SCHEDULE 14A INFORMATION
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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 25, 2008 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 Thursday,
September 25, 2008 at 2:00 p.m., for the following purposes:
(1) To elect four (4) 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 J.H. Cohn LLP as the
independent certified public accountants of the
Company for the fiscal year ending April 30, 2009
(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 8th day of
August 2008 are entitled to notice of and to vote at this meeting.
By order of the Board of Directors
Thomas J. Bitar,
Secretary
August 18 2008
The Company's 2008 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 25, 2008
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
Thursday, September 25, 2008 at 2:00 p.m. The close of business on August
8, 2008 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 18, 2008.
VOTING RIGHTS
On August 8, 2008 there were outstanding and entitled to vote
8,869,184 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
for each share of Common Stock owned on the record date, exercisable in
person or by proxy. 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 by the holder, the shares will be voted for the nominees
described below and for the ratification of the selection 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
____ ___ __________________________
John H. Freeman 59 President and Chief Executive Officer
Mark E. Maddocks 56 Vice President - Finance and
Chief Financial Officer
Jeffrey H. Duncan 58 Vice President - Manufacturing
and Engineering
Anthony Pawlik 54 Vice President - Sales
Anthony M. Lougee 47 Controller
1
John H. Freeman has been employed by the Company since May 7, 2008
when he was named President and Chief Executive Officer. Mr. Freeman has
been a Director since 2005.
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.
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.
Anthony Pawlik has been employed as Vice President-Sales since 2006.
Prior to that and since 2001 he served as Vice President of Sales, North
America for High Bandwidth Access/AMIC Technology, Inc. From 1995 to 2001,
he served as Director, Northeast Area Sales for Integrated Device
Technology, Inc. Prior to holding these positions, Mr. Pawlik's career
includes over 18 years of sales management experience with Texas Instruments
and Samsung Semiconductor.
Anthony M. Lougee has been employed by the Company since 1991, i
nitially 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
Four (4) 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 four (4)
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
_______________ ___
John H. Freeman 59
Thomas A. Majewski 56
Roger C. Cady 70
Rose Ann Giordano 69
John H. Freeman is an executive officer of the Company. Mr. Freeman
has been an independent consultant specializing in corporate sales,
marketing and operations consulting since December, 2006. Prior to that and
since September, 2004 he served as the Chief Operating Officer at Taratec
Development Corporation, a life sciences consulting company. Prior to that,
and for more than five years, he was responsible for leading IBM's worldwide
sales, marketing, and business planning for Pharmaceutical, Medical Device,
and Life Sciences clients. This included IBM product sales of hardware,
software, services and financing. Mr. Freeman has 30 years of executive
sales and operations management experience with IBM. Mr. Freeman is a
graduate of Pennsylvania State University with an M.S. in Computer Science
and holds a B.A. in Mathematics from Syracuse University. Mr. Freeman has
been a Director since 2005.
2
Thomas A. Majewski is a real estate developer. He is also a principal
in Walden, Inc., a computer consulting and technologies venture capital
firm, which he joined in 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.
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.
Rose Ann Giordano has been President of Thomis Partners, an investing
and advisory services firm, since 2002. Prior to that, and for more than
five years, Ms. Giordano served as Vice President of Worldwide Sales &
Marketing for the Customer Services Division of Compaq Computer Corporation.
Prior to that, Ms. Giordano held a number of positions with Digital
Equipment Corporation. Ms. Giordano was the first woman Vice President and
Corporate Officer of Digital Equipment Corporation. Ms. Giordano serves on
the Board of Directors of TimeTrade Inc., MIT Enterprise Forum/NE, the
National Association of Corporate Directors/New England and Emerson Hospital.
Ms. Giordano holds a B.A. in Mathematics from Marywood College and is a
graduate of the Stanford University Business School Executive Program.
Ms. Giordano has been a Director since 2005.
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.
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 ten directors and executive officers
collectively, as of July 25, 2008. 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)
___________________ ____________________ ________
John H. Freeman 22,000 (2) *
Rose Ann Giordano 22,000 (2) *
Thomas A. Majewski 105,250 (3) 1.2%
Bernard L. Riley 66,000 (3) *
Roger C. Cady 128,700 (4) 1.4%
Mark E. Maddocks 136,948 (5) 1.5%
Jeffrey H. Duncan 60,880 (6) *
Anthony Pawlik 36,200 (7) *
Anthony M. Lougee 28,870 (8) *
Directors and 606,848 (9) 6.6%
executive officers
as a group (9 persons)
Fidelity Low Priced 858,800 (10) 9.7%
Stock Fund
Robert V. Tarantino 799,400 (11) 8.9%
Al Frank Management, 596,383 (12) 6.7%
Inc.
3
_________________
(1) On August 8, 2008, 8,869,184 shares were outstanding.
(2) Of this amount, 22,000 shares may be acquired by the exercise of
options held.
(3) Of this amount, 56,000 shares may be acquired by the exercise of
options held.
(4) Of this amount, 40,000 shares may be acquired by the exercise of
options held.
(5) Of this amount, 6,000 shares are held by Mr. Maddocks' spouse, 26,207
shares are held by the Company's 401(k) Plan and 59,000 shares may be
acquired upon the exercise of options held.
(6) Of this amount, 57,200 shares may be acquired by the exercise of
options held and 3,680 shares are held by the Company's 401(k) Plan.
(7) Of this amount, 36,200 shares may be acquired by the exercise of
options held.
(8) Of this amount, 25,875 shares may be acquired upon the exercise of
options held and 2,995 shares are held by the Company's 401(k) Plan.
(9) Of this amount, 200,275 shares may be acquired by the exercise of
options held by executive officers, and 174,000 shares may be acquired by
exercise of options held by outside directors.
(10) As reported in a Schedule 13G/A filed February 14, 2005, this fund is
advised by Fidelity Management and Research Corp. which is controlled by
Edward R. Johnson, 3rd and a group consisting of members of the Edward R.
Johnson, 3rd family who are the principal Class B shareholders and who are
deemed to have the shared power to dispose of the Fund's shares. Each has
an address at 82 Devonshire Street, Boston MA 02109.
(11) Of this amount, 17,100 shares are held by Mr. Tarantino's wife and
81,600 shares may be acquired by the exercise of options held. Mr.
Tarantino's address is 57 Southfield Road, West Windsor, New Jersey 08550.
(12) As reported in a Schedule 13G filed February 13, 2008, this investment
advisor holds the sole power to vote 465,908 shares and sole power to
dispose of 596,383 shares. Its address is 32392 Coast Highway, Suite 260,
Laguna Beach, CA 92651.
* Less than 1%.
4
RELATED PARTY TRANSACTIONS
All transactions by the Company with a director or executive officer
must be approved by the Board of Directors if they exceed $120,000 in any
fiscal year. Apart from any transactions disclosed herein, no such
transaction was entered into with any director or executive officer during
the last fiscal year. Such transactions will be entered into only if found
to be in the best interest of the Company and approved in accordance with
the Company's Codes of Ethics, which are available on the Company web site.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The Compensation Committee of our Board of Directors is comprised of
all members of our Board of Directors, except the Chief Executive Officer.
The compensation committee's basic responsibility is to review the
performance of our management in achieving corporate goals and objectives
and to ensure that our executive officers are compensated effectively in a
manner consistent with our strategy and compensation practices. Toward that
end, the compensation committee oversaw, reviewed and administered all of
our compensation, equity and employee benefit plans and programs applicable
to executive officers.
Compensation Philosophy and Objectives
We operate in an extremely competitive and rapidly changing industry.
We believe that the skill, talent, judgment and dedication of our executive
officers are critical factors affecting the long-term value of our company.
Therefore, our goal is to maintain an executive compensation program that
will fairly compensate our executives, attract and retain qualified
executives who are able to contribute to our long-term success, induce
performance consistent with clearly defined corporate goals and align our
executives' long-term interests with those of our shareholders. We did not
identify specific metrics against which we measured the performance of our
executive officers. Our decisions on compensation for our executive
officers were based primarily upon our assessment of each individual's
performance. We relied upon judgment and not upon rigid guidelines or
formulas in determining the amount and mix of compensation elements for
each executive officer. Factors affecting our judgment include the nature
and scope of the executive's responsibilities and effectiveness in leading
our initiatives to achieve corporate goals.
Mr. Freeman, our Chief Executive Officer, as the manager of the
members of the executive team, assessed the individual contribution of each
member of the executive team, other than himself, and, where applicable,
made a recommendation to the compensation committee with respect to any
merit increase in salary, cash bonus, and option awards. The compensation
committee evaluated, discussed and modified or approved these
recommendations and conducted a similar evaluation of Mr. Freeman's
contributions to the Company.
During 2008 and beyond, our objective will be to provide overall
compensation that is appropriate given our business model and other criteria
to be established by the compensation committee. Some of the elements of
the overall compensation program are expected to include competitive base
salaries, short-term cash incentives and long-term incentives in the form
of options to purchase shares.
We expect that our Chief Executive Officer, as the manager of the
members of the executive team, will continue to assess the individual
contributions of the executive team and make a recommendation to the
compensation committee with respect to any merit increase in salary, cash
bonus pool allocations and the award of options to purchase shares. The
compensation committee will then evaluate, discuss and modify or approve
these recommendations and conduct a similar evaluation of the Chief
Executive Officer's contributions to corporate goals and achievement of
individual goals.
Role of Executive Officers and Compensation Consultants
Our Chief Executive Officer supports the compensation committee in its
work by providing information relating to our financial plans, performance
assessments and recommendation for compensation of our executive officers.
Mr. Freeman, while not a member of the compensation committee is a member of
the Board of Directors. The compensation committee has not in recent years
engaged any third-party consultant to assist it in performing its duties,
though it may elect to do so in the future.
5
Principal Elements of Executive Compensation
Our executive compensation program currently consists of the three
components discussed below. There is no pre-established policy or target
for the allocation between either cash and non-cash or short-term and
long-term incentive compensation. Rather, the relevant factors associated
with each executive are reviewed on a case-by-case basis to determine the
appropriate level and mix of compensation.
Base Salaries. The salaries of our Chief Executive Officer and our
other executive officers are established based on the scope of their
responsibilities, taking into account competitive market compensation for
similar positions based on information available to the compensation
committee. We believe that our base salary levels are consistent with
levels necessary to achieve our compensation objective, which is to maintain
base salaries competitive with the market. We believe that below-market
compensation could, in the long run, jeopardize our ability to retain our
executive officers. Any base salary adjustments are expected to be based on
competitive conditions, market increases in salaries, individual
performance, our overall financial results and changes in job duties and
responsibilities.
Annual Bonus Compensation. We maintain an annual bonus program. The
award of bonuses to our executive officers is the responsibility of the
compensation committee and is determined on the basis of individual
performance. The annual bonus program is designed to reward performance in
a way that furthers key corporate goals and aligns the interests of
management with our annual financial performance.
Long-Term Incentive Compensation. The Company has established the 2001
Stock Option Plan (the "Plan") to provide employees of the Company long-term
equity incentive compensation, which we believe is in accordance with our
objective of aligning the interests of management with our long-term
performance. The Plan is administered by the compensation committee. In
recent years the committee has granted five year options with an option
price equal to the closing market price of the common stock on the date of
grant. These options become exercisable one year from the date of grant.
Generally the committee does not consider the actual profits from the
exercise of options awarded in the past in determining the amount of awards
to be made in the future. Rather the committee focuses upon expected
amounts that may be received by the executive pursuant to those options
in the future.
Share Ownership Guidelines
We currently do not require our directors or executive officers to own
a particular amount of our shares, although we do have a policy against
directors or officers taking a short position in the Company's stock. The
compensation committee is satisfied that the equity holdings among our
directors and executive officers are sufficient at this time to provide
motivation and to align this group's interests with our long-term
performance.
Perquisites
Our executive officers participate in the same 401(k) plan, the same
life and health group insurance plans and enjoy the same employee benefits
plan as our other salaried employees. In addition, some of our executive
officers receive an automobile allowance as described in the Summary
Compensation Table.
Post-Termination Protection and Change in Control
We have entered into employment agreements with Messrs. Maddocks and
Duncan. Each such agreement provides for the payment of one year's salary
upon early termination in lieu of payments under the Company general
severance policy.
6
Financial Restatements
The compensation committee has not adopted a policy with respect to
whether we will make retroactive adjustments to any cash or equity-based
incentive compensation paid to executive officers (or others) where the
payment was predicated upon the achievement of financial results that were
subsequently the subject of a restatement. Our compensation committee
believes that this issue is best addressed when the need actually arises,
when all of facts regarding the restatement are known.
Tax and Accounting Treatment of Compensation
Section 162(m) of the Internal Revenue Code places a limit subject to
certain exceptions of $1 million on the amount of compensation that we may
deduct from the U.S. source income in any one year with respect to our Chief
Executive Officer, our Chief Financial Officer and each of our next three
most highly paid executive officers.
We account for equity compensation paid to our employees, i.e. stock
option awards, under the rules of SFAS 123R, which requires us to estimate
and record an expense for each award. Accounting rules also require us to
record cash compensation as an expense at the time the obligation is accrued.
Summary
The compensation committee believes that our compensation philosophy
and programs are designed to foster a performance-oriented culture that
aligns our executive officers' interests with those of our shareholders.
The compensation committee also believes that the compensation of our
executives is both appropriate and responsive to the goal of improving
shareholder value.
Compensation Committee Report
The following report is not deemed to be "soliciting material" or to
be "filed" with the SEC or subject to the SEC's proxy rules or the
liabilities of Section 18 of the Exchange Act, and the report shall not be
deemed to be incorporated by reference into any prior or subsequent filing
by the Company under the Securities Act of 1933, as amended
(the "Securities Act"), or the Exchange Act.
The compensation committee has reviewed and discussed the Compensation
Discussion and Analysis set forth above with our management. Based on its
review and discussions, the committee recommended to our Board of Directors
that the Compensation Discussion and Analysis be included in this proxy
statement and incorporated by reference into any Annual Report in Form 10-K
filed with the SEC for the fiscal year ended April 30, 2008.
Roger C. Cady, Chairman
Bernard L. Riley
Thomas A. Majewski
Rose Ann Giordano
7
Summary Compensation
The following table sets forth the compensation paid for the fiscal years ended April
30, 2006, 2007 and 2008 to the Company's Chief Executive Officer, the Chief Financial
Officer and the next three most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
(In Dollars)
Name and Other
Principal Fiscal Option Compen-
Position Year Salary Bonus Other(2) Awards(3) sation(4) Total
___________ _____ _______ ______ ______ _______ _________ _______
John H. Freeman (1) 2008 0 0 0 0 0 0
President and Chief 2007 0 0 0 0 0 0
Executive Officer 2006 0 0 0 0 0 0
Mark E. Maddocks 2008 196,424 5,000 7,800 14,480 10,747 234,451
Vice President-Finance, 2007 190,424 0 7,800 16,400 11,282 225,906
Chief Financial Officer 2006 181,376 0 7,800 26,732 11,092 227,000
Jeffrey H. Duncan 2008 194,032 5,000 7,800 14,480 10,614 231,926
Vice President- 2007 188,032 0 7,800 16,400 11,139 223,371
Manufacturing and 2006 179,088 0 7,800 26,732 10,745 224,365
Engineering
Anthony Pawlik 2008 215,000(5) 0 7,800 14,480 4,570 241,850
Vice President-Sales 2007 185,000(6) 0 7,800 16,400 2,466 211,666
2006 46,154 0 2,600 148,000 173 196,927
Anthony M Lougee 2008 120,000 2,500 0 6,335 6,571 135,406
Controller 2007 115,000 0 0 7,000 6,869 128,869
2006 110,000 0 0 11,410 6,582 127,882
Robert V. Tarantino (1) 2008 300,000 12,000 7,800 14,480 14,299 348,579
President and Chief 2007 276,327 0 7,800 24,000 15,221 323,348
Executive Officer 2006 275,000 0 7,800 39,120 14,000 335,920
__________________
(1) On May 7, 2008, John H. Freeman succeeded Robert V. Tarantino as President and Chief
Executive Officer. Mr. Tarantino retired effective that date and is no longer an executive
officer of the Company. Mr. Freeman's current compensation is disclosed under the section
entitled EMPLOYMENT AGREEMENTS.
(2) Automobile allowances.
(3) We measure the fair value of stock options using the Black-Scholes option pricing model
based upon the market price of the underlying common stock as of the date of grant, reduced
by the present value of estimated future dividends, using an expected quarterly dividend
rate of $0.06 and risk-free interest rates ranging from 3.0% to 5.0%. For fiscal year's
2008, 2007 and 2006 option values calculated using this model are $1.81, $2.00 and $3.18 per
share, respectively.
(4) 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.
(5) Consists of salary of $165,000 and commissions of $50,000.
(6) Consists of salary of $150,000 and commissions of $35,000.
8
GRANTS OF PLAN-BASED AWARDS (1)
Grant Option Exercise Grant
Name Date Awards(2) Price(3) Date
Value(4)
____________________ ________ _______ _______ ________
John H. Freeman(5) 9/27/2007 8,000 $3.33 $14,480
Mark E. Maddocks 9/27/2007 8,000 $3.33 $14,480
Jeffrey H. Duncan 9/27/2007 8,000 $3.33 $14,480
Tony Pawlik 9/27/2007 8,000 $3.33 $14,480
Anthony M. Lougee 9/27/2007 3,500 $3.33 $ 6,335
Robert V. Tarantino 9/27/2007 8,000 $3.33 $14,480
___________________
(1) The Company does not have any Equity Incentive Plan other than its 2001
Stock Option Plan and does not have a Non Equity Incentive Plan other than
the bonus pool. The size of grants under the 2001 Stock Option Plan and
the bonus pool are not predetermined in accordance with an incentive award.
(2) Granted under the 2001 Stock Plan. All of these options become
exercisable one year after the date of grant and expire five years from
the date of grant.
(3) Closing market price on the date of grant.
(4) Computed in accordance with SFAS 123R (see assumptions set forth under
the Summary Compensation table).
(5) Mr. Freeman's option awards were granted when he was a non-employee
director of the Company.
Narrative Description of Summary Compensation
Salary and bonus constituted 88% of total compensation for the named
executive officers in fiscal 2008. Options granted in fiscal 2008 were five
year options exercisable one year after the date of grant at an exercise
price equal to the closing market price of the Company's common stock on
the date of grant. No dividends are paid or accrued with respect to
options for the benefit of employees prior to the date of option exercise.
9
Outstanding Options
The following table sets forth information concerning outstanding
stock options at the fiscal year-end, April 30, 2008.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option Option
Options Options Exercise Expiration
Name Exercisable Unexercisable Price($) Date
John H. Freeman (1)
2005 6,000 0 6.42 09/14/2010
2006 8,000 0 4.70 09/13/2011
2007(2) 0 8,000 3.33 09/27/2012
Mark E. Maddocks
2001 10,000 0 7.98 11/26/2011
2002 8,200 0 2.99 09/18/2012
2003 8,200 0 4.09 09/17/2013
2004 8,200 0 6.75 09/15/2009
2005 8,200 0 6.63 09/14/2010
2006 8,200 0 4.70 09/13/2011
2007(2) 0 8,000 3.33 09/27/2012
Jeffrey H. Duncan
2001 8,200 0 7.98 11/26/2011
2002 8,200 0 2.99 09/18/2012
2003 8,200 0 4.09 09/17/2013
2004 8,200 0 6.75 09/15/2009
2005 8,200 0 6.63 09/14/2010
2006 8,200 0 4.70 09/13/2011
2007(2) 0 8,000 3.33 09/27/2012
Anthony Pawlik
Feb. 2006(3)20,000 30,000 5.14 02/23/2016
Sept.2006 8,200 0 4.70 09/13/2011
2007(2) 0 8,000 3.33 09/27/2012
Anthony M. Lougee
1999 6,000 0 6.00 06/09/2009
2001 2,500 0 7.98 11/26/2011
2002 1,875 0 2.99 09/18/2012
2003 2,500 0 4.09 09/17/2013
2004 2,500 0 6.75 09/15/2009
2005 3,500 0 6.63 09/14/2010
2006 3,500 0 4.70 09/13/2011
2007(2) 0 3,500 3.33 09/27/2012
Robert V. Tarantino
2001 12,800 0 7.98 11/26/2011
2002 12,800 0 2.99 09/18/2012
2003 12,000 0 4.09 09/17/2013
2004 12,000 0 6.75 09/15/2009
2005 12,000 0 6.63 09/14/2010
2006 12,000 0 4.70 09/13/2011
2007(2) 0 8,000 3.33 09/27/2012
10
_______________
(1) Mr. Freeman's option awards were granted when he was a non-employee
director of the Company.
(2) Since 2003 options granted have been five year options which became
exercisable at the end of the first year. The 2007 options vest on
September 27, 2008.
(3) This option for 50,000 shares was granted shortly after Mr. Pawlik was
hired. It is a ten year option which became exercisable in five equal
installments at the end of the first, second, third, fourth and fifth years.
Option Exercises
The following table provides information concerning stock option
exercises by named executive officers during the fiscal year ended
April 30, 2008:
OPTION EXERCISES (1)
Number of Value
Shares Acquired Received
Name on Exercise on Exercise
____ _______________ ____________
John H. Freeman __ __
Mark E. Maddocks __ __
Jeffrey H. Duncan (2) 64,773 $ 43,835
Anthony Pawlik __ __
Anthony M. Lougee __ __
Robert V. Tarantino 213,991 $174,756
_______________
(1) The Company does not have a Stock Award Plan.
(2) On October 30, 2007, the Company repurchased 85,227 of stock options
previously issued to Mr. Duncan for $31,321. The purchase price was
$0.3675 per option (the difference between the closing price of the
Company's common stock on that date, less the exercise price of the
repurchased options).
11
EQUITY COMPENSATION PLAN INFORMATION AT APRIL 30, 2008
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 899,000 $5.69 1,151,902
Equity compensation
plans not approved by
security holders 0 - 0
Total 899,000 $5.69 1,151,902
EMPLOYMENT AGREEMENTS
On May 7, 2008, the Company's Board of Directors appointed John H.
Freeman, to the position of President and Chief Executive Officer of the
Company. The Board of Directors agreed to hire Mr. Freeman as President and
Chief Executive Officer for a term of one year, with automatic renewal terms
of one year each. Mr. Freeman's base salary is $275,000 annually. He is
eligible biannually for a bonus of up to 50% of his base salary, as
determined by a review of the Company's Compensation Committee, and also
for a year-end bonus at the conclusion of the fiscal year if his performance
exceeds expectations. Mr. Freeman receives three weeks paid vacation and is
entitled to participate in any of the Company's present and future life
insurance, disability insurance, health insurance, pension retirement and
similar plans as well.
The Board of Directors hired Mr. Freeman based on the agreement that
he accepts certain non-solicitation, non-competition and non-disparagement
restrictions.
On May 7, 2008, the Company's Board of Directors granted Mr. Freeman
an option to purchase 150,000 shares of Dataram common stock, at the price
of $3.20 per share, the closing market price on May 7, 2008. Options to
purchase the first 37,500 shares become exercisable on November 7, 2008,
and options to purchase an additional 37,500 shares become exercisable on
each of May 7, 2009, November 7, 2009, and May 7, 2010. These options
expire on May 7, 2018.
Mark E. Maddocks and Jeffrey H. Duncan entered into similar Employment
Agreements with the Company as of February 1, 2005. Each agreement
continues on a year to year basis until terminated by the Company on thirty
(30) days notice before April 30th of each year. The current base
compensation under these agreements for Mr. Maddocks is $201,424, and for
Mr. Duncan is $199,032, which is subject to annual review by the Board of
Directors. In addition, executives will receive a bonus based upon a
formula which shall be reviewed and approved annually by the Board of
Directors. The Employment Agreements may be terminated by the Company for
cause and expire upon the death or six months after the onset of the
disability of the executive. In the event of termination or non-renewal,
the executive is entitled to one year's base salary at the current rate
plus a pro rata bonus for the current year. The Employment Agreements
contain terms concerning confidentiality, post-employment restrictions on
competition and non-solicitation of Company employees.
12
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, except that Mr. Riley was an executive officer of the
Company prior to his retirement in 1995.
RATIFICATION OF THE SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected
J.H. Cohn LLP as the independent certified public accountants to the Company
for the fiscal year ending April 30, 2009. The holders of Common Stock are
asked to ratify this selection. J.H. Cohn LLP has served the Company in
this capacity since October of 2005. If the shareholders fail to ratify
this selection of J.H. Cohn LLP, the Audit Committee will reconsider its
action in light of the shareholder vote.
The Company has been advised by J.H. Cohn 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
J.H. Cohn LLP for professional services:
2008 2007
_________ ________
Audit fees $ 102,900 $ 93,600
Audit related fees (1) 11,000 10,000
Tax fees(2) 11,000 12,500
All other fees (3) 5,000 0
Total fees $ 129,900 $116,100
______________
(1) Consists principally 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, including foreign jurisdictions.
(3) Consists principally of consultations regarding compliance with the
Sarbanes-Oxley Act.
All non-audit fees of an 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.
13
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, 2008 with management.
The Audit Committee has discussed with J.H. Cohn LLP the matters
required to be discussed in Statement on Auditing Standards No. 61, as
amended (AICPA, Professional Standards, Vol.1 AU Section 380, as adopted by
the Public Company Accounting Oversight Board in Rule 3200T).
The Audit Committee has received the written disclosures and the letter
from J.H. Cohn LLP required by Independence Standards Board Standard No. 1
("Independence Standards Board Standard No 1., Independence Discussion with
Audit Committee, as adopted by the Public Company Accounting Oversight
Board in Rule 3200T), as amended, and has discussed with J.H. Cohn 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, 2008 for filing with the
Securities and Exchange Commission.
Audit Committee
Thomas A. Majewski, Chairman
Bernard L. Riley
Roger C. Cady
Rose Ann Giordano
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 2009 ANNUAL MEETING
Any shareholder wishing to present a proposal which is intended to be
presented at the 2009 Annual Meeting of Shareholders should submit such
proposal to the Company at its principal executive offices no later than
April 17, 2009. It is suggested that any proposals be sent by certified
mail, return receipt requested.
14
BOARD OF DIRECTORS
The Board of Directors has a process for shareholders to communicate
with directors. Shareholders should write to the President at the
Company's mailing address and specifically request that a copy of the letter
be distributed to a particular board member or to all board members. Where
no such specific request is made, the letter will be distributed to board
members if material, in the judgment of the President, to matters on the
Board's agenda.
The Board of Directors of the Company met five times during the last
fiscal year. 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 Thomas A. Majewski, Bernard L. Riley, Roger
C. Cady and Rose Ann Giordano. This Committee met four times during the
last fiscal year. 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 approval of all audit and non-audit services of
the auditor. The Company's Board of Directors has adopted a written
charter for the Audit Committee which may be viewed at the Company's
website, www.dataram.com. Each member of the Audit Committee is
"independent" within the meaning of the NASDAQ listing standards. The Board
of Directors has determined that Mr. Riley is a "financial expert" within
the meaning of those standards and an "audit committee financial expert"
within the meaning of Item 401(h) 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 Board of Directors has a standing Compensation Committee whose
members are Thomas A. Majewski, Roger C. Cady, Bernard L. Riley, Rose Ann
Giordano, all of whom are "independent" within the meaning of the NASDAQ
listing standards. This committee relies upon the advice of the Company's
chief executive officer who makes recommendations both concerning director
compensation and the compensation of other executive officers. This
Committee met once during the past fiscal year. The principal functions of
the Compensation Committee are to recommend to the Board of Directors the
compensation of directors and the executive officers and to establish and
administer various compensation plans, including the stock option plan. The
Compensation Committee does not have a written charter.
The Board of Directors has a standing Nominating Committee whose
members are Thomas A. Majewski, Roger C. Cady, Bernard L. Riley, Rose Ann
Giordano, all of whom are "independent" with the meaning of the NASDAQ
listing standards. 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 NASDAQ
listings standards. The Board of Directors has adopted a charter for
Nominating Committee and may be viewed at the Company's website,
www.dataram.com. In years in which the Board considers that the selection
of a new director would be desirable, the Nominating Committee solicits
recommendations from the directors and the executive officers. The
Nominating Committee will also consider recommendations made by shareholders.
From these recommendations, the committee selects a small group to be
interviewed. The Nominating Committee then makes a recommendation to the
full board. 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.
15
DIRECTORS COMPENSATION
The following table sets forth information concerning non-employee
director compensation during the fiscal year ended April 30, 2008:
Fees Option All
Name Earned(1) Awards(2) Other Total
__________________ ______________ ___________ ______ ________
Thomas A. Majewski $24,000 14,480 0 $38,480
Rodger C. Cady $24,000 14,480 0 $38,480
Bernard Riley $24,000 14,480 0 $38,480
Rose Ann Giordano $24,000 14,480 0 $38,480
John H. Freeman(3) $24,000 14,480 0 $38,480
_______________
(1) All directors' fees, except for option awards, are paid in cash in the
year earned.
(2) As determined in accordance with SFAS 123R (see assumptions in Summary
Compensation Table).
(3) On May 7, 2008, Mr. Freeman was appointed President and Chief Executive
Officer of the Company. During the fiscal year ended April 30, 2008, Mr.
Freeman was a non-employee director of the Company.
Directors who are not employees of the Company receive a quarterly
payment of $6,000. During fiscal 2008 each received five year options to
purchase 8,000 shares of the Common Stock of the Company at $3.33, the
closing market value of the Common Stock at the date of grant. All of
these options become exercisable on September 27, 2008, one year from the
date of grant.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING 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.
16
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 2008 Annual Report to Security Holders, which is enclosed.
By Order of the Board of Directors
THOMAS J. BITAR,
Secretary
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, 2008, 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.
17
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 John H. Freeman 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 Thursday, September
25, 2008 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)
John H. Freeman __ Roger C. Cady __ Rose Ann Giordano __ Thomas A. Majewski __
VOTE WITHHELD____ from all nominees.
2. VOTE FOR____ AGAINST____ ABSTAIN____ ratification of the selection
of J.H. Cohn, LLP to be the independent auditors of the Company for the
fiscal year ending April 30, 2009.
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 2008
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.