FIRST AMENDED
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
[___] Preliminary Information Statement
[___] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ X ] Definitive Information Statement
TMI HOLDINGS, INC.
(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[___] Fee computed on table below per Exchange Act Rules 14c-5(g) and O-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 O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[___] Fee paid previously with preliminary materials.
[___] Check box if any part of the fee is offset as provided by Exchange
Act Rule O-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:
TMI HOLDINGS, INC.
11924 FOREST HILL BLVD., SUITE 22-204
WELLINGTON, FL 33414
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 17, 2003
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of the Shareholders
of TMI Holdings, Inc. (the "Company") to be held on June 17, 2003 at 9:00 AM,
Pacific Standard Time, at the Courtyard Marriott located at 620 North University
Drive, Coral Springs, Florida 33071, to consider and act upon the following
proposals, as described in the accompanying Information Statement:
1. To elect three (3) directors to serve until the next Annual Meeting of
Shareholders and thereafter until their successors are elected and
qualified;
2. To amend the Articles of Incorporation of the Company to effectuate an
increase in the number of shares of the Company's authorized common
stock to 30 million shares;
3. To adopt the Second Restated Articles of Incorporation for the purpose
of consolidating previous amendments to the Company's Articles of
Incorporation;
4. To approve the TMI Holdings, Inc. 2003 Qualified Securities Plan;
5. To ratify the TMI Holdings, Inc. 2003 Non-Qualified Securities Plan;
6. To approve the Second Restated Bylaws of TMI Holdings, Inc.;
7. To ratify the appointment of Berkowitz Dick Pollack & Brant LLP,
Certified Public Accountants, as independent auditors of the Company
for the fiscal year ending December 31, 2003; and
8. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The foregoing items of business are more fully described in the Information
Statement accompanying this Notice. The Board of Directors has fixed the close
of business on April 29, 2003, as the record date for Shareholders entitled to
notice of and to vote at this meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ Scott Siegel
Scott Siegel, President
May 20, 2003
Coral Springs, Florida
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WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
INFORMATION STATEMENT
INTRODUCTION
This information statement is being mailed or otherwise furnished to
stockholders of TMI Holdings, Inc., a Florida corporation (the "Company") in
connection with the upcoming annual meeting of its shareholders. This
information statement is being first sent to stockholders on or about May 19,
2003.
PROPOSALS
The following proposals are being presented at the meeting (the
"Proposals"):
1. To elect three (3) directors to serve until the next Annual Meeting of
Shareholders and thereafter until their successors are elected and
qualified;
2. To amend the Articles of Incorporation of the Company to effectuate an
increase in the number of shares of the Company's authorized common
stock to 30 million shares;
3. To adopt the Second Restated Articles of Incorporation for the purpose
of consolidating previous amendments to the Company's Articles of
Incorporation;
4. To approve the TMI Holdings, Inc. 2003 Omnibus Securities Plan ("2003
Omnibus Securities Plan");
5. To ratify the TMI Holdings, Inc. 2003 Non-Qualified Securities Plan
("2003 Non-Qualified Securities Plan");
6. To approve the Second Restated Bylaws of TMI Holdings, Inc.;
7. To ratify the appointment of Berkowitz Dick Pollack & Brant LLP,
Certified Public Accountants, as independent auditors of the Company
for the fiscal year ending December 31, 2003; and
8. To transact such other business as may properly come before the
meeting or any adjournments thereof.
VOTE REQUIRED
The vote which is required to approve the above Proposals is the
affirmative vote of the holders of a majority of the Company's voting stock.
Each holder of common stock is entitled to one (1) vote for each share held.
The holders of Series A Preferred Stock are entitled to ten (10) votes for each
share held; and the holders of Series B Convertible Preferred Stock do not have
voting rights.
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The record date for purposes of determining the number of outstanding
shares of voting stock of the Company, and for determining stockholders entitled
to vote, is the close of business on April 29, 2003 (the "Record Date"). The
Board of Directors of the Company adopted the resolution approving and
recommending each of the Proposals on May 2, 2003. As of the Record Date, the
Company had outstanding 1,439,675 shares of common stock, 250,000 shares of
Series A Preferred Stock, and 500,000 shares of Series B Convertible Preferred
Stock. Holders of the shares have no preemptive rights. All outstanding shares
are fully paid and nonassessable. The transfer agent for the common stock is
North American Transfer Co., 147 West Merrick Rd., Freeport, New York 11520,
telephone (516) 379-8501.
VOTE OBTAINED - SECTION 607.0704 FLORIDA REVISED STATUTES
Section 607.0704 of the Florida Revised Statutes (the "Florida Law")
provides that the written consent of the holders of the outstanding shares of
common stock, having not less than the minimum number of votes which would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, may be substituted for such a
meeting. Pursuant to Sections 607.1003 and 607.1007 of the Florida Revised
Statutes, approval by a majority of the outstanding shares of preferred and
common stock entitled to vote thereon is a valid method in order to amend or
restate the Articles of Incorporation. In addition, the Company's Articles of
Incorporation require a majority of the outstanding shares of preferred and
common stock approve the Restated Bylaws. In addition, the terms of the 2003
Omnibus Securities Plan and the 2003 Non-Qualified Securities Plan (hereinafter
the 2003 Omnibus Securities Plan and the 2003 Non-Qualified Plan shall be
referred to together as the "Plans") require that a majority of the outstanding
shares of preferred and common stock approve the Plans. In order to eliminate
the costs and management time involved in obtaining proxies and in order to
effect the Amended and Restated Articles of Incorporation, the Restated Bylaws,
and the Plans, as early as possible in order to accomplish the purposes of the
Company as hereafter described, the Board of Directors of the Company voted to
utilize, and did in fact obtain, the written consent of the holders of a
majority in the interest of the common stock of the Company.
Pursuant to Section 607.0704 of the Florida Revised Statutes, the Company
is required to provide prompt notice of the taking of the corporate action
without a meeting to the stockholders of record who have not consented in
writing to such action. This Information Statement is intended to provide such
notice. No dissenters' or appraisal rights under the Florida Law are afforded
to the Company's stockholders as a result of the approval of the Proposals.
PROPOSAL ONE
ELECTION OF DIRECTORS
Directors are elected by the shareholders at each annual meeting to hold
office until their respective successors are elected and qualified, and need not
be shareholders of the Company or residents of the State of Florida. Directors
may receive compensation for their services as determined by the Board of
Directors. See "Compensation of Directors." Pursuant to the Second Restated
Bylaws of the Company, which were approved by the Shareholders, the Board of
Directors consists of no less than one (1), nor more than ten (10) members.
Presently, the Board consists of two (2) members, namely Mr. Scott Siegel and
Mr. Neil Dolgin. All of the above-mentioned directors have chosen to stand for
re-election and have been nominated for re-election by the Board. In addition,
the Board has nominated Mr. Manny Losada for election to the Board. The
remaining seven (7) spots on the Board of Directors shall remain vacant.
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The Board of Directors has instructed the President to explore additional
candidates to be added to the Board. No candidates have been identified at this
time.
Voting for the election of directors is non-cumulative, which means that a
simple majority of the shares voting may elect all of the directors. Each share
of common stock is entitled to one (1) vote and, therefore, has a number of
votes equal to the number of authorized directors. Each share of Series A
Preferred Stock is entitled to ten (10) votes, and, therefore, has a number of
votes equal to ten times the number of authorized directors. Shares of Series B
Convertible Preferred Stock do not have voting rights and, as such, are not
entitled to vote on this proposal.
On May 2, 2003, the three nominees were approved by written consent of a
majority of the Company's stockholders.
Although management of the Company expects that each of the following
nominees will be available to serve as a director, in the event that any of them
should become unavailable prior to the shareholders meeting, a replacement will
be appointed by a majority of the then-existing Board of Directors. Management
has no reason to believe that any of its nominees, if elected, will be
unavailable to serve. All nominees are expected to serve until the next annual
shareholders meeting or until their successors are duly elected and qualified.
NOMINEES FOR ELECTION AS DIRECTOR
The following table sets forth certain information with respect to persons
nominated by the Board of Directors of the Company for election as Directors of
the Company and who will be elected following the annual shareholders meeting:
Name Age Position(s)
- ---- --- ------------
Scott Siegel 49 Director, Chief Executive Officer, Chief
Financial Officer, and Treasurer
Neil Dolgin 51 Director
Manny Losada 38 Director Nominee
Mr. Siegel has been a director of the Company since March 5, 2003. Mr.
Siegel was also installed as Chief Executive Officer, Chief Financial Officer,
and Treasurer of the Company since March 5, 2003. Mr. Siegel is the Chief
Executive Officer, Secretary and Treasurer of First Aid Direct, Inc.. He has
been an officer and/or director of First Aid Direct, Inc. since August 1997.
Mr. Dolgin has been a director of the Company since April 29, 2003. He
also serves in the following capacities: Chairman of the Board and Chief
Executive Officer of AMRES (commencing in 1997); Chief Executive Officer of
BravoRealty.com, Expidoc.com, and Anza Properties; Chief Executive Officer of
Firstline Mortgage, Inc., a HUD-approved originator of FHA, VA, and Title 1
loans (commencing in 1985); and Chairman of the Board of Firstline Relocation
Services, Inc., a three office enterprise that provides real estate sales,
financing, destination, and departure services to Fortune 500 companies
(commencing in 1995). Mr. Rinehart received his B.A. in Business Administration
from California State University at Long Beach in 1972.
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Mr. Losada is a nominee for the Board of Directors. He is not currently a
director of the Company. Mr. Losada was Vice President and General Manager of
Henry Schein, Inc. from 1999-2002, where he managed the overall business
operations of the Caligor Hospital Supply division. Prior to his position at
Henry Schein, Inc., Mr. Losada held various positions at Caligor Physician and
Hospital Supply from 1992-1998. His latest position was Vice President, and
prior to that he was Sales Manager and Director of Sales. In these positions
Mr. Losada was responsible for sales as well as the successful acquisitions of
several regional hospital suppliers. Mr. Losada is a member of the Health
Industry Distributor Association. In 1994 Mr. Losada received his Certification
in Materials Management from Bloomfield College, and in 1986 Mr. Losada received
his Bachelor of Science from Montclair State University.
COMPENSATION OF DIRECTORS
Directors of the Company receive no compensation as a Director but they
are entitled to reimbursement for their travel expenses. The Company does not
pay additional amounts for committee participation or special assignments of the
Board of Directors.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 2002, the Board of Directors met
on several occasions and took written action on numerous other occasions. All
the members of the Board attended the meetings. The written actions were by
unanimous consent.
The Company presently has no executive committee, nominating committee or
audit committee of the Board of Directors.
PROPOSAL TWO
AMENDMENT TO THE ARTICLES OF INCORPORATION
On May 2, 2003, the Board of Directors of the Company approved, declared it
advisable and in the Company's best interests and directed that there be
submitted to the holders of a majority of the Company's common stock for action
by written consent the proposed amendment to Article 5 of the Company's Articles
of Incorporation to increase the Company's authorized common stock from
1,500,000 shares to 30 million shares. On May 2, 2003, the Amendment to the
Articles of Incorporation was approved by written consent of a majority of the
Company's stockholders.
The Board of Directors believes that it is advisable and in the Company's
best interests to have available additional authorized but unissued shares of
common stock in an amount adequate to provide for the Company's future needs.
The additional shares will be available for issuance from time to time by the
Company in the discretion of the Board of Directors, normally without further
stockholder action (except as may be required for a particular transaction by
applicable law, requirements of regulatory agencies or by stock exchange rules),
for any proper corporate purpose including, among other things, future
acquisitions of property or securities of other corporations, stock dividends,
stock splits, stock options, convertible debt and equity financing. The
availability of additional authorized but unissued shares will be achieved by
effectuating an increase in the number of authorized shares of common stock from
1,500,000 to 30 million. This step is necessary, in the judgment of the Board
of Directors, in order to raise additional capital and carry out the Company's
business objectives. The Board of Directors believes that it is advisable and
in the Company's best interests to increase the authorized common stock in order
to more accurately reflect changes in the Company's business focus and changes
in management.
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PROPOSAL THREE
ADOPTION OF SECOND RESTATED
ARTICLES OF INCORPORATION
On May 2, 2003, the Board of Directors approved, declared it advisable and
in the Company's best interests and directed that there be submitted to the
holders of a majority of the Company's common stock for action by written
consent the Second Restated Articles of Amendment of TMI Holdings, Inc. On May
2, 2003, the Second Restated Articles of Incorporation was approved by written
consent of a majority of the Company's stockholders. Following the initial
filing of the Company's original Articles of Incorporation, and First Restated
Articles of Incorporation, the Company has filed numerous amendments to its
Articles of Incorporation and First Restated Articles of Incorporation, and the
amendment discussed herein will be an additional amendment.
In order to simplify the Company's Articles of Incorporation and the
various subsequent amendments, the Board of Directors believes it in the
Company's best interest to consolidate the original Articles of Incorporation,
the First Restated Articles of Incorporation, and the subsequent amendments into
a single Second Restated Articles of Incorporation.
PROPOSAL FOUR
APPROVAL OF THE TMI HOLDINGS, INC. 2003 QUALIFIED SECURITIES PLAN
GENERAL
On May 2, 2003, the Board of Directors of the Company approved, declared it
advisable and in the Company's best interests and directed that there be
submitted to the holders of a majority of the Company's voting stock for action
by written consent, the TMI Holdings, Inc. 2003 Omnibus Securities Plan (the
"2003 Omnibus Securities Plan"). On May 2, 2003, the 2003 Omnibus Securities
Plan was approved by written consent of a majority of the Company's
stockholders.
PURPOSE
The purpose of the 2003 Omnibus Securities Plan is to promote the interests
of the Company (including its subsidiaries) and its stockholders by using
investment interests in the Company to attract, retain and motivate its
management and other persons, including officers, directors, key employees and
certain consultants, to encourage and reward such persons' contributions to the
performance of the Company and to align their interests with the interests of
the Company's stockholders. In furtherance of this purpose, the 2003 Omnibus
Securities Plan authorizes the granting of the following types of stock-based
awards (each, an "Award"):
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- stock options (including incentive stock options and non-qualified stock
options);
- restricted stock awards;
- unrestricted stock awards; and
- performance stock awards.
Each of these types of Awards is described below under "Awards."
ELIGIBILITY
Key employees (including employees who are also directors or officers),
directors and certain consultants of the Company or any subsidiary are eligible
to be granted Awards under the 2003 Omnibus Securities Plan at the discretion of
the Board of Directors. In determining the eligibility of any person, as well
as in determining the number of shares to be covered by an Award and the type or
types of Awards to be made, the Board of Directors may consider:
- the position, relationship, responsibilities and importance of the
person to the Company; and
- such other factors as the Board of Directors deems relevant.
Selected consultants may participate in the 2003 Omnibus Securities Plan if:
- the consultant renders bona fide services to the Company or one of its
subsidiaries;
- the services rendered by the consultant are not in connection with the
offer or sale of securities in a capital-raising transaction and do
not directly or indirectly promote or maintain a market for the
Company's securities; and
- the consultant is a natural person who has contracted directly with the
Company or a subsidiary of the Company to render such services.
ADMINISTRATION
The 2003 Omnibus Securities Plan currently is administered by the Board of
Directors. In the future, the Board of Directors may form a Compensation
Committee to administer the 2003 Omnibus Securities Plan. Any Compensation
Committee must be comprised of at least two non-employee directors. If a
Compensation Committee is formed to administer the 2003 Omnibus Securities Plan,
the Board of Directors will delegate to the Compensation Committee full
authority, in its discretion, to:
- select the persons to whom Awards will be granted (each a
"Participant");
- grant Awards under the 2003 Omnibus Securities Plan;
- determine the number of shares to be covered by each Award;
- determine the nature, amount, pricing, timing and other terms of the
Award;
- interpret, construe and implement the provisions of the 2003 O mnibus
Securities Plan (including the authority to adopt rules and
regulations for carrying out the purposes of the plan); and
- terminate, modify or amend the 2003 Omnibus Securities Plan.
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The 2003 Omnibus Securities Plan is not subject to the provisions of the
Employee Retirement Income Security Act of 1974.
SHARES SUBJECT TO THE PLAN
A total of 140,000 shares of Common Stock (subject to adjustment as
described below) are reserved for issuance under the 2003 Omnibus Securities
Plan. Shares of common stock issued under the 2003 Omnibus Securities Plan may
be authorized but unissued shares, or shares reacquired by the Company,
including shares purchased on the open market. The unexercised, unearned or
yet-to-be acquired portions of any Award that expire, terminate or are canceled,
and shares of common stock issued pursuant to Awards under the 2003 Omnibus
Securities Plan that are reacquired by the Company pursuant to the terms under
which such shares were issued, will again become available for the grant of
further Awards.
ADJUSTMENT. In general, the aggregate number of shares as to which Awards
may be granted to Participants under the 2003 Omnibus Securities Plan, the
number and kind of shares thereof covered by each outstanding Award, and/or the
price per share thereof in each such Award will, upon a determination of the
Board of Directors, all be proportionately adjusted for any increase or decrease
in the number of issued shares of common stock resulting from an increase,
decrease or exchange in the outstanding shares of common stock or additional
shares or new or different shares are distributed in respect of such shares of
common stock, through merger, consolidation, sale or exchange of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution with respect to such shares. On May 1 of
each year, the number of shares in the 2003 Omnibus Securities Plan shall
automatically be adjusted to an amount equal to ten percent (10%) of the
outstanding stock of the Company on April 30 of the immediately preceding year.
Fractional interests will not be issued upon any adjustments made by the
Board or Directors; however, the committee may, in its discretion, make a cash
payment in lieu of any fractional shares of common stock issuable as a result of
such adjustments.
AWARDS
STOCK OPTIONS. Under the 2003 Omnibus Securities Plan, the Board of
Directors may grant either incentive stock options or nonqualified stock
options. Incentive stock options and non-qualified stock options may be granted
for such number of shares of common stock as the Board of Directors determines,
so long as such number of shares does not exceed the amount permitted under the
plan, or in the case of incentive stock options, the amount permissible under
I.R.C. Section 422.
The exercise price for each stock option is determined by the Board of
Directors. Stock options must have an exercise price of at least 85% (100% in
the case of incentive stock options, or at least 110% in the case of incentive
stock options granted to certain employees owning more than 10% of the
outstanding voting stock) of the fair market value of the common stock on the
date the stock option is granted. Under the 2003 Omnibus Securities Plan, fair
market value of the common stock for a particular date is generally the average
of the closing bid and asked prices per share for the stock as quoted on the OTC
Bulletin Board on such date.
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No stock option may be exercised after the expiration of ten years from the
date of grant (or five years in the case of incentive stock options granted to
certain employees owning more than 10% of the outstanding voting stock).
Pursuant to the 2003 Omnibus Securities Plan, the aggregate fair market value of
the common stock, for which one or more incentive stock options granted to any
participant may for the first time become exercisable as incentive stock options
under the federal tax laws during anyone calendar year shall not exceed
$100,000.
A stock option may be exercised in whole or in part according to the terms
of the applicable stock option agreement by delivery of written notice of
exercise to the Company specifying the number of shares to be purchased. The
exercise price for each stock option may be paid by the Participant in cash or
by such other means as the Board of Directors may authorize. Fractional shares
are not to be issued upon exercise of a stock option. The Board of Directors may
grant reload stock options in tandem with stock options that provide for an
automatic grant of a stock option in the event a participant pays the exercise
price of a stock option by delivery of common stock.
The Board of Directors may, in its discretion, at any time after the grant
of a stock option, accelerate vesting of such option, as a whole or in part, by
increasing the number of shares then purchasable. However, the Board of
Directors may not increase the total number of shares subject to an option.
Subject to the foregoing and the other provisions of the 2003 Omnibus
Securities Plan, stock options may be exercised at such times and in such
amounts and be subject to such restrictions and other terms and conditions, if
any, as determined by the Board of Directors.
RESTRICTED STOCK. Restricted stock may be awarded by the Board of Directors
subject to such terms, conditions and restrictions as it deems appropriate.
Restrictions may include limitations on voting rights and transferability of the
shares, restrictions based on the duration of employment or engagement with the
Company, and Company or individual performance. Restricted stock may not be sold
or encumbered until all restrictions expire or are terminated. In this regard,
the Secretary of the Company or such other escrow holder as the Board of
Directors may appoint shall retain physical custody of each certificate
representing restricted stock until all restrictions imposed under the
applicable Award Agreement shall expire or be removed.
The Board of Directors may require the Participant to pay the Company an
amount at least equal to the par value of the common stock awarded to the
Participant. Subject to any limitations imposed by the applicable Award
Agreement, from the date a Participant becomes the holder of record of
restricted stock, the Participant has all the rights of a stockholder with
respect to such shares, including the right to vote the shares and to receive
all dividends and other distributions paid with respect to the shares.
The 2003 Omnibus Securities Plan provides that to the extent the Board of
Directors elects to grant an Award of restricted stock, the Award Agreement
applicable thereto shall, except in certain specified situations, provide the
Company with the right to repurchase the restricted stock then subject to
restrictions immediately upon a termination of employment or engagement for any
reason whatsoever at a cash price per share equal to the price paid by the
Participant for the restricted stock.
UNRESTRICTED STOCK. The Board of Directors may, in its discretion, grant an
Award of unrestricted stock to any eligible Participant, pursuant to which such
Participant may receive shares of Common Stock free of any vesting restrictions
under the 2003 Omnibus Securities Plan. The Board of Directors may also sell
shares of unrestricted stock to eligible Participants at a purchase price
determined in its discretion. Unrestricted stock may be granted or sold in
respect of past services or other valid consideration, or in lieu of any cash
compensation due to such individual.
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PERFORMANCE STOCK AWARDS. The Board of Directors may make performance stock
awards under the 2002 Securities Plan based upon terms it deems appropriate.
The Board of Directors may make performance stock awards independent of or in
connection with the granting of any other Award under the 2003 Omnibus
Securities Plan. The Board of Directors shall determine whether and to whom
performance stock awards shall be made, the performance criteria applicable
under each such Award, the periods during which performance is to be measured,
and all other limitations and conditions applicable to the awarded shares. The
Board of Directors may utilize any of the following performance criteria when
granting performance stock awards:
- net income;
- pre-tax income;
- operating income;
- cash flow;
- earnings per share;
- return on equity;
- return on invested capital or assets;
- cost reductions or savings;
- funds from operations;
- appreciation in the fair market value of the common stock;
- earnings before anyone or more of the following: interest, taxes,
depreciation or amortization; and
- such other criteria deemed appropriate by the Board of Directors.
The Participant receiving a performance stock award shall have the rights
of a stockholder only as to shares actually received by the Participant and not
with respect to shares subject to the Award but not actually received. At any
time prior to the Participant's termination of employment (or other business
relationship) by the Company, the Board of Directors may, in its discretion,
accelerate, waive or, subject to the other provisions of the 2003 Omnibus
Securities Plan, amend any and all performance criteria specified under any
performance stock award.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences of the grant and exercise of Awards under present law. This
summary is not intended to be exhaustive and does not describe foreign, state or
local tax consequences. Recipients of Awards are advised to consult their
personal tax advisors with regard to all tax consequences arising with respect
to the Awards.
TAX WITHHOLDING. If a distribution is made under this 2003 Omnibus
Securities Plan in cash, the Company will withhold taxes as required by law. If
an Award is satisfied in the form of shares of the common stock, then no shares
may be issued unless and until arrangements satisfactory to the Company have
been made to satisfy any tax withholding obligations applicable with respect to
such Award.
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DEDUCTIBILITY OF AWARDS. Company deductions for Awards granted under the
2003 Omnibus Securities Plan are limited by Section 162(m) of the Internal
Revenue Code of 1986 (the "Code") which generally limits the Company's deduction
for non-performance based compensation to $1.0 million per year for the
Company's CEO and its other four (4) most highly compensated officers. The
Company has not paid any compensation to any executive officers that was not
deductible by reason of the prohibition of Section 162(m).
INCENTIVE STOCK OPTIONS. Pursuant to the 2003 Omnibus Securities Plan,
employees may be granted stock options that are intended to qualify as
"incentive stock options" under the provisions of Section 422 of the Code. An
optionee will not recognize any taxable income for federal income tax purposes
upon receipt of an incentive stock option or, generally, at the time of exercise
of an incentive stock option. The exercise of an incentive stock option
generally will result in an increase in an optionee's taxable income for
alternative minimum tax purposes.
If an optionee exercises an incentive stock option and does not dispose of
the shares received in a subsequent "disqualifying disposition" (generally, a
sale, gift or other transfer within two years after the date of grant of the
incentive stock option or within one year after the shares are transferred to
the optionee), upon disposition of the shares any amount realized in excess of
the optionee's tax basis in the shares disposed of will be treated as a
long-term capital gain, and any loss will be treated as a long-term capital
loss. In the event of a disqualifying disposition, the difference between the
fair market value of the shares received on the date of exercise and the
exercise price (limited, in the case of a taxable sale or exchange, to the
excess of the amount realized upon disposition over the optionee's tax basis in
the shares) will be treated as compensation received by the optionee in the year
of disposition. Any additional gain will be taxable as a capital gain and any
loss as a capital loss, which will be long-term or short-term, depending on the
length of time the optionee held the shares.
If the exercise price of an incentive stock option is paid in whole or in
part with shares of common stock, no income gain or loss generally will be
recognized by the optionee with respect to the shares of common stock paid as
the exercise price. However, if such shares of common stock were received upon
the exercise of an incentive stock option, the use of those shares as payment of
the exercise price will be considered a disposition for purposes of determining
whether there has been a disqualifying disposition of those shares.
Neither the Company nor any of its subsidiaries will be entitled to a
deduction with respect to shares received by an optionee upon exercise of an
incentive stock option and not disposed of in a disqualifying disposition. If an
amount is treated as compensation received by an optionee because of a
disqualifying disposition, the Company or one of its subsidiaries generally will
be entitled to a corresponding deduction in the same amount for compensation
paid.
NON-QUALIFIED STOCK OPTIONS. An optionee will not recognize any taxable
income for federal income tax purposes upon receipt of a non-qualified stock
option. Upon the exercise of a non-qualified stock option the amount by which
the fair market value of the shares received, determined as of the date of
exercise, exceeds the exercise price, the stock option will be treated as
compensation received by the optionee in the year of exercise. If the exercise
price of a non-qualified stock option is paid in whole or in part with shares of
common stock, (i) no income, gain or loss will be recognized by the optionee on
the receipt of shares equal in value on the date of exercise to the shares
delivered in payment of the exercise price, and (ii) no income, gain or loss
will be recognized by the optionee with respect to the shares of common stock
paid as the exercise price of the option. The fair market value of the remainder
of the shares received upon exercise of the non-qualified stock option,
determined as of the date of exercise, less the amount of cash, if any, paid
upon exercise, will be treated as compensation income received by the optionee
on the date of exercise of the stock option. The Company or one of its
subsidiaries, generally will be entitled to a deduction for compensation paid in
the same amount treated as compensation received by the optionee.
12
RELOAD OPTION RIGHTS. An optionee should not recognize any taxable income
for federal income tax purposes upon receipt of reload option rights, and a
reload option should be treated as a non-qualified stock option.
RESTRICTED STOCK. A recipient of restricted stock will not recognize any
taxable income for federal income tax purposes in the year of the Award,
provided the shares are subject to restrictions (that is, they are
non-transferable and subject to a substantial risk of forfeiture). However, the
recipient may elect under Section 83(b) of the Code to recognize compensation
income in the year of the Award in an amount equal to the fair market value of
the shares on the date of the Award (less the amount paid by the recipient for
such shares), determined without regard to the restrictions. If the recipient
does not make a Section 83(b) election, the fair market value of the shares on
the date the restrictions lapse (less the amount paid by the recipient for such
shares) will be treated as compensation income to the recipient and will be
taxable in the year the restrictions lapse. The Company or one of its
subsidiaries generally will be entitled to a deduction for compensation paid in
the same amount treated as compensation income to the recipient.
UNRESTRICTED STOCK. Any shares of common stock received pursuant to an
Award of unrestricted stock will be treated as compensation income received by
the recipient, generally, in the year in which the recipient receives such
shares. In each case, the amount of compensation income will equal the fair
market value of the shares of common stock on the date compensation income is
recognized (less the amount, if any, paid by the recipient for such shares). The
Company or one of its subsidiaries, generally, will be entitled to a
corresponding deduction in the same amount for compensation paid.
PERFORMANCE STOCK AWARDS. A recipient of a performance stock award will not
recognize any taxable income for federal income tax purposes upon receipt of the
Award. Any shares of common stock received pursuant to the Award will be treated
as compensation income received by the recipient, generally, in the year in
which the recipient receives such shares of common stock. The amount of
compensation income will equal the fair market value of the shares of common
stock on the date compensation income is recognized. The Company or one of its
subsidiaries, generally, will be entitled to a deduction for compensation paid
in the same amount treated as compensation income to the recipient.
OTHER TAX MATTERS. The exercise by a recipient of a stock option, the lapse
of restrictions on restricted stock, or the deemed earnout of performance stock
awards following the occurrence of a change in control, in certain
circumstances, may result in:
- a 20% federal excise tax (in addition to federal income tax) to the
recipient on certain payments of common stock or cash resulting from
such exercise or deemed earnout of performance stock awards or, in the
case of restricted stock, on all or a portion of the fair market value
of the shares on the date the restrictions lapse; and
- the loss of a compensation deduction which would otherwise be allowable
to the Company or one of its subsidiaries as explained above.
13
GRANTS UNDER THE 2003 OMNIBUS SECURITIES PLAN
As of the date of this Information Statement, no employee has been granted
Options or Shares under the Plan.
PROPOSAL FIVE
APPROVAL OF THE TMI HOLDINGS, INC. 2003 NON-QUALIFIED SECURITIES
PLAN
GENERAL
On May 2, 2003, the Board of Directors of the Company approved, declared it
advisable and in the Company's best interests and directed that there be
submitted to the holders of a majority of the Company's voting stock for action
by written consent, the TMI Holdings, Inc. 2003 Non-Qualified Securities Plan
(the "2003 Non-Qualified Securities Plan"). On May 2, 2003, the Board of
Directors approval of the 2003 Non-Qualified Securities Plan was ratified by
written consent of a majority of the Company's stockholders. The 2003
Non-Qualified Securities Plan is already in effect based upon the above Board of
Directors' approval.
PURPOSE
The purpose of the 2003 Non-Qualified Securities Plan is to promote the
interests of the Company (including its subsidiaries) and its stockholders by
using investment interests in the Company to attract, retain and motivate its
management and other persons, including officers, directors, key employees and
certain consultants, to encourage and reward such persons' contributions to the
performance of the Company and to align their interests with the interests of
the Company's stockholders. In furtherance of this purpose, the 2003
Non-Qualified Securities Plan authorizes the granting of the following types of
stock-based awards (each, an "Award"):
- stock options (including incentive stock options and non-qualified stock
options);
- restricted stock awards;
- unrestricted stock awards; and
- performance stock awards.
Each of these types of Awards is described below under "Awards."
ELIGIBILITY
Key employees (including employees who are also directors or officers),
directors and certain consultants of the Company or any subsidiary are eligible
to be granted Awards under the 2003 Non-Qualified Securities Plan at the
discretion of the Board of Directors. In determining the eligibility of any
person, as well as in determining the number of shares to be covered by an Award
and the type or types of Awards to be made, the Board of Directors may consider:
- the position, relationship, responsibilities and importance of the person
to the Company; and
- such other factors as the Board of Directors deems relevant.
14
Selected consultants may participate in the 2003 Non-Qualified Securities Plan
if:
- the consultant renders bona fide services to the Company or one of its
subsidiaries;
- the services rendered by the consultant are not in connection with the
offer or sale of securities in a capital-raising transaction and do
not directly or indirectly promote or maintain a market for the
Company's securities; and
- the consultant is a natural person who has contracted directly with the
Company or a subsidiary of the Company to render such services.
ADMINISTRATION
The 2003 Non-Qualified Securities Plan currently is administered by the
Board of Directors. In the future, the Board of Directors may form a
Compensation Committee to administer the 2003 Non-Qualified Securities Plan. Any
Compensation Committee must be comprised of at least two non-employee directors.
If a Compensation Committee is formed to administer the 2003 Non-Qualified
Securities Plan, the Board of Directors will delegate to the Compensation
Committee full authority, in its discretion, to:
- select the persons to whom Awards will be granted (each a "Participant");
- grant Awards under the 2003 Non-Qualified Securities Plan;
- determine the number of shares to be covered by each Award;
- determine the nature, amount, pricing, timing and other terms of the
Award;
- interpret, construe and implement the provisions of the 2003
Non-Qualified Securities Plan (including the authority to adopt rules
and regulations for carrying out the purposes of the plan); and
- terminate, modify or amend the 2003 Non-Qualified Securities Plan.
The 2003 Non-Qualified Securities Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974.
SHARES SUBJECT TO THE PLAN
A total of 2.5 million shares of Common Stock (subject to adjustment as
described below) are reserved for issuance under the 2003 Non-Qualified
Securities Plan. Shares of common stock issued under the 2003 Non-Qualified
Securities Plan may be authorized but unissued shares, or shares reacquired by
the Company, including shares purchased on the open market. The unexercised,
unearned or yet-to-be acquired portions of any Award that expire, terminate or
are canceled, and shares of common stock issued pursuant to Awards under the
2003 Non-Qualified Securities Plan that are reacquired by the Company pursuant
to the terms under which such shares were issued, will again become available
for the grant of further Awards.
ADJUSTMENT. In general, the aggregate number of shares as to which Awards
may be granted to Participants under the 2003 Non-Qualified Securities Plan, the
number and kind of shares thereof covered by each outstanding Award, and/or the
price per share thereof in each such Award will, upon a determination of the
Board of Directors, all be proportionately adjusted for any increase or decrease
in the number of issued shares of common stock resulting from an increase,
decrease or exchange in the outstanding shares of common stock or additional
shares or new or different shares are distributed in respect of such shares of
common stock, through merger, consolidation, sale or exchange of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution with respect to such shares.
15
Fractional interests will not be issued upon any adjustments made by the
Board or Directors; however, the committee may, in its discretion, make a cash
payment in lieu of any fractional shares of common stock issuable as a result of
such adjustments.
AWARDS
STOCK OPTIONS. Under the 2003 Non-Qualified Securities Plan, the Board of
Directors may only grant non-qualified stock options. Non-qualified stock
options may be granted for such number of shares of common stock as the Board of
Directors determines, so long as such number of shares does not exceed the
amount permitted under the plan.
The exercise price for each stock option is determined by the Board of
Directors. Stock options under the 2003 Non-Qualified Securities Plan must have
an exercise price of at least 85% of the fair market value of the common stock
on the date the stock option is granted. Under the 2003 Non-Qualified Securities
Plan, fair market value of the common stock for a particular date is generally
the average of the closing bid and asked prices per share for the stock as
quoted on the OTC Bulletin Board on such date.
No stock option may be exercised after the expiration of ten years from the
date of grant.
A stock option may be exercised in whole or in part according to the terms
of the applicable stock option agreement by delivery of written notice of
exercise to the Company specifying the number of shares to be purchased. The
exercise price for each stock option may be paid by the Participant in cash or
by such other means as the Board of Directors may authorize. Fractional shares
are not to be issued upon exercise of a stock option. The Board of Directors may
grant reload stock options in tandem with stock options that provide for an
automatic grant of a stock option in the event a participant pays the exercise
price of a stock option by delivery of common stock.
The Board of Directors may, in its discretion, at any time after the grant
of a stock option, accelerate vesting of such option, as a whole or in part, by
increasing the number of shares then purchasable. However, the Board of
Directors may not increase the total number of shares subject to an option.
Subject to the foregoing and the other provisions of the 2003 Non-Qualified
Securities Plan, stock options may be exercised at such times and in such
amounts and be subject to such restrictions and other terms and conditions, if
any, as determined by the Board of Directors.
RESTRICTED STOCK. Restricted stock may be awarded by the Board of Directors
subject to such terms, conditions and restrictions as it deems appropriate.
Restrictions may include limitations on voting rights and transferability of the
shares, restrictions based on the duration of employment or engagement with the
Company, and Company or individual performance. Restricted stock may not be sold
or encumbered until all restrictions expire or are terminated. In this regard,
the Secretary of the Company or such other escrow holder as the Board of
Directors may appoint shall retain physical custody of each certificate
representing restricted stock until all restrictions imposed under the
applicable Award Agreement shall expire or be removed.
16
The Board of Directors may require the Participant to pay the Company an
amount at least equal to the par value of the common stock awarded to the
Participant. Subject to any limitations imposed by the applicable Award
Agreement, from the date a Participant becomes the holder of record of
restricted stock, the Participant has all the rights of a stockholder with
respect to such shares, including the right to vote the shares and to receive
all dividends and other distributions paid with respect to the shares.
The 2003 Non-Qualified Securities Plan provides that to the extent the
Board of Directors elects to grant an Award of restricted stock, the Award
Agreement applicable thereto shall, except in certain specified situations,
provide the Company with the right to repurchase the restricted stock then
subject to restrictions immediately upon a termination of employment or
engagement for any reason whatsoever at a cash price per share equal to the
price paid by the Participant for the restricted stock.
UNRESTRICTED STOCK. The Board of Directors may, in its discretion, grant an
Award of unrestricted stock to any eligible Participant, pursuant to which such
Participant may receive shares of Common Stock free of any vesting restrictions
under the 2003 Non-Qualified Securities Plan. The Board of Directors may also
sell shares of unrestricted stock to eligible Participants at a purchase price
determined in its discretion. Unrestricted stock may be granted or sold in
respect of past services or other valid consideration, or in lieu of any cash
compensation due to such individual.
PERFORMANCE STOCK AWARDS. The Board of Directors may make performance stock
awards under the 2002 Securities Plan based upon terms it deems appropriate.
The Board of Directors may make performance stock awards independent of or in
connection with the granting of any other Award under the 2003 Non-Qualified
Securities Plan. The Board of Directors shall determine whether and to whom
performance stock awards shall be made, the performance criteria applicable
under each such Award, the periods during which performance is to be measured,
and all other limitations and conditions applicable to the awarded shares. The
Board of Directors may utilize any of the following performance criteria when
granting performance stock awards:
- net income;
- pre-tax income;
- operating income;
- cash flow;
- earnings per share;
- return on equity;
- return on invested capital or assets;
- cost reductions or savings;
- funds from operations;
- appreciation in the fair market value of the common stock;
- earnings before anyone or more of the following: interest, taxes,
depreciation or amortization; and
- such other criteria deemed appropriate by the Board of Directors.
The Participant receiving a performance stock award shall have the rights
of a stockholder only as to shares actually received by the Participant and not
with respect to shares subject to the Award but not actually received. At any
time prior to the Participant's termination of employment (or other business
relationship) by the Company, the Board of Directors may, in its discretion,
accelerate, waive or, subject to the other provisions of the 2003 Non-Qualified
Securities Plan, amend any and all performance criteria specified under any
performance stock award.
17
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences of the grant and exercise of Awards under present law. This
summary is not intended to be exhaustive and does not describe foreign, state or
local tax consequences. Recipients of Awards are advised to consult their
personal tax advisors with regard to all tax consequences arising with respect
to the Awards.
TAX WITHHOLDING. If a distribution is made under this 2003 Non-Qualified
Securities Plan in cash, the Company will withhold taxes as required by law. If
an Award is satisfied in the form of shares of the common stock, then no shares
may be issued unless and until arrangements satisfactory to the Company have
been made to satisfy any tax withholding obligations applicable with respect to
such Award.
DEDUCTIBILITY OF AWARDS. Company deductions for Awards granted under the
2003 Non-Qualified Securities Plan are limited by Section 162(m) of the Internal
Revenue Code of 1986 (the "Code") which generally limits the Company's deduction
for non-performance based compensation to $1.0 million per year for the
Company's CEO and its other four (4) most highly compensated officers. The
Company has not paid any compensation to any executive officers that was not
deductible by reason of the prohibition of Section 162(m).
NON-QUALIFIED STOCK OPTIONS. An optionee will not recognize any taxable
income for federal income tax purposes upon receipt of a non-qualified stock
option. Upon the exercise of a non-qualified stock option the amount by which
the fair market value of the shares received, determined as of the date of
exercise, exceeds the exercise price, the stock option will be treated as
compensation received by the optionee in the year of exercise. If the exercise
price of a non-qualified stock option is paid in whole or in part with shares of
common stock, (i) no income, gain or loss will be recognized by the optionee on
the receipt of shares equal in value on the date of exercise to the shares
delivered in payment of the exercise price, and (ii) no income, gain or loss
will be recognized by the optionee with respect to the shares of common stock
paid as the exercise price of the option. The fair market value of the
remainder of the shares received upon exercise of the non-qualified stock
option, determined as of the date of exercise, less the amount of cash, if any,
paid upon exercise, will be treated as compensation income received by the
optionee on the date of exercise of the stock option. The Company or one of its
subsidiaries, generally will be entitled to a deduction for compensation paid in
the same amount treated as compensation received by the optionee.
RELOAD OPTION RIGHTS. An optionee should not recognize any taxable income
for federal income tax purposes upon receipt of reload option rights, and a
reload option should be treated as a non-qualified stock option.
RESTRICTED STOCK. A recipient of restricted stock will not recognize any
taxable income for federal income tax purposes in the year of the Award,
provided the shares are subject to restrictions (that is, they are
non-transferable and subject to a substantial risk of forfeiture). However, the
recipient may elect under Section 83(b) of the Code to recognize compensation
income in the year of the Award in an amount equal to the fair market value of
the shares on the date of the Award (less the amount paid by the recipient for
such shares), determined without regard to the restrictions. If the recipient
does not make a Section 83(b) election, the fair market value of the shares on
the date the restrictions lapse (less the amount paid by the recipient for such
shares) will be treated as compensation income to the recipient and will be
taxable in the year the restrictions lapse. The Company or one of its
subsidiaries generally will be entitled to a deduction for compensation paid in
the same amount treated as compensation income to the recipient.
18
UNRESTRICTED STOCK. Any shares of common stock received pursuant to an
Award of unrestricted stock will be treated as compensation income received by
the recipient, generally, in the year in which the recipient receives such
shares. In each case, the amount of compensation income will equal the fair
market value of the shares of common stock on the date compensation income is
recognized (less the amount, if any, paid by the recipient for such shares). The
Company or one of its subsidiaries, generally, will be entitled to a
corresponding deduction in the same amount for compensation paid.
PERFORMANCE STOCK AWARDS. A recipient of a performance stock award will not
recognize any taxable income for federal income tax purposes upon receipt of the
Award. Any shares of common stock received pursuant to the Award will be treated
as compensation income received by the recipient, generally, in the year in
which the recipient receives such shares of common stock. The amount of
compensation income will equal the fair market value of the shares of common
stock on the date compensation income is recognized. The Company or one of its
subsidiaries, generally, will be entitled to a deduction for compensation paid
in the same amount treated as compensation income to the recipient.
OTHER TAX MATTERS. The exercise by a recipient of a stock option, the lapse
of restrictions on restricted stock, or the deemed earnout of performance stock
awards following the occurrence of a change in control, in certain
circumstances, may result in:
- a 20% federal excise tax (in addition to federal income tax) to the
recipient on certain payments of common stock or cash resulting from
such exercise or deemed earnout of performance stock awards or, in the
case of restricted stock, on all or a portion of the fair market value
of the shares on the date the restrictions lapse; and
- the loss of a compensation deduction which would otherwise be
allowable to the Company or one of its subsidiaries as explained
above.
GRANTS UNDER THE 2003 NON-QUALIFIED SECURITIES PLAN
As of the date of this Information Statement, no employee has been granted
Options or Shares under the Plan.
PROPOSAL SIX
ADOPTION OF SECOND RESTATED BYLAWS
On May 2, 2003, the Board of Directors approved, subject to stockholder
approval, the Second Restated Bylaws of TMI Holdings, Inc. In order to simplify
the Company's Bylaws and subsequent amendments, including changing the number of
directors in the Bylaws to correspond with the Company's Articles of
Incorporation, the Board of Directors believes it in the Company's best interest
to adopt the Second Restated Bylaws of TMI Holdings, Inc. On May 2, 2003, the
Second Restated Bylaws were approved by written consent of a majority of the
Company's stockholders.
19
The Second Restated Bylaws will become effective upon their execution,
anticipated to be approximately twenty-one (21) days after this Information
Statement has been distributed to the Company's stockholders.
PROPOSAL SEVEN
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has appointed Berkowitz Dick Pollack & Brant LLP,
independent certified public accountants, to audit the consolidated financial
statements of the Company for the fiscal year ending December 31, 2003 and seeks
ratification of such appointment. On May 2, 2003, the appointment of Berkowitz
Dick Pollack & Brant LLP was ratified by written consent of a majority of the
Company's stockholders.
Representatives of Berkowitz Dick Pollack & Brant LLP, are not expected to
be present at the Annual Meeting.
Audit Fees:
During the fiscal year ended December 31, 2002, Berkowitz Dick Pollack &
Brant LLP billed the Company approximately $37,000 in fees for professional
services rendered in connection with the audit of the Company's annual financial
statements and for reviewing the Company's quarterly financial statements
included in its quarterly reports on Form 10-QSB for the fiscal year then ended.
Financial Information Systems Design and Implementation Fees:
During the fiscal year ended December 31, 2002, the Company did not engage
Berkowitz Dick Pollack & Brant LLP to provide advice regarding financial
information systems design and implementation.
All Other Fees:
During the fiscal year ended December 31, 2002, Berkowitz Dick Pollack &
Brant LLP billed the approximately $7,000 for professional services related to
tax consulting and general consulting.
The Company does not have an audit committee, however, the Company's Board
of Directors has considered whether the services provided by Berkowitz Dick
Pollack & Brant LLP in connection with the Other Fees is compatible with
maintaining the independence of Berkowitz Dick Pollack & Brant LLP.
20
OTHER INFORMATION
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the current 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)
--- -----------
Scott Siegel 49 Director, Chie Executive Officer,
Chief Financial Officer, and Treasurer
Neil Dolgin 51 Director
Mr. Siegel has been a director of the Company since March 5, 2003. Mr.
Siegel was also installed as Chief Executive Officer, Chief Financial Officer,
and Treasurer of the Company since March 5, 2003. Mr. Siegel is the Chief
Executive Officer, Secretary and Treasurer of First Aid Direct, Inc.. He has
been an officer and/or director of First Aid Direct, Inc. since August 1997.
Mr. Dolgin has been a director of the Company since April 29, 2003. He
also serves in the following capacities: Chairman of the Board and Chief
Executive Officer of AMRES (commencing in 1997); Chief Executive Officer of
BravoRealty.com, Expidoc.com, and Anza Properties; Chief Executive Officer of
Firstline Mortgage, Inc., a HUD-approved originator of FHA, VA, and Title 1
loans (commencing in 1985); and Chairman of the Board of Firstline Relocation
Services, Inc., a three office enterprise that provides real estate sales,
financing, destination, and departure services to Fortune 500 companies
(commencing in 1995). Mr. Rinehart received his B.A. in Business Administration
from California State University at Long Beach in 1972.
EXECUTIVE COMPENSATION
The Summary Compensation Table shows certain compensation information for
services rendered in all capacities for the fiscal years ended December 31, 2001
and 2000. Other than as set forth herein, no executive officer's salary and
bonus exceeded $100,000 in any of the applicable years. The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.
21
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
- ---------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
-------------------------------------------- ---------------------------------------------
Awards Payouts
---------------------------- --------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL . YEAR SALARY BONUS ($) COMPENSATION AWARDS ($) OPTIONS SARS PAYOUTS COMPENSATION
POSITION ($) (#) ($) ($)
Scott Siegel(1) 2003 -0- -0- -0- -0- -0- -0- -0-
W. Michael Sessions 2002 -0- -0- -0- -0- -0- -0- -0-
John W. Meyers (3) 2002 -0- -0- -0- -0- -0- -0- -0-
Marc Douglas (4) 2002 -0- -0- -0- -0- -0- -0- -0-
2001 286,347 -0- -0- -0- -0- -0- -0-
Ileen Little(5) 2001 59,200 7,000 -0-(6) -0- 25,000 -0- -0-
Stephen L. Wiley (7) 2001 65,385 -0- -0-(6) -0- 25,000 -0- -0-
(1) Mr. Siegel was appointed as a Director and as President, Treasurer
and Secretary of the Company on March 5, 2003.
(2) On March 5, 2003, Mr. Sessions resigned as President and Secretary
of the Company.
(3) On March 5, 2003, Mr. Meyers resigned as President and Secretary
of the Company.
(4) On November 7, 2002, Mr. Douglas resigned from all positions he
held at the Company.
(5) Ms. Little resigned as the Company's Vice President and Secretary
following the sale of the Company's business units on August 27, 2001.
(6) 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.
(7) Mr. Wiley resigned as the Company's Chief Financial Officer
following the sale of the Company's business units on August 27, 2001.
22
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
NAME NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SAR'S GRANTED
OPTIONS/SAR'S GRANTED TO EMPLOYEES IN FISCAL EXERCISE OF BASE PRICE
(#) YEAR ($/SH) EXPIRATION DATE
Scott Siegel -0- N/A N/A N/A
W. Michael Sessions. -0- N/A N/A N/A
John W. Meyers -0- N/A N/A NA/
Marc Douglas -0- N/A N/A N/A
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING VALUE OF UNEXERCISED
OPTIONS/SARS AT FY-END (#) MONEY OPTION/SARS
SHARES ACQUIRED ON EXERCISABLE/UNEXERCISABLE AT FY-END ($)
NAME EXERCISE (#) VALUE REALIZED ($) EXERCISABLE/UNEXERCISABLE
Scott Siegel -0- N/A N/A N/A
W. Michael Sessions -0- N/A N/A N/A
John W. Meyers -0- N/A N/A N/A
Marc Douglas -0- N/A N/A N/A
COMPENSATION OF DIRECTORS
Directors of the Company receive no compensation as a Director but they are
entitled to reimbursement for their travel expenses. The Company does not pay
additional amounts for committee participation or special assignments of the
Board of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
KINA'OLE, INC. ACQUISITION
On January 31, 2003, TMI Holdings, Inc. (the "Company") acquired 100% of
the assets and outstanding stock of Kina'ole Development Corporation, a Hawaii
corporation. The Company acquired the Kina'ole shares from William Michael
Sessions and John W. Meyers, both of whom were officers and directors of the
Company at that time. In exchange for Kina'ole's assets and shares, the Company
issued Mr. Sessions and Mr. Meyers each 250,000 shares of the Company's Series B
Convertible Preferred Stock. Mr. Sessions and Mr. Meyers resigned as officers
and directors of the Company on March 5, 2003.
The Company's Series B Convertible Preferred Stock entitles its holders to
30 votes on all matters brought before a vote of the Company's stockholders and
each share of Series B Convertible Preferred Stock will be converted into the 30
shares of the Company's common stock as soon as the Company has sufficient
authorized but unissued common stock to convert all 500,000 shares of Series B
Convertible Preferred Stock.
23
Kina'ole is located in Lihue, Hawaii and is a seller of manufactured homes.
Through arrangements with dealerships on each Hawaiian island Kina'ole sells the
manufactured homes to retail customers. Kina'ole also delevops subdivisions of
manufactured homes and has an installation company that, as a licensed
contractor, completes the foundation and site work as well as installing the
manufactured homes.
SCOTT SIEGEL STOCK PURCHASE AGREEMENT
On February 21, 2003, the Company entered into a Stock Purchase Agreement
with Scott Siegel, whereby the Company issued 1,050,000 shares of common stock
and 250,000 shares of Series A Preferred Stock to Mr. Siegel in exchange for Mr.
Siegel agreeing to pay approximately $222,500 in outstanding Company debt. At
the time of this transaction Mr. Siegel was not a related party to the Company;
however, he became an officer and director of the Company on March 5, 2003.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 29, 2003, 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
--------------
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner (1) Beneficial Ownership of Class (2)
- -------------- -------------------- -------------------- ------------
Common
Stock. Scott Siegel(3) 1,000,000 69.5%
Common
Stock Neil Dolgin(4) 0 0.0%
Common All officers and directors as a group
Stock (2 persons) 1,000,000 69.5%
(1) Unless otherwise noted, the address of each beneficial owner is c/o
TMI Holdings, Inc., 11924 Forest Hill Blvd., Suite 22-204, Wellington
Florida 33414.
(2) Based on 1,439,675 shares outstanding as of April 29, 2003.
(3) Mr. Siegel is a Director of the Company and the Chief Executive
Officer, Chief Financial Officer, and Treasurer of the Company.
(4) Mr. Dolgin is a Director of the Company.
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Series A Preferred Stock(1)
---------------------------
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
- -------------- ---------------- -------------------- ---------
Series A
Preferred Scott Siegel 250,000 100%
Series A All officers and directors as a group
Preferred (1 person) 250,000 100%
(1) Each Share of Series A Preferred Stock has 10 to 1 voting rights on
any matters properly brought before a the shareholders of the Company
for a vote.
Series B Preferred Stock(1)
---------------------------
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
- -------------- ---------------- -------------------- ---------
Series B
Preferred W. Michael Sessions 250,000 50%
Series B
Preferred John W. Meyers 250,000 50%
Series B. All officers and directors as a group
Preferred (0 person) 0 0%
(1) Shares of Series B Preferred Stock do not have voting rights.
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, none of the required parties are delinquent in
their 16(a) filings.
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SHAREHOLDER PROPOSALS
Any shareholder desiring to submit a proposal for action at the 2004 Annual
Meeting of Shareholders and presentation in the Company's Information or Proxy
Statement with respect to such meeting should arrange for such proposal to be
delivered to the Company's offices at 11924 Forest Hill Blvd., Suite 22-204,
Wellington, Florida 33414, addressed to the corporate Secretary, no later than
December 15, 2003 in order to be considered for inclusion in the Company's
Information or Proxy Statement relating to the meeting. Matters pertaining to
such proposals, including the number and length thereof, eligibility of persons
entitled to have such proposals included and other aspects are regulated by the
Securities Exchange Act of 1934, Rules and Regulations of the Securities and
Exchange Commission and other laws and regulations to which interested persons
should refer. The Company anticipates that its next annual meeting will be held
in May 2004.
On May 21, 1998, the Securities and Exchange Commission adopted an
amendment to Rule 14a-4, as promulgated under the Securities and Exchange Act of
1934, as amended. The amendment to Rule 14a-4(c)(1) governs the Company's use
of its discretionary proxy voting authority with respect to a shareholder
proposal which is not addressed in the Company's proxy statement. The new
amendment provides that if a proponent of a proposal fails to notify the Company
at least 45 days prior to the month and day of mailing of the prior year's proxy
statement, then the Company will be allowed to use its discretionary voting
authority when the proposal is raised at the meeting, without any discussion of
the matter in the proxy statement.
OTHER MATTERS
The Company has not enclosed a copy of the Annual Report on Form 10-KSB to
Shareholders for the year ended December 31, 2002 with this Information
Statement because, due to financial constraints, the Annual Report has not been
filed.
By order of the Board of Directors
/s/ Scott Siegel
Scott Siegel, Chief Executive Officer
Coral Springs, Florida
May 20, 2003
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