SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
TMS, INC.
----------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $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 (Set forth amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
<PAGE> 1
TMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held January 23, 1998
Notice is hereby given that the Annual Meeting of Shareholders of TMS,
Inc., an Oklahoma corporation (the "Company"), will be held in Room
110 of the Center for International Trade and Development on the
campus of Oklahoma State University, Stillwater, Oklahoma, on Friday,
January 23, 1998, at 10:00 a.m., Central Standard Time, for the
following purposes:
(1) To elect five persons to serve as directors of the Company;
(2) To approve and ratify the selection of KPMG Peat Marwick LLP as
independent auditors; and
(3) To consider and act upon any other matters which may properly
come before the Meeting or adjournments thereof.
Shareholders of record at the close of business on December 1, 1997
shall be entitled to notice of and to vote at the Meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
Deborah D. Mosier, Secretary
December 10, 1997
<PAGE> 2
TMS, INC.
206 West Sixth Street
Stillwater, Oklahoma 74074
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 23, 1998
This Proxy Statement is furnished to shareholders of TMS, Inc., an
Oklahoma corporation (the "Company"), in connection with the solicitation of
proxies to be used at the Annual Meeting of Shareholders (the "Meeting") to
be held in Room 110 of the Center for International Trade and Development on
the campus of Oklahoma State University, Stillwater, Oklahoma on Friday,
January 23, 1998, at 10:00 a.m., Central Standard Time, or at any adjournment
thereof. The persons named as proxies in the enclosed form were selected by
the Board of Directors of the Company.
This Proxy Statement and the accompanying proxy are first being mailed
to shareholders on or about December 10, 1997, along with the Annual Report to
Shareholders, including financial statements for the fiscal year ended August
31, 1997.
GENERAL
Outstanding Shares and Voting Rights; Voting Procedures
At December 1, 1997, the Company had 13,283,906 shares of common
stock, $.05 par value ("Common Stock"), outstanding. The presence, in person
or by proxy, of the holders of at least a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum of such class at the
Meeting. Shareholders have no cumulative voting rights.
Any person signing and mailing the enclosed proxy may vote in person
if in attendance at the Meeting. Proxies may be revoked at any time before
they are voted by notifying the Secretary of such revocation, in writing, at
the Meeting, or by submitting a later dated proxy. Shareholders are
encouraged to vote on the matters to come before the Meeting by marking their
preferences on the enclosed proxy and by dating, signing, and returning the
proxy in the enclosed envelope. If a preference is not indicated on a proxy,
the proxy will be voted "FOR" the nominees to serve as directors of the
Company and "FOR" the ratification and selection of independent auditors.
It is not anticipated that matters other than those described above
and in the Notice of Annual Meeting, to which this Proxy Statement is
appended, will be brought before the Meeting for action, but if any other
matters properly come before the Meeting, it is intended that votes thereon
will be cast pursuant to said proxies in accordance with the best judgment of
the proxy holders.
With respect to the tabulation of votes on any matter, all abstentions
and non-votes for nominees are treated as present or represented and entitled
to vote at the Meeting.
Record Date
The close of business on December 1, 1997 has been fixed as the record
date for the determination of shareholders entitled to receive notice of and
to vote at the Meeting. Each outstanding share of Common Stock is entitled
to one vote on all matters herein.
<PAGE> 3
Expenses of Solicitation
The expenses of this solicitation of proxies will be borne by the
Company, including expenses in connection with the preparation and mailing of
this Proxy Statement and all documents which now accompany or may hereafter
supplement it. Solicitations will be made only by the use of the mails,
except that, if deemed desirable, officers and regular employees of the
Company may solicit proxies by telephone, telegraph, or personal calls. It is
contemplated that brokerage houses, custodians, nominees and fiduciaries will
be requested to forward the proxy soliciting material to the beneficial owners
of the Common Stock held of record by such persons and that the Company will
reimburse them for their reasonable expenses incurred in connection therewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding the beneficial
ownership of shares of the Company's Common Stock as of October 31, 1997, by
each shareholder known to the Company to be a beneficial owner of more than 5%
of Company's Common Stock. Unless otherwise indicated, the beneficial owner
has sole voting and investment power with respect to such shares of Common
Stock.
<TABLE>
<CAPTION>
Amount and Nature Percent
Name and Address of Beneficial Ownership of Class (1)
- ---------------- ----------------------- ------------
<S> <C> <C>
Dana R. Allen 1,934,506(2) 14.5%
433 Airport Boulevard,
Suite 414
Burlingame, California 94010
Theodore A. Walker
P.O. Box 1580 920,000(3) 6.9%
Alvin, Texas 77512
James R. Rau, M.D.
1203 South Hill Street 717,000(4) 5.4%
Alvin, Texas 77511
</TABLE>
(1) Shares of Common Stock subject to options exercisable on or before
February 8, 1998 (" Currently Exercisable Options") are deemed
outstanding for purposes of computing the percentage for such person but
are not deemed outstanding in computing the percent of any other person.
(2) Includes 34,044 shares subject to Currently Exercisable Options.
(3) Includes 56,000 shares which are held by Mr. Walker in joint tenancy with
his wife, Jerline, with whom he shares voting and investment power.
(4) Includes 345,010 shares held by Dr. Rau's wife, Martha, with whom he
shares voting and investment power as to such shares, and 100,000 shares
subject to Currently Exercisable Options.
As of the close of business on October 31, 1997, Cede & Co. owned of
record, but not beneficially, 5,904,904 shares (44%) of Common Stock. Cede &
Co., the nominee for the Depository Trust Company, holds securities of record
for participating financial institutions such as banks and broker/dealers.
<PAGE> 4
Market for the Company's Common Stock
The Company's Common Stock is traded in the over-the-counter market,
and prices are quoted by the National Quotation Bureau, Incorporated ("NQB")
on the "pink sheets," and the NASD Non-Nasdaq OTC Bulletin Board. The
following table sets forth the quarterly range of high and low bid prices of
the Company's Common Stock for fiscal years 1997 and 1996. The quotations are
inter-dealer prices without retail mark-ups, mark-downs, or commissions and
may not represent actual transactions. The source of such quotations is the
NQB.
<TABLE>
<CAPTION>
Bid Prices
----------
Fiscal 1997 High Low
- ----------- ---- ---
<S> <C> <C>
First Quarter $ 7/8 $ 9/16
Second Quarter 11/16 9/16
Third Quarter 11/16 17/32
Fourth Quarter 9/16 15/32
Fiscal 1996 High Low
- ----------- ---- ---
First Quarter $ 1-5/32 $ 3/8
Second Quarter 1-1/2 5/8
Third Quarter 1-3/8 15/32
Fourth Quarter 7/8 5/8
</TABLE>
The Company has not declared nor paid any cash dividends since its
incorporation, nor does it anticipate that it will pay dividends in the
foreseeable future. Any earnings realized by the Company are expected to be
reinvested in the Company's business; however, the declaration and payment of
dividends in the future will be determined by the Board of Directors in light
of conditions then existing, including, among others, the Company's earnings,
its financial condition and capital requirements (including working capital
needs), and any arrangements restricting the payment of dividends.
As of December 1, 1997, there were approximately 1,900 record holders
of Common Stock, which is the only outstanding class of the capital stock of
the Company.
ELECTION OF DIRECTORS
General
Pursuant to the Bylaws of the Company, the shareholders are to elect
at the Meeting directors to hold office until the next Annual Meeting of
Shareholders and until their successors shall be elected and shall qualify.
The Board of Directors has fixed the number of directors at five for the
ensuing year.
The Board of Directors has no reason to believe that any nominee will
become unavailable. However, in the event that any of the nominees should
become unavailable, proxies solicited by the Board of Directors will be voted
for the election of substitute nominees or additional nominees designated by
the Board of Directors.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS, IF PROPERLY SIGNED AND
RETURNED, WILL BE VOTED "FOR" THE ELECTION OF THE FIVE NOMINEES LISTED BELOW
AS DIRECTORS OF THE COMPANY.
<PAGE> 5
Information Concerning Nominees
Certain information as of October 31, 1997, concerning the nominees to
the Board of Directors of the Company, is set forth below based upon
information supplied by such persons. Unless otherwise indicated, the
beneficial owner has sole voting and investment power with respect to such
shares of Common Stock.
<TABLE>
<CAPTION>
Common Stock Beneficially Owned
-------------------------------
Director Number Percentage
Age Since of Shares of Class(1)
--- ----- --------- -----------
<S> <C> <C> <C> <C>
Dana R. Allen 44 1996 1,934,506(2) 14.5%
James R. Rau, M.D. 68 1990 717,000(3) 5.4%
Doyle E. Cherry 55 1988 255,903(4) 1.9%
Art Crotzer 46 1997 412,595(5) 3.0%
Marshall C. Wicker 71 1994 311,838(6) 2.3%
All executive officers and
directors as a group (9
persons) 3,662,832(7) 26.3%
</TABLE>
(1) Shares of Common Stock subject to Currently Exercisable Options
are deemed outstanding for purposes of computing the percentage
for such person but are not deemed outstanding in computing the
percent of any other person.
(2) See footnote (2) to the table under the heading "Security
Ownership of Certain Beneficial Owners."
(3) See footnote (4) to the table under heading "Security Ownership
of Certain Beneficial Owners."
(4) Includes 20,000 shares held by Mr. Cherry in joint tenancy with
his wife, Theresa, with whom he shares voting and investment
power; and 150,000 shares subject to Currently Exercisable
Options.
(5) Includes 18,000 shares held by Mr. Crotzer in joint tenancy with
his wife, Reta, with whom he shares voting and investment power,
and 311,615 shares subject to Currently Exercisable Options.
(6) Includes 163,399 shares held by Mr. Wicker in joint tenancy with
his wife, Bettye, with whom he shares voting and investment
power.
(7) Includes 603,409 shares as to which directors and executive
officers share voting and investment power with others and
625,659 shares subject to Currently Exercisable Options.
Information Concerning Nominees
The Company's nominees for the five directorships are listed below with
brief statements setting forth their principal occupations and other
biographical information.
Arthur D. Crotzer has served as President and Chief Executive Officer of
the Company since October 1997. Since 1983 he has served in various
management capacities with the Company, most recently as Senior Vice
President of Engineering. Mr. Crotzer was awarded a Bachelor of Science degree
in math and physics from Austin Peay State University in 1973 and in 1975 he
earned a Master of Science degree in computer science from Oklahoma State
University.
<PAGE> 6
Dana R. Allen has served as Executive Vice President and Director of the
Company since March 1996 and also serves as the General Manager of the
Company's Image Enhancement and Forms line of business. Mr. Allen was
President of Sequoia Computer Corporation ("Sequoia") from 1987 until 1996.
Prior to founding Sequoia in 1987, Mr. Allen was Data Development Manager and
Product Manager for Triad Systems, Inc., a data services company. Prior to
that time, Mr. Allen served as President of H&A Auto Parts, an auto parts
retailer/wholesaler.
Doyle E. Cherry has served as Chairman of the Board of Directors of the
Company since October 1997, and as a Director of the Company since 1988. Mr.
Cherry is a chartered financial consultant and since 1961 has worked in the
insurance and securities industries and the actuarial, tax and financial
consulting fields. From 1982 to August 1993, Mr. Cherry also served as
President and Chief Executive Officer of First Market Corporation and the
First Market Group of Companies. Since July 1993, he has served as President
of Thiotech USA, Inc., a chemical manufacturer and distributor located in
Houston, Texas.
Dr. James R. Rau has served as a Director of the Company since 1990. Dr.
Rau practiced medicine from 1956 to 1985 in a private practice and from 1985
to 1988 as a part-time physician with the Monsanto Company in Houston, Texas.
Since leaving Monsanto, Dr. Rau has managed his financial and real estate
investments.
Marshall C. Wicker has served as a Director of the Company since 1994.
Since 1983, he has owned and operated Marwick Enterprises, which is engaged
in ranching and investments. Mr. Wicker is a Professional Engineer and a
member of the American Association of Petroleum Geologists and Society of
Exploration Geophysicists.
Executive Officers
The following sets forth the name and a description of the background and
principal occupation of each executive officer of the Company who is not a
director of the Company.
Deborah D. Mosier, 30, joined the Company in 1995 as Controller of
Financial Operations and was appointed Chief Financial Officer in October
1996. Prior thereto, Ms. Mosier worked for six years in the audit practice
of KPMG Peat Marwick LLP. Ms. Mosier received her Bachelor of Science Degree
with a major in accounting from Oklahoma State University and is a Certified
Public Accountant.
Board of Directors' Meetings
During the 1997 fiscal year, the Company's Board of Directors held four
meetings. All members of the Board of Directors attended more than seventy-
five percent (75%) of the Board of Directors' meetings.
Committees of the Board
The Board of Directors has a standing Compensation Committee. Such
committee is currently comprised of Dr. Rau and Messrs. Cherry and Wicker, and
conducts all necessary business during the regular meetings of the Board or
through action by written consent. The Compensation Committee administers
the Company's stock option plans. The Company does not have a standing
nominating committee.
<PAGE> 7
Certain Relationships and Related Transactions
No officer or director had transactions with or indebtedness to the
Company in excess of $60,000 during the fiscal year ended August 31, 1997.
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder require that certain officers, directors and
beneficial owners of the Company's Common Stock file various reports with
the Securities and Exchange Commission (the "SEC"). Based solely upon a
review of such reports filed with the SEC, the Company believes that no late
reports were filed, for the fiscal year ended August 31, 1997.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash and noncash compensation for
each of the last three fiscal years awarded to or earned by the Chief
Executive Officer of the Company.
<TABLE>
<CAPTION>
Annual Compensation
All Other
Name and Principal Position Year Salary ($) Compensation
- --------------------------- ---- ---------- ------------
<S> <C> <C> <C>
Maxwell Steinhardt (1) 1997 $121,200 $1,832
1996 $110,667 --
1995 $ 95,000 --
</TABLE>
(1) Mr. Steinhardt became Chief Executive Officer in March 1996 and
resigned effective October 23,1997. "All other Compensation" includes
employer matching contributions to the Company's defined contribution
plan.
Option Grants Table
The following table sets forth restricted stock options awarded during
fiscal year 1997. No director or executive officer was granted any stock
appreciation rights during fiscal year 1997.
<TABLE>
<CAPTION>
Number of
Securities % of Total
Underlying Options Granted Exercise
Options to Employees in Price Expiration
Name Granted(#) Fiscal Year 1997 ($/Share) Date
---- ---------- ---------------- --------- ----
<S> <C> <C> <C> <C>
Deborah D. Mosier
Chief Financial
Officer 30,000 100% $0.5625 May 10, 2005
</TABLE>
<PAGE> 8
APPROVAL OF SELECTION OF AUDITORS
Subject to approval by the shareholders, the Board of Directors has
selected the firm of KPMG Peat Marwick LLP, certified public accountants (the
"Auditors"), as auditors of the Company for the year ending August 31, 1998.
Representatives of the Auditors are expected to be present at the Meeting to
respond to questions of shareholders.
The Company has been advised by the Auditors that neither the firm nor
any of its associates has any relationship with the Company or any affiliate
of the Company other than the usual relationship that exists between
independent public accountants and their clients. To the knowledge of the
Board of Directors, neither the Auditors nor any of its associates has any
direct or material indirect financial interest in the Company and its
subsidiaries in the capacities of promoter, underwriter, voting trustee,
director, officer, or employee.
During the past fiscal year, the Auditors have examined the accounts
of the Company and provided other services with respect to certain filings of
the Company with the Securities and Exchange Commission.
The affirmative vote of the holders of a majority of the shares of
Common Stock present at the Meeting in person or by proxy and entitled to
vote is required to approve this proposal.
The Board of Directors recommends a vote "FOR" the selection of KPMG
Peat Marwick LLP as auditors of the Company for the current fiscal year and
the proxy, unless otherwise indicated thereon, will be voted "FOR" the
ratification of KPMG Peat Marwick LLP as auditors of the Company for the
current fiscal year.
<PAGE> 9
SHAREHOLDERS' PROPOSALS
Proposals by shareholders intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company prior to September 30,
1998, in order for the proposals to be included in the proxy statement and
proxy card relating to such meeting. It is suggested that proposals be
submitted to the Company by certified mail, return receipt requested.
OTHER MATTERS
Management knows of no other business which is likely to be brought
before the Meeting. If other matters not now known to management come before
the Meeting, however, it is the intention of the persons named in the
accompanying proxy to vote in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
DEBORAH D. MOSIER, Secretary
December 10, 1997
A copy of the Company's Form 10-KSB Annual Report as filed with the
Securities and Exchange Commission will be furnished without charge to
shareholders on request to the Chief Financial Officer of the Company, at its
address stated herein.
<PAGE> 10
TMS, Inc.
206 West Sixth Street
Stillwater, Oklahoma 74074
This Proxy is solicited on behalf of the Board of Directors of TMS,
Inc. (the "Company"). The undersigned hereby appoints Doyle E. Cherry,
Arthur D. Crotzer, Dana R. Allen, and James R. Rau, M.D., as proxies, each
with the power to appoint his substitute, and hereby appoints and authorizes
them to represent and vote as designated below, all the shares of common stock
of the Company held of record by the undersigned on December 1, 1997, at the
Annual Meeting of Shareholders to be held on January 23, 1998, or any
adjournment thereof.
1. ELECTION OF DIRECTORS [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed below to vote for all
(except as marked nominees listed below
to the contrary
below)
Dana R. Allen Doyle E. Cherry James R. Rau, M.D.
Arthur D. Crotzer Marshall C. Wicker
(INSTRUCTION) : To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below).
- --------------------------------------------------------------------------
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. PROPOSAL to approve and ratify the selection of KPMG Peat Marwick LLP as
the Company's independent auditors for the fiscal year ending August 31,
1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
(Continued and to be signed on the reverse side.)
This proxy, when properly executed, dated and delivered, will be voted
in the manner directed herein by the undersigned shareholder. If no
direction is made, this proxy will be voted FOR Proposals 1, 2 and 3.
Please sign exactly as name appears below.
When shares are held by joint tenants, both
should sign. When signing as attorney or as
executor, administrator, trustee or guardian,
please give full title as such. If
corporation, please sign in full corporate
name by president or other authorized officer.
If a partnership, please sign in partnership
name by authorized person.
Date: , 19
---------------------------------- ----
X
----------------------------------------------
(Signature)
X
----------------------------------------------
(Signature, if held jointly)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
