<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the apprporiate 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
--------------------------------------------
ADVANTAGE MARKETING SYSTEMS, INC.
--------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[_] 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 the 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>
ADVANTAGE MARKETING SYSTEMS, INC.
2601 Northwest Expressway, Suite 1210W
Oklahoma City, Oklahoma 73112
Telephone: (405) 842-0131
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
TO THE SHAREHOLDERS:
The Annual Meeting of the Shareholders of Advantage Marketing Systems,
Inc., an Oklahoma corporation (the "Company"), will be held at the Medallion
Hotel, One North Broadway (Corner of Broadway and Main), in downtown Oklahoma
City, Oklahoma, on August 14, 1997, commencing at 4:00 p.m., Central Daylight-
Savings Time, and thereafter as it may be adjourned from time to time, for the
following purposes:
1. To elect two directors of the Company to hold office until the 2000 annual
meeting of shareholders and until his successor shall have been duly
elected and qualified;
2. To consider and act upon a proposal to ratify the appointment of Deloitte &
Touche LLP as the independent auditor of the Company for 1997; and
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Holders of record of Common Stock at the close of business on June 30,
1997, are entitled to notice of and to vote at the meeting or any adjournment
thereof, notwithstanding transfer of any stock on the books of the Company after
such record date. The accompanying Proxy Statement contains information
regarding the matters to be considered at the Annual Meeting. Copies of this
Notice and the accompanying Proxy Statement were first mailed to Shareholders on
or about July 11, 1997. For reasons outlined in the attached Proxy Statement,
the Board of Directors recommends a vote "FOR" the matters being voted upon.
YOUR ATTENDANCE OR PROXY IS IMPORTANT TO ASSURE A QUORUM AT THE ANNUAL
MEETING. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON
ARE REQUESTED TO COMPLETE AND RETURN THE ENCLOSED PROXY, USING THE ENVELOPE
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED FROM WITHIN THE UNITED STATES.
ANY PERSON GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME PRIOR TO ITS
EXERCISE AND, IF PRESENT AT THE ANNUAL MEETING, MAY WITHDRAW IT AND VOTE IN
PERSON. ATTENDANCE AT THE ANNUAL MEETING IS LIMITED TO SHAREHOLDERS, THEIR
PROXIES AND INVITED GUESTS OF THE COMPANY. ALL SHAREHOLDERS ARE CORDIALLY
INVITED TO ATTEND THE ANNUAL MEETING.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ ROGER P. BARESEL
Roger P. Baresel, Corporate Secretary
Oklahoma City, Oklahoma
July 11, 1997
<PAGE>
PROXY STATEMENT
------------------------
ADVANTAGE MARKETING SYSTEMS, INC.
2601 NORTHWEST EXPRESSWAY, SUITE 1210W
OKLAHOMA CITY, OKLAHOMA 73112
(405) 842-0131
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 14, 1997
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished to the shareholders of Advantage
Marketing Systems, Inc. (the "Company") in connection with an Annual Meeting
(the "Annual Meeting") of the holders of the Common Stock of the Company (the
"Shareholders") to be held at 4:00 p.m., Central Daylight-Savings Time, on
August 14, 1997, at the Medallion Hotel, One North Broadway (Corner of Broadway
and Main), in Oklahoma City, Oklahoma, and any adjournment thereof. This Proxy
Statement and the accompanying Notice of Annual Meeting of Shareholders and
Proxy were first mailed on or about July 11, 1997, to Shareholders of record on
June 30, 1997.
If the accompanying Proxy is properly executed and returned, the shares of
Common Stock represented by the Proxy will be voted at the Annual Meeting. If a
Shareholder indicates in his, her or its Proxy a choice with respect to any
matter to be acted upon, that Shareholder's shares will be voted in accordance
with such choice. If no choice is indicated, such shares will be voted "FOR"
the election of the nominees for director listed below and the ratification of
the appointment of the independent auditor. The Shareholders will also consider
and vote upon such other business as may properly come before the Annual Meeting
or any adjournment thereof. The Board of Directors of the Company knows of no
business that will be presented for consideration at the Annual Meeting, other
than matters described in this Proxy Statement. A Shareholder giving a Proxy
may revoke it by giving written notice of revocation to the Secretary of the
Company at any time before the Proxy is voted, by executing another valid proxy
bearing a later date and delivering such proxy to the Secretary of the Company
prior to or at the Annual Meeting, or by attending the Annual Meeting and voting
in person.
Neither the corporate laws of the state of Oklahoma, the state in which the
Company is currently incorporated, nor the Company's Certificate of
Incorporation or Bylaws have any provisions regarding the treatment of
abstentions and broker non-votes. It is the Company's policy (i) to count
abstentions or broker non-votes for purposes of determining the presence of a
quorum at the Annual Meeting, (ii) to treat abstentions as votes not cast but to
treat them as shares represented at the Annual Meeting for determining results
on actions requiring a majority vote, and (iii) to consider neither abstentions
nor broker non-votes in determining results of plurality votes.
The expenses of this proxy solicitation, including the cost of preparing
and mailing this Proxy Statement and accompanying proxy will be borne by the
Company, which are estimated to be $2,000. Such expenses will also include the
charges and expenses of banks, brokerage firms, and other custodians, nominees
or fiduciaries
<PAGE>
for forwarding solicitation material regarding the Annual Meeting to beneficial
owners of the Company's Common Stock. Solicitation of proxies may be made by
mail, telephone, personal interviews or by other means by the Board of Directors
or employees of the Company who will not be additionally compensated therefor,
but who may be reimbursed for their out-of-pocket expenses in connection
therewith.
SHAREHOLDERS ENTITLED TO VOTE
The Shareholders entitled to vote at the Annual Meeting are the holders of
record, at the close of business on June 30, 1997 (the "Record Date"), of the
2,680,081 shares of Common Stock then outstanding. Each holder of a share of
Common Stock outstanding on the Record Date will be entitled to one vote on each
matter presented at the Annual Meeting for each share held. The Company's
officers and directors own a total of 374,133 shares, or 13.96 percent of the
issued and outstanding Common Stock, and intend to vote all of such shares in
favor of the matters to be voted upon at the Annual Meeting. There is no
cumulative voting with respect to the election of directors. The presence in
person or by proxy of the holders of a majority of the shares of Common Stock
issued and outstanding at the Annual Meeting will constitute a quorum for the
transaction of business. All matters to be brought before the Annual Meeting
will require the affirmative vote of a majority of the shares of Common Stock
present at the Annual Meeting in person and by proxy and entitled to vote.
Votes will be tabulated by an inspector of election appointed by the Board of
Directors of the Company.
THIS PROXY STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF THESE TRANSACTIONS NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
-2-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
GENERAL
The following table presents certain information as to the beneficial
ownership of the Common Stock as of June 30, 1997 by (i) the only persons known
by the Company to own beneficially more than five percent thereof, (ii) each
Director and nominee for Director of the Company, (iii) the executive officers
of the Company, and (iv) the Executive Officers and Directors as a group,
together with their percentage holdings of the outstanding shares. All persons
listed have sole voting and investment power with respect to their shares unless
otherwise indicated. For purposes of the following table, the number of shares
and percent of ownership of outstanding Common Stock that the named person
beneficially owned includes shares of Common Stock that such person has the
right to acquire within 60 days of June 30, 1997, which are deemed to be
outstanding, but which are not deemed to be outstanding for the purposes of
computing the number of shares beneficially owned and percent of outstanding
Common Stock of any other named person.
<TABLE>
<CAPTION>
SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIALLY OUTSTANDING
BENEFICIAL OWNER OWNED SHARES
- ------------------- ------------ -----------
<S> <C> <C>
John W. Hail(1)(2)................... 390,434 13.8%
Curtis H. Wilson, Sr.(1)(3).......... 272,603 9.3%
Robert and Retha Nance(4)............ 195,699 7.2%
Roger P. Baresel(1)(5)............... 167,328 5.9%
Harland C. Stonecipher(6)............ 80,768 3.0%
R. Terren Dunlap(1)(7)............... 37,500 1.4%
Executive Officers and
Directors as a group
(five persons)(2)(3)(5)(6)(7)(8).. 948,633 29.1%
</TABLE>
- ------------
(1) A Director or an executive officer of the Company, with a business address
of 2601 Northwest Expressway, Suite 1210W, Oklahoma City, Oklahoma 73112.
(2) The shares and percent include 150,000 shares of Common Stock that are
subject to currently exercisable stock options held by Mr. Hail.
(3) The shares and percent include 250,000 shares of Common Stock that are
subject to currently exercisable stock options held by Mr. Wilson and 5,538
shares of outstanding Common Stock held by Ruth Wilson, wife of Mr. Wilson,
and with respect to which Mr. Wilson disclaims any beneficial interest.
(4) Mr. and Mrs. Nance are husband and wife and their business address is Post
Office Box 405, Wheatland, Oklahoma 73097. The shares and percent include
(i) 9,625 shares of outstanding Common Stock held by Mr. Nance, (ii) 37,750
shares of outstanding Common Stock owned by Mrs. Nance, (iii) 93,841 shares
of outstanding Common Stock owned jointly by Mr. and Mrs. Nance, and (iv)
54,483 shares of Common Stock that are subject to currently exercisable
stock options granted to and held by Mr. Nance.
-3-
<PAGE>
(5) The shares consist of and each percent is based upon (i) 9,500 shares of
outstanding Common Stock jointly held by Mr. Baresel and his wife, Judith
A. Baresel, (ii) 2,000 shares of Common Stock subject to currently
exercisable 1997-A Warrants jointly held by Mr. and Mrs. Baresel, (iii)
35,000 shares of Common Stock that are subject to currently exercisable
stock options held by Mr. Baresel, and (i) 20,828 shares of outstanding
Common Stock held by Mrs. Baresel, (ii) 87,500 shares of Common Stock that
are subject to currently exercisable stock options held by Mrs. Baresel,
and (iii) 12,500 shares of Common Stock that are subject to currently
exercisable stock options held by Mrs. Baresel as the custodian for the
benefit of the children of Mr. and Mrs. Baresel, and with respect to which
Mr. Baresel disclaims any beneficial interest.
(6) Mr. Stonecipher is a Director of the Company with a business address of 321
East Main Street, Ada, Oklahoma 74820, and Chairman of the Board and Chief
Executive Officer of Pre-Paid Legal Services, Inc. The shares consist of
and each percent is based upon 80,768 shares of outstanding Common Stock
held by Pre-Paid Legal Services, Inc. which may be deemed to be
beneficially owned by Mr. Stonecipher.
(7) The shares consist of and each percent is based upon 37,500 shares of
Common Stock which are subject to a currently exercisable stock options
held by Mr. Dunlap.
(8) The number of shares and each percent includes 574,500 shares of Common
Stock that are issuable upon exercise of stock options and warrants held by
the executive officers and directors as a group.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors of the
Company (the "Board of Directors") shall consist of not less than one nor more
than twelve directors, as determined from time to time by resolution of the
Board of Directors. The number of directors is currently fixed at five.
Pursuant to the terms of the Company's Bylaws, the directors are divided into
three classes. Class I Directors hold office for a term expiring at the annual
meeting of shareholders to be held in 1999, Class II Directors hold office for a
term expiring at the annual meeting of shareholders to be held in 1997, and
Class III Directors hold office for a term expiring at the annual meeting of
shareholders to be held in 1998. Each director will hold office for the term to
which he is elected and until his successor is duly elected and qualified. Mr.
Stonecipher is serving as a Class I Director under a term expiring in 1999,
Messrs. Wilson and Dunlap are serving as Class II Directors under terms expiring
in 1997, and Messrs. Hail and Baresel are serving as Class III Directors under
terms expiring in 1998. At each annual meeting of the shareholders of the
Company, the successor to a member of the class of directors whose term expires
at such meeting will be elected to hold office for a term expiring at the annual
meeting of shareholders held in the third year following the year of his
election.
The Board of Directors has nominated Curtis H. Wilson, Sr. and R. Terren
Dunlap for re-election as a director for a term ending in 2000 and until his
successor shall have been duly elected and qualified. The persons named as
proxies in the accompanying Proxy, who have been designated by the Board of
Directors, intend to vote, unless otherwise instructed in the Proxy, for the
election of Messrs. Wilson and Dunlap. Should any nominee named herein become
unable for any reason to stand for election as a director of the Company, it is
intended that the persons named in the Proxy will vote for the election of such
other person as the Board of
-4-
<PAGE>
Directors may recommend. The Company knows of no reason why either nominee will
be unavailable or unable to serve.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or by proxy at the Annual Meeting and entitled to vote,
is required for the election of a director. An abstention from voting and
broker non-votes will be tabulated as a vote withheld on the election, but will
be included in computing the number of shares present for purposes of
determining the presence of a quorum for the Annual Meeting and whether a
nominee has received the vote of a majority of the shares present at the Annual
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RE-ELECTION OF MESSRS.
WILSON AND DUNLAP TO THE BOARD OF DIRECTORS. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY
CHOICE.
INFORMATION ABOUT EACH DIRECTOR OF ADVANTAGE MARKETING SYSTEMS, INC.
John W. Hail, age 66, is the founder of Advantage Marketing Systems, Inc.
and has served as its Chief Executive Officer and Chairman of the Board of
Directors of the Company since its inception in June, 1988. During 1987 and
through May 1988, Mr. Hail served as Executive Vice President, Director and
Agency Director of Pre-Paid Legal Services, Inc., a public company engaged in
the sale of legal services contracts, and also served as Chairman of the Board
of directors of TVC Marketing, Inc., the exclusive marketing agent of Pre-Paid
Legal Services, Inc.
Curtis H. Wilson, Sr., age 71, has served as Vice-Chairman of the Board of
Directors of the Company since June 1988. From January 1984 to June 1988, Mr.
Wilson was Executive Vice President of TVC Marketing, Inc.
Roger P. Baresel, age 41, has served as Vice President, Chief Financial
Officer and a Director of the Company since June 1995, and in July 1995, he
became President. Mr. Baresel is a Certified Public Accountant and holds a
Master of Business Administration. He maintained an accounting practice for ten
years, specializing in providing consulting services to small and growing
businesses and provided consulting services to the Company from 1988 until
joining the Company as a full-time employee in June 1995.
R. Terren Dunlap, age 52, has served as a Director of the Company since
June 1995. He served as Vice President-International Development of the Company
from June 1995 through March 1996. Mr. Dunlap is a Director and the co-founder
and since 1984 and until March 1994 served as Chief Executive Officer and
Chairman of the Board, of Go-Video, Inc., a developer and distributor of
consumer electronics products. Mr. Dunlap holds a Juris Doctorate from Ohio
Northern University and a Bachelor of Science Degree in Business Administration
from Ashland University.
Harland C. Stonecipher, age 58, has served as a Director of the Company
since August 1995. Mr. Stonecipher has been Chairman of the Board and Chief
Executive Officer of Pre-Paid Legal Services, Inc. since its inception in 1972.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1996, the Board of Directors held three meetings. All of the
directors were present at all of the meetings. The Board of Directors does not
have any standing nominating committee. The only committee that it has is the
audit committee established in 1997 consisting of Messrs. Hail, Baresel and
Stonecipher.
-5-
<PAGE>
Nominations of candidates for election as directors of the Company may be made
at a meeting of Shareholders by or at the direction of the Board of Directors or
by any Shareholder entitled to vote at such meeting. The Company's Bylaws
provide that the annual meeting of Shareholders will be fixed by the Board of
Directors.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
Executive Officers of the Company. The following table sets forth certain
information relating to compensation paid to or accrued for the named executive
for services rendered during the years ended December 31, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------------
ANNUAL COMPENSATION AWARD OF OPTIONS
---------------------------------- -------------------
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS OTHER(2) NUMBER OF SHARES
- ----------------------------- ---- --------- ----- ---------- -------------------
<S> <C> <C> <C> <C> <C>
John W. Hail................. 1996 $ -- $ -- $22,000 --
Chief Executive Officer 1995 -- -- 87,684 375,000(3)
1994 -- -- 66,026 --
- ------------------------
</TABLE>
(1) Dollar value of base salary (both cash and non-cash) earned during the
year.
(2) The Company furnishes the use of an automobile to Mr. Hail, the value of
which is not greater than $5,000 annually. During 1996, 1995, and 1994,
the Company made non-interest bearing advances to the John Hail Agency,
Inc., an affiliate of Mr. Hail, of $22,000, $87,684, and $66,026,
respectively. See "Certain Transactions."
(3) Adjusted to give effect to the one-for-eight reverse stock split on October
29, 1996.
AGGREGATE STOCK OPTION EXERCISE AND YEAR-END OPTION VALUES
The following table sets forth information related to the number and value
of options held by the named executive officer at December 31, 1996 and 1995.
During 1996 and 1995, no options to purchase Common Stock were exercised by the
named executive officer.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AS OF OPTIONS AS OF
DECEMBER 31, 1996 AND 1995 DECEMBER 31, 1996 AND 1995(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
John W. Hail.. 1996 150,000 -- $562,500 $ --
1995 150,000(2) -- $600,000 $ --
- -------------
</TABLE>
(1) The closing highest bid price of the Common Stock as quoted on National
Quotation Bureau, Incorporated on December 31, 1996 and 1995, was $5.75 and
$6.00, respectively, after giving effect to the one-for-eight reverse stock
split on October 29, 1996. The per-share value is calculated based on the
applicable closing highest bid price per share, minus the exercise price
multiplied by the number of shares of Common Stock underlying the options.
(2) During 1995, Mr. Hail transferred by gift 225,000 exercisable stock
options.
-6-
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive $250 for each Board
meeting attended. Directors who are also employees of the Company receive no
additional compensation for serving as Directors. The Company reimburses its
Directors for travel and out-of-pocket expenses in connection with their
attendance at meetings of the Board of Directors. The Company's Bylaws provide
for mandatory indemnification of directors and officers to the fullest extent
permitted by Oklahoma law.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
The Board of Directors has appointed Deloitte & Touche LLP as the
independent auditor of the Company for the fiscal year ending December 31, 1997.
Deloitte & Touche LLP has been the independent auditor of the Company since
1990, and, prior to its merger with Touche Ross & Co., Deloitte, Haskins & Sells
had been the independent auditor of the Company since its inception. A proposal
will be presented at the Annual Meeting asking the Shareholders to ratify the
appointment of Deloitte & Touche LLP as the Company's independent auditor. If
the Shareholders do not ratify the appointment of Deloitte & Touche LLP, the
Board of Directors will reconsider the appointment. The affirmative vote of a
majority of the shares present in person or by proxy at the Annual Meeting and
voting on this proposal is required for the adoption of this proposal.
Abstentions and broker non-votes will not be tabulated as negative votes on this
proposal, but will be included in computing the number of shares present for
purposes of determining the presence of a quorum for the Annual Meeting and
whether this proposal has received the vote of a majority of the shares present
at the Annual Meeting.
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting. Such representative will be given the opportunity to make a statement
if he desires to do so and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF THE INDEPENDENT AUDITOR. PROXIES SOLICITED BY THE BOARD
OF DIRECTORS OF THE COMPANY WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A
CONTRARY CHOICE.
CERTAIN TRANSACTIONS
Set forth below is a description of transactions entered into between the
Company and certain of its officers, directors and shareholders during the last
two years. Certain of these transactions will continue in effect and may result
in conflicts of interest between the Company and such individuals. Although
these persons have fiduciary duties to the Company and its shareholders, there
can be no assurance that conflicts of interest will always be resolved in favor
of the Company.
John W. Hail, Chief Executive Officer and Chairman of the Board of
Directors of the Company, is the sole director and shareholder of the John Hail
Agency, Inc. ("JHA"). Pursuant to an unwritten agreement, the Company provided
office space, utilities and supplies, as well as an occasional part-time
administrative staff person, through June 30, 1996, to JHA for a monthly payment
of $1,000 as reimbursement of the Company's
-7-
<PAGE>
costs. In addition, the Company made non-interest bearing advances to JHA of
$22,000 and $87,684 during the years ended December 31, 1996 and 1995,
respectively. JHA has made repayments of these advances of $6,141 and $67,401
during the fiscal years ended December 31, 1996 and 1995, respectively. During
the three months ended March 31, 1997, JHA made repayments of $3,164. At March
31, 1997, JHA was indebted to the Company in the amount of $64,658. Effective
June 30, 1996, the Company adopted a policy to not make any further advances to
JHA, and JHA executed a promissory note payable to the Company in the principal
amount of $73,964 bearing interest at eight percent per annum and payable in 60
installments of $1,499 per month.
At December 31, 1995, the balance due on a short-term loan to the Company
from Mr. Hail was $81,929. During 1995, the Company combined interest payable of
approximately $52,000 with the principal due under the loan and began making
weekly interest and principal payments of $1,500. The loan was unsecured, due
on demand and bore interest at 12 percent per annum. As of December 31, 1996,
the loan had been paid in full.
During the five months ended May 31, 1995, Roger P. Baresel provided
accounting and consulting services to the Company and for such services Mr.
Baresel was paid $13,500. On June 1, 1995, Mr. Baresel became an executive
officer and a Director of the Company and ceased providing accounting and
consulting services to the Company on an independent contractor basis.
During the three months ended March 31, 1997, and the years ended December
31, 1996 and 1995, the Company paid Curtis H. Wilson, Sr., a Director of the
Company, sales commissions of $9,728, $38,337 and $51,669, respectively.
During 1995, the Company granted Mr. Baresel 10-year, transferrable stock
options exercisable for the purchase of 125,000 and 43,750 shares of Common
Stock for $2.00 and $3.60 per share, respectively. These stock options were not
granted pursuant to the Company's Stock Option Plan. During 1995, Mr. Baresel
transferred by gift 156,250 of such stock options to third parties, including
87,500 to his wife, Judith A. Baresel, and 12,500 to Mrs. Baresel in her
capacity as guardian for the benefit of their children. All of the stock
options were granted at the fair market value of the Common Stock on the date of
grant and are currently exercisable.
During 1995, the Company granted Mr. Hail 10-year, transferrable stock
options exercisable for the purchase of 375,000 shares of Common Stock for $2.00
per share. These stock options were not granted pursuant to the Company's Stock
Option Plan. During 1995, Mr. Hail transferred by gift 225,000 of these stock
options to third parties. During 1997, the Company granted Mr. Hail 10-year
nontransferable stock options exercisable for the purchase of 100,000 shares of
Common Stock for $6.00 per share. All of the stock options were granted at the
fair market value of the Common Stock on the date of grant and are currently
exercisable.
During 1995, the Company granted Mr. Wilson six-year stock options
exercisable for the purchase of 125,000 shares of Common Stock for $3.60 per
share. All of the stock options were granted at the fair market value of the
Common Stock on the date of grant and are currently exercisable.
During 1995, the Company granted R. Terren Dunlap, a Director and former
executive officer of the Company, five-year stock options exercisable for the
purchase of 37,500 shares of Common Stock for $2.16 per share. All of the stock
options were granted at the fair market value of the Common Stock on the date of
grant and are currently exercisable.
During 1995, the Company granted United Financial Advisory Services, Inc.
("UFASI") five-year stock options exercisable for the purchase of 125,000 shares
of Common Stock for $3.60 per share and 125,000 shares
-8-
<PAGE>
of Common Stock for $4.96 per share. All of the stock options were granted at or
above the fair market value of the Common Stock on the date of grant and are
currently exercisable. As a result of the grant of these stock options, United
Financial Advisory Services, Inc. became a greater than five percent beneficial
owner of the Common Stock of the Company. In addition, UFASI received cash
compensation of $10,000 and $20,000 from the Company during 1995 and 1996,
respectively. On May 30, 1997, pursuant to agreement between United Financial
Advisory Services, Inc. and the Company, stock options exercisable for the
purchase of 125,000 shares of Common Stock for $4.96 per share were surrendered
to and canceled by the Company.
During 1995, the Company granted Mr. Nance five-year stock options
exercisable for the purchase of 49,125 shares of Common Stock for $2.00 per sha
of 6,945 shares of Common Stock for $2.16 per share. Furthermore, during 1994,
Mr. Nance was granted five-year stock options exercisable for the purchase of
5,358 shares of Common Stock for $2.80 per share. All of the stock options were
granted at or above the fair market value of the Common Stock on the date of
grant and are currently exercisable.
The Board of Directors of Company believes that the terms of the
transactions described above were at least as favorable as could be obtained
from unaffiliated third parties. The Company has adopted policies that any
loans to officers, directors and five percent or more shareholders
("affiliates") are subject to approval by a majority of the disinterested
independent directors of the Company and that further transactions with
affiliates will be on terms no less favorable than could be obtained from
unaffiliated parties and approved by a majority of the disinterested independent
directors. As of the date of this Proxy Statement, the Board of Directors is
comprised of the five members of which two are independent directors.
OTHER BUSINESS TO BE BROUGHT BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
action at the Annual Meeting other than that described in the Notice of Annual
Meeting of Shareholders and this Proxy Statement. However, if any other matters
should properly come before the Annual Meeting, it is the intention of the
persons named in the accompanying Proxy to vote such Proxies as they deem
advisable in accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Under the existing rules of the Securities and Exchange Commission, any
shareholder of the Company may present proposals on any matter which is a proper
subject for consideration by the shareholders at the 1998 Annual Meeting of
Shareholders, which the Company currently anticipates will be held on or before
August 30, 1998. In order to be included in the proxy statement (or disclosure
statement in the event proxies are not solicited by the Board of Directors of
the Company) for the 1998 Annual Meeting of Shareholders, a proposal must be
received by May 1, 1998. It is suggested that a Shareholder desiring to submit
a proposal do so by sending the proposal certified mail, return receipt
requested, addressed to the Secretary of the Company at its principal office,
2601 Northwest Expressway, Suite 1210W, Oklahoma City, Oklahoma 73112. Detailed
information for submitting proposals will be provided upon written request,
addressed to the Secretary of the Company.
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<PAGE>
Your cooperation in giving this matter your immediate attention and in
returning your Proxy promptly will be appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ROGER P. BARESEL
Roger P. Baresel
Corporate Secretary
July 11, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT, WHICH INCLUDES ITS FORM 10-KSB FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1996, IS ENCLOSED HEREWITH, AND THE COMPANY'S
QUARTERLY REPORTS ON FORM 10-QSB FOR THE QUARTERS ENDED MARCH 31 AND JUNE 30,
1997, EXCLUDING CERTAIN OF THE EXHIBITS, MAY BE OBTAINED WITHOUT CHARGE BY
WRITING ADVANTAGE MARKETING SYSTEMS, INC., 2601 NORTHWEST EXPRESSWAY, SUITE
1210W, OKLAHOMA CITY, OKLAHOMA 73112, ATTENTION: CORPORATE SECRETARY.
<PAGE>
PROXY PROXY
ADVANTAGE MARKETING SYSTEMS, INC.
2601 NORTHWEST EXPRESSWAY, SUITE 1210W
OKLAHOMA CITY, OKLAHOMA 73112
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF ADVANTAGE MARKETING SYSTEMS, INC.
The undersigned hereby appoints John W. Hail and Roger P. Baresel as
Proxies, each with the power to appoint his substitute, and hereby appoints and
authorizes either of them to represent and vote as designated below, all the
shares of Common Stock,$.0001 par value, of Advantage Marketing Systems, Inc.
(the "Company") held of record by the undersigned on June 30, 1997, at the
annual meeting of shareholders to be held on Thursday, August 14, 1997, or any
adjournment thereof.
1. To consider and act upon the re-election of Curtis H. Wilson, Sr. and
R. Terren Dunlap as a director for a term ending in 2000 and until his successor
shall have been duly elected and qualified. A vote "For" will represent a vote
for the nominee director.
Curtis H. Wilson, Sr. [_] FOR [_] AGAINST [_] ABSTAIN
R. Terren Dunlap [_] FOR [_] AGAINST [_] ABSTAIN
2. To consider and act upon the ratification and the appointment of
Deloitte & Touche LLP as the Company's independent auditor for the fiscal year
ending December 31, 1997. A vote "For" will represent a vote for such
ratification and appointment.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, 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 AND 2.
Please sign exactly as the name appears to left.
When shares are held by joint tenants, both
should sign. When signing as attorney, as
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate name
by president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
Date:___________________________________,1997
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Signature
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Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
