UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14F-1
INFORMATION STATEMENT
PURSUANT TO SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
TMI HOLDINGS, INC.
(Exact name of registrant as
specified in its corporate charter)
FLORIDA 000-30011 65-0309540
(State or other (Commission (I.R.S. Employer
jurisdiction of incorporation) File Number) Identification
No.)
3141 W. HALLANDALE BEACH BOULEVARD
HALLANDALE, FLORIDA 33009
(Address of principal executive offices) (zip code)
(954) 985-8430
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report.)
TMI HOLDINGS, INC.
3141 W. HALLANDALE BEACH BOULEVARD
HALLANDALE, FLORIDA 33009
(954) 985-8430
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
GENERAL
This Information Statement is being mailed on or about November 11, 2002 to
the holders of shares of common stock, par value $0.01 (the "Common Stock") of
TMI Holdings, Inc., a Florida corporation ("TMIH" or the "Company"), as of
November 6, 2002. You are receiving this Information Statement in connection
with the appointment of persons designated by the majority of the Company's
shareholders to fill seats on the Company's Board of Directors (the "Board").
The resignation of the existing directors, and the appointment of new directors,
will be effective on the later to occur of (i) 10 days following the mailing of
this Information Statement to the TMIH shareholders, or (ii) the Douglas Closing
(as hereinafter defined).
On October 28, 2002, the Company's majority shareholder, Marc Douglas
("Douglas"), entered into a Stock Purchase Agreement (the "Douglas Sale
Agreement") with Matthew P. Dwyer ("Dwyer"), which if closed will result in a
change of the Company's management, Board of Directors, and ownership.
Pursuant to the terms of the Douglas Sale Agreement, Douglas has agreed to
sell 250,000 shares of the Company's Series A Preferred Stock, representing 100%
of the outstanding preferred stock of the Company and 42% of the voting control
of the Company (the "Preferred Stock"), to Dwyer. As consideration for the
purchase of the Preferred Stock, Dwyer has agreed to execute a promissory note
to Douglas in the principal amount of $150,000.00 due 120 days from the Closing
(the "Dwyer Note"). The Dwyer Note will be secured by the pledge of certain
securities, other than the Company's securities, by Dwyer. The Closing, as
defined in the Douglas Sale Agreement (the "Douglas Closing"), will take place
upon the satisfaction of certain conditions, including delivery of this
Information Statement.
On November 7, 2002, Dwyer entered into a Stock Purchase Agreement (the
"Dwyer Sale Agreement") with William Michael Sessions ("Sessions") and John W.
Meyers ("Meyers"), whereby Dwyer agreed to sell the Preferred Stock to Sessions
and Meyers. As consideration for the purchase of the Preferred Stock, Sessions
and Meyers have agreed to execute a promissory note to Dwyer in the principal
amount of $175,000.00 due 120 days from the Closing under the Douglas Sale
Agreement (the "Sessions/Meyers Note"). The Closing, as defined in the Dwyer
Sale Agreement (the "Dwyer Closing"), will take place upon the satisfaction of
certain conditions, including delivery of this Information Statement.
In accordance with the Douglas Sale Agreement, the following events have
occurred or will occur at the Douglas Closing:
- - On October 28, 2002, the Board of Directors of the Company exempted the
transactions contemplated by the Douglas Sale Agreement from the provisions of
Section 607.0901 and 607.0902 of the Florida Statutes;
- - On October 28, 2002 the Board of Directors of TMIH (i) appointed two
designees of Dwyer (namely Sessions and Meyers) to the TMIH Board, and (ii)
resigned as directors of TMIH, all effective on the later to occur of (i) 10
days following the mailing of this Information Statement to the TMIH
shareholders, or (ii) the Douglas Closing.
2
- - Effective as of the Douglas Closing, the Company assigned to Douglas and
his affiliates a promissory note in the principal amount of $675,000, plus
accrued interest, which sum is a part of the original promissory note in the
original principal amount of $1,175,000 made by Thrift Ventures, Inc. to the
Company (the "Thrift Note"). Thrift Ventures, Inc. is an entity controlled by
Douglas.
- - Effective as of the Douglas Closing, the Company entered into a five-year
Consulting Agreement with Douglas for an aggregate consulting fee of $500,000,
which shall be paid in five equal annual installments of $100,000 each by the
Company assigning to Douglas the sum of $100,000 per year, each year, that being
the remaining sum due to the Company under the Thrift Note.
- - Effective as of the Douglas Closing, Douglas, Douglas Holdings (as
hereinafter defined) and Douglas Partnership (as hereinafter defined) cancelled
an aggregate of 1,567,167 shares of TMIH common stock, along with all options
and warrants to acquire TMIH stock then held by them.
YOU ARE URGED TO READ THIS INFORMATION STATEMENT CAREFULLY. YOU ARE NOT,
HOWEVER, REQUIRED TO TAKE ANY ACTION.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Voting Securities of the Company
- ------------------------------------
As of November 6, 2002, assuming the sale of 250,000 shares of Preferred
Stock to Sessions and Meyers as outlined above, there were 250,000 shares of
Preferred Stock issued and outstanding. Each share of Preferred Stock entitles
the holder to 10 votes per share on each matter which may come before a meeting
of the shareholders. The holders of the Preferred Stock control 42% of the
total voting securities of the Company.
As of November 6, 2002, there were 3,463,877 shares of Common Stock issued
and outstanding. Each share of Common Stock entitles the holder thereof to one
vote on each matter which may come before a meeting of the shareholders.
3
Security Ownership of Certain Beneficial Owners and Management
- ---------------------------------------------------------------------
(Prior to the Douglas Closing and the Dwyer Closing)
- ------------------------------------------------------------
The following table sets forth, as of November 6, 2002, certain information
with respect to the Company's equity securities owned of record or beneficially
by (i) each Officer and Director of the Company; (ii) each person who owns
beneficially more than 5% of each class of the Company's outstanding equity
securities; and (iii) all Directors and Executive Officers as a group.
Common Stock
Amount and
Nature of
Name and Address of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class (1)
- -------------- ------------------------------ ------------ ------------
Marc Douglas (3)
Common . . . . . . . . . 3141 W. Hallandale Beach Blvd.
Stock. . . . . . . . . . Hallandale, Florida 33009 2,172,167 (6) 53.4% (5)
Jay M. Haft (2) (4)
Common . . . . . . . . . 3141 W. Hallandale Beach Blvd.
Stock. . . . . . . . . . Hallandale, Florida 33009 210,000 (7) 5.7%
Howard Rothchild (2) (4)
Common . . . . . . . . . 3141 W. Hallandale Beach Blvd.
Stock. . . . . . . . . . Hallanda, Florida 33009 87,000 (7) 2.5%
Richard Weiner
Common . . . . . . . . . 890 N.W. 115 Aenue
Stock. . . . . . . . . . Plantation, Florida 33325 552,500 (8) 16.0%
------------- ------------
All Officers and Directors
as a Group (3 Persons) 2,469,167 56.6%
============= ============
Series A Preferred Stock
Marc Douglas (3)
Series A . . . . . . . . 3141 W. Hallandale Beach Blvd.
Preferred Stock. . . . . Hallandale, Florida 33009 250,000 100.0% (5)
------------- ------------
All Officers and Directors
as a Group (1 Person) 250,000 100.0%
============= ============
(1) Based on 3,463,877 shares of common stock outstanding.
(2) Indicates a Director of the Company.
(3) Mr. Douglas submitted his resignation as an officer and director of TMIH
on August 27, 2001. Effective August 1, 2002, Mr. Douglas was designated as the
Principal Executive Officer and the Principal Financial and Accounting Officer
of TMIH.
(4) Mr. Haft and Mr. Rothchild submitted their resignation as directors of
TMIH on October 28, 2002. Their respective resignations will be effective upon
the later to occur of (i) 10 days following the mailing of this Information
Statement to the TMIH shareholders, or (ii) the Douglas Closing.
4
(5) The Common Stock votes together with the Preferred Stock on all matters,
except as otherwise legally required. The Preferred Stock entitles the holder
to 10 votes per share, and the Common Stock entitles the holder to one vote per
share. The combined voting power held by Mr. Douglas from both the Series A
Preferred Stock and Common Stock is 68.2%.
(6) Of Douglas' total shares, 6,000 shares are held of record by Douglas
Family Holdings, Inc. ("Douglas Holdings"), a corporation of which Douglas is
the sole shareholder, and 400,000 shares are held of record by Douglas Family
Limited Partnership ("Douglas Partnership"), of which Douglas Holdings is
the general partner; 105,000 shares are issuable upon exercise of options
exercisable within 60 days; and 500,000 shares are issuable upon the exercise
of warrants.
(7) Shares underlying options exercisable within 60 days.
(8) Includes 35,000 shares held jointly with Elyce Weiner and 10,000 shares
held jointly with Matthew Weiner.
Security Ownership of Certain Beneficial Owners and Management
- ---------------------------------------------------------------------
(After the Douglas Closing and the Dwyer Closing)
- --------------------------------------------------------
The following table sets forth, as of November 6, 2002, certain information
with respect to the Company's equity securities which will be owned of record or
beneficially by (i) each Officer and Director of the Company; (ii) each person
who owns beneficially more than 5% of each class of the Company's outstanding
equity securities; and (iii) all Directors and Executive Officers as a group,
after giving effect to the transactions contemplated by the Douglas Closing and
the Dwyer Closing.
Common Stock
Amount and
Nature of
Name and Address of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class (1)
- -------------- ------------------------------ ------------ ------------
Marc Douglas (2)
Common . . . . . . . . . 3141 W. Hallandale Beach Blvd.
Stock. . . . . . . . . . Hallandale, Florida 33009 -0- *
Jay M. Haft (3)
Common . . . . . . . . . 3141 W. Hallandale Beach Blvd.
Stock. . . . . . . . . . Hallandale, Florida 33009 210,000 (6) 10.0%
Howard Rothchild (3)
Common . . . . . . . . . 3141 W. Hallandale Beach Blvd.
Stock. . . . . . . . . . Hallandale, Florida 33009 87,000 (6) 4.4%
William Michael Sessions (4)
Common . . . . . . . . . 4463 Pahee Street, Suite 203-B
Stock. . . . . . . . . . Lihue, Hawaii 96766 -0- *
John W. Meyers (4)
Common . . . . . . . . . 4463 Pahee Street, Suite 203-B
Stock. . . . . . . . . . Lihue, Hawaii 96766 -0- *
Richard Weiner
Common . . . . . . . . . 890 N.W. 115 Avenue
Stock. . . . . . . . . . Plantation, Florida 33325 552,500 (7) 29.1%
------------- ------------
All Officers and Directors
as a Group (2 Persons) -0- *
============= ============
5
Series A Preferred Stock
William Michael Sessions (4)
Series A . . . . . . . . 4463 Pahee Street, Suite 203-B
Preferred Stock. . . . . Lihue, Hawaii 96766 125,000 50% (5)
John W. Meyers (4)
Series A . . . . . . . . 4463 Pahee Street, Suite 203-B
Preferred Stock. . . . . Lihue, Hawaii 96766 125,000 50% (5)
------------- ------------
All Officers and Directors
as a Group (2 Persons) 250,000 100%
============= ============
(1) Based on 1,896,710 shares of common stock outstanding.
(2) Mr. Douglas submitted his resignation as an officer and director of TMIH
on August 27, 2001. Effective August 1, 2002, Mr. Douglas was designated as the
Principal Executive Officer and Principal Financial and Accounting Officer of
TMIH.
(3) Mr. Haft and Mr. Rothchild submitted their resignation as an officer and
director of TMIH on October 28, 2002. Their respective resignations will be
effective upon the later to occur of (i) 10 days following the mailing of this
Information Statement to the TMIH shareholders, or (ii) the Douglas Closing.
(4) Indicates an Officer or Director of the Company.
(5) The Common Stock votes together with the Preferred Stock on all matters,
except as otherwise legally required. The Preferred Stock entitles the holder
to 10 votes per share, and the Common Stock entitles the holder to one vote per
share. The combined voting power held by each of Mr. Sessions and Mr. Meyers
from both the Preferred Stock and Common Stock is 56.9%.
(6) Shares underlying options exercisable within 60 days.
(7) Includes 35,000 shares held jointly with Elyce Weiner and 10,000 shares
held jointly with Matthew Weiner.
Changes in Control
- --------------------
On October 28, 2002, the Company's majority shareholder, Marc Douglas
entered into a Stock Purchase Agreement with Matthew P. Dwyer which resulted in
a change of the Company's management, Board of Directors, and ownership. On
November 7, 2002, Dwyer entered into a Stock Purchase Agreement with William
Michael Sessions and John W. Meyers whereby Dwyer sold a controlling interest in
the Company to Sessions and Meyers. Both transactions have been described more
fully herein.
DIRECTORS AND EXECUTIVE OFFICERS
Legal Proceedings
- ------------------
The Company is not aware of any legal proceedings in which any director,
officer, or any owner of record or beneficial owner of more than five percent of
any class of voting securities of the Company, or any affiliate of any such
director, officer, affiliate of the Company, or security holder, is a party
adverse to the Company or has a material interest adverse to the Company.
6
Directors and Executive Officers
- -----------------------------------
The following table sets forth the names and ages of the current and
incoming directors and executive officers of the Company, the principal offices
and positions with the Company held by each person and the date such person
became a director or executive officer of the Company. The executive officers
of the Company are elected annually by the Board of Directors. The directors
serve one-year terms until their successors are elected. The executive officers
serve terms of one year or until their death, resignation or removal by the
Board of Directors. Unless described below, there are no family relationships
among any of the directors and officers.
Name Age Position(s)
- ---- --- -----------
Marc Douglas (1) 43 Principal Executive Officer and Principal
Financial and Accounting Officer
Jay M. Haft (1) 65 Director
Howard Rothchild (1) 66 Director
William Michael Sessions (2) 53 CEO, Secretary, Director
John W. Meyers (2) 35 COO, Treasurer, Director
(1) Outgoing Officer or Director
(2) Incoming Officer and Director
WILLIAM MICHAEL SESSIONS will be the CEO, Secretary, and a Director
effective on the Closing of the transactions contemplated herein. Mr. Sessions
currently serves as the CEO of Kina'Ole Development Corporation, a home
developer, where he has served since June 2002 and will continue to serve after
taking office with the Company. From July 1996 through October 2002, Mr.
Sessions has served as a Mortgage Loan Officer with GMAC Mortgage (July 1996 to
May 2002) and American Savings Bank (June 2002 to October 2002). Mr. Sessions
also presently serves as the President of Hawaii Habitat for Humanity, a
non-profit organization, where he has served since July 2000.
JOHN W. MEYERS will be the COO, Treasurer, and a Director effective on the
Closing of the transactions contemplated herein. Mr. Meyers currently serves as
the President of Beach Activities of Kavac, Inc., a retail diving store, where
he has served since 1995 and will continue to serve after taking office with the
Company. From April 2002 through the present, Mr. Meyers has served as the COO
of Kina'Ole Development Corporation. Previously, Mr. Meyers has served as the
General Manager of Quality Homes of Kauai, and as the President of Hawaiian
Palisade Development.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
- ------------------------------------------------------------------------------
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 a
registered class of the Company's equity securities to file with the SEC initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than
ten percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of Forms 3, 4, and 5,
as applicable, Mr. Richard Weiner, one of the Company's shareholders owning more
than ten percent of TMIH Common Stock, failed to file a Form 3, to reflect his
purchase of shares of TMIH Common Stock. In addition, Messrs Haft and Rothchild
failed to file a Form 5 to reflect grants of stock options in fiscal 2001. The
Company believes that all of the officers, directors and the remaining persons
who own more than ten percent of TMIH's Common Stock were timely filed by such
persons. The Company has made the parties to the transactions described herein
aware of their filing obligations following each applicable closing.
7
Board Meetings and Committees
- --------------------------------
During the fiscal year ended December 31, 2001, the Board of Directors met
on numerous occasions. All the members of the Board attended the meetings. All
written actions taken by the Board were by unanimous consent.
The Board of Directors has an Audit Committee to review the internal
accounting procedures of the Company and to consult with and review the services
provided by the Company's independent accountants, [although they have not
adopted a formal charter]. Due to the resignation of the existing Directors,
and the fact new Directors will be taking office, the Directors that will serve
on the Audit Committee have not been determined. The Audit Committee has not
held any meetings or taken any action as of the date hereof.
The Board of Directors has a Compensation Committee to review the
compensation paid to officers and directors, including the issuance of stock and
stock options, [although they have not adopted a formal charter]. Due to the
resignation of the existing Directors, and the fact new Directors will be taking
office, the Directors that will serve on the Compensation Committee have not
been determined. The Compensation Committee has not held any meetings or taken
any action as of the date hereof.
There are no other committees of the Board of Directors.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Summary Compensation Table
- ----------------------------
The following table sets forth information with respect to the total
compensation earned by, or paid to, the persons serving as the Company's Chief
Executive Officer and President, Chief Financial Officer and Vice President (the
"Named Executive Officers"), during 2001, 2000 and 1999. No other executive
officer of the Company earned total salary and bonus in excess of $100,000
during the fiscal years 2001, 2000 and 1999.
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------------- ------------------------
RESTRICTED SHARES
OTHER ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION. . YEAR SALARY ($) BONUS ($) COMPENSATION ($) AWARDS (#) OPTIONS (#)
- --------------------------- ---- --------- --------- ---------------- ---------- -----------
Marc Douglas . . . . . . . . . 2001 286,347 -- --(2) -- --
President and Chief Executive. 2000 382,130 82,294 167,779(2)(3) -- --
Officer (1). . . . . . . . . . 1999 380,666 92,241 124,570(2) -- --
Ileen Little . . . . . . . . . 2001 59,200 7,000 (5) -- 25,000
Vice President and . . . . . . 2000 136,400 7,000 (5) -- 20,000
Secretary (4). . . . . . . . . 1999 139,600 -- (5) -- --
Stephen L. Wiley . . . . . . . 2001 65,385 -- (5) -- 25,000
Chief Financial Officer (6). . 2000 133,691 -- (5) -- --
1999 137,500 -- (5) -- 5,000
8
(1) Mr. Douglas resigned as the Company's President and Chief Executive
Officer following the sale of the Company's business units on August 27, 2001.
Mr. Douglas continues to provide certain administrative assistance to the
Company, primarily related to the Company's SEC reporting obligations, but
receives no salary or other compensation for those services.
(2) Includes advances amortized into operations as compensation, personal
use of a Company car, life insurance payments, and payments in lieu of vacation
time.
(3) Reflects the grant of 500,000 restricted shares of the Company's Common
Stock, which had a market value of $0.16 per share ($80,000 in the aggregate)
on the date of grant. These shares were granted in consideration of the
restructuring of Mr. Douglas' employment agreement. This amount does not
include the value of warrants to purchase 500,000 shares of common stock granted
to Mr. Douglas in connection with his guarantee of the note delivered pursuant
to the convertible debenture settlement.
(4) Ms. Little resigned as the Company's Vice President and Secretary
following the sale of the Company's business units on August 27, 2001.
(5) Perquisites and other personal benefits paid to the indicated Named
Executive Officers for the applicable periods did not exceed 10% of the total of
annual salary and bonus reported.
(6) Mr. Wiley resigned as the Company's Chief Financial Officer following
the sale of the Company's business units on August 27, 2001.
Stock Option Grants in Last Fiscal Year
- ---------------------------------------------
The following table indicates information regarding the options granted to
the Named Executive Officers during 2001.
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES IN EXERCISE EXPIRATION
NAME OPTIONS GRANTED FISCAL YEAR PRICE DATE
- ---------------- --------------- ----------------- --------- ----------
Marc Doulgas . . -- -- -- --
Ileen Little . . 25,000 12.8% $ 0.10 08/24/11
Stephen L. Wiley 25,000 12.8% $ 0.10 08/24/11
Stock Options Held At Year End
- -----------------------------------
The following table indicates the total number and value of exercisable and
unexercisable stock options held by the Company's Named Executive Officers as of
December 30, 2001. No options were exercised by the Named Executive Officers
during 2001.
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END (1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- ----------- ------------- ----------- -------------
Marc Douglas . . 105,000(2) -- -- --
Ileen Little . . 68,000 -- -- --
Stephen L. Wiley 58,750 -- -- --
9
- ----------
(1) Based on a closing price on December 28, 2001 of $0.06 per share.
(2) Effective November 28, 2000, the Company restructured Mr. Douglas'
employment agreement. As a result of the restructuring, the Company cancelled
stock options to purchase 700,000 shares of common stock previously granted to
Mr. Douglas. This amount does not include warrants to purchase 500,000 shares
of common stock granted to Mr. Douglas in connection with his guarantee of the
note delivered pursuant to the convertible debenture settlement.
All of the Company's options remained outstanding following the sale of the
Company's business units.
Compensation Committee Interlocks and Insider Participation
- ----------------------------------------------------------------
The Compensation Committee has been responsible for establishing the
compensation for the Company's executive officers. Mr. Douglas, the Company's
President and a member of the Board prior to his resignation following the sale
of the Company's business units, was a member of the Compensation Committee.
Dated: November 7, 2002 By order of the Board of Directors
/s/ Marc Douglas
------------------------------------
Marc Douglas, Principal Executive
Officer and Principal Financial and
Accounting Officer
10