SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
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Rule 14c-5(d)(2))
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TM Century, Inc.
(Name of Registrant as Specified In Its Charter)
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and 0-11.
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( ) Check box if any part of the fee is offset as provided by
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TM CENTURY, INC.
2002 ACADEMY
DALLAS, TX 75234
1999 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 four directors to serve one-year terms and until their
successors are elected and qualified.
The holders of 70.7% of the outstanding Common Stock of the Company
have agreed to execute a written consent (i) approving the election
as directors of the four nominees of the Board of Directors and it is
anticipated that the Board will execute a written consent ratifying
the Board's appointment of Deloitte & Touche, LLP as independent
public accountants of the Company for the fiscal year ending
September 30, 1999. 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 1999.
Because the election of the four nominees 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 February 8, 1999. The Board
of Directors and management of the Company are not aware of any other
action that will be authorized in such consent.
Dallas, Texas /s/Neil W. Sargent
December 16, 1998 Neil W. Sargent, 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 four 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 73 Chairman of the Board of August 1990
Directors and Consultant
A. Ann Armstrong 65 Director August 1990
Donald E. Latin 68 Director October 1990
Neil W. Sargent 67 President & CEO and Director April 1995
Robert D. Graupner 41 Executive Vice President May 1996
Robert F. Shannon, 47 Vice President August 1990
Jr.
Roger A. Holeman 42 Chief Financial Officer August 1997
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 four current directors of the Company, Marjorie L.
McIntyre, A. Ann Armstrong, Donald E. Latin and Neil W. Sargent, 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 to be
executed on February 8, 1999. Carol M. Long and A. Ann Armstrong, who
collectively hold 70.7% of the outstanding Common Stock of the
Company in their capacities as co-trustees of the Marjorie McIntyre
Trust, have agreed to execute such written consent. 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 8 meetings during fiscal 1998. Each
director attended at least 75% of the total number of meetings held
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. Latin are members, and Compensation Committee, of
which Ms. Armstrong, Mr. Latin and Mrs. McIntyre 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 Deloitte & Touche, LLP on April 14,
1998, to review fiscal year 1997 financial information. The
Compensation Committee, which is responsible for monitoring the
Company's compensation practices, held a meeting in August 1998.
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.
Donald E. Latin is President of D. Latin & Company, Inc., a Dallas
based investment banking firm he founded in 1985. From 1983 to 1985,
he served as Executive Vice President and Chief Financial Officer of
Dallas Federal Savings and Loan Association. Prior thereto, he
served as Senior Vice President and Manager of the corporate finance
department of the investment banking firm of Rauscher Pierce Refsnes,
Inc. in Dallas. He also serves as a director of The Dwyer Group,
Inc., a publicly-owned company, and has previously served as a
director of several publicly-owned companies.
Neil W. Sargent, a 40 year veteran of the radio industry, joined the
Company as President and CEO in April 1995. From 1987 to 1995 he was
employed by Westwood One Radio Networks based in Valencia, California
(formerly known as Unistar; which was formerly known as Transtar),
where he served as Senior Vice President of Affiliate Sales. Before
joining Westwood One he was President of Programming Consultants,
Inc. in Albuquerque, New Mexico. Mr. Sargent was elected as a
director of the Company in April 1995.
Robert D. 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.
Roger A. Holeman, C.P.A., joined the Company in August 1997 as Chief
Financial Officer. From 1996 to August, 1997 he was employed by TNP
Enterprises, Inc., in Fort Worth, TX where he served as a Business
Development Consultant. From 1988 to 1996 he was employed by Atmos
Energy Corporation in Dallas where he served as a Senior Auditor and
Manager of General Accounting. Mr. Holeman received a Bachelors of
Science in Business from Indiana University in 1978 and earned a
Master of Business Administration from the Tulane School of Business
in 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 Roger A. Holeman, the initial
statement of beneficial ownership of securities (Form 3), in which no
transactions were 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 Officer (the "Named Executive Officer") for the last three
fiscal years and (2) certain information regarding option values. No
other executive officer met the minimum compensation threshold of
$100,000 for inclusion in the tables. No options were granted to or
exercised by the Named Executive Officer during the last fiscal year.
Summary Compensation Table
Long Term
Annual Compensation Compensation
Awards
Securities
Underlying All Other
Name and Principal Position Year Salary ($)Bonus ($) Options (#) Compensation
Neil W. Sargent 1998 178,882 - 15,000 -
President & CEO 1997 180,000 - 0 -
1996 180,000 - 0 -
Robert D. Graupner 1998 108,333 0 -
Executive Vice President 1997 99,999 0 -
1996 40,576 (1) 25,000 -
(1) Salary from commencement of employment on May 6, 1996.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options
Shares Value Options at FY-End at FY-End (1)
Acquired Realized
Name on Exercise (#) ($) (#) Exercisable/ ($) Exercisable/
Unexercisable Unexercisable
Neil W. Sargent - - 68,000 / 47,000 $1,500 / $6,000
Robert D. Graupner - - 12,500 / 12,500 -
(1) Options are "in the money" if the fair market value of the
underlying securities exceeds the exercise price of the option.
The option issued in August 1998 was the only "in the money"
option at the end of fiscal year 1998. The option value of the
option shares issued during August 1998 was $.355 per share and
3,000 shares may be exercised as of September 30, 1998. The fair
market value of the Company's Common Stock was $.50 per share on
September 30, 1998. 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 1998 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 1996, the Company renewed, for an additional three-year term,
a consulting agreement with Mrs. McIntyre, which provides for annual
compensation of $120,000 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. McIntyre
volunteered and received a 10% reduction in annual compensation
effective as of March 16, 1998 until further notice.
Mr. Latin and Ms. Armstrong, the Company's two nonemployee directors,
receive monthly fees of $2,000 and $1,500, 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, 1998, Mr. Latin and Ms. Armstrong
received total fees of $24,000 and $18,000 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. Mr. Latin and 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. Neil W. Sargent, President and CEO and a director of the
Company, was granted an Incentive Stock Option under the Plan
covering 100,000 shares of Common Stock upon his election as an
officer in April 1995 and an additional 15,000 shares based on the
August 1998 amendment to the April 1995 agreement.
Effective April 1995, the Company entered into a three-year
employment contract with Neil W. Sargent, President, CEO and a
director of the Company which provides for a base annual salary of
$180,000 and eligibility to participate in the Company's Bonus Plan.
On August 10, 1998, the Company amended the April 1995 three year
employment contract with Neil W. Sargent, President and CEO,
retroactively to April 17, 1998. The amended contract calls for a
base annual salary of $157,000 from October 1, 1998 through April 16,
1999. The salary payable to the Employee shall be reduced by the
amount of any pay increases given by the Company to its Chief
Operating Officer, but in no event shall such reductions exceed
$35,000. The amendment provided for 15,000 additional stock options
based on the average bid and ask closing price of TMCI stock as of
August 10, 1998, which was $.355. Additionally, if in any year
during the Employment Term the Company becomes profitable (i.e., the
audited statement of operations included in the Company's Annual
Report on Form 10-K as filed with the U.S. Securities and Exchange
Commission, reflects a positive income for the year) the Employee's
salary shall be increased by the amount of $8,000 as well as the
Company shall provide the Employee a monthly automobile allowance.
Except as specifically provided above, all of the terms and
conditions of the Original Agreement shall remain in full force and
effect; such as eligibility to participate in the Company's Bonus
Plan and an additional bonus plan based on the achievement of certain
financial targets. Pursuant to this agreement, Mr. Sargent has
agreed not to compete with the Company during the term of the
agreement and for one year thereafter.
Effective May 1996, the Company entered into a three-year employment
contract with Robert D. Graupner, the Executive Vice President of the
Company which provided for a base annual salary of $100,000 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
the Employee's salary and other compensation and determine whether
any salary increase or increase in other compensation is appropriate.
On August 1, 1998, the Board of Directors approved a $15,000 increase
to the base annual salary.
INDEPENDENT PUBLIC ACCOUNTANTS
It is anticipated that Deloitte & Touche, LLP will be appointed by
the Board of Directors to serve as the Company's independent public
accountants for the fiscal year ending September 30, 1999. 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."
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 Officer,
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, 1997 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 November 30, 1998 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 1,737,000 (1) (2) (3) 69.7
21500 Armstrong Road
Grass Valley, CA 95949
Neil W. Sargent 105,750 (4) 4.3
2002 Academy
Dallas, TX 75234
Donald E. Latin 25,500 (5) 1.0
600 N. Pearl St., Ste. 2250
Dallas, TX 75201
A group, composed of Mrs. McIntyre 1,755,000 (1) (2) (6) 67.1
(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 directors as a group 1,933,866 (7) 78.3
(8 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 68,000 shares that Mr. Sargent has the right to acquire
pursuant to presently exercisable incentive stock options.
(5) Includes 12,500 shares that Mr. Latin has the right to acquire
pursuant to presently exercisable nonqualified stock options.
(6) 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.
(7) Includes 109,125 shares and 25,000 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, 1998 and 1997 and for each of the fiscal periods ended
September 30, 1998, 1997, and 1996.
A copy of the Company's 1998 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/Neil W. Sargent
Neil W. Sargent
President and Chief Executive Officer
Dallas, Texas
December 16, 1998