<PAGE> 1
U.S. Securities and Exchange Commission
Washington, DC 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, 1999.
CRAMER, INC.
KANSAS I.R.S. EMPLOYER IDENTIFICATION
625 ADAMS STREET, KANSAS CITY, KS 66105 NUMBER 48-0638707
TELEPHONE: (913) 621-6700
[X] No fee required.
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[CRAMER LOGO]
CRAMER, INC.
625 Adams Street
Kansas City, Kansas 66105
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 18, 1999
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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, 1999 at 1:00 p.m. (local time) for the following purposes:
1. To elect four 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, 1999.
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 7, 1999 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 15, 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.
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[CRAMER LOGO]
CRAMER, INC.
625 Adams Street
Kansas City, Kansas 66105
- --------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 18, 1999
- --------------------------------------------------------------------------------
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, 1999, at 1:00 p.m. (local time), or
any adjournments thereof. This Proxy Statement and form of proxy are being
mailed to shareholders commencing approximately April 15, 1999.
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 7, 1999, 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.
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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 and will have no effect.
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 currently composed of five (5) members
elected to serve for terms as indicated. The officers and directors of the
Company are as follows:
<TABLE>
<CAPTION>
Officer or Director Term to
Name Age Office of the Company Since Expire
- ----------------------------- ------- ----------------------------------------- -------------------- -----------
<S> <C> <C> <C> <C>
James R. Zicarelli 47 Chairman of the Board & CEO 1992 1999
David E. Crandall 55 Director 1992 1999
James E. Workman 48 Director 1994 1999
Mark L. de Naray 48 Director 1997 1999
Robert J. Kovach 57 Director, President and Chief Operating
Officer 1997 1999
Jeffery Meyer 47 Vice President, Sales & Marketing
1998
David C. Mettlach 46 Vice President, Sales 1992
Gary A. Rubin 41 Vice President, Finance
Secretary & Treasurer 1995
</TABLE>
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> 5
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. Mr. de Naray's term expires
at the 1999 annual meeting and he is not
standing for reelection.
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.
Jeffery Meyer Vice President, Sales and Marketing of
Cramer since September 1998. Prior
background as national sales director -
retail operations for Hallmark Cards, the
leading greeting card manufacturer in the
United States.
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.
<PAGE> 6
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 executive officers named in the summary compensation table,
and by the officers and directors of the Company as a group:
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name and Address Beneficial of
Title of Class of Beneficial Owner Ownership(a) Class(k)
- -------------- ------------------- ------------ --------
<S> <C> <C> <C>
Common Stock Rotherwood Corporation(b) 2,081,236 50.6%
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 3.0%
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. Robert Kovach(g) 0 0%
145 Pointe Road
Gladstone, MO 64116
Common stock Mr. Mark L. de Naray(h) 60,000(i) 1.5%
2420 Zircon Lane, North
Plymouth, MN 55447
All Officers and Directors
as a Group (8 persons) 215,341(j) 5.2%
</TABLE>
<PAGE> 7
(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 that 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. Kovach is a Director of the Company and President and Chief Operating
Officer.
(h) Mr. de Naray is a Director of the Company.
(i) Includes options to purchase 60,000 shares of the common stock. As of
March 31, 1999, 40,000 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.
(j) Includes options to purchase 60,000 shares of common stock. 40,000 shares
are vested and can be exercised immediately and the remaining shares vest
at a rate of 1,500 shares a month over the next year.
(k) Percentage based on common and common equivalent shares.
<PAGE> 8
I. ELECTION OF DIRECTORS
The Board proposes that four (4) 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 Board recommends that you vote FOR the four nominees for directors listed
below:
<TABLE>
<CAPTION>
- -------------------------- --------- ------------------------------------------------- --------------
Year First
Named
Name Age Principal Occupation Director
- -------------------------- --------- ------------------------------------------------- --------------
<S> <C> <C> <C>
David E. Crandall 54 Chairman and Founder of PPA Industries 1992
- -------------------------- --------- ------------------------------------------------- --------------
Robert J. Kovach 57 President and COO of Cramer 1997
- -------------------------- --------- ------------------------------------------------- --------------
James R. Zicarelli 47 President of Rotherwood Corporation, the 1992
Company's majority owner and CEO of the Company
- -------------------------- --------- ------------------------------------------------- --------------
James E. Workman 48 President, Workman Consulting International 1994
- -------------------------- --------- ------------------------------------------------- --------------
</TABLE>
There is no arrangement or understanding between any director and any other
person regarding his selection as a director.
During the fiscal year ended December 31, 1998, four 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.
Directors Carter, Workman, de Naray, and Crandall each missed one of the
meetings of the Board of Directors in 1998.
<PAGE> 9
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 1997 and 1998. 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 1997
and 1998 by Mr. Robert Kovach, the Company's President. Mr. Kovach is the only
member of the Company's executive staff at the end of the 1998 fiscal year who
earned salary and/or bonus in excess of $100,000 in 1998 or 1997.
<TABLE>
<CAPTION>
Other Annual All Other
Year Salary Bonus Compensation Compensation
---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C>
1997 $25,378 $0 (a) $33 (b)
1998 $129,000 $9,000 (a) $132 (b)
</TABLE>
(a) Did not exceed the lesser of $50,000 or 10% of Mr. Kovach's 1997 or
1998 salary and bonus.
(b) Consists of the premiums paid on value in excess of $50,000 for a
term-life insurance policy on Mr. Kovach's life maintained by the
Company for the benefit of Mr. Kovach'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 related to marketing of the
Company's ergonomic keyboard products. Total fees paid to Mr. de Naray during
1998 and 1997 were $17,500.00 and $5,000.00, respectively.
<PAGE> 10
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 1997 and 1998, 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 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 that were charged for the foregoing services are:
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Paid by the Company to Rotherwood and its affiliates $ 90,000 $ 98,000
Paid to the Company by Rotherwood and its affiliates 0 66,000
</TABLE>
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 1998
Financial Statements incorporated by reference herein).
Executive Officers of the Company
<TABLE>
<CAPTION>
------------------------- --------------------------------------------------- -------- ---------------------------
Year First Elected
Name Title Age Officer
------------------------- --------------------------------------------------- -------- ---------------------------
<S> <C> <C> <C>
James Zicarelli Chief Executive Officer 47 1995
------------------------- --------------------------------------------------- -------- ---------------------------
Robert Kovach President and Chief Operating Officer 57 1997
------------------------- --------------------------------------------------- -------- ---------------------------
Jeffery Meyer Vice President, Sales and Marketing 47 1988
------------------------- --------------------------------------------------- -------- ---------------------------
David Mettlach Vice President, Sales 46 1992
------------------------- --------------------------------------------------- -------- ---------------------------
Gary Rubin Vice President, Finance, CFO, Secretary & 41 1995
Treasurer
------------------------- --------------------------------------------------- -------- ---------------------------
</TABLE>
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, 1998, and any Forms 5 and amendments thereto
furnished to the Company with respect to the 1998 fiscal year, the Company is
not aware of any person who, at any time during the 1998 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 1998 fiscal year or prior years.
<PAGE> 11
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,
1999. 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,
1998 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.
III. OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of no other
business that 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 2000 must be received by the Company for inclusion in its Proxy Statement and
form of proxy related to that meeting by December 31, 1999.
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 15, 1999
<PAGE> 12
DOCUMENTS AND INFORMATION INCORPORATED BY REFERENCE
The financial statements of the Company for the fiscal years ended December 31,
1998 and 1997, 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, 1998 being sent to shareholders
with this Proxy Statement and are incorporated in this Proxy Statement by
reference.
<PAGE> 13
CRAMER, INC.
628 Adams Street, Kansas City, Kansas 64105
PROXY
This Proxy is solicited on Behalf of the Board of Directors of Cramer, Inc.
The undersigned shareholder of Cramer, Inc. hereby appoints James R.
Zicarelli and Gary Rubin, and each of them, as the true and lawful proxies and
attorneys-in-fact of the undersigned with power of substitution of each, for
and in the name of the undersigned, to attend the annual meeting of
shareholders of the Company to be held on May 18, 1999 commencing at 1:00 p.m.
at the headquarters of the Company and to vote therein the name and on behalf
of the undersigned, at the meeting and any adjournment thereof, the number of
shares of common stock which the undersigned would be entitled to vote, as
fully and with the same effect as the undersigned might do if personally,
present, on the following matters as set forth in the Proxy Statement and
Notice dated April 15, 1999.
1. Election of Directors
[ ] FOR all nominees listed (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees
(INSTRUCTION: to withheld authority to vote for any individual nominee strike a
line through the nominee's name in the list below. The total number of votes
that you are entitled to meet under the cumulative voting method will be
distributed equally among the remaining nominees.)
David E. Crandall James R. Zicarelli James E. Workman Robert Kovach
2. To ratify the appointment of Deloitte & Touche LLP as independent auditors
for the Company for the fiscal year commencing January 1, 1999.
[ ] APPROVAL [ ] DISAPPROVAL [ ] ABSTAIN
(Please sign and date on reverse)
<PAGE> 14
This proxy when properly executed will be voted in the manner indicated herein
by the undersigned shareholder, but it will be voted in favor of all the
resolutions set forth in the Proxy Statement if no specifications are made.
This proxy is revocable and the undersigned reserves the right to attend the
meeting and vote in person. The undersigned here by revokes any proxy
heretofore given in respect of shares of the Company.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, as
administrator, trustee or guardian, please given 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 partnership name by
an authorized person.
DATED:___________________________, 1999
_______________________________________
Signature
_______________________________________
Signature if held jointly
