convenience,
Mr. Tompkins also serves as an assistant secretary of BRI for which he
receives no additional compensation.
Mr. Smerling serves as President of Reading and the Vice President,
Marketing of Reading, also serve in the same positions with City Cinemas, a
Manhattan-based motion picture theater exhibitor owned in equal parts by
James J. Cotter and Michael Forman. City Cinemas is an affiliate of Mr.
Cotter, Chairman of the Board of Craig and Reading. Reading, Cine Vista and
City Cinemas entered into an Executive Sharing Agreement pursuant to which Mr.
Smerling provides services to both Cine Vista and City Cinemas entities and
the cost of such services is shared equally by the parties, if such costs
cannot be allocated directly to such parties.
Reading acquired the Angelika Film Center on August 27, 1996. The theater is
owned jointly by Reading and Sutton Hill, a partnership affiliated with City
Cinemas. City Cinemas (also owned indirectly in equal parts by Messrs. Cotter
and Forman) operates Reading domestic theaters pursuant to management
agreements. Management fees paid to City Cinemas for the year ended December
31, 1997 amounted to approximately $370,000. Mr. Cotter is the principal
shareholder of Craig and a company owned by Mr. Forman and his family owns 17%
of Craig's currently outstanding Common Stock and 10.2% of Craig's Class A
Common Preference Stock.
Reading utilizes the services of certain Citadel employees, including the
President and Chief Executive Officer of Citadel, for real estate advisory
services. Reading pays Citadel for such services at a rate amounting to
$240,000 in fiscal 1997. In addition, Craig provided certain administrative
services and office rental to Citadel for which it was paid $96,000 for the
year ended December 31, 1997.
In 1996 and January 1997, Reading loaned Robert F. Smerling, President of
Reading, a total of $70,000 pursuant to an interest free promissory note
payable upon demand.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation policies and programs are designed to
attract and retain talented executives and motivate them to achieve the
Company's business objectives that the Board of Directors believes will
enhance stockholder value. Each of the Company's executive officers is
employed pursuant to employment agreements. The principal terms of these
arrangements, including salary and other base-level compensation, are
described herein under "Summary Compensation Table".
In 1996, Reading became a majority owned subsidiary of the Company. The
Compensation Committee of REI's Board of Directors is responsible for
compensation matters of employees of REI. Certain executives and
11
<PAGE>
consultants provide services to both Craig and REI. The compensation committee
of Craig considers compensation received from such majority subsidiary in
determining the Company executive compensation.
The Company's current compensation strategy is to supplement the executive
officers' base level compensation with periodic discretionary cash bonuses in
recognition of individual performance and stock option grants designed to link
the executives' long term compensation to appreciation in stockholder value
over time. To this end, the Compensation Committee from time to time
recommends to the Board of Directors the award of performance bonuses and
stock option grants to individual executive officers.
Periodic cash bonuses and stock option awards for executive officers of the
Company are determined primarily on the basis of the individual job
performance of the executive officers and achievement of the Company's
business objectives, but no particular weighting is given by the Compensation
Committee to individual performance versus the achievement of corporate
objectives. These variable elements in the compensation of the Company's
executive officers recognize individual contributions and are determined based
upon the level of the executive's responsibilities, the efficiency and
effectiveness with which he or she oversees the matters under his or her
supervision and the degree to which the officer has contributed to the
accomplishment of major tasks that advance the Company's goals. In light of
the nature of the executive officers' responsibilities, particularly the fact
that they have overall corporate policy-making and administrative
responsibilities but do not oversee operating businesses, the Compensation
Committee's assessment of Mr. Cotter's performance and the performance of
other executive officers is not based directly on corporate performance from a
financial point of view. However, the Company's financial performance is one
factor that affects the Compensation Committee's recommendation with respect
to the overall level of compensation to be made for all executive officers as
a group. In appropriate cases, the Compensation Committee takes into account
in making its recommendations compensation received by executive officers for
companies affiliated with the Company. Mr. Cotter, in his capacities as
Chairman of the Board and Chief Executive Officer, is involved in the
negotiation of employment arrangements with the Company's other executive
officers, reviews executive performance with the Compensation Committee and is
consulted with respect to the amounts of each other executive officer's
discretionary bonus and stock option award, if any.
Subject to an exception for "performance-based compensation", effective
January 1, 1994, corporations generally will be denied a deduction for federal
income tax purposes for compensation paid to senior executive officers to the
extent that such compensation exceeds $1 million. This law did not impact the
Compensation Committee's deliberations with respect to 1996 and for 1997 the
Company does not expect to pay any executive officer cash compensation in
excess of the deductibility limit. The Compensation Committee and the Board of
Directors, however, retain discretion and authorize the payment of
compensation that does not qualify for income tax deductibility.
William D. Gould
Gerard P. Laheney
12
<PAGE>
PERFORMANCE GRAPH
The information set forth below shall not be deemed incorporated by
reference by any general statement incorporating by reference the Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company incorporates
this information by reference, and shall not otherwise be deemed soliciting
material or be deemed filed under such Acts.
The following line graph compares the cumulative total stockholder return on
Craig Corporation's Common Stock and Class A Common Preference Stock from
September 30, 1992 through September 30, 1995, the three month period ended
December 31, 1995 and the years ended December 31, 1997 and 1996 against the
cumulative total return as calculated by the Center for Research in Securities
Prices ("CRSP") of (i) the New York Stock Exchange ("NYSE")/ American Stock
Exchange ("AMEX")/ NASDAQ Stock Market Index (U.S. Companies) and (ii) the
CRSP Total Return Index for NYSE/AMEX/NASDAQ, in the SIC Graph Code 7830-7839
(motion picture theaters and allied businesses), and (iii) the cumulative
return of the Company's former peer group, the CRSP Total Return Index for
NASDAQ/NYSE/AMEX SIC Code 5410-5419, Grocery stores.
The past performance shown for the Company's common stock and Class A Common
Preference Stock is not necessarily indicative of future performance.
CUMULATIVE RETURN FROM SEPTEMBER 1992 TO DECEMBER 1997
<TABLE>
<CAPTION>
Retail
Craig Stock Motion Food
Measurement Craig Class A Market Picture Group
Period Common Common Index Index Index
- ----------- ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C>
9/30/92 $100.00 $100.00 $100.00 $100.00 $100.00
9/30/93 148.40 160.71 117.30 170.30 103.70
9/30/94 145.20 155.36 119.90 154.90 112.40
9/30/95 121.00 126.78 154.60 191.40 130.20
12/31/95 127.40 128.57 162.00 196.20 139.40
12/31/96 185.50 200.00 196.40 224.20 177.90
12/31/97 262.10 269.64 257.10 255.30 240.40
</TABLE>
The graph assumes a one hundred dollar ($100) investment on September 30, 1992
and reinvestment of dividends on the date such dividends were declared.
13
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has examined, as independent auditors, the consolidated
financial statements of the Company since 1987. Ernst & Young LLP also serves
as auditors the Company's affiliate, Reading Entertainment, Inc. A
representative of Ernst & Young will attend the Annual Meeting of Stockholders
and will have the opportunity to make a statement if he or she desires to do
so and to respond to appropriate questions.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 1997 (the "Annual Report") and quarterly report for the three and
nine month periods ending September 30, 1998 are enclosed.
STOCKHOLDER PROPOSALS
Any stockholder who, in accordance with and subject to the provisions of the
proxy rules of the SEC, wishes to submit a proposal for inclusion in the
Company's proxy statement for its 1999 Annual Meeting of Stockholders, must
deliver such proposal in writing to the Secretary of the Company at the
Company's principal executive offices at 550 South Hope Street, Suite 1825,
Los Angeles, CA 90071, no later than July 27, 1999.
The Board of Directors will consider written nominations for directors from
stockholders. Nominations for the election of directors made by the
stockholders of the Company must be made by written notice delivered to the
Secretary of the Company at the Company's principal executive offices not less
than 120 days prior to the first anniversary of the immediately preceding
annual meeting of stockholders at which directors are elected. Such written
notice must set forth, among other things, the name, age, address and
principal occupation or employment of such nominee, the number of shares of
the Company's Common Stock owned by such nominee and such other information as
is required by the proxy rules of the SEC with respect to a nominee of the
Board of Directors. Nominations not made in accordance with the foregoing
procedure will not be valid.
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented
for consideration other than the matters described in the Notice of Annual
Meeting, but if any matters are properly presented, it is the intention of the
persons named in the accompany proxy to vote on such matters in accordance
with their judgment.
By Order of the Board of Directors,
/s/ Robin W. Skophammer
Robin W. Skophammer,
Secretary
Dated: November 25, 1998
14
<PAGE>
- -------------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CRAIG CORPORATION
The undersigned stockholder of Craig Corporation, a Delaware corporation (the
"Company"), acknowledges receipt of the Notice of the Annual Meeting of
Stockholders of the Company and the accompanying Proxy Statement, each dated
November 25, and the undersigned hereby revokes all prior proxies and hereby
constitutes and appoints James J. Cotter, S. Craig Tompkins and Robin W.
Skophammer, and each of them (each with full power of substitution and with
full power to act without the others and, if two or more of them act hereunder,
by action of a majority of them), the proxies of the undersigned, to represent
the undersigned and to vote all the shares of voting stock of the Company that
the undersigned would be entitled to vote at the Annual Meeting of Stockholders
of the Company to be held December 15, 1998 at 10:00 a.m. (Los Angeles time) at
the Regal Biltmore Hotel, 506 S. Grand Avenue, Los Angeles, California, and at
any adjournment or postponement thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
- -------------------------------------------------------------------------------
Please mark [X]
your votes as
indicated in
this example
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2.
WITHHELD
FOR FOR ALL
1. ELECTION OF DIRECTORS [_] [_]
NOMINEES: James J. Cotter,
S. Craig Tompkins,
Margaret Cotter, William D. Gould,
Gerard P. Laheney and
Ralph B. Perry III
2. In the proxies' discretion to vote upon any other matter as may properly come
before the meeting or any adjournment or postponement thereof. Management is
not aware of any other matter that will be presented for action at the
meeting.
WITHHELD FOR: (Write that nominee's name in the space provided below).
- ---------------------------------------------------------------------
Signature(s) __________________________ Date ________________________
NOTE: Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in the partnership name by
an authorized person.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
