THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(D) OF REGULATION S-T
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.1a-11(c) or (S)240.1a-12
TMS, INC.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
TMS, INC.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11;*
4) Proposed maximum aggregate value of transaction:
* Set forth amount on which the filing is calculated and state how it
was determined.
[ ] 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:
Notes:
TMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 19, 1996
Notice is hereby given that the Annual Meeting of Shareholders of TMS,
Inc., an Oklahoma corporation (the "Company"), will be held in Room 300 of the
Centennial Student Lounge, Student Union Building, on the campus of Oklahoma
State University, Stillwater, Oklahoma, on Friday, January 19, 1996, at 10:00
a.m., Central Standard Time, for the following purposes:
(1) To elect six (6) persons to serve as directors of the Company;
(2) To approve and ratify the selection of KPMG Peat Marwick LLP as
independent auditors; and
(3) To consider and act upon any other matters which may properly
come before the Meeting or adjournments thereof.
Shareholders of record at the close of business on December 1, 1995
shall be entitled to notice of and to vote at the Meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
Marshall C. Wicker, Secretary
December 15, 1995
TMS, INC.
206 West Sixth Street
Stillwater, Oklahoma 74074
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 19, 1996
This Proxy Statement is furnished to shareholders of TMS, Inc., an
Oklahoma corporation (the "Company"), in connection with the solicitation, on
behalf of the Board of Directors of the Company, of proxies to be used at the
Annual Meeting of Shareholders (the "Meeting") to be held in Room 300 of the
Centennial Student Lounge, Student Union Building on the campus of Oklahoma
State University, Stillwater, Oklahoma on Friday, January 19, 1996, at 10:00
a.m., Central Standard Time, or at any adjournment thereof. The persons named as
proxies in the enclosed form were selected by the Board of Directors of the
Company.
This Proxy Statement and the accompanying proxy are first being mailed
to shareholders on or about December 15, 1995. The Annual Report to
Shareholders, including financial statements for the fiscal year ended August
31, 1995, has been previously mailed to shareholders.
GENERAL
OUTSTANDING SHARES AND VOTING RIGHTS; VOTING PROCEDURES
At October 31, 1995, the Company had 8,451,947 shares of common stock,
$.05 par value ("Common Stock"), outstanding. The presence, in person or by
proxy, of the holders of at least a majority of the outstanding shares of Common
Stock is necessary to constitute a quorum of such class at the Meeting.
Shareholders have no cumulative voting rights.
Any person signing and mailing the enclosed proxy may vote in person
if in attendance at the Meeting. Proxies may be revoked at any time before they
are voted by notifying the Secretary of such revocation, in writing, at the
Meeting, or by submitting a later dated proxy. Shareholders are encouraged to
vote on the matters to come before the Meeting by marking their preferences on
the enclosed proxy and by dating, signing, and returning the proxy in the
enclosed envelope. If a preference is not indicated on a proxy, the proxy will
be voted "FOR" the nominees to serve as directors of the Company; "FOR" the
proposal to amend the Company's Certificate of Incorporation for the purpose of
effecting a 1-for-4 reverse split of the Company's Common Stock; and "FOR" the
ratification and selection of independent auditors.
It is not anticipated that matters other than those described above
and in the Notice of Annual Meeting, to which this Proxy Statement is appended,
will be brought before the Meeting for action, but if any other matters properly
come before the Meeting, it is intended that votes thereon will be cast pursuant
to said proxies in accordance with the best judgment of the proxy holders.
With respect to the tabulation of votes on any matter, abstentions are
treated as present or represented and entitled to vote at the Meeting, while
non-votes by nominees are treated as not being present or represented and not
entitled to vote at the Meeting.
RECORD DATE
The close of business on December 1, 1995 has been fixed as the record
date for the determination of shareholders entitled to receive notice of and to
vote at the Meeting. Each outstanding share of Common Stock is entitled to one
(1) vote on all matters herein.
EXPENSES OF SOLICITATION
The expenses of this solicitation of proxies will be borne by the
Company, including expenses in connection with the preparation and mailing of
this Proxy Statement and all documents which now accompany or may hereafter
supplement it. Solicitations will be made only by the use of the mails, except
that, if deemed desirable, officers and regular employees of the Company may
solicit proxies by telephone, telegraph, or personal calls. It is contemplated
that brokerage houses, custodians, nominees and fiduciaries will be requested to
forward the proxy soliciting material to the beneficial owners of the Common
Stock held of record by such persons and that the Company will reimburse them
for their reasonable expenses incurred in connection therewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding the beneficial
ownership of shares of the Company's Common Stock as of October 31, 1995, by
each shareholder known to the Company to be a beneficial owner of more than 5%
of Company's Common Stock. Unless otherwise indicated, the beneficial owner has
sole voting and investment power with respect to such shares of Common Stock.
Amount and Nature Percent
Name and Address of Beneficial Ownership of Class/(1)/
---------------- ----------------------- --------------
Theodore A. Walker 1,000,000/(2)/ 11.8%
P.O. Box 1580
Alvin, Texas 77512
James R. Rau, M.D. 717,000/(3)/ 8.4%
1203 South Hill Street
Alvin, Texas 77511
J. Richard Phillips 618,927/(4)/ 7.2%
206 West Sixth Street
Stillwater, Oklahoma 74074
Ashok Mathur 447,700/(5)/ 5.3%
One Portofino Court
San Carlos, California 94070
______________________
/(1)/ Shares of Common Stock subject to options currently exercisable or
exercisable on or before February 18, 1996 ("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
/(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 as to such shares, and 100,000 shares
subject to Currently Exercisable Options.
/(4)/ Includes 426,120 shares which are held by Dr. Phillips in joint tenancy
with his wife, Sharon, with whom he shares voting and investment power;
13,600 shares held by Mrs. Phillips, with whom Dr. Phillips shares voting
and investment power as to such shares; and 142,615 shares of Common Stock
subject to Currently Exercisable Options. See "Executive Compensation."
/(5)/ Held by Mr. Mathur in joint tenancy with his wife, Minu, with whom he
shares voting and investment power.
As of the close of business on October 31, 1995, Cede & Co. owned of
record, but not beneficially, 2,714,168 shares (32.1%) 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.
ELECTION OF DIRECTORS
GENERAL
Pursuant to the Bylaws of the Company, the shareholders are to elect
directors at the Meeting to hold office until the next Annual Meeting of
Shareholders and until their successors shall be elected and shall qualify. The
Board of Directors has fixed the number of directors at six for the ensuing
year, and the number shall be decreased to five if the Sequoia Acquisition is
not closed prior to the Meeting. See "--Appointment of Director in Connection
with the Sequoia Acquisition."
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.
APPOINTMENT OF DIRECTOR IN CONNECTION WITH THE SEQUOIA ACQUISITION
Under the terms of the Merger Agreement, the Company agreed to appoint
Dana R. Allen to serve on the Company's Board of Directors commencing the date
of closing of the Sequoia Acquisition. In the event the Sequoia Acquisition is
closed prior to the Meeting, Mr. Allen will be nominated at the Meeting for
election as a director; if no such closing occurs prior to the Meeting, then Mr.
Allen will not be nominated, the number of directors to be elected at the
Meeting would be reduced to five, and Mr. Allen would not be appointed
thereafter to the Board of Directors unless there were a closing of the Sequoia
Acquisition.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS, IF PROPERLY SIGNED AND
RETURNED, WILL BE VOTED "FOR" THE ELECTION OF THE SIX NOMINEES LISTED BELOW AS
DIRECTORS OF THE COMPANY.
3
INFORMATION CONCERNING NOMINEES
Certain information as of October 31, 1995, concerning the nominees to
the Board of Directors of the Company, as well as the designee of Sequoia in
connection with the Sequoia Acquisition, is set forth below based upon
information supplied by such persons. Unless otherwise indicated, the beneficial
owner has sole voting and investment power with respect to such shares of Common
Stock.
Common Stock
------------
Beneficially Owned
------------------
Name Age Director Number Percentage
- ---- ---- Since of Shares of Class(1)
----- --------- -----------
James R. Rau, M.D. 66 1990 717,000/(1)/ 8.4%
J. Richard Phillips 61 1983 618,927/(2)/ 7.2%
Doyle E. Cherry 53 1988 255,903/(3)/ 3.0%
Maxwell Steinhardt 41 1995 382,155/(4)/ 4.5%
Marshall C. Wicker 69 1994 311,828/(5)/ 3.7%
Dana R. Allen/(7)/ 42 -- -0-/(7)/ --
All executive officers and directors
as a group (9 persons) ................. 2,801,044/(8)/ 29.9%
___________________________
/(1)/ See footnote (3) to the table under the heading "Security Ownership of
Certain Beneficial Owners."
/(2)/ See footnote (4) to the table under the heading "Security Ownership of
Certain Beneficial Owners."
/(3)/ Includes 20,000 shares held by Mr. Cherry in joint tenancy with his wife,
Theresa, with whom he shares voting and investment power; 3,500 shares
held by Mrs. Cherry; and 150,000 shares subject to Currently Exercisable
Options.
/(4)/ Shares held by Mr. Steinhardt in joint tenancy with his wife, Amanda, with
whom he shares voting and investment power, and 82,155 shares subject to
Currently Exercisable Options.
/(5)/ Includes 163,399 shares held by Mr. Wicker in joint tenancy with his wife,
Bettye, with whom he shares voting and investment power.
/(6)/ The designee of Sequoia to serve as a director upon consummation of the
Sequoia Acquisition. See "-Appointment of Director in Connection with the
Sequoia Acquisition."
/(7)/ Excludes 2,075,887 shares of Common Stock which may be issued to Mr. Allen
in the event the Sequoia Acquisition is consummated, which would represent
17.1% of the issued and outstanding shares of Common Stock if the Sequoia
Acquisition occurred on October 31, 1995.
/(8)/ Includes 1,581,119 shares as to which directors and executive officers
share voting and investment power with others and 918,049 shares subject
to Currently Exercisable Options.
The Company's nominees for the six directorships are listed below with
brief statements setting forth their principal occupations and other
biographical information.
Dr. J. Richard Phillips has served as Chairman of the Board and Chief
Executive Officer of the Company since May 1993 and has served as a director of
the Company since 1983. From 1983 to May 1993 he was President of the Company.
Dr. Phillips served as Chairman of
4
Computer Science at Oklahoma State University from 1976 to 1981, and for two
years prior thereto was Program Director for Software Engineering at the
National Science Foundation in Washington, D.C. Dr. Phillips graduated from
Lewis & Clark College in 1959 with a Bachelor of Science degree in Mathematics
and Physics and earned a Ph.D in Computer Science (Mathematics) from Oregon
State University in 1966.
Maxwell Steinhardt has served as President and Chief Operating Officer of
the Company since June 1993 and prior to that time was Vice President, Marketing
and Sales, of the Company. Mr. Steinhardt was elected to the Company's Board of
Directors on February 18, 1994. From October 1988 until joining the Company in
August 1990, he served as Vice President of Marketing and Sales for First
Pacific Networks ("FPN"), a telecommunications equipment company located in
Sunnyvale, California. From November 1985 until joining FPN, Mr. Steinhardt was
Managing Partner and founder of CTPS, Inc., a technology consulting firm. Mr.
Steinhardt graduated from Princeton University in 1978 with a Bachelor of Arts
degree in political science.
Doyle E. Cherry has served in the insurance and securities industry and
actuarial, tax and financial consulting fields since 1961. From 1982 to August
1993, he also served as President and Chief Executive Officer of First Market
Corporation and the First Market Group of Companies. Since July 1993, he has
served as President of Thiotech USA, Inc., a chemical manufacturer and
distributor located in Houston, Texas.
Dr. James R. Rau was elected to the Company's Board of Directors on March
8, 1990. Dr. Rau practiced medicine from 1956 to 1985 in a private practice and
from 1985 to 1988 as a part-time physician with the Monsanto Company in Houston,
Texas. Since leaving Monsanto, Dr. Rau has managed his financial and real estate
investments.
Marshall C. Wicker was elected to the Company's Board of Directors on
February 18, 1994. Since 1983, he has owned and operated Marwick Enterprises,
which is engaged in ranching and investments. Mr. Wicker is a Professional
Engineer and a member of the American Association of Petroleum Geologists and
Society of Exploration Geophysicists.
Dana R. Allen has served as Chairman and Chief Executive Officer of
Sequoia since he founded that company in 1987. Mr. Allen graduated from
California State University, Chico, with a Bachelor of Arts Degree in Geology.
EXECUTIVE OFFICERS
The following sets forth the name and a description of the background and
principal occupation of each executive officer of the Company who is not a
director of the Company.
Arthur D. Crotzer, 43, has served in various capacities with the Company
since 1983, and is currently serving as Senior Vice President, Engineering. Mr.
Crotzer was awarded a Bachelor of Science degree in Math and Physics from Austin
Peay State University in 1973 and in 1975 he earned a Master of Science degree
in Computer Science from Oklahoma State University.
5
Dale E. May, 54, joined the Company as Vice President, Finance and
Administration, in October 1989. Mr. May is a Certified Public Accountant and a
Certified Financial Planner, and is a member of the American Institute of
Certified Public Accountants. Mr. May graduated from Oklahoma City University in
1964 with a Bachelor of Science degree in Accounting and in 1969 graduated from
Southwestern Baptist Theological Seminary with a Master of Divinity degree.
Richard P. Scanlan, 33, joined the Company in 1989 as a project manager
and technical consultant for customers. He served as Director of Sales from June
1992 to July 1993, when he became Vice President, Sales. He received a Bachelor
of Science degree in Business Management from Oklahoma State University in 1985,
and in 1989 he received a second Bachelor of Science degree in Management
Science and Computer Systems from Oklahoma State University.
Gail L. Bower, 43, joined the Company in 1991 as Manager of West Coast
Sales Operations and was promoted to Director of Marketing in July 1993. She has
served as Vice President, Marketing since October 1994. From 1987 to joining the
Company, Ms. Bower was a product manager for KnowledgeSet, a CD-ROM publishing
software developer.
BOARD OF DIRECTORS' MEETINGS
During the 1995 fiscal year, the Company's Board of Directors held three
meetings. All members of the Board of Directors attended more than seventy-five
percent (75%) of the Board of Directors' meetings.
COMMITTEES OF THE BOARD
The Board of Directors has a standing Compensation Committee. Such
committee consists of Mr. Cherry, Dr. Rau and Mr. Wicker, and conducts all
necessary business during the regular meetings of the Board or through action by
written consent. The Compensation Committee administers the Company's stock
option plans. The Company does not have a standing nominating committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No officer or director had transactions with or indebtedness to the
Company in excess of $60,000 during the fiscal year ended August 31, 1995.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder require that certain officers, directors and beneficial
owners of the Company's Common Stock file various reports with the Securities
and Exchange Commission (the "SEC"). Based solely upon a review of such reports
filed with the SEC, the Company believes that, for the fiscal year ended August
31, 1995, Rick P. Scanlan filed two late reports, Dale E. May filed six late
reports and Dr. J. Richard Phillips filed two late reports.
6
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company. During the last fiscal year, no executive officer of the
Company received cash compensation, including bonuses, in excess of $100,000,
and no director or executive officer was granted any stock appreciation rights
or restricted stock awards.
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
--------------------------------------------------
Name and Principal Position Year Salary Bonus Number of Securities
Underlying Options
- ------------------------------------------------------------------------------------------------
J. Richard Phillips, Chief Executive Officer 1995 $84,000 -0- -0-
1994 $78,319 -0- 89,327/(1)/
1993 $72,300 -0- -0-
____________________
/(1)/ The Summary Compensation Table contained in the Company's Proxy Statement
in connection with Annual Meeting held on December 19, 1994, included
options to purchase 150,000 shares granted under 1994 stock option plans.
The 1994 stock option plans were not approved by the Company's
shareholders; therefore, such options did not become effective and are not
included in long-term compensation for fiscal 1994.
APPROVAL OF SELECTION OF AUDITORS
Subject to approval by the shareholders, the Board of Directors has
selected the firm of KPMG Peat Marwick LLP, certified public accountants (the
"Auditors"), as auditors of the Company for the year ending August 31, 1996.
Representatives of the Auditors are expected to be present at the Meeting to
respond to questions of shareholders.
The Company has been advised by the Auditors that neither the firm nor
any of its associates has any relationship with the Company or any affiliate of
the Company other than the usual relationship that exists between independent
public accountants and their clients. To the knowledge of the Board of
Directors, neither the Auditors nor any of its associates has any direct or
material indirect financial interest in the Company and its subsidiaries in the
capacities of promoter, underwriter, voting trustee, director, officer, or
employee.
During the past fiscal year, the Auditors have examined the accounts
of the Company and provided other services with respect to certain filings of
the Company with the Securities and Exchange Commission.
The affirmative vote of the holders of a majority of the shares of
Common Stock present at the Meeting in person or by proxy and entitled to vote
is required to approve this proposal.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE SELECTION OF KPMG
PEAT MARWICK LLP AS AUDITORS OF THE COMPANY FOR THE CURRENT FISCAL YEAR AND THE
PROXY, UNLESS OTHERWISE INDICATED THEREON, WILL BE VOTED "FOR" THE RATIFICATION
OF KPMG PEAT MARWICK LLP AS AUDITORS OF THE COMPANY FOR THE CURRENT FISCAL YEAR.
SHAREHOLDERS' PROPOSALS
Proposals by shareholders intended to be presented at the 1996 Annual
Meeting of Shareholders must be received by the Company prior to August 31,
1996, in order for the proposals to be included in the proxy statement and proxy
card relating to such meeting. It is suggested that proposals be submitted to
the Company by certified mail, return receipt requested.
OTHER MATTERS
Management knows of no other business which is likely to be brought
before the Meeting. If other matters not now known to management come before the
Meeting, however, it is the intention of the persons named in the accompanying
proxy to vote in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
MARSHALL C. WICKER, Secretary
December 15, 1995
A COPY OF THE COMPANY'S FORM 10-K ANNUAL REPORT AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO
SHAREHOLDERS ON REQUEST TO THE VICE PRESIDENT, FINANCE AND ADMINISTRATION OF THE
COMPANY, AT ITS ADDRESS STATED HEREIN.
8
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, J.
RICHARD PHILLIPS, AND JAMES R. RAU, M.D., AS PROXIES, EACH WITH THE POWER TO
APPOINT HIS SUBSTITUTE, AND HEREBY APPOINTS AND AUTHORIZES THEM TO REPRESENT AND
VOTE AS DESIGNATED BELOW, ALL OF THE SHARES OF COMMON STOCK OF THE COMPANY HELD
OF RECORD BY THE UNDERSIGNED ON DECEMBER 1, 1995, AT THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 19, 1996, 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
Dana R. Allen Doyle E. Cherry J. Richard Phillips James R. Rau, M.D. Maxwell Steinhardt Marshall C. Wicker
(INSTRUCTION): TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
- ------------------------------------------------------------------------------------------------------------------------------------
2. PROPOSAL to approve and ratify the selection of KPMG Peat Marwick LLP as the company's independent auditors for the fiscal
year ending August 31, 1996.
[_] 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 AND 2.
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 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.
Dated:_________________________, 19____
x________________________________________
(Signature)
x________________________________________
(Signature, if held jointly)
PLEASE SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.