U.S. Securities and Exchange Commission
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
[X] Filed by the Registrant
[X] Definitive Proxy Statement for the Annual Meeting to be Held
May 18, 1998.
CRAMER, INC.
KANSAS I.R.S. Employer Identification
Number 48-0638707
625 Adams Street, Kansas City, KS 66105
Telephone: (913) 621-6700
[X] No fee required.
<PAGE>
CRAMER, INC.
625 Adams Street
Kansas City, Kansas 66105
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 18, 1998
_________________________________________________________________
The Annual Meeting of Shareholders of Cramer, Inc. will be held
at the Cramer corporate headquarters, 625 Adams Street, Kansas
City, Kansas 66105, on the 18th day of May, 1998 at 2:30 p.m.
(local time) for the following purposes:
1. To elect six directors to serve until the next annual
meeting of shareholders and until their respective
successors shall have been elected and shall have qualified.
2. To ratify the appointment of Deloitte & Touche, L.L.P. as
independent auditors of the Company for the fiscal year
commencing January 1, 1998.
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The transfer books will not be closed. Only shareholders of
record as of the close of business on April 9, 1998 are entitled
to notice of and to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gary A. Rubin
Gary A. Rubin, Secretary
Kansas City, Kansas
April 17, 1998
If you do not expect to be present at the meeting, please
complete, date and sign the enclosed proxy and return it promptly
in the enclosed, stamped envelope.
<PAGE>
CRAMER, INC.
625 Adams Street
Kansas City, Kansas 66105
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 18, 1998
The accompanying form of proxy is solicited by the Board of
Directors of Cramer, Inc., a Kansas corporation, for use only at
the annual meeting of shareholders to be held at the Company's
corporate headquarters, 625 Adams Street, Kansas City, Kansas
66105, on the 18th day of May, 1998, at 2:30 p.m. (local time),
or any adjournments thereof. This Proxy Statement and form of
proxy are being mailed to shareholders commencing approximately
April 17, 1998.
Properly executed and dated proxies received prior to the meeting
will be voted in accordance with the instructions thereon. If no
instructions are given on the proxy with respect to the matters
to be acted upon, the shares represented by proxy will be voted
for the nominees for director designated on the proxy and for
approval of the auditors of the Company.
The Board of Directors may use the services of the Company's
directors, officers and other employees to solicit proxies
personally or by telephone and may request brokers, fiduciaries,
custodians and nominees to send proxies, proxy statements and
other material to their principals and reimburse them for their
out-of-pocket expenses in so doing. The cost of solicitation of
proxies shall be borne by the Company. A shareholder may revoke
his proxy at any time before the meeting by executing a proxy
with a later date, by giving written notice to the secretary of
the Company prior to the meeting, or by attending the meeting and
voting in person. Mere attendance at the meeting will not
constitute revocation of a proxy.
On April 9, 1998, the record date for determining shareholders
entitled to notice of and to vote at the meeting, the Company had
issued and outstanding 4,051,400 shares of common stock, each of
which is entitled to one vote on each matter to be voted on at
the meeting.
The affirmative vote of a plurality of the shares voting is
required to elect each director. The shareholders have
cumulative voting rights in electing directors. Under cumulative
voting, each shareholder has the right to as many votes as shall
equal the number of shares of stock owned by him/her times the
number of directors to be elected. A shareholder may cast all of
his/her votes for a single nominee or may distribute them among
two or more of the nominees as seen fit.
The affirmative vote of a majority of the shares voting is
required for approval of the appointment of the independent
auditors. An abstention will not be counted as a negative vote.
<PAGE>
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS:
The Company's Board of Directors is composed of six (6) members
elected to serve for terms as indicated. The officers and
directors of the Company are as follows:
Officer or
Director of
the Company Term to
Name Age Office Since Expire
James R. Zicarelli 46 Chairman of the 1992 1998
the Board & CEO
David E. Crandall 54 Director 1992 1998
James E. Workman 47 Director 1994 1998
Mark L. de Naray 47 Director 1997 1998
Ev F. Carter 70 Director 1997 1998
Robert J. Kovach 55 Director, 1997 1998
President and
Chief Operating
Officer
David C. Mettlach 45 Vice President, 1992
Business Development 1995
Gary A. Rubin 40 Vice President,
FinanceSecretary
& Treasurer
Past Business Experience
James R. Zicarelli President of Rotherwood Corporation, a
holding company and majority stockholder of
the Company. In addition, Mr. Zicarelli
serves as a board member or officer of The
American Company, Inc., Pacer Corporation,
and Sagebrush Technology Inc. Prior to 1992,
Mr. Zicarelli was the President of DRC, a
data services company.
David E. Crandall Chairman and CEO of PPA Industries, a
manufacturing Company located in Dallas,
Texas. In addition, Mr. Crandall serves as
board member of PPA Industries, Inc., and
Information Retrieval Methods.
James E. Workman President, Workman Consulting International.
Formerly General Manager, Pacer Trading
Company, a subsidiary of Rotherwood
Corporation. Prior to joining Pacer, Mr.
Workman was the Director of Purchasing, IAMS
Company. IAMS is a premium pet food
manufacturer.
<PAGE>
Ev F. Carter Retired CEO. President and CEO of Wadia
Digital, a manufacturer of audio equipment
from 1990 to 1997. Elected to Cramer's Board
of Directors in December 1997.
Mark L. de Naray From 1992 to present CEO and/or Board member
of Select Comfort Corporation, a manufacturer
and marketer of leading edge sleeping
systems. Elected to Cramer's Board in
December 1997.
Robert J. Kovach President and Chief Operating Officer of
Cramer since September 1997, Elected to the
Board of Directors in December 1997.
Formerly Vice President Operations with
Versa, a machine tool manufacturer.
David C. Mettlach Vice President of Cramer since October 1992.
Prior background in developing, marketing and
manufacturing contract furniture products for
Haworth and Universal Woods, Inc. These
products included seating lines, casegoods
(wood and metal) and panel systems.
Gary A. Rubin Vice President, Finance of Cramer since April
1995. Formerly Vice President, Finance and
Administration for a capital equipment
manufacturer and Senior Audit Manager for Deloitte
& Touche. Certified Public Accountant.
No director or officer has any family relationship with any other
director or officer.
Based on its review of Forms_3 and 4 and amendments thereto
furnished to the Company under Rule_16a-3(d) of the Securities
and Exchange Commission during the fiscal year ended December_31,
1997, and any Forms_5 and amendments thereto furnished to the
Company with respect to the 1997 fiscal year, the Company is not
aware of any person who, at any time during the 1997 fiscal year,
was a director, officer or beneficial owner of more than ten
percent of the Company's common stock and who failed to file on a
timely basis, as disclosed in such Forms, the reports required by
Section_16(a) of the Securities Exchange Act of 1934 during the
1997 fiscal year or prior years.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the ownership of the Company's
common stock by each person known to the Company to be the
beneficial owner of more than 5% of its outstanding common stock,
by individual directors and nominees for director of the Company,
and by the officers and directors of the Company as a group:
Amount and
Name and Nature of Percent
Title of Address Of Beneficial of
Class Beneficial Owner Ownership(a) Class(m)
Common Stock Rotherwood Corporation(b) 2,081,236 50.7%
Suite 225
7601 France Ave South
Edina, MN 55435
Common Stock James L. Marvin(c) 300,000 7.3%
Suite 203
155 West Lake Avenue
Colorado Springs, CO
80906
Common Stock David E. Crandall(d) 125,341 3.1%
8222 Douglas Avenue
Suite 660
Dallas, TX 75225
Common Stock James R. Zicarelli(e) 0 0%
Suite 225
7601 France Ave South
Edina, MN 55435
Common stock Mr. James E. Workman(f) 30,000 0.8%
2245 Rockingham Drive
Troy, OH 45373
Common stock Mr. Ev F. Carter(g) 10,000(h) 0%
143 Radio Road
River Falls, WI 54022
Common stock Mr. Robert Kovach(i) 0 0%
145 Pointe Road
Gladstone, MO 64116
Common stock Mr. Mark L. de Naray(j) 60,000(k) 1.4%
2420 Zircon Lane, North
Plymouth, MN 55447
All Officers and Directors
as a Group (8 persons) 225,341(l) 5.5%
<PAGE>
(a) Represents shares over which the designated individual has
investment and voting power.
(b) Rotherwood Corporation may be deemed a "parent" of the
Company by virtue of its percentage of stock ownership.
(c) Consists of 300,000 shares of common stock which are held by
Foothills Company, an affiliate of Mr. Marvin.
(d) Mr. Crandall is a Director of the Company.
(e) Mr. Zicarelli is a Director, Chairman and CEO of the Company
and an Officer of Rotherwood Corporation
(f) Mr. Workman is a Director of the Company.
(g) Mr. Carter is a Director of the Company.
(h) Includes options to purchase 10,000 shares of the Company,
which can be exercised immediately.
(i) Mr. Kovach is a Director of the Company and President and
Chief Operating Officer.
(j) Mr. de Naray is a Director of the Company.
(k) Includes options to purchase 40,000 shares of the common
stock. At March 31, 1998, 22,000 shares are vested and can
be exercised immediately. The remaining shares vest at a
rate of 1,500 shares a month for each month that Mr. de Nary
serves on the Company's Board of Directors.
(l) Includes options to purchase 70,000 shares of common stock.
At March 31, 1998, 32,000 shares are vested and can be
exercised immediately and the remaining 24,000 shares vest
at a rate of 1,000 shares a month over the next two years.
(m) Percentage based on common and common equivalent shares.
<PAGE>
I. ELECTION OF DIRECTORS
It is proposed that a Board of six (6) directors be elected, to
hold office until the next annual meeting of shareholders and
until their respective successors are elected and qualified. It
is intended that the accompanying form of proxy will be voted FOR
the election of the five nominees set forth below unless
direction to the contrary is given. In the event any such
nominee is unable or declines to serve, the proxy may be voted
for the election of another person in his/her place. The Board
of Directors knows of no reason to anticipate that any such
nominee will be unable to serve or will decline to serve.
The nominees for election to the Board of Directors are as
follows:
Year
Principal First Named
Name Age Occupation Director
David E. Crandall 53 Chairman and Founder
of PPA Industries 1992
Ev. F. Carter 70 Retired 1997
Mark de Naray 47 Member of the Board of
Directors - Select
Comfort Corporation 1997
Robert J. Kovach 55 President and COO of Cramer 1997
James R. Zicarelli 44 President of Rotherwood
Corporation, the Company's
majority owner and CEO of
the Company 1992
James E. Workman 47 President, Workman
Consulting International 1994
During the fiscal year ended December 31, 1997, five meetings of
the Board of Directors of the Company were held.
The Company's Board of Directors serves as the Audit Committee.
The functions performed by the Board as Audit Committee include
review of significant financial information of the Company,
review of the scope of the audit and oversight of the audit
function, and recommendation of the appointment of the
independent auditors of the Company.
The Directors of the Company serve the same function as a
Compensation Committee. The purpose of the committee is to
establish the compensation of the executive officers of the
Company.
No director missed any meetings of the Board of Directors in
1997.
<PAGE>
EXECUTIVE COMPENSATION
Board member James Zicarelli serves as the Company's CEO. Mr.
Zicarelli is an employee of Rotherwood Corporation and does not
receive any compensation from the Company for serving as CEO.
Mr. Zicarelli's compensation from Rotherwood is not specifically
related to Cramer's performance or the time spent by him in
Cramer management. However, the Company paid certain management
fees to Rotherwood in 1996 and 1997. See Item 12 of the Company's
annual report on Form 10-KSB being sent to shareholders with this
proxy for further discussion of Cramer's transactions with
Rotherwood.
SUMMARY COMPENSATION TABLE
The following table sets forth the salary and other compensation
earned in 1996 and 1997 by Mr. James Lockley, the Company's
former Vice President of Sales and Marketing. Mr. Lockley who
resigned effective February 23, 1998 was the only member of the
Company's executive staff who earned salary or bonus in excess of
$100,000 per year in 1996 or 1997.
Other Annual All Other
Year Salary Bonus Compensation Compensation
1996 $71,610 $ 0 /a/ $48 /b/
1997 $96,655 $15,000 /a/ $72 /b/
/a/ Did not exceed the lesser of $50,000 or 10% of Mr. Lockley's
1996 or 1997 salary and bonus.
/b/ Consists of the premiums paid on value in excess of $50,000
for a term-life insurance policy on Mr. Lockely's life
maintained by the Company for the benefit of Mr. Lockley's
estate.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or Rotherwood
receive $1000.00 for each Board meeting attended and are
reimbursed for their expenses related to such meetings.
Mr. Mark de Naray provides consulting services to the Company's
Workplace Design division. Total fees paid to Mr. de Naray
during 1997 were $5,000.00
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
By virtue of its 51% ownership of the Company's common stock,
Rotherwood Corporation (Rotherwood) may be deemed a "parent" of
the Company.
Mr. James Zicarelli, Chairman of the Company's Board of
Directors, has served as the Company's CEO since February 1995.
Mr. Zicarelli is an employee of Rotherwood. In 1995, Cramer
began paying fees to Rotherwood for management services including
those provided by Mr. Zicarelli. In 1996 and 1997, the Company
also paid fees to other affiliates of Rotherwood for consultation
and assistance provided in the area of Human Resources and Labor
Relations. In 1996 and 1997, certain employees of Cramer
provided operating and financial consulting services to other
subsidiaries of Rotherwood in return for fees paid to the
Company. Total amounts charged for the foregoing services were:
1997 1996
Paid by the Company to $98,000 $102,000
Rotherwood and
its affiliates
Paid to the Company by
Rotherwood and its
affiliates $66,000 $ 56,000
The Company believes that the amounts charged for services
provided or received were not less favorable than those charged
by third parties.
The company participates in a combined Rotherwood credit facility
with Mercantile Bank (see Management's Discussion and Analysis
and Note 3 to the 1997 Financial Statements incorporated by
reference herein).
<PAGE>
II. APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Deloitte &
Touche L.L.P. as independent auditors of the Company for the
fiscal year commencing January 1, 1998. Shareholders are
requested to signify their approval or disapproval of this
appointment; however, the vote of the shareholders will be
advisory only.
The financial statements of the Company for the fiscal years
ended December 31, 1997 were audited by Deloitte & Touche L.L.P.,
certified public accountants.
Representatives of Deloitte & Touche L.L.P. are expected to be
present at the annual meeting and are expected to be available to
respond to appropriate questions.
<PAGE>
III. OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors
knows of no other business which will be presented at the
meeting. If any other matters should be properly brought before
the meeting, it is the intention of the persons named in the
accompanying form of proxy to vote on such matters in accordance
with their best judgment.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders for the annual meeting of shareholders
of the Company in 1999 must be received by the Company for
inclusion in its Proxy Statement and form of proxy related to
that meeting by December 31, 1998.
ANNUAL REPORT
A copy of the Company's annual report on Form 10-KSB is being
mailed to shareholders concurrently with this Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gary A. Rubin
Gary A. Rubin, Secretary
April 17, 1998
DOCUMENTS AND INFORMATION INCORPORATED BY REFERENCE
The financial statements of the Company for the fiscal years
ended December 31, 1997 and 1996, together with the auditor's
report thereon, meeting the requirements of Item 310 of
Regulation S-B of the Securities and Exchange Commission, and
Management's Discussion and Analysis of Financial Condition and
Results of Operations, are included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1997
being sent to shareholders with this Proxy Statement and are
incorporated in this Proxy Statement by reference.
