As filed with the Securities and Exchange Commission on December 10, 1996
Registration No. 33
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TMS, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 91-1098155
(State of Incorporation) (I.R.S. Employer Identification No.)
206 West Sixth Avenue
Stillwater, Oklahoma 74074
(405) 377-0880
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Maxwell Steinhardt, President
TMS, Inc.
206 West Sixth Avenue
Stillwater, Oklahoma 74074
(405) 377-0880
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
Douglas A. Branch, Esq.
Phillips McFall McCaffrey McVay & Murrah, P.C.
12th Floor, One Leadership Square
211 N. Robinson
Oklahoma City, Oklahoma 73102
(405) 235-4100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
_______________________________
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. o
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. x
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. o
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. o
CALCULATION OF REGISTRATION FEE
===============================================================================
Title of each
class of Proposed maximum Proposed maximum Amount of
securities to Amount to be offering price aggregate registration
be registered registered(1) per share(1) offering price(1) fee
_______________________________________________________________________________
Common Stock,
par value 102,345
$.05 Shares $.66 $67,548.00 $100.00
_______________________________________________________________________________
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the bid and ask prices of
Common Stock on December 5, 1996.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
_______________________________________________________________________________
PROSPECTUS
_______________________________________________________________________________
102,345 Shares
TMS, INC.
Common Stock
($.05 par value)
__________________
The shares (the "Shares") of common stock, par value $.05 per share (the "Common
Stock"), of TMS, Inc. (the "Company") offered hereby (the "Offering") are being
sold by certain individual selling shareholders (the "Selling Shareholders").
See "Selling Shareholders." The Company will not receive any of the proceeds
from the sale of the Shares by the Selling Shareholders.
__________________
The Shares may be offered by the Selling Shareholders from time to time in open
market transactions (which may include block transactions), through the writing
of options on the Shares, or otherwise in the over-the-counter market, or in
private transactions at prices relating to prevailing market prices or at
negotiated prices. The Selling Shareholders may effect such transactions by
selling Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders and/or the purchasers of Shares for whom such broker-
dealers may act as agent or to whom they sell as principal or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). The Selling Shareholders and any broker-dealer acting in
connection with the sale of the Shares offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended
(the " Securities Act"), in which event any discounts, concessions or
commissions received by them, which are not expected to exceed those customary
in the types of transactions involved, or any profit on resales of the Shares
by them, may be deemed to be underwriting commissions or discounts under the
Securities Act.
The costs, expenses and fees incurred in connection with the registration of the
Shares (exclusive of any selling commissions or brokerage fees) will be paid by
the Company. The expenses of the offering, other than selling commissions and
brokerage fees, are estimated to be approximately $5,100.
The Common Stock is traded on the over-the-counter market and is not currently
eligible for inclusion on the Nasdaq Small Cap Market or any other stock
exchange. On December 5, 1996, the closing bid price of the Common Stock as
reported on the Nasdaq OTC Bulletin Board was $.593 per share.
__________________
See "Risk Factors" located herein at page 3 for a discussion of risk factors
that should be considered in connection with an investment in the Common Stock
offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_______________________________________________________________________________
The date of this Prospectus is December 10, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at its regional
offices in New York (7 World Trade Center, Suite 1300, New York, New York
10048) and 500 West Madison Street, Suite 1400 Northwestern Atrium Center,
Chicago, Illinois 60661. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
The Commission also maintains a Web site at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus and to
be a part hereof the following reports and documents filed with the Commission
pursuant to the Exchange Act: (i) the Company's Form 10-KSB Annual Report, for
the fiscal year ended August 31, 1996; (ii) the Company's Quarterly Reports on
Form 10-QSB for the quarters ended November 30, 1995, February 29, 1996 and May
31, 1996; (iii) current reports on Form 8-K dated September 6, 1995 and March
15, 1996; and (iv) the description of the Company's Common Stock contained in
the Company's Form 10 Registration Statement filed with the Commission on
January 17, 1990.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the securities
covered by this Prospectus shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been
or may be incorporated by reference in this Prospectus (other than exhibits to
such documents which are not specifically incorporated by reference into such
documents). Such requests should be directed to Maxwell Steinhardt, President,
TMS, Inc., 206 West Sixth Avenue, Stillwater, Oklahoma 74074, (405) 377-0880.
THE COMPANY
The Company is an Oklahoma corporation and has been engaged in the
computer software industry since 1981. The Company licenses computer software
products and provides software development services to enable information
delivery through electronic publishing and electronic image management.
<PAGE> 2
The Company's operations include products and services used by
corporations, governments and large institutions. The Company's products are
primarily text and image retrieval "toolkits," which allow customers to develop
new software applications or customize existing applications. In addition, the
Company offers off-the-shelf products for customers that do not have software
development resources. Services include software development and the
conversion of paper documents for use in electronic publishing environments.
The Company emphasizes the development of software for customers desiring new
or custom applications, and document conversion for customers desiring to
convert paper and other media to electronic form.
The Company's executive offices are located at 206 West Sixth Avenue,
Stillwater, Oklahoma 73074, and its telephone number is (405) 377-0880.
RISK FACTORS
In addition to the other information in this Prospectus, prospective
investors should carefully consider the following investment considerations
relating to the Company and its Common Stock before making an investment.
Variability of Quarterly Operating Results. The Company's revenues and
operating results can vary substantially from quarter to quarter. License
revenues, which represented approximately 65% of total revenues in fiscal 1996,
are difficult to forecast because of factors such as the size and timing of
individual license transactions, changes in customer budgets and deployments of
units incorporating the Company's software, and general economic conditions.
In recent years, the Company has emphasized software development services as a
means of mitigating the variability of revenues and operating results, and the
principal growth in revenues has been in the area of services. Although the
Company currently has a backlog of software development services, there is no
assurance that the Company will be able to maintain that backlog.
Competition and Market Trends. The computer software market is highly
competitive. As the markets in which the Company's products and services are
sold continue to develop and as the Company enters new markets, it expects that
additional competitors will enter those markets and that competition will
become more intense. Some of the Company's competitors or potential
competitors have greater financial, marketing, or technical resources than the
Company. These competitors may be able to adapt more quickly to new or
emerging technologies and standards or changes in customer requirements or may
be able to devote greater resources to the promotion and sale of their products
than the Company. Many of these competitors market, or can potentially market,
their products directly to the ultimate consumers of such products and may have
more ability to control pricing and marketing decisions which may affect their
revenues. There can be no assurance that the Company will be able to continue
competing successfully in this industry. Continued investment in research and
product development and in marketing will be required to permit the Company to
compete successfully, and there is no assurance that the Company will have the
necessary capital resources to fund that investment.
Possible Volatility of Stock Price. Trading of the Common Stock has
been limited; however, if trading becomes more active, the trading price in the
future could be subject to wide fluctuations in response to quarterly
variations in operating results, announcements of technological innovations or
new products by the Company or its competitors, as well as other events or
factors. In addition, the stock market has from time to time experienced
extreme price and volume fluctuations which have particularly affected the
stock price of many high technology companies and which often have been
unrelated to the operating performance of these companies. These broad market
fluctuations may adversely affect the market price of the Common Stock.
<PAGE> 3
No Current Listing on Stock Exchange. The Company's Common Stock is
traded on the over-the-counter market and is not currently eligible for
inclusion on the Nasdaq Small Cap Market or any other stock exchange and
eligibility for such inclusion is subject to compliance with several
requirements, such as a minimum market price of the Common Stock. To qualify
for listing on the Nasdaq Small Cap Market, the Company must meet certain
requirements which it does not currently meet, particularly that the market
price of the Common Stock exceed $3.00 per share. To satisfy this requirement,
it may be necessary to effect a reverse stock split. There is no assurance
that a reverse split will be successful in reaching such a minimum price or
that the price of the Common Stock would, after adjustment for the reverse
split, trade at the same level as the pre-split shares. The Company has, from
time to time, considered a reverse split and may effect a reverse split in the
future; however, there are no present commitments to do so. In any event, even
if an exchange listing is obtained, there can be no assurance that the market
for the Common Stock will become liquid or active or that liquidity or
activity, if achieved, will be sustained.
Dependence Upon a Single Customer. POWERCOM-2000, Inc. ("POWERCOM"), a
wholly-owned subsidiary of Briggs & Stratton, accounted for approximately
$607,000 or 11% of the Company's total revenue in fiscal 1996. During fiscal
1996, the Company continued to perform document conversion services for
POWERCOM, principally the conversion of parts and maintenance manuals for lawn
and garden products into an electronic format. Document conversion services
accounted for approximately $482,000 or 79% of the total POWERCOM revenue in
1996. As reported in fiscal year 1995, the Company expected a decline in
future revenue from POWERCOM. In fiscal 1996, service revenue from POWERCOM
approximated $110,000 compared to $621,000 in fiscal 1995. Although this
customer has ongoing service requirements, primarily for document conversion,
management cannot project the level of revenue that could result from this
customer in fiscal 1997. In fiscal 1995, POWERCOM accounted for 22% of the
Company's total revenue, the only customer to account for 10% or more of total
revenues for that year. To offset the expected decline in POWERCOM revenues,
the Company has continued to develop strategic relationships with large firms
to produce revenue opportunities for both products and services.
Risks of Software Product Development. The Company's future success
will depend on its ability to develop and release, on a timely basis, new
software products and upgrades. The Company has historically engaged in
software development services for customers and it derives revenues from such
services and licensing revenue from the customer's future use of the software
developed by the Company. The software development process is inherently
unpredictable. Development time and the achievability of design objectives may
not be determinable until very late in the development process. Problems and
delays in product development may result in the delay or cancellation of
planned product or service offerings by the Company and its strategic partners,
and such problems and delays could have an adverse effect on the operating
results of the Company. Consequently, the receipt of service and licensing
revenue from these customers will also be delayed. There can be no assurance
that the Company will not experience similar problems and delays in the future,
resulting in material adverse effects on the Company's operating results.
Furthermore, no complex software product is totally free of errors, and
significant errors may go undetected for some time. Discovery of significant
errors may delay or cancel product releases and, if not discovered until after
product release, may necessitate recall of products by the Company and its
strategic partners and expose the Company to substantial expense and claims for
reimbursement.
<PAGE> 4
Dependence on Key Personnel. The Company believes that its continued
success will depend in large part upon its ability to attract and retain
highly-skilled technical, managerial and marketing personnel. Competition for
such personnel in the software industry is intense, and the Company has from
time to time experienced difficulty in locating candidates with appropriate
qualifications. There can be no assurance that the Company will be successful
in attracting and retaining the personnel it requires to develop and market new
and enhanced products and conduct its operations successfully.
Dependence on Proprietary Technology. The Company relies on a
combination of patent, trade secret, copyright and trademark laws,
nondisclosure agreements and other contractual provisions and technical
measures to protect its proprietary rights. There can be no assurance that
these protections will be adequate or that the competitors of the Company will
not independently develop technologies that are substantially equivalent or
superior to the technology of the Company. The patentability of computer
software until recently has been severely limited and the scope and extent of
patent rights in this field are evolving. The Company has filed with the
Patent and Trademark Office patent applications and has been awarded patents
relating to the Company's ScanFix product. However, there can be no assurance
that patents will be issued with respect to future patent applications, or that
the Company's patents will be upheld as valid or will prevent the development
of competitive products. The Company makes source codes available to certain
of its customers and this may increase the likelihood of misappropriation or
other misuse of the Company's intellectual property. Existing copyright laws
afford only limited protection. In addition, the laws of certain countries in
which the Company's products are or may be licensed do not protect its products
and intellectual property rights to the same extent as the laws of the United
States. Moreover, the financial resources of the Company may not be adequate
to enable the Company to actively pursue litigation as a means of enforcing its
intellectual property rights. There can be no assurance that a third party
will not in the future assert that the Company's technology violates third
party patents. As the number of software products in the industry increases
and the functionality of these products further overlap, the Company believes
that software developers may become increasingly subject to infringement
claims. Any such claims, with or without merit, can be time consuming and
expensive to defend.
Potential Issuance of Preferred Stock; Anti-Takeover Provisions. The
Board of Directors of the Company has the authority to issue up to 1,000,000
shares of Preferred Stock and to fix the rights, preferences, privileges and
restrictions, including voting rights, of these shares without any further vote
or action by the shareholders. The rights of the holders of the Common Stock
will be subject to, and may be adversely affected by, the rights of the holders
of any Preferred Stock that may be issued in the future. The issuance of the
Preferred Stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of the
Company's outstanding voting stock, thereby delaying, deferring or preventing a
change in control of the Company. Furthermore, such Preferred Stock may have
other rights, including economic rights, senior to the Common Stock, and as a
result, the issuance of such stock could have a material adverse effect on the
market value of the Common Stock. The Company has no present plans to issue
shares of Preferred Stock. The Company may in the future adopt other measures
that may have the effect of delaying, deferring or preventing a change in
control of the Company. Certain of such measures may be adopted without any
further vote or action by the shareholders. The Company has no present plans
to adopt any such measures. The Company is also afforded the protection of
Section 1145 of the Oklahoma General Corporation Act, which could delay or
prevent a change in control of the Company, impede a merger, consolidation or
other business combination involving the Company or discourage a potential
acquiror from making a tender offer or otherwise attempting to obtain control
of the Company.
<PAGE> 5
No Dividends on the Common Stock. The Company has never paid a cash
dividend on the Common Stock and the Company does not currently intend to pay
cash dividends on the Common Stock in the foreseeable future.
Voting Power of Officers and Directors. The Company's officers and
directors hold voting power of approximately 32.2% of the issued and
outstanding shares of the Common Stock and therefore are able exert a
significant degree of influence in the election of the Board of Directors and
the control over the Company's affairs.
Future Acquisitions. The Company may in the future pursue acquisitions
of complementary products, technologies and businesses. Future acquisitions by
the Company may result in potentially dilutive issuances of equity securities,
the incurrence of additional debt and amortization expenses related to goodwill
and other intangible assets, which could adversely affect the profitability of
the Company. In addition, acquisitions involve numerous risks, including
difficulties in the assimilation of the operations, products and personnel of
the acquired company, the diversion of management's attention from other
business concerns, risks of entering markets in which the Company has limited
or no direct prior experience, and the potential loss of key employees of the
acquired company. The Company is continually reviewing product and technology
acquisition opportunities, although there are currently no discussions,
commitments or agreements which would be material to the Company. In the event
that such an acquisition does occur, there can be no assurance as to the effect
thereof on the business, financial condition or results of the Company's
operations.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered hereby.
PLAN OF DISTRIBUTION
The Shares may be offered by the Selling Shareholders from time to time
in open market transactions (which may include block transactions), through the
writing of options on the Shares or otherwise in the over-the-counter market,
or in private transactions at prices relating to prevailing market prices or at
negotiated prices. The Selling Shareholders may effect such transactions by
selling Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Shareholders and/or the purchasers of Shares for whom such broker-
dealers may act as agent or to whom they sell as principal or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). The Selling Shareholders and any broker-dealer acting in
connection with the sale of the Shares offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act in which event any
discounts, concessions or commissions received by them, which are not expected
to exceed those customary in the types of transactions involved, or any profit
on resales of the Shares by them, may be deemed to be underwriting commissions
or discounts under the Securities Act.
<PAGE> 6
The Shares offered hereby may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale, or at negotiated prices.
The costs, expenses and fees incurred in connection with the
registration of the Shares (exclusive of any selling commissions or brokerage
fees) will be paid by the Company.
To comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Shares may not be sold
unless such Shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied
with.
SELLING SHAREHOLDERS
The following table sets forth the Shares owned by the Selling
Shareholders before and after the Offering (assuming all Shares offered hereby
are sold) and the amount of Shares offered. The Selling Shareholders have no
obligation to sell any of the Shares offered.
<TABLE>
<CAPTION>
Shares Owned Shares Owned
Relationship Before the Shares After the
with the Offering Being Offering
Company Number Percent Offered Number Percent
_________ ______ _______ _______ ______ _______
<S> <S> <C> <C> <C> <C> <C>
Hannon Armstrong
& Company None 76,759 * 76,759 - *
Peter L. Pomeroy None 25,586 * 25,586 - *
________________
*Less than 1%
</TABLE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Phillips McFall McCaffrey McVay & Murrah, P.C., Oklahoma City,
Oklahoma.
EXPERTS
The consolidated financial statements of TMS, Inc. and its subsidiary as
of August 31, 1996 and 1995, and for the years then ended, and the financial
statement schedule for the years ended August 31, 1996 and 1995, included in
the Company's 1996 Annual Report on Form 10-KSB, have been incorporated by
reference herein and in the Registration Statement in reliance upon the report
of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in auditing and accounting.
<PAGE> 7
===================================== =======================================
No dealer, salesman or other person TMS, INC.
has been authorized to give any
information or to make any
representation not contained in this
Prospectus and, if given or made,
such information or representation
must not be relied upon as having
been authorized by the Company or the
Selling Shareholders. This
Prospectus does not constitute an
offer to sell or solicitation of an
offer to buy any securities offered
hereby in any jurisdiction to any
person to whom it is unlawful to make
such offer in such jurisdiction.
Neither the delivery of this
Prospectus nor any sale made
hereunder shall, under any circum-
stances, create any implication that
the information herein is correct as 102,345 Shares
of any time subsequent to the date Common Stock
hereof or that there has been no ($.05 par value)
change in the affairs of the Company
since such date.
_____________________________
_______________________________________
TABLE OF CONTENTS
PROSPECTUS
Page _______________________________________
Available Information......... 2
The Company................... 2
Risk Factors.................. 3
Use of Proceeds............... 6
Plan of Distribution.......... 6
TMS, Inc.
Selling Shareholders.......... 7 206 West Sixth Avenue
Stillwater, Oklahoma 74074
Legal Matters................. 7 (405) 377-0880
==================================== =======================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses of the offering, all of which are to be paid by
the Company, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Registration Fees:
Securities and Exchange Commission......................$ 100.00
Printing and engraving expenses.............................. 100.00
Legal fees and expenses...................................... 3,000.00
Accountants' fees and expenses............................... 2,000.00
Miscellaneous................................................ 300.00
________
Total.................................................... $5,500.00
=========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Oklahoma General Corporation Act grants every corporation the power
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (other than by action
by or in the right of the corporation) by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The Oklahoma statute also grants every corporation the power to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust,
or other enterprise against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, except that
no indemnification shall be made in respect of any claim, issue, or matter as
to which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
The Oklahoma statute provides that to the extent that a director,
officer, employee, or agent of a corporation has been successful on the merits
or otherwise in defense of any action, suit, or proceeding referred to in the
statute, or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses, including attorneys' fees, actually incurred by
him in connection therewith.
<PAGE> II-2
Articles Nine and Ten of the Registrant's Certificate of Incorporation
indemnify and exculpate the directors, officers, employees, and agents of the
Registrant from and against certain liabilities. Article Nine provides that
the Registrant shall indemnify to the full extent permitted under the Oklahoma
General Corporation Act any director, officer, employee, or agent of the
Registrant. Article Ten provides that a director of the Registrant shall have
no personal liability to the Registrant or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability (a)
for any breach of the director's duty of loyalty to the Registrant or its
shareholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for acts or omissions
specified in Section 1053 of the Oklahoma General Corporation Act regarding the
unlawful payment of dividends and the unlawful purchase or redemption of the
Registrant's stock, and (d) for any transaction from which the director derived
an improper personal benefit.
Item 16. Exhibits.
Exhibit Description
2.1 --- Amended Plan of Reorganization and Agreement of Merger
dated November 7, 1995 (the "Merger Agreement")
incorporated herein by reference to Exhibit 2.1 to
Amendment No. 2 to the Registrant's Form S-4
Registration Statement (No. 33-64649).
2.2 --- Amendment No. 1 to the Merger Agreement incorporated
herein by reference to Exhibit 2.2 to Amendment No. 2 to
the Registrant's Form S-4 Registration Statement (No.33-
64649).
4.1 --- Specimen Certificate for Common Stock of registrant,
incorporated herein by reference to Exhibit 4.1 to the
registrant's Form S-4 Registration Statement (No. 33-
64649).
5.1 --- Opinion of Phillips McFall McCaffrey McVay & Murrah,P.C.
23.1 --- Consent of Phillips McFall McCaffrey McVay & Murrah,P.C.
23.2 --- Consent of KPMG Peat Marwick LLP.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15, above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted against the registrant by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE> II-3
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) For purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE> II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Stillwater, State of Oklahoma, on December 10,
1996.
TMS, INC.
By: /s/ Maxwell Steinhardt
______________________________
Maxwell Steinhardt
Chairman of the Board of
Directors and Chief Executive
Officer
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Maxwell Steinhardt as his true and lawful
attorney-in-fact and agent, with full power of substitution, for him, and in
his name, place and stead, in any and all capacities to sign any or all
amendments or post-effective amendment to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto the said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
/s/ Maxwell Steinhardt Chairman of the Board of December 10, 1996
______________________ Directors and Chief
Maxwell Steinhardt, Executvie Officer
Principal Executive
Officer
/s/ Deborah D. Mosier
_______________________ Chief Financial Officer December 10, 1996
Deborah D. Mosier
Principal Financial and
Accounting Officer
*/s/ Doyle E. Cherry
_______________________ Director December 10, 1996
Doyle E. Cherry
*/s/ James R. Rau, M.D.
_______________________ Director December 10, 1996
James R. Rau, M.D.
*/s/ Marshall C. Wicker
_______________________ Director December 10, 1996
Marshall C. Wicker
*/s/ Dana R. Allen
_______________________ Executive Vice President December 10, 1996
Dana R. Allen and Director
*By:/s/ Maxwell Steinhardt
______________________
Maxwell Steinhardt
Attorney-in-Fact
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit Description Page
_______ ___________ ________
2.1 Amended Plan of Reorganization and Agreement Incorporated herein by
of Merger dated November 7, 1995 (the "Merger reference to Exhibit
Agreement"). 2.1 to Amendment No. 2
to the Registrant's
Form S-4 Registration
Statement (No.33-64649)
2.2 Amendment No. 1 to the Merger Agreement Incorporated herein by
reference to Exhibit
2.2 to Amendment No. 2
to the Registrant's
Form S-4 Registration
Statement (No.33-64649)
4.1 Specimen Certificate for Common Stock of
Registrant Incorporated herein by
reference to Exhibit
4.1 to the Registrant's
Form S-4 Registration
Statement (No.33-64649)
5.1 Opinion of Phillips McFall McCaffrey McVay
& Murrah, P.C.
23.1 Consent of Phillips McFall McCaffrey McVay
& Murrah, P.C.
23.2 Consent of KPMG Peat Marwick LLP
Exhibit 5.1
December 10, 1996
TMS, Inc.
206 West Sixth Ave.
P.O. Box 1358
Stillwater, Oklahoma 74074
Re: TMS, Inc. ("Company")
Form S-3 Registration Statement\
Our File No. 63988.00101
Gentlemen:
We have acted as counsel to the Company in connection with the
preparation of the Registration Statement on Form S-3 (the "Registration
Statement"), to be filed by the Company with the Securities and Exchange
Commission (the "Commission"), relating to 102,345 shares of the Company's
common stock, $.05 par value (the "Shares").
In connection therewith, we have examined the Certificate of
Incorporation, the By-laws and the corporate minutes of the Company, the
Registration Statement to be filed with the Commission, and such other
documents as we deemed necessary to the opinion hereinafter expressed.
Based on the foregoing, we are of the opinion that the Shares are
validly authorized and issued, fully paid, and nonassessable.
We are members of the bar of the State of Oklahoma and do not hold
ourselves out as experts on, or as generally familiar with, or qualified to
express opinions under law other than the law of the State of Oklahoma and the
law of the United States and the opinion given herein is limited thereto.
Very truly yours,
PHILLIPS MCFALL MCCAFFREY MCVAY
& MURRAH, P.C.
/s/ Phillips McFall McCaffrey McVay &
Murrah, P.C.
Exhibit 23.1
CONSENT OF COUNSEL
Phillips McFall McCaffrey McVay & Murrah, P.C., hereby consents to the
filing of its opinion of counsel as an exhibit to the Form S-3 Registration
Statement filed by TMS, Inc.
PHILLIPS MCFALL MCCAFFREY MCVAY & MURRAH, P.C.
/s/ Phillips McFall McCaffrey McVay & Murrah, P.C.
Oklahoma City, Oklahoma
December 10, 1996
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENTS
The Board of Directors
TMS, Inc.:
We consent to the use of our report contained in TMS, Inc.'s 1996 annual
report on Form 10-KSB incorporated herein by reference and to the reference to
our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Oklahoma City, Oklahoma
December 9, 1996
