SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DATARAM CORPORATION
(Name of Registrant as Specified In Its Charter)
--
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DATARAM CORPORATION
A New Jersey Corporation
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on September 14, 2004 at 2:00 P.M.
TO THE SHAREHOLDERS OF DATARAM CORPORATION:
The Annual Meeting of the Shareholders of DATARAM CORPORATION (the
"Company") will be held at the Company's corporate headquarters at 186
Princeton Road (Route 571), West Windsor, New Jersey, on Tuesday, September
14, 2004 at 2:00 p.m., for the following purposes:
(1) To elect five (5) directors of the Company to serve
until the next succeeding Annual Meeting of
Shareholders and until their successors have been
elected and have been qualified.
(2) To ratify the selection of KPMG LLP as the
independent certified public accountants of the
Company for the fiscal year ending April 30, 2005
(3) To transact such other business as may properly come
before the meeting or any adjournments.
Only shareholders of record at the close of business on the 30th day of
July 2004 are entitled to notice of and to vote at this meeting.
By order of the Board of Directors
Thomas J. Bitar,
Secretary
August 6, 2004
The Company's 2004 Annual Report is enclosed.
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
[LOGO]
DATARAM CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 14, 2004
This Proxy Statement is furnished by DATARAM CORPORATION (the
"Company"), which has a mailing address for its principal executive offices
at P.O. Box 7528, Princeton, New Jersey 08543-7528, in connection with the
solicitation by the Board of Directors of proxies to be voted at the Annual
Meeting of Shareholders of the Company to be held at the Company's corporate
headquarters at 186 Princeton Road (Route 571), West Windsor, New Jersey on
Tuesday, September 14, 2004 at 2:00 p.m. The close of business on July 30,
2004 has been fixed as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. This Proxy Statement was mailed to shareholders on or about August
6, 2004.
VOTING RIGHTS
On July 30, 2004 there were outstanding and entitled to vote 8,588,213
shares of the Company's common stock, par value $1.00 per share (the "Common
Stock"). Holders of the Common Stock are entitled to one vote, exercisable in
person or by proxy, for each share of Common Stock owned on the record date.
Shareholders may revoke executed proxies at any time before they are voted by
filing a written notice of revocation with the Secretary of the Company.
Where a choice has been specified by the holder on the proxy, the shares will
be voted as directed. Where no choice has been specified, the shares will be
voted for the nominees described below and for the ratification of
accountants.
Directors are elected by a plurality of the number of votes cast. With
respect to each other matter to be voted upon, a vote of a majority of the
number of shares voting is required for approval. Abstentions and proxies
submitted by brokers with a "not voted" direction will not be counted as
votes cast with respect to each matter.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth information concerning each of the
Company's executive officers:
Name Age Positions with the Company
____ ___ __________________________
Robert V. Tarantino 61 Chairman of the Board of Directors, President
and Chief Executive Officer
Lars Marcher 42 Executive Vice President and Chief Operating
Officer
Jeffrey H. Duncan 54 Vice President - Manufacturing
and Engineering
Mark E. Maddocks 52 Vice President - Finance and
Chief Financial Officer
Hugh F. Tucker 51 Vice President - Sales
Mark R. Bresky 56 Vice President - Information
Technology
Anthony M. Lougee 43 Controller
- 1 -
Robert V. Tarantino has been employed by the Company since 1970. He has
served as President and Chief Executive Officer since 1986. In 1998, he was
elected Chairman of the Board of Directors.
Lars Marcher has been employed by the Company as Vice President since
2001. Prior to that, he was President of Dataram International which was
formed when the Company acquired certain assets of Memory Card Technology
A/S. Prior to the acquisition and since 1998, Mr. Marcher served as Vice
President-Sales and Marketing of Memory Card Technology A/S and assumed the
duties of its Chief Executive Officer in 2000. Prior to that Mr. Marcher was
employed as Director of Marketing for Apple Computer, Australia.
Jeffrey H. Duncan has been employed by the Company since 1974. In 1990,
he became Vice President-Engineering. Since 1995, he served as Vice
President-Manufacturing and Engineering.
Mark E. Maddocks has been employed by the Company since 1978. In 1986 he
became Controller. Since 1996 he has served as Vice President-Finance and
Chief Financial Officer.
Hugh F. Tucker has been employed by the Company since 1983, initially as
Western Regional Sales Manager. In 1995 he became Director of Sales and
Marketing. Since 1996 he has served as Vice President-Sales.
Mark R. Bresky has been employed by the Company since 1992, initially as
Manager of Information Technology. In 1995 he became Director of Information
Technology. Since June of 2000 he has served as Vice President-Information
Technology.
Anthony M. Lougee has been employed by the Company since 1991, initially
as Accounting Manager. In 2002 he was named an executive officer and
currently serves as Controller, a position he has held since 1999.
ELECTION OF DIRECTORS
Five (5) directors will be elected at the Annual Meeting of Shareholders
by the vote of a plurality of the shares of Common Stock represented at such
meeting. Unless otherwise indicated by the shareholder, the accompanying
proxy will be voted for the election of the five (5) persons named under the
heading "Nominees for Directors." Although the Company knows of no reason
why any nominee could not serve as a director, if any nominee shall be unable
to serve, the accompanying proxy will be voted for a substitute nominee.
NOMINEES FOR DIRECTORS
The term of office for each director will expire at the next Annual
Meeting of Shareholders and when the director's successor shall have been
elected and duly qualified. Each nominee is a member of the present Board of
Directors and has been elected by shareholders at prior meetings.
Name of Nominee Age
_______________ ___
Robert V. Tarantino 61
Richard Holzman 70
Thomas A. Majewski 52
Bernard L. Riley 74
Roger C. Cady 66
Mr. Tarantino is an executive officer of the Company. Mr. Tarantino has
been a Director since 1981 and Chairman of the Board of Directors since 1998.
- 2 -
Richard Holzman has been retired since August of 1995. From January of
1994 until August of 1995, he had been Vice-President of Optika Imaging
Systems. Prior to that, he had served as President of Teamworks Technologies,
Inc., a software development company. Mr. Holzman has been a Director since
1978.
Thomas A. Majewski has been a principal in Walden, Inc., a computer
consulting and technologies venture capital firm, since 1990. Prior to 1990,
he had been Chief Financial Officer of Custom Living Homes & Communities,
Inc., a developer of residential housing. Mr. Majewski has been a Director
since 1990.
Bernard L. Riley retired as Executive Vice President and Chief Financial
Officer of the Company in 1995. He had been employed by the Company since
1992. His business career included thirty years with International Paper with
senior responsibilities in both finance and general management before taking
early retirement in 1985. At that time, he was Vice President - Logistics.
Thereafter, he served for four years as Vice President, Finance and as a
director of Emcore Corporation, a semiconductor equipment manufacturer.
During the two years immediately prior to joining Dataram, he was a
management consultant. Mr. Riley has been a Director since 1995.
Roger C. Cady is a founder and principal of Arcadia Associates, a
strategic consulting and mergers and acquisitions advisory firm. He was
employed as Vice President of Business Development for Dynatech Corporation,
a diversified communications equipment manufacturer, from 1993 to 1996.
Before joining Dynatech he was a strategic management consultant for eight
years. His business career has included 16 years in various engineering,
marketing and management responsibilities as a Vice President of Digital
Equipment Corporation, and President of two early stage startup companies.
Mr. Cady has been a Director since 1996.
- 3 -
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned by certain owners known by the Company to beneficially own
in excess of 5% of the Common Stock, each director of the Company, each named
executive officer and eleven directors and executive officers collectively,
as of July 31, 2004. Unless otherwise indicated, stock ownership includes
sole voting power and sole investment power. No other person or group is
known to beneficially own in excess of five percent (5%) of the Common Stock.
Name of Amount and Percent
Beneficial Nature of of
Owner Beneficial Ownership Class(1)
___________________ ____________________ ________
Robert V. Tarantino 1,051,033 (2) 11.8%
Richard Holzman 44,380 (3) *
Thomas A. Majewski 73,250 (3) *
Bernard L. Riley 34,000 (3) *
Roger C. Cady 88,700 (3) 1.0%
Lars Marcher 70,250 (4) *
Jeffrey H. Duncan 238,874 (5) 2.7%
Mark E. Maddocks 175,948 (6) 2.0%
Hugh F. Tucker 179,405 (7) 2.1%
Directors and 2,003,649 (8) 21.1%
executive officers
as a group (11 persons)
Fidelity Low Priced 853,800 (9) 9.9%
Stock Fund
________________
(1) On July 30, 2004, 8,588,213 shares were outstanding.
(2) Of this amount, 17,100 shares are held by Mr. Tarantino's wife and
324,800 shares may be acquired by the exercise of options held. Mr.
Tarantino's address is 186 Princeton Road (Route 571), West Windsor, New
Jersey 08550.
(3) Of this amount, 24,000 shares may be acquired by the exercise of options
held.
(4) Of this amount, 70,250 shares may be acquired by the exercise of options
held.
(5) Of this amount, 235,250 shares may be acquired by the exercise of options
held.
(6) Of this amount, 6,000 shares are held by Mr. Maddocks' wife and 68,150
shares may be acquired by the exercise of options held.
(7) Of this amount, 64,250 shares may be acquired by the exercise of options
held.
(8) Of this amount, 794,050 shares may be acquired by the exercise of options
held by executive officers, and 96,000 shares may be acquired by exercise of
options held by outside directors.
(9) As reported in a Schedule 13G filed January 10, 2002, this fund is
advised by Fidelity Management and Research Corp. which is controlled by FMR
Corp. whose principal shareholders are Edward R. Johnson, 3rd and Abagail P.
Johnson, all of whom have been deemed to have the sole power to dispose of
the Fund's shares. Each has an address at 82 Devonshire Street, Boston MA
02109.
* Less than 1%.
- 4 -
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid for the fiscal years ended April
30, 2002, 2003 and 2004 to the Company's Chief Executive Officer and the next four most
highly compensated executive officers.
Summary Compensation Table
Annual Compensation Long Term Compensation
___________________________ ______________________
Other
Name and Annual Stock Other
Principal Fiscal Compen- Options Compen-
Position Year Salary Bonus sation Awarded sation(1)
___________ _____ _______ ______ ______ _______ _________
Robert V. Tarantino 2004 307,800 0 -- 12,000 12,231
Chairman of the Board, 2003 307,800 0 -- 12,800 11,000
President and Chief 2002 307,800 0 -- 12,800 17,800
Executive Officer
Lars Marcher 2004 239,800 0 -- 8,200 7,094
Executive Vice President 2003 227,400 0 -- 8,200 4,419
and Chief Operating Officer 2002 211,000 0 -- 8,200 0
Jeffrey H. Duncan 2004 186,888 0 -- 8,200 10,952
Vice President - Manu- 2003 186,888 0 -- 8,200 10,539
facturing and Engineering 2002 186,888 0 -- 8,200 10,745
Mark E. Maddocks 2004 189,176 0 -- 8,200 11,092
Vice President - Finance, 2003 189,176 0 -- 8,200 10,883
Chief Financial Officer 2002 189,176 0 -- 10,000 10,883
Hugh F. Tucker 2004 204,360 0 -- 8,200 12,040
Vice President - Sales 2003 204,360 0 -- 8,200 11,624
2002 204,360 0 -- 8,200 11,794
___________________
(1) Payments by the Company to a plan trustee under the Company's Savings and Investment
Retirement Plan, a 401-K plan. The Company does not have a pension plan.
Option Grants in the Last Fiscal Year
Exercise Expiration
Name Number %(1) Price Date 5%($)(2) 10%($)(2)
____ ______ ____ _______ __________ ________ _________
Robert V. Tarantino 12,000 9.2 4.09 9/17/13 30,866 78,221
Lars Marcher 8,200 6.3 4.09 9/17/13 21,092 53,451
Jeffrey H. Duncan 8,200 6.3 4.09 9/17/13 21,092 53,451
Mark E. Maddocks 8,200 6.3 4.09 9/17/13 21,092 53,451
Hugh F. Tucker 8,200 6.3 4.09 9/17/13 21,092 53,451
___________________
(1) Percent of total granted to employees
(2) Potential realized value at assumed annual rates of stock price appreciation for option
term.
- 5 -
The following table provides information concerning stock option
exercises by named executive officers during the fiscal year ended
April 30, 2004 and the number and value of the named executive officers'
unexercised options at fiscal year end:
Option Exercises and Values at April 30, 2004
Value of
Unexercised
Number of In-the-Money
Options at Options at
April 30, 2004 April 30, 2004
______________ ______________
Shares acquired Value Exercisable/ Exercisable/
Name on exercise Received ($) Unexercisable Unexercisable ($)
____ ___________ _________ _____________ _________________
Robert V. Tarantino -- -- 309,600 1,238,762
28,000 71,256
Lars Marcher -- -- 66,150 8,016
58,450 47,089
Jeffrey H. Duncan -- -- 231,150 965,203
18,450 47,089
Mark E. Maddocks -- -- 64,050 262,003
19,350 47,089
Hugh F. Tucker -- -- 60,150 255,741
18,450 47,089
Equity Compensation Plan Information at April 30, 2004
Plan Category Number of Securities Weighted-average Number of securities
to be issued upon exercise price of remaining available
exercise of outstanding options, for future issuance
outstanding options warrants and rights under equity compen-
sation plans (exclud-
ing securities re-
flected in column (a))
(a) (b) (c)
______________________ _______________________ ____________________ _____________________
Equity compensation
plans approved by
security holders 1,486,200 4.508 1,394,950
Equity compensation
plans not approved 100,000 (1) 9.875 0
by security holders
Total 1,586,200 4.846 1,394,950
(1) Options granted to an employee of the Company as an inducement to enter into an
Employment Agreement with the Company as part of the MCT asset acquisition.
- 6 -
PERFORMANCE GRAPH
COMPARISON OF THE FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG DATARAM CORPORATION, THE S&P 500 INDEX AND A PEER GROUP
[The chart is a three-line graph of dollars versus dates having the following
data points:
4/99 4/00 4/01 4/02 4/03 4/04
____ ____ ____ ____ ____ ____
Dataram 100 421 189 148 51 140
Peer Group** 100 71 67 69 68 71
S&P 500 100 110 96 84 73 89]
*$100 invested on 4/30/99 in stock or index including reinvestment of
dividends. Fiscal year ending April 30.
**Standard Industrial Code Peer Group includes the following companies:
Ciprico, Inc.; Dot Hill Systems Corp; Dataram Corp.; Drexler Technology
Corp.; Exabyte Corp.; Iomega Corp.; Komag Inc.; M Sys Flash Disk Pioneers
Ltd.; MTI Technology Corp.; Network Engines, Inc.; Overland Data, Inc.;
Procom Technology, Inc.; Simpletech, Inc.; Storage Computer Corp.; and
Western Digital Corp.
- 7 -
EMPLOYMENT AGREEMENTS. Robert V. Tarantino entered into an Employment
Agreement with the Company as of May 1, 1997. This agreement continues on a
year to year basis until terminated by one of the parties. It provides for a
current base compensation of $300,000 subject to annual review by the Board
of Directors. In addition Mr. Tarantino will receive a bonus based upon a
formula which shall be reviewed and approved annually by the Board of
Directors (See "Report of the Compensation and Stock Option Committee of the
Board of Directors on Executive Compensation-Bonuses"). The Employment
Agreement may be terminated by the Company for cause and expires upon the
death, or six months after the onset of the disability, of the executive. In
the event of termination within a year of a change of control, Mr. Tarantino
is entitled to damages for the breach of the Employment Agreement or, if
greater, one year's base salary at the current rate plus one year's bonus
determined by averaging the bonus paid in each of the three preceding years.
The Employment Agreement contains terms concerning confidentiality,
assignment and disclosure of inventions and post-employment restrictions on
competition.
Lars Marcher accepted an offer of employment of the Company on January 15,
2002. The Company offered Mr. Marcher a base salary of 232,000 a year and
agreed to annual review of that base salary. Mr. Marcher is entitled to
participate in the Company's bonus plan for executives and is entitled to an
automobile allowance. If terminated by the Company, Mr. Marcher is entitled
to eighteen months salary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The Securities
and Exchange Commission rules regarding disclosure of executive compensation
require proxy statement disclosure of specified information regarding certain
relationships of members of the Company's Board of Directors with the Company
or certain other entities. None of the members of the Corporation's Board of
Directors has a relationship requiring such disclosure.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company's compensation policies applicable to its executive officers
are administered by the Compensation and Stock Option Committee (the
"Committee") of the Board of Directors. All members of the Committee are
independent directors. These policies are designed to enhance the overall
strength and financial performance of the Company by aligning the financial
interests of the Company's executive officers with those of its stockholders.
The three primary components of executive compensation are base salaries,
bonuses and stock option grants. The Committee determines the base salary,
bonus amount and stock option grants for the President and Chief Executive
Officer. The Committee reviews and gives final approval to the President and
Chief Executive Officer's recommendations for base salaries, bonus and stock
option grants for all other executives.
Base Salary
The Committee considered the financial performance of the Company,
reviewed a survey of executive salaries for computer and computer products
companies and determined the base salary for the President and Chief
Executive Officer, Robert V. Tarantino. Base salaries for other executive
officers for the fiscal year ended April 30, 2004 were determined by the
President and Chief Executive Officer.
Bonuses
Annually, the Committee reviews and gives final approval for a
bonus plan for the President and Chief Executive Officer and for other
executive officers. This bonus plan is typically based on a distribution of a
percentage of pre-tax operating profits based on meeting or exceeding stated
objectives. For fiscal 2004, no bonuses were distributed.
Stock Option Plan
The value to each executive officer of stock option grants is tied
directly to stock price performance. The Committee grants options under the
stockholder approved option plan at an exercise price equal to the market
price of the Common Stock at the date of grant. Typically, options that are
granted to employees have deferred vesting over five years, but expire after
ten years from the date of grant (provided, of course, the employee continues
in the employment of the Company). If at an option's expiration date there
has been no appreciation in the market price for the Company's Common Stock,
the option will not then have any value.
- 8 -
Grants are made to executive officers based on salary, responsibility
and performance of the individual officer. The Committee believes that
options are important to better align the financial interests of executive
officers with those of shareholders in general. Each option granted was a
ten-year option with a deferred vesting provision of four to five years.
Compensation and Stock Option Committee
Richard Holzman
Thomas A. Majewski
Roger C. Cady
Bernard L. Riley
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF EACH OF THE NOMINEES PROPOSED BY THE BOARD OF DIRECTORS, AND,
UNLESS A SHAREHOLDER GIVES INSTRUCTIONS ON THE PROXY CARD TO THE CONTRARY,
THE PROXY AGENTS NAMED THEREON INTEND SO TO VOTE.
RATIFICATION OF THE SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected KPMG LLP as
the independent certified public accountants to the Company for the fiscal
year ending April 30, 2005. The holders of Common Stock are asked to ratify
this selection. KPMG LLP has served the Company in this capacity since the
Company's incorporation. If the shareholders fail to ratify this selection of
KPMG LLP, the Audit Committee will reconsider its action in light of the
shareholder vote.
The Company has been advised by KPMG LLP that representatives of that
firm are expected to be present at the Annual Meeting of Shareholders. These
representatives will have the opportunity to make a statement, if they so
desire, and will also be available to respond to appropriate questions from
shareholders.
PRINCIPAL ACCOUNTANTS FEES AND SERVICES
The following table sets forth the aggregate fees billed to the Company
for the last two fiscal years by the Company's independent accounting firm,
KPMG LLP for professional services:
2004 2003
Audit fees $ 102,500 $ 121,000
Audit related fees (1) 12,000 11,000
Tax fees(2) 18,600 18,000
All other fees 0 23,000
Total fees $ 133,100 $ 173,000
(1) Consists of the audit of the financial statements of the Company's
employee benefit plan.
(2) Consists principally of fees for tax consultation and tax compliance
services.
All non-audit fees of auditor must be pre-approved by the Audit Committee of
the Board of Directors unless the amount is less than 5% of the amount of
revenues to the auditor in the previous fiscal year or was not regarded as a
non-audit fee at the time it was contracted for. In either event, the fee
must be submitted to the Audit Committee for its approval before the
completion of the audit. In the previous fiscal year, all Audit Related
Fees, all Tax Fees and all Other Fees were pre-approved by the Audit
Committee pursuant to this policy.
-9-
REPORT OF THE AUDIT COMMITTEE
Pre-approval by the Audit Committee of all non-audit services performed
by the Company's independent accountants is now required by law. Where
urgent action is required, the Chairman of the Committee may give this
approval subject to confirmation of this decision by the full Committee at
its next meeting.
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the fiscal year ended April 30, 2004, with
management and the Company's independent public accountants, KPMG LLP.
The Audit Committee has discussed with KPMG LLP the matters required to
be discussed by Statement of Auditing Standards No. 61 (Certification of
Statements on Auditing Standards, AU 380).
The Audit Committee has received the written disclosures and the letter
from KPMG LLP required by Independence Standards Board Standard No. 1
("Independence Discussions with Audit Committees"), as amended, and has
discussed with KPMG LLP that firm's independence from the Company.
Based on the review and discussions referred to above in this report,
the Audit Committee recommended to the Company's Board of Directors that the
audited financial statements be included in the Company's Annual Report on
Form 10-K for the fiscal year ended April 30, 2004 for filing with the
Securities and Exchange Commission.
Audit Committee
Thomas A. Majewski, Chairman
Richard Holzman
Bernard L. Riley
Roger C. Cady
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS, AND, UNLESS A
SHAREHOLDER GIVES INSTRUCTIONS ON THE PROXY CARD TO THE CONTRARY, THE
APPOINTEES NAMED THEREON INTEND SO TO VOTE.
OTHER MATTERS
Should any other matter or business be brought before the meeting, a
vote may be cast pursuant to the accompanying proxy in accordance with the
judgment of the proxy holder. The Company does not know of any such other
matter or business.
PROPOSALS OF SECURITY HOLDERS AT 2005 ANNUAL MEETING
Any shareholder wishing to present a proposal which is intended to be
presented at the 2005 Annual Meeting of Shareholders should submit such
proposal to the Company at its principal executive offices no later than
April 11, 2005. It is suggested that any proposals be sent by certified mail,
return receipt requested.
BOARD OF DIRECTORS
The Board of Directors of the Company met five times during the last
fiscal year. Shareholders wishing to communicate with the Directors should
write to the President at the Company's mailing address and specifically
request that a copy of the letter be distributed to each Board member. It is
the policy of the Board that all members will attend the Annual Meeting of
Shareholders and all members of the Board attended last year's meeting.
The Board of Directors has a standing Audit Committee established in
accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended, whose members are Richard Holzman, Thomas A. Majewski, Bernard L.
Riley and Roger C. Cady. This Committee met four times during the last fiscal
year.
- 10 -
The Company's Board of Directors has adopted a revised written charter for
the Audit Committee which was attached as an exhibit to this Proxy Statement.
Each member of the Audit Committee is "independent" within the meaning of the
National Association of Securities Dealers Listing Standards ("NASD"). Mr.
Riley is considered a "financial expert" within the meaning of that rule and
Item 401(i) of SEC Regulation S-K and is "independent" as that term is used
in Item 7(d)(3)(iv) of Schedule 14A of the Proxy Rules. The principal
functions of the Audit Committee are evaluation of work of the auditors,
review of the accounting principles used in preparing the annual financial
statements, review of internal controls and procedures and approving all
audit and non-audit services of the auditor. The Charter of the Audit
Committee is attached to this proxy statement and is available on the
Company's website.
The Board of Directors has a standing Compensation and Stock Option
Committee whose members are Richard Holzman, Thomas A. Majewski, Roger C.
Cady and Bernard L. Riley. This Committee met one time during the past fiscal
year. The principal functions of the Compensation and Stock Option Committee
are to recommend to the Board of Directors the compensation of directors and
the Chief Executive Officer and to establish and administer various
compensation plans, including stock option plans.
The Board of Directors has a standing Nominating Committee whose members
are Richard Holzman, Thomas A. Majewski, Roger C. Cady and Bernard L. Riley.
This Committee met once during the past fiscal year. The principal
function of this Committee is the recommendation to the Board of Directors of
new members of the Board of Directors. The members of the Nominating
Committee are "independent" within the meaning of the NASD Listings Standard.
This Committee will consider nominees for the Board of Directors recommended
by shareholders. Shareholders desiring to make such recommendations should
write directly to the Committee at the Company's executive offices at P.O.
Box 7528, Princeton, New Jersey 08543-7528.
Directors who are not employees of the Company receive a quarterly
payment of $6,000. During fiscal 2004 Mr. Holzman, Mr. Riley, Mr. Cady and
Mr. Majewski each received ten year options to purchase 8,000 shares of the
Common Stock of the Company at $4.09, the fair market value of the Common
Stock at the date of grant. All of these options are exercisable one year
from the date of grant. Mr. Holzman also participates in the Company's
health plan.
SECTION 16(a) COMPLIANCE
The Securities and Exchange Commission requires that the Company report
to shareholders the compliance of directors, executive officers and 10%
beneficial owners with Section 16(a) of the Securities Exchange Act of 1934,
as amended. This provision requires that such persons report on a current
basis most acquisitions or dispositions of the Company's securities. Based
upon information submitted to the Company, all directors, executive officers
and 10% beneficial owners have fully complied with such requirements during
the past fiscal year.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expense of preparing, printing and mailing the
form of proxy, including broker solicitation fees and accountants' and
attorneys' fees in connection therewith, will be borne by the Company. The
amount is expected to be the amount normally expended for a solicitation for
an election of directors in the absence of a contest and costs represented by
salaries and wages of regular employees and officers. Solicitation of proxies
will be made by mail, but regular employees may solicit proxies by telephone
or otherwise.
Please date, sign and return the accompanying proxy at your earliest
convenience. No postage is required for mailing in the United States.
Financial information concerning the Company is set forth in the
Company's 2004 Annual Report to Security Holders, which is enclosed.
By Order of the Board of Directors
THOMAS J. BITAR,
Secretary
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ANNUAL REPORT ON FORM 10-K
Upon the written request of a shareholder, the Company will provide,
without charge, a copy of its Annual Report on Form 10-K for the year ended
April 30, 2004, including the financial statements and schedules and
documents incorporated by reference therein but without exhibits thereto, as
filed with the Securities and Exchange Commission. The Company will furnish
any exhibit to the Annual Report on Form 10-K to any shareholder upon request
and upon payment of a fee equal to the Company's reasonable expenses in
furnishing such exhibit. All requests for the Annual Report on Form 10-K or
its exhibits should be addressed to Vice President - Finance, Dataram
Corporation, P.O. Box 7528, Princeton, New Jersey 08543-7528.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS CHARTER
I. PURPOSE
The purpose of the Audit Committee is to oversee the accounting and
financial reporting processes of Dataram Corporation and the audit of its
financial statements; the Corporation's systems of internal controls
regarding finance and accounting; and the Corporation's financial disclosure
process. Consistent with this function, the Audit Committee should encourage
continuous improvement of, and should foster adherence to, the Corporation's
policies, procedures and practices at all levels. The Audit Committee's
primary duties and responsibilities are to:
Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
Review and appraise the audit efforts of the Corporation's independent
accountants and internal auditing department.
Provide an open avenue of communication among the independent accountants,
financial and senior management, the internal auditing department, and the
Board of Directors.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and
free from any relationship that, in the opinion of the Board, would interfere
within the meaning of NASD rules, with the exercise of his or her independent
judgment as a member of the Committee. All members of the Committee shall
have a working familiarity with basic finance and accounting practices, and
at least one member of the Committee shall have accounting or related
financial management expertise.
The members of the Committee shall be elected by the Board at its annual
organizational meeting and shall serve until such time as their successors
shall be duly elected and qualified. Unless a Chair is elected by the full
Board, the members of the Committee may designate a Chair by majority vote of
the full Committee membership.
III. MEETINGS
The Committee shall meet at least once annually, but shall meet as
frequently as circumstances dictate. As part of its job to foster open
communication, the Committee should meet at least annually with management,
and the independent accountants in separate executive sessions to discuss any
matters that the Committee or each of these groups believe should be
discussed privately. In addition, the Committee or at least its Chair should
meet in person or by telephone with the independent accountants and
management quarterly to review the Corporation's proposed quarterly financial
reports.
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IV. POWERS
The Committee shall be empowered to retain all or discharge any auditor
of the Company. No auditor of the Company shall provide any non-audit
services to the Company unless pre-approved by the Audit Committee or in
exceptional circumstances pre-approved by the Chairman of the Audit Committee
who shall report all such approvals to the Audit Committee at its next
meeting. All approvals of non-audit services shall be reported in the
Company's annual financial disclosure documents. The Committee may retain
legal counsel and hire other independent experts and advisors as the
Committee shall determine to be necessary.
V. COMPLAINTS
The Company shall post a Notice in a prominent place in the accounting
office of the Company which shall advise all employees that they may make a
complaint or a comment or a suggestion to the Audit Committee concerning the
methods and procedures used by the Company in connection with the Company's
accounting, the Company's internal controls or the auditing of the Company's
accounts.
This Notice shall state that such complaints, comments and suggestions
can be made by an employee with the request that the identity of the employee
be kept confidential, or that the employee can make the complaint, comment or
suggestion totally anonymously.
The Notice shall specifically state that no adverse action will be taken
against any employee submitting a complaint, comment or suggestion to the
Audit Committee.
The Notice will identify an e-mail address for a site off of the
business premises of the Company and accessible only by the Chairman of the
Audit Committee. All e-mails left at that number will be saved, and will be
kept offsite in a confidential file maintained by the Chairman of the Audit
Committee for at least five years. The Notice will also contain an address
where written information can be forwarded to a place offsite convenient for
the Chairman of the Audit Committee. Any writings so received will be
retained for at least five years.
The Chairman of the Audit Committee shall, on a regular basis, present
to all other members of the Audit Committee all of the e-mails and written
materials forwarded to the Chairman unless the Chairman determines that
matter is clearly irrelevant. Among the remaining matters, the Chairman
shall classify them as either routine or serious. Routine complaints,
comments and suggestions shall be discussed at the next regular meeting of
the Audit Committee. Serious matters shall be addressed at a meeting of the
Audit Committee to be held no less than four weeks from the receipt by the
Chairman or sooner if circumstances require.
If an employee has submitted a complaint, comment or suggestion and has
identified himself or herself, the Chairman shall acknowledge receipt of the
complaint to a home address of the employee, assure the employee of
confidentiality (if confidentiality has been requested, and advise the
employee that the full Committee will review the complaint) comment or
suggestion. When appropriate, the Chairman will advise the employee of the
Committee's disposition of the complaint and any action taken by the Company
as a result.
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DATARAM CORPORATION
P.O. Box 7528, Princeton, New Jersey 08543-7528
PROXY SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
The undersigned hereby appoints and constitutes Robert V. Tarantino and
Thomas J. Bitar, and each of them, attorneys and proxies for the undersigned,
with full power of substitution to vote as if the undersigned were personally
present at the Annual Meeting of the Shareholders of Dataram Corporation (the
"Company") to be held at the Company's corporate headquarters at 186
Princeton Road (Route 571), West Windsor, New Jersey, on Tuesday, September
14, 2004 at 2 o'clock in the afternoon and at all adjournments thereof, the
shares of stock of said Company registered in the name of the undersigned.
The undersigned instructs all such proxies to vote such shares as follows
upon the following matters, which are described more fully in the
accompanying proxy statement:
I authorize and instruct my Proxy to:
1. VOTE FOR____ all nominees for the Company's Board of Directors listed
below; except that I WITHHOLD AUTHORITY for the following nominees (if any)
Richard Holzman ____ Robert V. Tarantino ____
Thomas A. Majewski ____ Bernard L. Riley ____ Roger C. Cady ____
VOTE WITHHELD____ from all nominees.
2. VOTE FOR____ AGAINST____ ABSTAIN____ ratification of the selection
of KPMG LLP to be the independent auditors of the Company for the fiscal year
ending April 30, 2005.
(Continued, and to be signed, on the other side)
(See other side)
3. In their discretion, to vote upon such other business as may properly
come before the meeting and all adjournments thereof. 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.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as 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
partnership name by authorized person.
Signature
Signature if held jointly
Dated 2004
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.