SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
Check the appropriate box:
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TM Century, Inc.
(Name of Registrant as Specified In Its Charter)
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TM CENTURY, INC.
2002 ACADEMY
DALLAS, TX 75234
2000 INFORMATION STATEMENT
TO OUR STOCKHOLDERS:
The accompanying information is being provided by the Board of
Directors of TM Century, Inc., a Delaware corporation (the
"Company"), in connection with the election by the stockholders of
the Company of five directors to serve one-year terms and until
their successors are elected and qualified.
It is anticipated that the holders of 69.5% of the outstanding Common
Stock of the Company will execute a written consent (i) approving the
election as directors of the five nominees of the Board of Directors,
(ii) ratifying the Board's anticipated appointment of King Griffin &
Adamson P.C. as independent public accountants of the Company for the
fiscal year ending September 30, 2000 and (iii) ratify the Amended
and Restated 1991 Long-Term Performance Incentive Plan (the "Plan").
Under Delaware law, such shares represent a sufficient number of
shares to ensure the election of such nominees and such ratification
without the vote or consent of any other stockholder of the Company.
Delaware statutes provide that any action that is required to be
taken, or that may be taken, at any annual or special meeting of
stockholders of a Delaware corporation may be taken, without a
meeting, without prior notice and without a vote, if a written
consent, setting forth the action taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes
necessary to authorize such action.
Based on the foregoing, the Board of Directors of the Company has
determined not to call an annual meeting of stockholders, and no
annual meeting of stockholders of the Company will be held in 2000.
Because the election of the five nominees and ratification of the
Plan is assured, the Board believes it would not be in the best
interests of the Company and its stockholders to incur the costs of
holding an annual meeting or of soliciting proxies or consents from
additional stockholders in connection with the election of directors.
Stockholder ratification of the appointment of independent public
accountants is not required by law or the Company's bylaws.
It is anticipated that the written consent of stockholders referred
to above will be executed on or around March 6, 2000. The Board of
Directors and management of the Company are not aware of any other
action that will be authorized in such consent.
This information statement is expected to be mailed to shareholders
on or about February 4, 2000.
Dallas, Texas /s/R. David Graupner
January 25, 2000 R. David Graupner, President, Chief
Executive Officer and Director
WE ARE NOT ASKING YOU FOR A PROXY OR WRITTEN CONSENT, AND YOU ARE
REQUESTED NOT TO SEND US A PROXY OR CONSENT.
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
General
-------
Certain information regarding the directors and executive officers of
the Company is set forth below. The Company's bylaws provide that
the number of directors shall be fixed from time to time by the Board
of Directors or by the stockholders. The Board of Directors
currently consists of five directors. All directors hold office
until the next annual meeting of the stockholders and until their
successors have been elected and qualified. Vacancies existing in
the Board may be filled by a majority vote of the remaining
directors. Officers of the Company serve at the discretion of the
Board of Directors.
Officer/Director
Name Age Position Since
---------------------- ----- -------------------------- ----------------
Marjorie L. McIntyre 74 Chairman of the Board of August 1990
Directors and Consultant
A. Ann Armstrong 66 Director August 1990
Carol M. Long 50 Director March 1999
Michael E. Cope 52 Director August 1999
R. David Graupner 42 President & CEO and May 1996
Director
Robert F. Shannon, Jr. 48 Vice President of Creative August 1990
Development
Marcus D. Hill 37 Vice President of April 1999
Operations
Robert B. Jenkins 44 Vice President of April 1999
Sales/Marketing
Teri R.S. James 44 Vice President of Finance September 1999
Election of Directors
---------------------
Under the Company's bylaws, the nominees for election as directors
who receive a plurality of the votes cast by stockholders are elected
as directors of the Company. Cumulative voting with respect to the
election of directors is not permitted.
Section 228(a) of the Delaware General Corporation Law permits any
action that is required to be taken, or that may be taken, at any
annual or special meeting of stockholders of a Delaware corporation
to be taken without a meeting, without prior notice and without a
vote, if a written consent, setting forth the action taken, is signed
by the holders of outstanding stock having not less than the minimum
number of votes necessary to authorize such action.
Each of the five current directors of the Company, Marjorie L.
McIntyre, A. Ann Armstrong, Carol M. Long, Michael E Cope and R.
David Graupner, has been nominated by the Board of Directors for re-
election. Each nominee is expected to be elected by written consent
of the holders of a majority of the outstanding Common Stock of the
Company. It is anticipated that Carol M. Long and A. Ann Armstrong,
who collectively hold 69.5% of the outstanding Common Stock of the
Company in their capacities as co-trustees of the Marjorie McIntyre
Trust, will execute such written consent on or about March 6, 2000.
See "Voting Securities and Principal Stockholders". Under Delaware
law, such shares represent a sufficient number of shares to ensure
the election of all nominees without the vote or consent of any other
stockholder of the Company. Pursuant to such consent, the directors
will be elected to serve until the next annual meeting of
stockholders, and until their successors have been elected and
qualified. Each director has consented to serve if elected.
No record date will be established, nor will the vote or consent of
any other stockholder be solicited, in connection with the execution
of such written consent.
Board of Directors and Committees
---------------------------------
The Board of Directors held 12 meetings during fiscal 1999. Each
director attended at least 75% of the total number of meetings held
(during his or her term as a director) by the Board and each
committee on which such director served. The Company presently has a
standing Audit Committee, of which Ms. Armstrong and Mr. Cope are
members, and Compensation Committee, of which Ms. Long, and Mr. Cope
are members. The Company does not have a standing Nominating
Committee. The Audit Committee, which is responsible for reviewing
all financial information distributed by the Company and coordinating
with the outside independent accounting firm as to the establishment
of fees for services, held a meeting with King Griffin & Adamson P.C.
on December 22, 1999, to review fiscal year 1999 financial
information. No meetings were held by the Compensation Committee.
Business Experience of Directors and Executive Officers
-------------------------------------------------------
Marjorie L. McIntyre was a founder of Century 21 Programming, Inc.
("Century 21"), a company with which the Company merged in 1990, and
served as its Chairman of the Board of Directors from 1972 to 1990.
Mrs. McIntyre served as a consultant to Century 21 from July 1990
until its October 1990 merger with the Company, and has served as a
consultant to the Company since the merger. She was elected Chairman
of the Board of Directors of the Company in 1992. She is co-founder
of Home Interiors and Gifts, a Dallas-based home furnishings and
accessories firm, having served as an officer and director of that
firm from 1958 to 1973.
A. Ann Armstrong is a practicing attorney and has been admitted to
the State Bars in California in 1990, New York in 1980, and Texas in
1984. Prior to establishing her private law practice in California
in 1990, she practiced law in New York from 1979 to 1981 with
Donovan, Leisure, Newton & Irvine and from 1981 through 1983 with
Skadden, Arps, Slate, Meagher & Flom, and in Texas from 1983 through
1989. Ms. Armstrong is co-founder of Home Interiors and Gifts, a
Dallas-based home furnishings and accessories firm, and served as a
director of that firm from 1958 through 1963. Ms. Armstrong holds a
Bachelors of Science in Accounting from New York University magna cum
laude, 1976, a Masters in Business Administration in Finance from New
York University with distinction, 1977, and a Juris Doctorate from
Yale Law School, 1979.
Carol M. Long is the owner of Lightcatcher Productions, a film and
video production company which has operated in Dallas, Texas since
1996. She also serves as Director and Secretary for Vendyl Jones
Research Institute, a non profit organization based in Arlington,
Texas which is dedicated to Biblical Archaeology in the Middle East.
Ms. Long was a director of TM Century, Inc. from 1990 to 1995 and
served as a consultant to the Company from 1995 to 1998. Ms. Long is
the daughter of Marjorie McIntyre.
Michael Cope was President, CEO and Chairman of Interphase
Corporation, a Dallas based publicly owned computer technology
manufacturer, from 1974 through 1994. Following his retirement from
Interphase Corporation he served on the board of directors for that
company until 1996. Mr. Cope was a member of the board of directors
for XLNT, Inc., a San Diego based Networking technology supplier from
1996 until the company was bought by Intel in 1999. He currently
serves as CEO and member of the board of directors of Phoenix
Ventures, LTD, a Turks and Caicos based off-shore corporation
involved in establishing a government sponsored and licensed lottery
in the Caribbean and Latin America. He is also a member of the board
of directors for Liaison, Inc., a Dallas based health care management
company, and Hi-Line Electric, Inc., a Dallas based distributor of
electronic goods. Mr. Cope also sits on the advisory boards of
several Dallas based private companies and has recently agreed to
join the board of directors for NexTrend, Inc., a Dallas based
private on-line trading company.
R. David Graupner was elected to the board of directors in March,
1999 and named President and CEO effective May 1, 1999. Mr. Graupner
joined the Company as Executive Vice President in May 1996. From
1990 to 1996 he was employed as Vice President and General Manager of
Midcontinent Media in Madison, Wisconsin where he was responsible for
the day-to-day operations of several radio stations. Mr. Graupner
has over 20 years experience in network radio and program
syndication, radio programming and managing radio stations.
Robert F. Shannon, Jr. has served as Vice President of either the
Company or Century 21 for over 10 years. Mr. Shannon has over 15
years of prior experience as a disc jockey and program director for
radio stations in Boston, Dallas, and Phoenix and as owner of a radio
specials production company.
Marcus Hill joined the Company as Operations Manager in August, 1998
and was named Vice President of Operations in July 1999. Before
joining the Company he spent ten years running studio operations for
a Dallas based corporation specializing in musical advertising
campaigns as well as other broadcast services. Mr. Hill began his
career as a recording engineer with Omega Audio and brings many years
experience as producer, engineer and musician to his role as producer
of TM Century's new JingleBank sales library. He has a Bachelor of
Fine Arts Degree in cinematography from Stephen F. Austin State
University.
Robert Jenkins joined the Company as Director of Music Libraries in
November 1998 with over fourteen years of experience in the music
production library and licensing business. He was named Vice
President of Sales and Marketing in July 1999. Prior to his
employment with TM Century, Inc. Mr. Jenkins was Executive Vice
President of Chesky Records, an independent record label out of New
York. He also served as EVP of FirstCom Music and, as owner of Bob
Jenkins Music Services, provided music representation and licensing
services to such high profile clients as ESPN, ABC, CBS and Turner
Broadcasting. Mr. Jenkins is a graduate of the University of
Nebraska School of Music.
Teri James joined TM Century in April 1997 as Accounting Manager
until September 1999 when she was named Vice President of Finance.
From 1995 until 1997 she served as Controller for Digital Data
Systems, Inc., an Irving, Texas based company which produced
Homescope, multiple listing service on cd-rom. Prior to 1995 she
acted as Controller for Hawaii Properties, Inc., a Dallas based real
estate management company. Ms. James has a Bachelor of Science
degree in Accounting from Southwest Missouri State University and has
been a C.P.A. since 1981.
Compliance with Section 16(a) of the Securities Exchange Act
------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more
than ten percent of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and
reports of changes in their ownership in the Company's Common Stock.
Executive officers, directors and greater than ten-percent
stockholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such reports furnished to the Company and
written representations that no other reports were required, the
Company believes that, during the last fiscal year, all of the
Company's officers, directors, and greater than ten-percent
beneficial owners were in compliance with the Section 16(a) filing
requirements except as follows: for Michael E. Cope, Robert Jenkins,
Marcus Hill and Teri James, one statement (each) of initial
statement of beneficial ownership of securities (Form 3) was filed
late; and for Michael Cope, one statement of changes in beneficial
ownership of securities (Form 4), in which one transaction was
reported, was filed late.
EXECUTIVE COMPENSATION
The following tables present (1) compensation paid or accrued for
services rendered in all capacities to the Company by its Chief
Executive Officers (no other executive officers met the minimum
compensation threshold of $100,000 for inclusion in the tables) (the
"Named Executive Officers") for the last three years, (2) certain
information regarding option values. No options were granted under
the Company's long term performance incentive plan to the Named
Executive Officers in 1999.
Summary Compensation Table
Long Term
Annual Compensation Compensation Awards
Securities Underlying All Other
Name and Principal Position Year Salary ($) Bonus($) Options (#) Compensation
Neil W. Sargent 1999 (1) 91,000 0 -
President & CEO 1998 178,882 - 15,000 -
1997 180,000 - 0 -
R. David Graupner 1999 (2) 132,500 - 0 -
President & CEO 1998 108,333 - 0 -
Executive Vice President 1997 99,999 - 0 -
(1) Salary through retirement on June 30, 1999.
(2) Executive Vice President through 4/99, President and CEO 5/99-9/99
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
-----------------------------------------------------------------------------------
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options
Shares Value Options at FY-End at FY-End (1)
Acquired Realized ------------------ -----------------
Name on Exercise ($) (#) Exercisable/ ($) Exercisable/
(#) Unexercisable Unexercisable
-----------------------------------------------------------------------------------
Neil W. Sargent - - 85,250 /29,750 $4,250 / $7,898
R. David Graupner - - 16,250 / 8,750 -
(1) Options are "in the money" if the fair market value of the
underlying securities exceeds the exercise price of the option.
The option to purchase 15,000 shares issued to Mr. Sargent in
August 1998 was the only "in the money" option at the end of
fiscal year 1999. The exercise price of such option is $.355 per
share and 5,250 shares may be exercised as of September 30, 1999.
The fair market value of the Company's Common Stock was $.81 per
share on September 30, 1999. The Company applies APB Opinion No.
25, "Accounting for Stock Issued to Employees" in accounting for
its stock option and award plan. No compensation expense is
recorded during fiscal 1999 since the exercise price of each
option granted was greater than or equal to the market price of
the Company's stock on the date of grant.
Compensation of Directors and Employment Contracts
--------------------------------------------------
In July 1999, the Company renewed, for an additional three-year term,
a consulting agreement with Mrs. McIntyre, which provides for annual
compensation of $60,000 and the performance by Mrs. McIntyre of up to
60 hours per month of consulting services to management. Pursuant to
this agreement, as renewed, Mrs. McIntyre agreed not to compete with
the Company during the term of the agreement.
Ms. Armstrong and Ms. Long, as nonemployee directors, receive monthly
fees of $1,500 and $2,000, respectively, for their attendance at
Board of Directors' and committee meetings and for consulting
services to the Company on an as-needed basis. For the fiscal year
ended September 30, 1999, Ms. Armstrong and Ms. Long received total
fees of $18,000 and $9,500 respectively.
For a period of five years beginning in December 1991, a Nonqualified
Stock Option covering 2,500 shares of Common Stock was granted each
December at an exercise price of $1.20 per share (the fair market
value of the Common Stock on December 3, 1991) under the Company's
1991 Long Term Performance Incentive Plan to each director who at the
time of grant was a member of the Compensation Committee and who was
not an employee or consultant of the Company. Ms. Armstrong received
such options each year commencing 1991 through 1995. Each such
option has a term of ten years and vests with respect to 20% of the
shares covered thereby on the date of grant, cumulatively with
respect to an additional 30% of such shares on the first anniversary
of the grant date, and cumulatively with respect to the remaining 50%
of such shares on the second anniversary of the grant date.
Directors who are not members of the Compensation Committee are
eligible to be granted Incentive Stock Options or Nonqualified Stock
Options under the Plan at the discretion of the Committee.
Mr. Cope, the third nonemployee director, receives no cash
compensation but was granted an Incentive Stock Option under the Plan
covering 100,000 shares of Common Stock upon his election as a
director in August 1999.
The Company entered into a three year employment contract with Neil
Sargent to serve as President and CEO in April, 1995. That agreement
was amended on August 10, 1998, retroactive to April 1998, to provide
for employment of Mr. Sargent through April 16, 2000, however, Mr.
Sargent resigned as President and CEO to allow the appointment of Mr.
Graupner to that position effective May 1999. Effective June 30,
1999 Mr. Sargent resigned his employment with the Company and entered
into a five year consulting agreement which provides for the payment
of $21,600 annually and retention of the options for 100,000 shares
of common stock granted by the Board of Directors on March 13, 1995
and the options for 15,000 shares granted by the Board of Directors
on November 4, 1998 for the term of the agreement.
Effective May 1999, the Company entered into a thirty-eight month
employment contract with R. David Graupner, the President and CEO of
the Company which provides for a base annual salary of $150,000 and
eligibility to participate in the Company's Bonus Plan. At the end
of each fiscal year and at such other times as the Board of Directors
or the Compensation Committee of the Board of Directors will review
Mr. Graupner's salary and other compensation and determine whether
any salary increase or increase in other compensation is appropriate.
INDEPENDENT PUBLIC ACCOUNTANTS
It is anticipated that King Griffin & Adamson P.C. will be appointed
by the Board of Directors to serve as the Company's independent
public accountants for the fiscal year ending September 30, 2000. It
is anticipated that such appointment will be ratified pursuant to the
written consent to be executed by certain stockholders, as described
on the first page of this Information Statement and under the heading
"Information Concerning the Directors and Executive Officers -
Election of Directors."
AMENDED AND RESTATED 1991 LONG-TERM PERFORMANCE INCENTIVE PLAN
In July, 1999 the Board of Directors adopted the Amended and Restated
1991 Long-Term Performance Incentive Plan (the "Plan) which increased
the number of shares reserved for issuance from 250,000 to 350,000
and created a class of Employee Stock Option which allows options to
be granted to designated employees in accordance with the following
schedule:
Length of Employment Number of Options
-------------------- -----------------
6 months 1,000
3 years 500
5 years 500
New Plan Benefits
Name and Position Grant Price Number of Options
Granted
---------------------------- -------------------- -----------------
Executive Group (4 persons) $.67/per share 5,000
Employee Group (29 persons) $.67-$.68 per share 40,000
Employee Stock Options shall be exercisable on the date such Options
are granted.
It is anticipated that the Plan will be ratified pursuant to the
written consent to be executed by certain stockholders, as described
on the first page of this Information Statement and under the heading
"Information Concerning the Directors and Executive Officers -
Election of Directors."
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth (a) beneficial ownership of the Common
Stock of each director of the Company, the Named Executive Officers,
all officers and directors as a group and each person known by the
Company to own beneficially more than 5% of the Common Stock of the
Company and (b) the percentage of outstanding Common Stock of the
Company owned by each of the foregoing as of December 31, 1999 except
as otherwise noted. Unless otherwise indicated, each person and the
members of the group have sole voting and investment power with
respect to the shares shown. As of December 31, 1999 there were
2,483,193 shares of Common Stock outstanding.
Number of Beneficially Percent
Name and Address Owned Shares of Class
----------------------- ----------------------- -----------
Marjorie L. McIntyre 1,755,000 (1)(2) 70.7
2002 Academy
Dallas, TX 75234
Carol M. Long 1,725,750 (1)(2) 69.5
2002 Academy
Dallas, TX 75234
A. Ann Armstrong 1,738,250 (1)(2)(3) 69.6
21500 Armstrong Road
Grass Valley, CA 95949
Neil W. Sargent 123,750 (4) 4.8
9531 E. Chuckwagon Lane
Scottsdale, AZ 85262
Michael E. Cope 10,000 (5) 0.4
3550 Carmel Court
Southlake, TX 76092
R. David Graupner 16,250 (6) 0.6
2002 Academy
Dallas, TX 75234
A group, composed of 1,755,000 (1)(2)(7) 67.1
Mrs. McIntyre
(individually), and
Mrs. Long and Ms.
Armstrong, as Co-
Trustees of the
Marjorie McIntyre Trust
(the "Trust") created
by instrument dated
November 18, 1984 by
Marjorie L. McIntyre,
as Settlor
All officers and 1,953,241 (8) 78.3
directors as a group
(10 persons)
(1) Includes 1,725,750 shares held by the Trust, which is
irrevocable, of which Mrs. Long and Mrs. Long's children are co-
income beneficiaries; Mrs. Long's descendants are remainder
beneficiaries; and Mrs. Long and Ms. Armstrong are co-Trustees.
Mrs. Long and Ms. Armstrong must act unanimously to vote or dispose
of shares held by the Trust. Disclosures in this Information
Statement regarding the Trust and its holdings are based on
information provided to the Company by the trustees.
(2) For purposes of Section 16 of the Securities Exchange Act of
1934, as amended, Mrs. McIntyre disclaims beneficial ownership of the
shares held by Ms. Armstrong and the Trust, respectively; Mrs. Long
disclaims beneficial ownership of the shares held by Mrs. McIntyre,
Ms. Armstrong, and the Trust, respectively, except to the extent of
her indirect beneficial interest, as co-beneficiary of the Trust, in
the shares held by the Trust; and Ms. Armstrong disclaims beneficial
ownership of the shares held by Mrs. McIntyre and the Trust,
respectively. (3) Includes 12,500 shares that Ms. Armstrong has
the right to acquire pursuant to presently exercisable nonqualified
stock options.
(4) Includes 83,000 shares that Mr. Sargent has the right to acquire
pursuant to presently exercisable incentive stock options.
(5) Includes 10,000 shares that Mr. Cope has the right to acquire
pursuant to presently exercisable incentive stock options.
(6) Includes 16,250 shares that Mr. Graupner has the right to
acquire pursuant to presently exercisable incentive stock options.
(7) Mrs. Long and Ms. Armstrong, as co-Trustees of the Trust, and
Mrs. McIntyre have informally agreed to consult with one another from
time to time to determine, on a case-by-case basis, whether they will
act as a group with respect to voting or disposing of the shares
respectively held by them. See "Information Concerning the Directors
and Executive Officers - Election of Directors" for a discussion of
an agreement relating to the election of directors to which this
Information Statement relates.
(8) Includes 135,250 shares and 22,500 shares that the officers and
directors have the right to acquire pursuant to presently exercisable
incentive stock options and nonqualified stock options, respectively.
Each share of Common Stock is entitled to one vote on each matter
presented to the stockholders of the Company.
A copy of the Company's Annual Report to Stockholders is being mailed
to the stockholders with this Information Statement. The Company's
Annual Report to Stockholders contains financial statements as of
September 30, 1999 and 1998 and for each of the fiscal periods ended
September 30, 1999, 1998, and 1997.
A copy of the Company's 1999 Annual Report on Form 10-KSB is
available to each stockholder without charge by writing to
Shareholder Relations, TM Century, Inc., 2002 Academy, Dallas, TX
75234.
By Order of the Board of Directors,
/s/R. David Graupner
R. David Graupner
President and Chief Executive Officer
Dallas, Texas
February 4, 2000