UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 240.14a-12
TMS, Inc.
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(Name of Registrant as Specified in Its Charter)
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(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)(1) 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):
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[] 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.
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4) Date Filed:
The Imaging Solutions Company
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 6, 2003
Notice is hereby given that the Annual Meeting of Shareholders of TMS,
Inc., an Oklahoma corporation, will be held in Room 119 of the Stillwater Public
Library, 1107 South Duck, Stillwater, Oklahoma, on Friday, June 6, 2003, at
10:00 a.m., Central Standard Time, for the following purposes:
(1) To elect three persons to serve as directors;
(2) To approve and ratify the selection of KPMG 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 April 15, 2003
are entitled to notice of and to vote at the meeting or any adjournment
thereof. Shareholders who attend the meeting may revoke their proxies and
vote in person if they desire.
BY ORDER OF THE BOARD OF DIRECTORS,
Marshall C. Wicker, Secretary
Stillwater, Oklahoma
April 28, 2003
TMS, INC.
206 West Sixth Street
Stillwater, Oklahoma 74074
PROXY STATEMENT FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD June 6, 2003
This Proxy Statement is furnished to shareholders of TMS Inc., an Oklahoma
corporation (the "Company"), in connection with the solicitation of proxies by
the Company for the Annual Meeting of Shareholders to be held in Room 119 of the
Stillwater Public Library, 1107 South Duck, Stillwater, Oklahoma, on Friday,
June 6, 2003, 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 on
or about May 5, 2003 to shareholders of record as of April 15, 2003.
GENERAL
Outstanding Shares and Voting Rights; Voting Procedures
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At the close of business on April 15, 2003 the Company had 13,112,659
shares of common stock $.05 par value ("Common Stock"), outstanding. The
holders of at least a majority of the outstanding shares of Common Stock,
present, in person or by proxy, will constitute a quorum for the transaction of
business at the meeting. Shareholders have no cumulative voting rights.
Any person signing and mailing the enclosed proxy may attend the meeting
and vote in person. Shareholders may revoke their proxies 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 election of the nominees as directors 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.
The election of the director nominees will be by plurality vote. It is the
Company's policy (i) to count abstentions and broker non-votes for determining
the presence of a quorum at the meeting, (ii) to treat abstentions as shares
represented at the meeting and voting against a proposal and to disregard broker
non-votes in determining results of proposals requiring a majority or higher
vote, and (iii) to consider neither abstentions nor broker non-votes in
determining results of plurality votes.
Record Date
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The Board of Directors has selected April 15, 2003 as the record date to
determine 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.
Expenses of Solicitation
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The Company will pay the expenses of this solicitation of proxies,
including expenses in connection with the preparation and mailing of this Proxy
Statement and all documents may hereafter supplement this Proxy Statement.
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. The Company will request that brokerage houses, custodians, nominees
and fiduciaries 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 doing so.
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 April 15, 2003, by each
shareholder known to the Company to be a beneficial owner of more than 5% of the
Company's Common Stock. Unless otherwise indicated, the beneficial owner has
sole voting and investment power with respect to such shares of Common Stock.
Name and Address of Beneficial Owner Amount and Nature of Percent of
Beneficial Ownership Class (1)
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Theodore A. Walker
P.O. Box 1580
Alvin, Texas 77512 920,000 (2) 7.0%
James R. Rau, M.D.
1203 South Hill Street
Alvin, Texas 77511 679,500 (3) 5.2%
Russell W. Teubner
5717 Woodlake Drive
Stillwater, Oklahoma 74074 677,450 5.2%
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(1) Shares of Common Stock subject to options exercisable on or before
June 15, 2003 ("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 56,000 shares which are held by Mr. Walker in joint tenancy
with his wife, Jerline, with whom he shares voting and investment
power.
(3) Includes 345,010 shares held by Dr. Rau's wife, Martha, with whom he
shares voting and investment power, and 62,500 shares subject to
Currently Exercisable Options.
The following table sets forth information regarding the beneficial
ownership of shares of the Company's Common Stock as of April 15, 2003 by each
director and executive officer individually and as a group. Unless otherwise
indicated, the beneficial owner has sole voting and investment power with
respect to such shares of Common Stock.
Name and Address of Beneficial Owner Amount and Nature of Percent of
Beneficial Ownership Class (1)
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Directors:
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Doyle E. Cherry
P.O. Box 477
Channelview, Texas 77530 205,903 (2) 2.0%
James R. Rau, M.D.
1203 South Hill Street
Alvin, Texas 77511 679,500 (3) 5.2%
Marshall C. Wicker
610 Hyde Park Blvd
Cleburne, Texas 361,828 (4) 2.8%
Executive Officers
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Deborah L. Klarfeld
7843 S. 69th E. Ave
Tulsa, Oklahoma 74133 130,557 (5) 1.0%
Deborah D. Mosier
5811 Trenton Ave
Stillwater, Oklahoma 74074 182,000 (6) 1.4%
All directors and executive officers as a group 1,559,788 (7) 11.5%
(1) Shares of Common Stock subject to options exercisable on or
before June 15, 2003 ("Currently Exercisable Options") are deemed
outstanding for purposes of computing the percentage for such person
but are not deemed outstanding in computing the percentage of any
other person.
(2) Includes 20,000 shares held by Mr. Cherry in joint tenancy with
his wife, Theresa, with whom he shares voting and investment power,
and 100,000 shares subject to Currently Exercisable Options.
(3) Includes 345,010 shares held by Dr. Rau's wife, Martha, with whom
he shares voting and investment power as to such shares, and 62,500
shares subject to Currently Exercisable Options.
(4) Includes 163,399 shares held by Mr. Wicker in joint tenancy with
his wife, Bettye, with whom he shares voting and investment power, and
50,000 shares subject to Currently Exercisable Options.
(5) Includes 125,000 shares subject to Currently Exercisable Options.
(6) Includes 47,000 shares held by Ms. Mosier in joint tenancy with
her husband, Gregory, with whom she shares voting and investment
power, and 135,000 shares subject to Currently Exercisable Options.
(7) Includes 575,409 shares as to which directors and executive
officers share voting and investment power with others and 472,500
shares subject to Currently Exercisable Options.
As of the close of business on April 15, 2003 Cede & Co. owned of record but
not beneficially, 8,449,128 shares (64.82%) 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.
Changes in Control
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We are not aware of any arrangements (including any pledge by a person of our
securities) that would result in a change of control.
Compliance with Section 16(a) of the Securities Exchange Act
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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. 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, 2002.
ELECTION OF DIRECTORS
General
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Pursuant to the Company's Bylaws the Board of Directors has fixed the
number of directors at three for the ensuing year. Current board members Doyle
E. Cherry, James R. Rau, M.D. and Marshall C. Wicker will not stand for
reelection.
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 THREE NOMINEES LISTED BELOW AS
DIRECTORS OF THE COMPANY.
Information Concerning Nominees
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Certain information as of April 15, 2003, concerning the nominees to the
Board of Directors of the Company, is set forth below. Unless otherwise
indicated, the beneficial owner has sole voting and investment power with
respect to such shares.
Common Stock Beneficially Owned
Director Since Term Expires Number of Percentage of
Age Shares Class(1)
Don Brown, Jr.
7715 E. Highway 4
Grandview, Texas 76050 52 ---- 2004 316,336(2) 2.4%
Deborah L.Klarfeld
7843 S. 69th E. Ave
Tulsa, Oklahoma 74133 46 ---- 2004 130,557(3) 1.0%
Henry H. Scherich, Ph.D.
423 Morris Street
Durham, North Carolina 27701 64 ---- 2004 121,566(4) 0.9%
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(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
percentage of any other person.
(2) Includes (i) 4,200 shares held by Mr. Brown's wife, Patricia, with
whom he shares voting and investment power; and (ii) 132,236
shares held in a family limited partnership, of which Mr. Brown is
the sole general partner and for which Mr. Brown has sole voting
and investment power. Also includes 24,000 shares held by Mr.
Brown's parents, for which Mr. Brown has sole voting and
investment power, but disclaims beneficial ownership.
(3) Includes 125,000 shares subject to Currently Exercisable Options.
(4) All 121,566 shares are held by Measurement Incorporated, an entity
for which Dr. Scherich is the president, chief administrative
officer and majority owner.
Information Concerning Nominees
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The following information is furnished for each person who is nominated for
election as a director.
Don Brown, Jr. has served since 1999 as the managing partner of A&B
Industries LLC, a privately held company which operates construction-related
companies in Cleburne, Texas. From 1976 to 1999, Mr. Brown was employed by The
First State Bank of Rio Vista as Senior Investments Officer. Mr. Brown graduated
from Baylor University with a Bachelor's degree in Business Administration.
Deborah L. Klarfeld has served as President of the Company since July 2002.
She joined the Company in September 1999 as the General Manager of the Tools and
Technologies division and the Vice President of Marketing. In September 2000,
Ms. Klarfeld was appointed Vice President of Component Products and Corporate
Marketing. Prior to joining the Company, Ms. Klarfeld served as Vice President
for New Business Development at Electronic Label Technology from April 1996 to
September 1999 and as Vice President of Marketing for United Industries
Corporation from September 1994 to April 1996. Ms. Klarfeld received her Master
of Business Administration degree from the University of Tulsa and her Bachelor
of Science degree with a major in Chemistry from the University of Oklahoma.
Henry H. Scherich, Ph.D., is the President of Measurement Incorporated, a
privately held company he founded in 1980 that provides assessment and scoring
services in the field of education. Dr. Scherich received his doctorate in
Educational Measurement and Statistics from Southern Illinois University, his
M.A. in Education with a specialty in Guidance and Counseling from the
University of Illinois, Champaign-Urbana, and his Bachelor of Arts degree from
Ottawa University in Ottawa, Kansas.
Board of Directors' Meetings
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During the 2002 fiscal year, the Company's Board of Directors held five
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
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The Board of Directors has a standing Compensation Committee that
administers the Company's stock option plans and officer compensation
arrangements. 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 met one time during the 2002 fiscal year with all members in
attendance. The Company does not have a standing nominating or audit committee.
Because the Company's securities are not listed on the New York Stock
Exchange or the American Stock Exchange, or quoted on Nasdaq, the Company is not
required to have an audit committee. However, the Company is evaluating the
qualifications for listing on the BBX, a new exchange that will eventually
take the place of the OTC Bulletin Board. The BBX is expected to become
operational later in calendar 2003, pending approval by the Securities and
Exchange Commission. The Company will be required to implement a number of
listing requirements if it becomes listed on the BBX, including having an
audit committee.
Certain Relationships and Related Transactions
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On October 10, 2002, the Company entered into an agreement with Measurement
Incorporated to further develop certain software technology and bring it to
market through a new entity, VSC Technologies, LLC. Henry H. Scherich, Ph.D.,
who is a nominee for election as a director of the Company, is the president,
chief administrative officer and majority owner of Measurement Incorporated.
Under the terms of that agreement, The Company transferred its rights in
the Company's Virtual Scoring Center(R) technology to VSC Technologies, LLC in
exchange for one-time cash payment of $250,000 and a 50% ownership interest in
that Company. Measurement Incorporated has the remaining 50% ownership interest
in that company.
No officer, director or director nominee had any other direct or indirect
material transactions during the last two years, or proposed transactions, for
which the Company was or is to be a party.
Compensation of Directors and Executive Officers
Executive Officer Summary Compensation Table
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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. No executive officer, other than the Chief Executive
Officer, earned more than $100,000 total annual salary and bonus during such
period.
Annual Compensation Long-term Compensation Awards
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Name and Principal Position Year Salary($) Bonus($) Restricted Stock Award ($)(1) Options (#) All Other Compensation ($)
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Deborah L. Klarfeld -
President (2) 2002 108,333 - - - 3,375
2001 105,000 15,000 - - 3,450
2000 93,333 - - 125,000 1,317
Deborah D. Mosier -
President (3) 2002 118,333 - 2,700 - 3,838
2001 127,917 - 3,240 - 2,637
2000 123,417 - 3,240 150,000 2,776
(1) On September 24, 1999, our Board of Directors approved a restricted
stock grant in the amount of 50,000 shares of Common Stock. The shares
were issued at a rate of 1,000 shares per month. The restricted stock
grant terminated upon the resignation of Ms. Mosier as our President on
July 1, 2002. Based on the $.27 per share market price on the date of
grant, the value of the shares issued to Ms. Mosier was $3,240 in both
fiscal 2000 and 2001 and $2,700 in fiscal 2002.
(2) Ms. Klarfeld became President effective July 1, 2002. "All Other
Compensation" includes employer matching contributions to our defined
contribution plan.
(3) Ms. Mosier became President effective September 24, 1999, and resigned
effective July 1, 2002. "All Other Compensation" includes employer
matching contributions to our defined contribution plan.
Compensation of Directors
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Each director received $1,000 per month for services as a director through
November 2002, at which time the directors resolved to discontinue their
compensation.
APPROVAL OF SELECTION OF AUDITORS
Subject to approval by the shareholders, the Board of Directors has
selected the firm of KPMG LLP, certified public accountants, as auditors of the
Company for the fiscal year ending August 31, 2003. Representatives of KPMG LLP
are expected to be present at the meeting to respond to shareholder questions.
KPMG LLP has advised the Company 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 KPMG LLP 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.
The following sets forth the fees paid or accrued by the Company to its
independent auditors, KPMG LLP, for the fiscal year ended August 31, 2002.
Audit Fees
Fees for the fiscal year 2002 audit and reviews of the Forms
10-QSB, were $52,000.
Financial Information System Design and Implementation Fees
KPMG LLP did not render any services related to financial information
systems design and implementation for the fiscal year ended August 31,
2002.
All Other Fees
During fiscal 2002, KPMG LLP charged $12,625 for "other fees" which
included services provided for tax preparation, and accounting research.
The Board of Directors believes that non-audit services provided by KPMG
LLP are compatible with maintaining KPMG LLP's independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF KPMG 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 LLP AS AUDITORS OF THE COMPANY FOR THE CURRENT FISCAL YEAR.
SHAREHOLDERS' PROPOSALS
Proposals by shareholders intended to be presented at the Annual Meeting of
Shareholders to be held in 2004 must be received by the Company prior to August
31, 2003, 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 other than those set forth in the
notice of annual meeting of shareholders 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,
Marshall C. Wicker, Secretary
April 28, 2003
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 Principal Accounting Officer of the Company, at
its address stated herein.
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, James R. Rau,
M.D., and Marshall C. Wicker 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 April 15, 2003, at the Annual Meeting of Shareholders to
be held on June 6, 2003, or any adjournment thereof.
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below [ ]
WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote
for all nominees listed below
Don Brown, Jr. Deborah L. Klarfeld Henry H. Scherich, Ph.D.
2. PROPOSAL to approve and ratify the selection of KPMG LLP as the Company's
independent auditors for the fiscal year ending August 31, 2003.
[ ]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: ______________________________,
2003
______________________________________________
(Signature)
______________________________________________
(Signature, if held jointly)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.