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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12.
CRAMER, INC.
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(Name of Registrant as Specified in Its Charter)
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(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)(1) 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:
- --------------------------------------------------------------------------------
(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(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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[CRAMER LOGO]
CRAMER, INC.
625 Adams Street
Kansas City, Kansas 66105
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 2000
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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 May 16,
2000 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, 2000.
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 15, 2000 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 21, 2000
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 16, 2000
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 May 16, 2000, 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 21, 2000.
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 ratification of the auditors appointed by the Board.
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/her 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 15, 2000, 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
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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
ratification 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
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS:
The Company's Board of Directors is currently composed of four members elected
to serve for terms as indicated. The officers and directors of the Company are
as follows:
<TABLE>
<CAPTION>
Officer or
Director
of the Company Term to
Name Age Office Since Expire
- ------------------------------ -------- ------------------------------------------ --------------------- -------------
<S> <C> <C> <C> <C>
James R. Zicarelli 48 Chairman of the Board & CEO 1992 2000
David E. Crandall 56 Director 1992 2000
James E. Workman 49 Director 1994 2000
Robert J. Kovach 58 Director, President and Chief
Operating Officer 1997 2000
Jeffery Meyer 48 Vice President, Sales &
Marketing 1998
Gary A. Rubin 42 Vice President, Finance
Secretary & Treasurer 1995
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.
</TABLE>
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<TABLE>
<S> <C>
James E. Workman President, Oceana Products. 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.
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 Director, Retail
Operations Mass Channel, a senior management position,
sales planning and product management, for Hallmark
Cards, the leading greeting card manufacturer in the United
States.
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.
</TABLE>
No director or officer has any family relationship with any other director or
officer.
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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 the executive officers of the Company, and by the officers
and directors of the Company as a group:
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(a) Class(j)
- ------------------- ----------------------- ----------
<S> <C> <C>
Rotherwood Corporation(b) 2,081,236 51.4%
7601 France Ave. South
Edina, MN 55435
James L. Marvin(c) 300,000 7.4%
Suite 203
155 West Lake Avenue
Colorado Springs, CO 80906
David E. Crandall(d) 125,341 3.1%
8222 Douglas Avenue, Suite 660
Dallas, TX 75225
James R. Zicarelli(e) 0 0%
7601 France Ave. South
Edina, MN 55435
Mr. James E. Workman(f) 30,000 0.7%
2245 Rockingham Drive
Troy, OH 45373
Mr. Robert Kovach(g) 0 0%
145 Pointe Road
Gladstone, MO 64116
Mr. Gary Rubin(h) 0 0%
9713 West 121 Terrace
Overland Park, KS 66213
Mr. Jeffery Meyer(i) 0 0%
14030 Knox
Overland Park, KS 6621x
All Officers and Directors
as a Group (6 persons) 155,341 3.8%
</TABLE>
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(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. Pursuant to Rule 13d-3 of the Securities and
Exchange Commission, the 2,081,236 shares held by Rotherwood may be
attributable to Mr. Zicarelli because of his voting and investment power
over these shares. However, these shares are not included in the total of
all Officers and Directors as a group.
(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. Rubin is Vice President Finance, Secretary and Treasurer of the
Company.
(i) Mr. Meyer is Vice President Sales and Marketing of the Company
(j) Percentage based on common and common equivalent shares.
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I. ELECTION OF DIRECTORS
The Board proposes that four 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 four 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 56 Chairman and Founder of PPA Industries 1992
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Robert J. Kovach 58 President and COO of Cramer 1997
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James R. Zicarelli 48 President of Rotherwood Corporation, the 1992
Company's majority owner, and CEO of the Company
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James E. Workman 49 President, Oceana Products 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, 1999, three meetings of the Board of
Directors of the Company were held. No director missed any meetings during 1999.
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.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the salary and other compensation earned in 1997,
1998 and 1999 by Mr. Zicarelli, the Company's CEO, Mr. Robert Kovach, the
Company's President, and Mr. Jeff Meyer, the Company's Vice President of Sales.
Mr. Kovach and Mr. Meyer are the only members of the Company's executive staff
at the end of the 1999 fiscal year who earned salary and/or bonus in excess of
$100,000 in 1997, 1998 or 1999.
<TABLE>
<CAPTION>
Other Annual All Other
Year Salary Bonus Compensation Compensation
---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C>
Mr. Zicarelli (a)
Mr. Kovach
1997 $ 25,378 $ 9000 (b) $ 33(c)
1998 $120,000 $ 12000 (b) $132(c)
1999 $124,676 $ 0(d) (b) $132(c)
Mr. Meyer
1998 $ 34,326 $10,000(e) (b) $ 30(c)
1999 $107,945 $10,000(d) (b) $132(c)
</TABLE>
(a) 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 1998 and 1999. (See "Certain Relationships
and Related Transactions", Item 12 of the Company's annual report on Form
10-KSB and incorporated by reference in this proxy statement.)
(b) Did not exceed the lesser of $50,000 or 10% of Mr. Kovach's or Mr. Meyer's
1997, 1998, or 1999 salary and bonus.
(c) Consists of the premiums paid on value in excess of $50,000 for a term-life
insurance policy on the individual's life maintained by the Company for the
benefit of the individual's estate.
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(d) Both Mr. Kovach and Mr. Meyer's current employment arrangements provide for
a bonus based on the Company's relative profitability. Mr. Kovach received
no bonus in 1999 as a result of the Company's operating loss. Mr. Meyer did
not earn any bonus under this arrangement in 1999. However, Mr. Meyer's
initial employment agreement also included a guaranteed bonus of $10,000
for 1999. No such guarantees exist in future years.
(e) Consists of a $5000 bonus paid upon beginning of Mr. Meyer's employment
with the Company and a $5,000 bonus paid at the discretion of the board of
directors based on the Company's results in 1998.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or Rotherwood receive $1000 for
each Board meeting attended and are reimbursed for their expenses related to
such meetings.
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 1998 and 1999, the
Company also paid fees to other affiliates of Rotherwood for consultation and
assistance provided in the area of Human Resources and Labor Relations. Total
amounts that were charged for the foregoing services are:
<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Paid by the Company to Rotherwood and its affiliates $ 90,000 $ 48,000
</TABLE>
The Company believes that the amounts charged for services provided 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 1999
Financial Statements incorporated by reference herein).
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COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
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, 1999, and any Forms 5's and amendments thereto
furnished to the Company with respect to the 1999 fiscal year, the Company is
not aware of any person who, at any time during the 1999 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.
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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,
2000. Shareholders are requested to signify their ratification 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,
1999 and 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 2001 must be received by the Company for inclusion in its Proxy Statement and
form of proxy related to that meeting by December 31, 2000.
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 21, 2000
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DOCUMENTS AND INFORMATION INCORPORATED BY REFERENCE
The financial statements of the Company for the fiscal years ended December 31,
1999 and 1998, 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, and Items 12 Certain Relationships and Related
Transactions, are included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1999 being sent to shareholders with this Proxy
Statement and are incorporated in this Proxy Statement by reference.
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CRAMER, INC.
625 Adams Street, Kansas City, Kansas 66105
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 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 16, 2000 commencing at 1:00 p.m. at the
headquarters of the Company and to vote thereat, in the name and on behalf of
the undersigned, at the meeting and any adjournments 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 21, 2000.
1. Election of Directors
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees
(INSTRUCTION: to withhold 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 cast 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 appointment of Deloitte & Touche LLP as independent auditors for
the Company for the fiscal year commencing January 1, 2000.
[ ] APPROVAL [ ] DISAPPROVAL [ ] ABSTAIN
(Please sign and date on reverse)
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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 hereby 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 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 partnership name by an
authorized person.
Dated: , 2000
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================================================================================
Signature
================================================================================
Signature if held jointly
