<PAGE>
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
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
QMS, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
QMS, Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:*
(4) Proposed maximum aggregate value of transaction:
- - --------
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF QMS, INC. APPEARS HERE]
To The Stockholders of QMS, Inc.:
You are cordially invited to attend the annual meeting of stockholders to be
held at the Adam's Mark Hotel, 64 Water Street, Mobile, Alabama, on Tuesday,
January 24, 1995, at 2:00 p.m. local time.
The principal business of the meeting will be to elect one class of directors
to serve a three-year term beginning January 24, 1995. During the meeting, we
also will review the results of the past year and report on significant aspects
of our operations during the first quarter of fiscal 1995.
Whether or not you plan to attend the annual meeting, please complete, sign,
date and return to the Company the enclosed proxy card in the enclosed,
postage-prepaid envelope at your earliest convenience so that your shares will
be represented at the meeting. If you choose to attend the meeting, you may, of
course, revoke your proxy and personally cast your votes.
Sincerely yours,
/s/ James L. Busby
JAMES L. BUSBY
President
Mobile, Alabama
December 14, 1994
<PAGE>
QMS, INC.
ONE MAGNUM PASS
MOBILE, ALABAMA 36618
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 24, 1995
The annual meeting of stockholders of QMS, Inc. will be held on Tuesday,
January 24, 1995, at 2:00 p.m. local time, at the Adam's Mark Hotel, 64 Water
Street, Mobile, Alabama.
The meeting is called for the following purposes:
1. To elect two persons to serve as Class I directors for a three-year term
beginning in 1995;
2. To consider and act upon such other business as may properly come before
the meeting or any adjournment(s).
The Board of Directors has fixed November 28, 1994 as the record date for the
determination of stockholders entitled to notice of and to vote at the meeting.
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES
WILL BE REPRESENTED AT THE MEETING. IF YOU CHOOSE TO ATTEND THE MEETING, YOU
MAY, OF COURSE, REVOKE YOUR PROXY AND PERSONALLY CAST YOUR VOTES.
By Order of the Board of Directors,
[SIG CUT]
GREGORY R. JONES
Secretary
Mobile, Alabama
December 14, 1994
<PAGE>
QMS, INC.
ONE MAGNUM PASS
MOBILE, ALABAMA 36618
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of QMS, Inc. (the "Company") of proxies to be voted at the
annual meeting of stockholders of the Company to be held Tuesday, January 24,
1995, and at any and all adjournments thereof (the "Meeting"). Any proxy given
pursuant to such solicitation and received in time for the Meeting will be
voted with respect to all shares represented by it and will be voted in
accordance with the directions, if any, given in such proxy. If directions are
not given, the proxy will be voted FOR the election of the persons named herein
to serve as Class I directors.
Stockholders who execute proxies may revoke them at any time before they are
voted by filing with the Secretary of the Company either an instrument revoking
the proxy or a duly executed proxy bearing a later date. Proxies also may be
revoked by any stockholder present at the Meeting who expresses a desire to
vote his or her shares in person. A majority of the stockholders entitled to
vote must be present in person, or represented by proxy, to constitute a quorum
and to act upon the proposed business. Failure of a quorum to be represented at
the Meeting will necessitate adjournment and will subject the Company to
additional expense.
The terms "fiscal 1992," "fiscal 1993," "fiscal 1994" and "fiscal 1995" as
used herein refer to the Company's fiscal years ended October 2, 1992, October
1, 1993 and September 30, 1994, and its fiscal year ending September 29, 1995,
respectively.
SHARES ENTITLED TO VOTE
The Notice of the Meeting, this Proxy Statement and the form of proxy are
first being mailed to stockholders on or about December 14, 1994. At the close
of business November 28, 1994, the record date for determining the stockholders
entitled to notice of and to vote at the Meeting, there were 10,671,157 shares
of common stock, $.01 par value ("Common Stock"), of the Company outstanding
and entitled to vote at the Meeting. Each share is entitled to one vote.
The election of directors requires the affirmative vote of a plurality of
shares of Common Stock voting in person or by proxy at the Meeting. Therefore,
votes withheld from director nominees will not be included in vote totals and
will not be considered in determining the outcome of the election of directors.
YOUR BOARD OF DIRECTORS URGES YOU TO SIGN, DATE
AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE
1
<PAGE>
PROPOSAL 1 -- ELECTION OF DIRECTORS
DIRECTORS AND DIRECTOR NOMINEES
The Company's Certificate of Incorporation provides for three classes of
directors serving staggered terms of office. Upon the expiration of the term
of office for a class of directors, the nominees for that class will be
elected for a term of three years to serve until the election and
qualification of their successors. At the Meeting, two nominees for the Class
I positions will be considered. The Class III and Class II directors have one
year and two years, respectively, remaining in their terms of office.
The Company's Certificate of Incorporation and Bylaws provide that the
Company shall have at least five and no more than ten directors, the exact
number to be determined by resolution of the Board of Directors from time to
time. The Board has, by resolution, set the number of directors at nine. There
is presently one vacancy on the Board resulting from the prior resignation of
a Class I director. The Company is in the process of identifying candidates
who might fill this vacancy, although no specific nominee has yet been
selected. If this vacancy remains following the Meeting, the Board of
Directors may elect to fill the vacancy pursuant to the authority vested in it
by the Company's Bylaws.
It is the intention of the persons named as proxies to vote the proxies for
the election as Class I directors of the Company of the persons named below,
each of whom is currently a director, unless the stockholders direct otherwise
in their proxies. In the event any of the nominees named below refuses or is
unable to serve as a director (which is not now anticipated), the persons
named as proxies reserve full discretion to vote for such other person or
persons as may be nominated. The election of the nominees to the Board of
Directors requires the presence, by proxy or in person, of the holders of a
majority of all shares of the Company's Common Stock entitled to notice of and
to vote at the Meeting and the affirmative vote of the holders of a plurality
of the shares voted at the Meeting.
Set forth below is certain information furnished to the Company by each of
the Company's directors, including each of the nominees.
YOUR BOARD OF DIRECTORS RECOMMENDS
THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF THE NOMINEES FOR DIRECTOR
CLASS I DIRECTORS -- CURRENT TERM EXPIRING AT THE MEETING
The Class I directors are nominees for an additional term of three years,
expiring in 1998.
JAMES L. BUSBY(1) (age 48) has been a director and President, Chief
Executive Officer and Chairman of the Board of the Company since 1977.
LUCIUS E. BURCH, III (age 53) has been a director of the Company since 1983.
He has been President of Massey Burch Investment Group, Inc. (an investment
management and venture capital firm) since 1981 and Chairman of Massey Burch
Investment Group, Inc. since 1990. He is also a director of BioSafety Systems
(a manufacturer of proprietary products for the protection of health care
workers), Surgical Care Affiliates, Inc. (an operator of ambulatory care
centers) and Titan Holdings, Inc. (an insurance holding company).
- - --------
(1) Messrs. Dow and Parker are brothers-in-law of Mr. Busby.
2
<PAGE>
CLASS II DIRECTORS -- CURRENT TERM EXPIRING 1997
DONALD L. PARKER, PH.D.(1) (age 49) has been a director of the Company since
1979 and an executive officer since 1981. Since 1981, he has served as the
Company's Executive Vice President, Products and Technology (formerly Senior
Vice President, Marketing and Technology; and formerly Senior Vice President,
Corporate Technology).
JACK R. ALTHERR (age 68) has been a director of the Company since 1985. Mr.
Altherr retired from the Company in 1991 and has served the Company as a
consultant on various occasions since September 1991. From 1984 to 1991, he
served the Company in various capacities, including: Executive Vice President,
Sales and Marketing; Executive Vice President, Sales; Chief Operating
Officer/Chief Financial Officer; Senior Vice President, Finance; Executive
Vice President, Finance and Administration; and Treasurer.
G. WILLIAM SPEER (age 53) has been a director since 1983 and Assistant
Secretary of the Company since April 1994. He served as Secretary from 1983 to
1994. He has been a member of the law firm of Powell, Goldstein, Frazer &
Murphy since 1965 (and a partner since 1970). He is also a director of
Southern Electronics Corporation (a wholesale distributor of computer-related
and cellular telephone products) and Goody's Family Clothing, Inc. (an apparel
retailer).
CLASS III DIRECTORS -- CURRENT TERM EXPIRING 1996
CHARLES D. DALEY (age 60) has been a director of the Company since 1990 and
an executive officer since 1988. Since 1988, he has served as the Company's
Executive Vice President, Finance and Administration (formerly Senior Vice
President, Finance and Administration), Treasurer and Chief Financial Officer.
Prior thereto, he was Vice President, Finance and Administration at Megatek
Corp., a subsidiary of United Telecommunications (a CAD/CAM terminal
manufacturer).
MICHAEL C. DOW (1) (age 47) has been a director of the Company since 1977
and was an executive officer from 1977 until January 1989. He served the
Company in a consulting capacity from February 1989 to January 1992. From 1977
to January 1989, he served the Company in various capacities, including Senior
Vice President, Marketing and Service; Senior Vice President, Marketing;
Senior Vice President, Sales and Customer Technical Service; Senior Vice
President, Sales and Customer Support; and Senior Vice President, Sales and
Services. Since October 1989, he has served as Mayor of the City of Mobile,
Alabama. He is also a director of Openquest Technologies, Inc. (a provider of
computer programming services).
S. FELTON MITCHELL, JR. (age 49) has been a director of the Company since
1987. He has been President, S. Felton Mitchell, Jr., P.C. (attorney) since
1987 and sole proprietor, S. Felton Mitchell, Jr., CPA (accounting) since
1986. He is also a director of Mobile Gas Service Corporation.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal 1994, the Board of Directors met four times. All members of
the Board attended at least 75% of the total number of Board meetings and
meetings of committees of which they were members.
During fiscal 1994, the Audit Committee consisted of Messrs. Altherr, Burch,
Mitchell and Speer (Chairman) and met four times. The Audit Committee is
responsible for reviewing and making recommendations regarding the Company's
employment of independent auditors, the annual audit of the Company's
financial statements and the Company's internal accounting practices and
policies.
During fiscal 1994, the Compensation Committee, consisting of Messrs. Burch
(Chairman), Mitchell and Speer, met four times. The Compensation Committee is
responsible for recommending and reviewing the compensation, including fringe
benefits, of the executive officers and directors of the Company and for
administering certain of the Company's stock option plans.
The Company has no nominating committee.
- - --------
(1)Messrs. Dow and Parker are brothers-in-law of Mr. Busby.
3
<PAGE>
DIRECTOR COMPENSATION
No remuneration is paid to executive officers of the Company for services
rendered in their capacities as directors. The Company pays fees to non-
employee directors of $1,500 per month, plus $750 for each day, or part
thereof, spent in meetings of the Board of Directors or committees thereof.
Non-employee directors who are members of a committee are paid an additional
$2,000 a year for each committee on which the non-employee director serves.
Non-employee directors may elect to receive stock options pursuant to the QMS,
Inc. Stock Option Plan for Directors in lieu of cash compensation. Cash
directors' fees paid to Mr. Speer are paid over by him to the law firm of which
he is a partner.
Mr. Altherr is a party to an employment and consulting agreement with the
Company pursuant to which he received consulting fees of approximately $150,000
in fiscal 1994. The agreement expires in September 1996. Prior to his
retirement from the Company in 1991, Mr. Altherr served in various executive
capacities, including as Executive Vice President, Sales and Marketing. Mr.
Altherr is obligated under this agreement to assume such duties and
responsibilities with respect to the Company as may be assigned to him from
time to time by the Board of Directors.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than 10% of the
Company's Common Stock to file reports of ownership and changes in ownership of
such securities with the Securities and Exchange Commission (the "SEC") and the
New York Stock Exchange, Inc. Such persons are also required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company or
representations that no Forms 5 were required, the Company believes that during
fiscal 1994 all of the Company's directors and executive officers complied with
all Section 16(a) filing requirements, except that Mr. Peter van Schaick, an
officer of certain subsidiaries of the Company who is no longer required to
file Section 16 reports, filed one late report covering one stock option grant.
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the Board of
Directors and during fiscal 1994 included Messrs. Busby and Daley, Dr. Parker,
and Messrs. Raymond A. Rosewall and Albert A. Butler (each of whom is
identified in the Summary Compensation Table below), Philip R. Cahoon and
Gregory R. Jones.
Mr. Rosewall (age 43) has been Executive Vice President, Worldwide Sales and
Marketing since April 1992; from July 1989 to April 1992, he was Executive Vice
President, Operations; and from September 1986 to July 1989, he was Vice
President, Manufacturing at Genicom Corporation (a computer printer
manufacturer).
Mr. Butler (age 52) has been Senior Vice President, Operations since April
1992; from January 1991 to April 1992, he was Vice President, Corporate
Materials and Logistics; from May 1965 to December 1990, he was Manager of
Logistics at General Electric Co. (manufacturer of electronics).
Mr. Cahoon (age 41) has been Corporate Controller since August 1985 and also
has been Vice President and Assistant Secretary since October 1990; and from
July 1987 to October 1990, he was Executive Director of QMS. Prior to being
employed by QMS, Mr. Cahoon was Manager, Cost Analysis and Controls with
International Paper Company.
Mr. Jones (age 42) has been Vice President, General Counsel and Secretary
since April 1994, and assumed the additional duties of the former Vice
President, Human Resources (whose employment terminated) in August 1994; from
July 1992 to April 1994, he was General Counsel to the Company; from September
1991 to July 1992 he served the Company as Corporate Attorney; from September
1988 to August 1991 he was Manager of Contracts and Pricing at Thiokol
Corporation (a manufacturer of solid fuel rocket motors).
4
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of November 28, 1994
regarding the amount of Common Stock beneficially owned by each of the
executive officers whose names appear in the "Summary Compensation Table"
included herein ("named executive officers"), each director and director
nominee of the Company, all directors and officers of the Company as a group,
and each person known to the Company to own beneficially more than five
percent of the outstanding shares of Common Stock. All shares shown reflect
sole voting and investment power except as otherwise noted.
According to rules adopted by the Securities and Exchange Commission, a
person is a "beneficial owner" of securities if that person has or shares the
power to vote them or to direct their investment or has the right to acquire
beneficial ownership of such securities within 60 days through the exercise of
an option, warrant or right of conversion of a security or otherwise. As of
the date of this Proxy Statement, the Company only has shares of Common Stock
outstanding.
<TABLE>
<CAPTION>
NUMBER OF SHARES AND NATURE OF
BENEFICIAL OWNERSHIP AT
NOVEMBER 28, 1994
-------------------------------------------
VOTING OR OPTIONS
INVESTMENT POWER EXERCISABLE
-------------------------- WITHIN PERCENT OF
NAME OR GROUP SOLE SHARED 60 DAYS CLASS(/1/)
------------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
James L. Busby.......... 556,943(/2/) 0 122,000 6.3%
Charles D. Daley........ 0 3,000(/3/) 63,000 *
Donald L. Parker, Ph.D.
....................... 4,353 25,517(/3/) 68,000 *
Jack R. Altherr......... 5,363 0 6,250 *
Lucius E. Burch, III.... 14,740 69,525(/4/) 27,307 1.0%
Michael C. Dow.......... 19,000 40,467(/3/) 11,250 *
S. Felton Mitchell, Jr.. 0 0 20,307 *
G. William Speer........ 0 0 22,307 *
Raymond A. Rosewall .... 6,693 0 50,000 *
Albert A. Butler........ 3,226 1,000 15,200 *
Franklin J.
Lassman(/5/)........... 0 0 15,400 *
All current directors
and executive officers
as a group
(12 persons)........... 612,574 139,809 433,221 10.7%
</TABLE>
- - --------
* Indicates beneficial ownership of less than 1.0%.
(1) For each person named and the group identified in the table, "Percent of
Class" has been calculated assuming the exercise of all options
exercisable by that person or group within 60 days after November 28,
1994.
(2) Includes 17,000 shares held by his spouse, as to which Mr. Busby has no
voting or investment power and disclaims beneficial ownership.
(3) Voting and investment power shared with spouse with respect to the
indicated shares.
(4) Of the indicated shares, 5,000 are held of record by Mr. Burch's spouse;
18,425 are held of record by a trust of which Mr. Burch is a beneficiary
and a co-trustee; 100 are held by dependents of Mr. Burch; and 46,000 are
held of record by investment clients of Mr. Burch's firm (Massey Burch
Investment Group, Inc.). Mr. Burch disclaims beneficial ownership of all
shares held by his spouse, dependents and investment clients of his firm.
(5) Mr. Lassman's employment as an executive officer of the Company ended in
April 1994.
EXECUTIVE COMPENSATION TABLES
The following tables present certain information concerning the cash
compensation and stock options provided to the named executive officers for
each of fiscal 1994, fiscal 1993 and fiscal 1992. The notes to these tables
provide more specific information regarding compensation. The executive
officer compensation policies of the Board of Directors are discussed in more
detail in the Compensation Committee Report.
This table presents the total compensation earned by the Company's CEO and
its five most highly compensated executive officers other than the CEO who
earned over $100,000 in salary and bonus during fiscal 1994. The Company has
no outstanding stock appreciation rights ("SARs") and no shares of restricted
stock.
5
<PAGE>
TABLE 1
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ($) AWARDS
---------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(/1/) ($) ($) (#) ($)(/2/)
- - --------------------------- ------ -------- ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
James L. Busby 1994 593,685 0 0 10,000 52,589
Chairman, President and 1993 594,326 0 0 5,000 141,774
CEO 1992 566,346 0 * 10,000 *
Charles D. Daley 1994 314,434 0 0 5,000 176,185
Executive Vice President, 1993 315,131 0 0 5,000 243,590
Treasurer and CFO 1992 294,231 0 * 10,000 *
Donald L. Parker, Ph.D. 1994 318,235 0 0 5,000 43,663
Executive Vice President, 1993 318,871 0 0 5,000 93,810
Products & Technology 1992 294,231 0 * 10,000 *
Raymond A. Rosewall 1994 245,074 0 0 5,000 5,456
Executive Vice President, 1993 245,760 0 0 5,000 5,295
Worldwide Sales & Marketing 1992 215,000 0 * 20,000 *
Albert A. Butler 1994 149,916 0 0 5,000 5,068
Sr. Vice President, 1993 144,800 0 0 5,000 5,133
Operations 1992 134,999 0 * 7,000 *
Franklin J. Lassman(/3/) 1994 186,539 84,475 0 0 5,630
Former Sr. Vice President 1993 223,606 48,475 16,915 13,500 3,635
and Managing Director, 1992 209,722 0 * 5,000 *
Asia Pacific Operations
</TABLE>
- - --------
* Omitted pursuant to regulations of the Securities and Exchange Commission.
(1) Amounts reported in the "Salary" column for fiscal 1993 for Messrs. Busby
and Daley and Dr. Parker are greater than the corresponding amounts for
fiscal 1992 solely because of timing differences in the Company's bi-weekly
pay periods. The increase in Mr. Rosewall's salary occurred in connection
with his change in position from Executive Vice President, Operations to
Executive Vice President, Worldwide Sales and Marketing. The amounts in
this column include automobile allowance and accounting services for
Messrs. Busby, Daley, Parker and Rosewall for all three fiscal years and
tax equalization for Mr. Lassman for fiscal 1992 and 1993, but such amounts
do not exceed the lesser of $50,000 or 10% of such officer's salary for
such year.
(2) Includes for Mr. Busby: $5,456 contributed on his behalf to the Company's
401(k) Plan, $4,650 for life insurance premiums paid on his behalf and
$42,483 accrued in connection with a supplemental executive retirement
benefits agreement. Includes for Mr. Daley: $5,456 contributed on his
behalf to the Company's 401(k) Plan and $170,729 accrued in connection with
a supplemental executive retirement benefits agreement. Includes for Dr.
Parker: $5,456 contributed on his behalf to the Company's 401(k) Plan,
$2,180 for life insurance premiums paid on his behalf and $36,027 accrued
in connection with a supplemental executive retirement benefits agreement.
Includes for Mr. Rosewall: $5,456 contributed on his behalf to the
Company's 401(k) Plan. Includes for Mr. Butler: $5,068 contributed on his
behalf to the Company's 401(k) Plan. Includes for Mr. Lassman: $5,630
contributed on his behalf to the Company's 401(k) Plan.
(3) Mr. Lassman's employment as an executive officer of the Company ended in
April 1994.
6
<PAGE>
TABLE II
FISCAL 1994 STOCK OPTION GRANTS
The following table presents information regarding options to purchase shares
of Common Stock that were issued by the Company to its named executive officers
in fiscal 1994 that may be exercised to purchase shares of Common Stock. The
Company granted no SARs during fiscal 1994.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT
OPTIONS EMPLOYEES OR BASE DATE
GRANTED IN FISCAL PRICE EXPIRATION VALUE
NAME (#)(/1/) YEAR ($/SHARE) DATE ($)(/2/)
---- ---------- ---------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
James L. Busby.............. 10,000 4.2% $8.75 1/25/04 $36,000
Charles D. Daley............ 5,000 2.1% $8.75 1/25/04 $18,000
Donald L. Parker, Ph.D...... 5,000 2.1% $8.75 1/25/04 $18,000
Raymond A. Rosewall......... 5,000 2.1% $8.75 1/25/04 $18,000
Albert A. Butler............ 5,000 2.1% $8.75 1/25/04 $18,000
Franklin J. Lassman(/3/).... 0 0% $ 0 n/a $ 0
</TABLE>
- - --------
(1) All options granted to the named executive officers were granted on January
25, 1994. These options become exercisable in 20% increments annually
beginning on the date of grant and are subject to accelerated vesting in
whole or in part upon a "change of control" as defined in the Company's
1987 Stock Option Plan.
(2) This column represents the present value of the options on the date of
grant using the Black-Scholes option pricing model adapted for the
Company's Common Stock, utilizing the following assumptions: three-year
stock price volatility of 0.5273; no dividend yield; expected term to
exercise of 366 days; interest rates equal to the U.S. Treasury Note rates
in effect at the date of the grant (approximately 8%) for the expected term
of the option and no adjustment for non-transferability or forfeiture. The
actual value, if any, an executive may realize will depend on the excess of
the stock price over the exercise price on the date the option is
exercised, so there is no assurance that the value to be realized by an
executive will be at or near the value estimated by the Black-Scholes
model.
(3) Mr. Lassman's employment as an executive officer of the Company ended in
April 1994.
TABLE III
AGGREGATED OPTION EXERCISES IN FISCAL 1994 AND
FISCAL YEAR-END OPTION VALUES
The following table presents information regarding options exercised for
shares of the Company's Common Stock during fiscal 1994 and the value of
unexercised options held at September 30, 1994. The Company has no outstanding
SARs.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES VALUE OPTIONS AT 9/30/94 (#) OPTIONS AT 9/30/94 ($)(/1/)
ACQUIRED ON REALIZED ------------------------- -------------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------- ----------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
James L. Busby.......... 0 $ 0 113,000 32,000 $ 139,625 $ 8,500
Charles D. Daley........ 0 0 57,000 22,000 20,125 5,500
Donald L. Parker, Ph.D.
....................... 0 0 62,000 22,000 60,125 5,500
Raymond A. Rosewall..... 0 0 44,000 26,000 10,375 5,500
Albert A. Butler........ 0 0 10,800 16,200 1,375 5,500
Franklin J.
Lassman(/2/)........... 6,000 15,000 10,700 18,800 438 1,750
</TABLE>
- - --------
(1) Based on the closing price on the New York Stock Exchange -- Composite
Transactions of the Company's Common Stock on that date ($9.50).
(2) Mr. Lassman's employment as an executive officer of the Company ended in
April 1994.
7
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the Company's five-year cumulative total return
to the S&P 500 and the S&P Computer Systems Composite Index over the five-year
period beginning on October 1, 1989 and ending September 30, 1994. The total
stockholder return assumes $100 invested at the beginning of the period in the
Company's Common Stock, the S&P 500 and the S&P Computer Systems Composite
Index. It also assumes reinvestment of all dividends. Past financial
performance should not be considered to be a reliable indicator of future
performance, and investors should not use historical trends to anticipate
results or trends in future periods.
QMS, INC.
COMPARISON OF CUMULATIVE TOTAL RETURN (10/01/89-09/30/94)
VS.
S&P 500 AND S&P COMPUTER SYSTEMS COMPOSITE INDICES
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG S&P 500, S&P COMPUTER SYSTEMS COMPOSITE INDICES
AND QMS, INC.
<CAPTION>
S&P
Measurement period S&P COMPUTER QMS,
(Fiscal Year Covered) 500 SYSTEMS Inc.
- - --------------------- -------- -------- --------
<S> <C> <C> <C>
Measurement PT -
10/01/89 $100.00 $100.00 $100.00
FYE 10/01/90 $ 90.72 $ 89.25 $ 95.60
FYE 10/01/91 $118.97 $ 97.90 $202.20
FYE 10/01/92 $132.11 $ 81.80 $ 64.84
FYE 10/01/93 $149.20 $ 54.72 $ 80.22
FYE 09/30/94 $154.73 $ 79.95 $ 83.52
</TABLE>
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
S&P 500.......................... $100 $90.72 $118.97 $132.11 $149.20 $154.73
S&P Computer Systems............. 100 89.25 97.90 81.80 54.72 79.95
QMS, Inc......................... 100 95.60 202.20 64.84 80.22 83.52
</TABLE>
EXECUTIVE AGREEMENTS
The Company has entered into an Executive Agreement with each of Messrs.
Busby, Daley and Rosewall and Dr. Parker. Each agreement will remain in effect
so long as the executive remains employed by the Company and thereafter until
all payments to which the executive is entitled under the agreement have been
made. Among other things, each agreement provides that if, within 18 months
after the date of a Change of Control (as defined in each agreement) while the
executive is employed by the Company, (i) the executive's
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<PAGE>
employment is involuntarily terminated (except for cause) or (ii) the executive
voluntarily terminates his employment because of material changes in the nature
or scope of his duties or employment (including a change of the principal place
of performance of his duties) or the reduction of his compensation without his
consent, then the executive may exercise his rights to receive payments under
the agreement, including a cash payment of 299% of his "base amount," as
defined in Section 280G of the Code (the "Executive Payment"). If the executive
dies before the payment is made, his legal representative is entitled to
receive the Executive Payment.
Under the agreement, a "Change of Control" of the Company means (i) the
acquisition by any individual, entity or group (other than an employee benefit
plan of the Company) of 20% or more of the combined voting power of the
Company's then outstanding securities entitled to vote generally in the
election of directors or (ii) a change in the composition of the Board of
Directors such that the persons who either were directors on the date of the
agreement, or who became directors subsequent to such date and whose election
or nomination to the Board of Directors was duly approved by the persons who
were directors on the date of the agreement, shall not constitute a majority of
the members of the Board of Directors.
Each agreement also provides for the payment of all costs and expenses
incurred by the executive to (i) defend the validity of the agreement, (ii)
contest any determinations by the Company concerning the amounts payable by the
Company under the agreement, (iii) determine in any tax year of the executive
the tax consequences to the executive of any amounts payable (or reimbursable)
under the agreement or (iv) prepare responses to an Internal Revenue Service
audit of, and otherwise defend, his personal income tax return for any year
which is the subject of any such audit or any adverse determination,
administrative proceeding or civil litigation arising therefrom that is
occasioned by or related to an audit by the Internal Revenue Service of the
Company's income tax returns.
Should any of the payments or reimbursements that are provided for under the
agreement to be paid to or for the benefit of the executive or payments or
benefits under any other plan, agreement or arrangement between the executive
and the Company, be determined or alleged to be subject to an excise or similar
purpose tax pursuant to Section 4999 of the Code or any successor or other
comparable federal, state or local tax law, the Company shall pay to the
executive such additional compensation as is necessary to place the executive
in the same after-tax position he would have been in had no such tax been paid
or incurred by the executive.
REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS OF QMS, INC.
The Compensation Committee of the Board of Directors is composed of three
non-management directors, Messrs. Burch (Chairman), Mitchell and Speer. The
Committee is responsible for setting overall policies that govern the Company's
compensation programs, administering certain of the Company's equity
compensation plans and establishing the cash compensation of executive
officers.
The Company's executive compensation programs are designed to attract, reward
and retain key executives who will continue to lead the Company in achieving
its objectives in a highly competitive and fast-changing industry.
The cash compensation for each of the Company's executives consists of a base
salary and an annual incentive program. Long-term incentives consist of stock
options granted under the Company's 1984 and 1987 Stock Option Plans.
9
<PAGE>
CASH COMPENSATION -- BASE SALARIES
Base salary targets are established by reviewing published survey data and
compensation information contained in proxy statements regarding similar
positions held by executives of other high technology/electronics firms of
approximately the same size as the Company. The Compensation Committee then
chooses to pay the executive at, above or below his base salary target
according to the following two factors:
1. The executive's job performance in the Company's last fiscal year, and
2. The executive's perceived potential to contribute to the Company's
performance in the upcoming fiscal year.
Final decisions regarding the establishment of base salary targets and levels
of base salaries are made independently by the Compensation Committee. The
Committee does, however, solicit input from the Company's Chief Executive
Officer and Executive Vice President and Chief Financial Officer on the level
of performance of executives reporting to them. Base salary adjustments may be
made within a fiscal year based on the executive's performance and contribution
to the Company's results of operations during that period.
CASH COMPENSATION -- ANNUAL INCENTIVE PROGRAMS
The Compensation Committee believes that an annual cash compensation program
tied to the Company's performance provides appropriate short-term incentives to
the Company's key executive officers. Accordingly, Messrs. Busby, Daley and
Rosewall and Dr. Parker participate in an annual cash incentive program that
requires the Company to achieve a certain earnings per share level before any
payments may be made. The earnings per share levels are established by the
Compensation Committee upon recommendation by the Executive Vice President and
Chief Financial Officer of the Company each year and are generally set at
levels providing for an increase in earnings per share over the prior year
before any incentive compensation is earned. The threshold earnings per share
target level for fiscal 1994 was $0.55 per share. If such earnings had been
achieved, each of Messrs. Busby, Daley and Rosewall and Dr. Parker would have
received an additional cash payment equal to 18% of his base salary. If higher
earnings per share levels had been achieved, they would have been eligible to
receive correspondingly higher bonus amounts. The Committee's philosophy is
that executive base salaries should be competitive within the industry and
should be paid regardless of the Company's performance so long as the officer
retains his position, but that the annual incentive portion of executive
compensation should not be paid unless stockholders benefit from improved
earnings per share. Because target earnings per share levels were not attained
in fiscal 1992, fiscal 1993 or fiscal 1994, no payments were made under this
program for those years.
STOCK OPTION PROGRAMS
The Compensation Committee believes that management ownership of a
significant equity interest in the Company is a major incentive in building
stockholder value and aligning the long-term interests of management and
stockholders. To that end, the Compensation Committee has historically granted
stock options at option prices not less than the fair market value of the
Common Stock on the grant date. Any gain from the exercise of the stock options
will occur only when the price of the Company's Common Stock increases above
the option grant price. This situation, in turn, means that stockholder value
is being enhanced. In fiscal 1994, the Compensation Committee granted stock
options to the named executive officers as outlined in Table II above setting
forth fiscal 1994 stock option grants.
COMPENSATION -- CHIEF EXECUTIVE OFFICER
The Compensation Committee considers the information set forth above
concerning compensation paid to executives by other companies in setting the
compensation of Mr. Busby as the Chief Executive Officer of the Company. The
Committee's objective in setting Mr. Busby's compensation is that his salary be
at the high end of a range of salaries paid to chief executive officers of
companies in the high technology/electronics
10
<PAGE>
industry of approximately the same size as the Company. In addition, the
Committee approves the performance objectives set forth in the annual incentive
plan described above, which is designed to permit Mr. Busby (as well as the
other officer-participants in the annual incentive plan) to earn additional
compensation if certain earnings per share levels are achieved. See the
discussion under "Cash Compensation -- Annual Incentive Programs" above. The
Committee also granted stock options to Mr. Busby in fiscal 1994 based on the
philosophy described under "Stock Option Programs" above. See "Table II --
Fiscal 1994 Stock Option Grants" for the terms of such options.
LIMITATIONS ON THE DEDUCTIBILITY OF COMPENSATION
Pursuant to the 1993 Omnibus Budget Reconciliation Act, a portion of annual
compensation payable after 1993 to any of the Company's five highest paid
executive officers would not be deductible by the Company for federal income
tax purposes to the extent such officer's overall compensation exceeds
$1,000,000. Qualifying performance-based incentive compensation, however, would
be both deductible and excluded for purposes of calculating the $1,000,000
base. It has been determined that no portion of anticipated compensation
payable to any executive officer in 1994 would be non-deductible. Although the
Compensation Committee does not presently intend to award compensation in
excess of the $1,000,000 cap, it will continue to address this issue when
formulating compensation arrangements for executive officers.
Submitted By the Compensation Committee
of the Board of Directors
Lucius E. Burch, III S. Felton Mitchell, Jr. G. William Speer
The foregoing Report of the Compensation Committee shall not be deemed to
constitute soliciting material or to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Burch, Mitchell and Speer. Mr.
Speer is also a partner in the firm of Powell, Goldstein, Frazer & Murphy of
Atlanta, Georgia, which acts as corporate counsel for the Company.
AUDITORS
The firm of Deloitte & Touche LLP has served as the Company's independent
certified public accountants since 1980. The appointment of auditors is a
matter for determination by the Audit Committee of the Board of Directors and
is not being submitted to the stockholders for approval or ratification. A
representative of this firm is expected to attend the Meeting, to respond to
questions from stockholders and to make a statement if he so desires.
STOCKHOLDER PROPOSALS FOR ANNUAL MEETING
Any stockholder of the Company wishing to submit a proposal for action at the
Company's annual meeting of stockholders to be held in 1996 and desiring the
proposal to be considered for inclusion in the Company's proxy material
relating thereto must provide a written copy of the proposal to the management
of the Company at its principal executive office not later than August 5, 1995
and must otherwise comply with the rules of the Securities and Exchange
Commission relating to stockholder proposals.
11
<PAGE>
ANNUAL REPORT
The Company's 1994 Annual Report to Stockholders is being mailed to the
Company's stockholders with this Proxy Statement. The Annual Report is not part
of the proxy solicitation material.
GENERAL
Management does not know of any other matters to be presented at the Meeting
for action by stockholders. However, if any other matter requiring a vote of
the stockholders is properly presented at the Meeting or any adjournment
thereof, it is intended that votes will be cast pursuant to the proxies with
respect to such matters in accordance with the best judgment of the persons
acting under the proxies.
The Company will pay the cost of soliciting proxies in the accompanying form.
In addition to solicitation by use of the mail, certain officers and regular
employees of the Company may solicit the return of proxies by telephone,
telegram or personal interview. The Company has engaged Corporate Investor
Communications, Inc. to distribute and solicit proxies for the Meeting at an
estimated cost of $4,500, plus reasonable expenses. The Company has requested
that brokerage houses and custodians, nominees and fiduciaries forward
soliciting materials to their principals and beneficial owners of Common Stock
of the Company, and will reimburse them for their reasonable out-of-pocket
expenses.
A list of stockholders entitled to be present and vote at the Meeting will be
available at the offices of the Company, One Magnum Pass, Mobile, Alabama, for
inspection by the stockholders during regular business hours from January 15,
1995 to the date of the Meeting. The list also will be available during the
Meeting for inspection by stockholders who are present.
If you cannot be present in person, you are requested to complete, sign, date
and return the enclosed proxy promptly. An envelope has been provided for that
purpose. No postage is required if mailed in the United States.
[Sig. Cut]
GREGORY R. JONES
Secretary
December 14, 1994
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<PAGE>
QMS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON JANUARY 24, 1995
The undersigned hereby appoints Gregory R. Jones and G. William Speer, or
either of them, proxies, with power of substitution, to vote the shares of
common stock of QMS, Inc. which the undersigned is entitled to vote at the
annual meeting of stockholders on January 24, 1995 and any adjournment thereof,
as specified on the reverse side.
(Continued and to be signed and dated on the other side.)
<PAGE>
[X] Please mark
your votes
as this
------------
COMMON
1. Election of Directors: James L. Busby and Lucius E. Burch, III
FOR the election as directors WITHHOLD AUTHORITY
of both of to elect any
the nominees nominee
listed above listed above.
[ ] [ ]
(Instructions: To withhold authority to vote for any particular nominee, draw a
line through his name above.)
2. With discretionary power in the transaction of such other business as may
properly come before the meeting.
This proxy, properly executed, will be voted as directed
hereon. If no direction is made, this proxy will be voted
FOR all nominees in Proposal 1. The proxies may vote in
their discretion as to other matters which may properly
come before the meeting.
- - -------------------------------------------------------
Signature
- - -------------------------------------------------------
Signature (if held jointly)
Title of authority (if applicable)
NOTE: Please sign exactly as name appears hereon. If shares
are registered in more than one name, the signature of all
proxies are required. A corporation should sign in its full
corporate name by a duly authorized officer stating his or
her title. Trustees, guardians, executors and administrators
should sign in their official capacity, giving their full
titles as such. If a partnership, please sign in the partner-
ship name by an authorized person.
