UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule
14a-6(e) (2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
ADVANTAGE MARKETING SYSTEMS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount of which
the filing fee is calculated and state how it was determined):
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the offsetting fee was paid previously. Identify the previous
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ADVANTAGE MARKETING SYSTEMS, INC.
711 NE 39th Street
Oklahoma City, Oklahoma 73105
Telephone: (405) 842-0131
NOTICE OF ANNUAL MEETING
TO OUR SHAREHOLDERS:
Our Annual Meeting of Shareholders will be held at the Marriott Hotel at
3233 Northwest Expressway in Oklahoma City, Oklahoma, on August 20, 2004
commencing at 5:00 P.M. Central Daylight-Savings Time, and thereafter as it may
be adjourned from time to time, for the following purposes:
1. To elect three directors to hold office until the 2007 annual meeting
of shareholders and until their successors shall have been duly
elected and qualified;
2. To consider and approve the name change of the Company from Advantage
Marketing Systems, Inc. to AMS Health Sciences, Inc.;
3. To consider and act upon a proposal to ratify the appointment of Grant
Thornton LLP as our independent auditor for 2004; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Holders of record of common stock at the close of business on June 21,
2004, are entitled to notice of and to vote at the meeting or any adjournment
thereof, notwithstanding transfer of any stock on our books after such record
date. The accompanying proxy statement contains information regarding the
matters to be considered at the Annual Meeting. Copies of this notice and the
accompanying proxy statement were first mailed to shareholders on or about July
15, 2004. For reasons set forth in the attached proxy statement, the Board of
Directors recommends a vote "FOR" the matters being voted upon.
Your attendance or proxy is important to assure a quorum at the Annual
Meeting. Shareholders who do not expect to attend the Annual Meeting in person
are requested to complete and return the enclosed Proxy, using the envelope
provided, which requires no postage if mailed from within the United States. Any
person giving a proxy has the power to revoke it at any time prior to its
exercise and, if present at the Annual Meeting, may withdraw it and vote in
person. Attendance at the Annual Meeting is limited to shareholders, their
proxies and our invited guests. All shareholders are cordially invited to attend
the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS:
REGGIE B. COOK
Reggie B. Cook, Corporate Secretary
Oklahoma City, Oklahoma
July 15, 2004
PROXY STATEMENT
Advantage Marketing Systems, Inc.
711 NE 39th Street
Oklahoma City, Oklahoma 73105
(405) 842-0131
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 20, 2004
SOLICITATION AND REVOCATION OF PROXIES
We at Advantage Marketing Systems, Inc. are furnishing this proxy statement
in connection with the Annual Meeting of the holders of our common stock to be
held at 5:00 P.M., Central Daylight-Savings Time, on August 20, 2004, at the
Marriott Hotel at 3233 Northwest Expressway in Oklahoma City, Oklahoma, and any
adjournment thereof. This proxy statement and the accompanying Notice of Annual
Meeting of Shareholders and Proxy were first mailed on or about July 15, 2004,
to our shareholders of record on June 21, 2004.
If the accompanying proxy is properly executed and returned, the shares of
common stock represented by the proxy will be voted at the Annual Meeting. If
you indicate in your proxy a choice with respect to any matter to be acted upon,
your shares will be voted in accordance with your choice. If no choice is
indicated, your shares will be voted "FOR" the election of the nominees for
director listed below, the approval of the Company name change and the
ratification of our appointment of Grant Thornton LLP as our independent
auditors for 2004. Our shareholders will also consider and vote upon such other
business as may properly come before the Annual Meeting or any adjournment
thereof. Our Board of Directors knows of no business that will be presented for
consideration at the Annual Meeting, other than matters described in this proxy
statement. You may revoke your proxy by giving written notice of your revocation
to our Secretary at any time before your proxy is voted, by executing another
valid proxy bearing a later date and delivering the new proxy to our Secretary
prior to or at the Annual Meeting, or by attending the Annual Meeting and voting
in person.
Neither the corporate laws of the State of Oklahoma, the state in which we
are currently incorporated, nor our Certificate of Incorporation or Bylaws have
any provisions regarding the treatment of abstentions and broker non-votes. Our
policy is (i) to count abstentions or broker non-votes for purposes of
determining the presence of a quorum at the Annual Meeting, (ii) to treat
abstentions and broker non-votes as votes not cast but to treat them as shares
represented at the Annual Meeting for determining results on actions requiring a
majority vote, and (iii) to consider neither abstentions nor broker non-votes in
determining results of plurality votes.
The expenses of this proxy solicitation, including the cost of preparing
and mailing this proxy statement and accompanying proxy will be borne by us.
Such expenses will also include the charges and expenses of banks, brokerage
firms and other custodians, nominees or fiduciaries for forwarding solicitation
material regarding the Annual Meeting to beneficial owners of our common stock.
Solicitation of proxies may be made by mail, telephone, personal interviews or
by other means by members of our Board of Directors or our employees who will
not be additionally compensated therefore, but who may be reimbursed for their
out-of-pocket expenses in connection therewith.
SHAREHOLDERS ENTITLED TO VOTE
Shareholders entitled to vote at the Annual Meeting are the holders of
record, at the close of business on June 21, 2004, our record date, of the
6,848,960 shares of common stock then outstanding. Each holder of a share of
common stock outstanding on the record date will be entitled to one vote for
each share held on each matter presented at the Annual Meeting. Our officers and
directors own a total of 1,431,921 shares, or 20.9 percent of the issued and
outstanding common stock, and intend to vote all of these shares in favor of the
matters to be voted upon at the Annual Meeting. There is no cumulative voting
with respect to the election of directors. The presence in person or by proxy of
the holders of a majority of the shares of common stock issued and outstanding
at the Annual Meeting will constitute a quorum for the transaction of business.
All matters to be brought before the Annual Meeting will require the affirmative
vote of a majority of the shares of common stock present at the Annual Meeting
in person and by proxy and entitled to vote. Votes will be tabulated by an
inspector of election appointed by our Board of Directors.
THIS PROXY STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF THESE TRANSACTIONS NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
PROPOSAL 1
ELECTION OF DIRECTORS
Our Bylaws provide that our Board of Directors shall consist of not less
than one nor more than fifteen directors, as determined from time to time by
resolution of our Board of Directors. The number of directors is currently fixed
at seven (7) directors. In general, the directors are divided into three
classes. Class I Directors hold office for a term expiring at the annual meeting
of shareholders to be held in 2006, Class II Directors hold office for a term
expiring at the annual meeting of shareholders to be held in 2004, and Class III
Directors hold office for a term expiring at the annual meeting of shareholders
to be held in 2005. Each director holds office for the term to which he is
elected or until his successor is duly elected and qualified. Messrs. Dickey and
Cook are serving as Class I Directors under a term expiring in 2006. Messrs.
Hail, Buxton and D'Arcangelo are serving as Class II Directors under a term
expiring in 2004 and Messrs. Stonecipher and Hague are serving as Class III
Directors under a term expiring in 2005. At each of our annual shareholders
meetings, the successor to a director whose term expires at such meeting will be
elected to hold office for a term expiring at the annual shareholders meeting
held in the third year following the year of his election.
Our Board of Directors has nominated John W. Hail, M. Thomas Buxton III and
David J. D'Arcangelo for re-election as directors for a term ending in 2007 or
until their successors shall have been duly elected and qualified. The persons
named as proxies in the accompanying proxy, who have been designated by our
Board of Directors, intend to vote unless otherwise instructed in the proxy, for
the election of Messrs. Hail, Buxton and D'Arcangelo. Should any nominee named
herein become unable for any reason to stand for election as a director, the
persons named in the proxy will vote for the election of such other person as
our Board of Directors may recommend. We know of no reason why any nominee will
be unavailable or unable to serve.
The affirmative vote of the holders of a majority of our common stock
present, in person or by proxy at the Annual Meeting and entitled to vote, is
required for the election of a director. An abstention from voting and broker
non-votes will be tabulated as a vote withheld on the election, but will be
included in computing the number of shares present for purposes of determining
the presence of a quorum for the Annual Meeting and whether a nominee has
received the vote of a majority of the shares present at the Annual Meeting.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RE-ELECTION OF JOHN W.
HAIL, M. THOMAS BUXTON III AND DAVID J. D'ARCANGELO TO THE BOARD OF DIRECTORS.
PROXIES SOLICITED BY OUR BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS
SPECIFY A CONTRARY CHOICE.
Information About Each Director and Director Nominee of Advantage Marketing
Systems, Inc.
Name Age Position with Us
---- --- ----------------
John W. Hail 73 Chairman of the Board, Chief Executive Officer and Director
David D'Arcangelo 48 President and Director
Reggie B. Cook 49 Chief Financial Officer, Secretary, Treasurer and Director
Steven M. Dickey 56 Director
Steven R. Hague 59 Director
M. Thomas Buxton III 54 Director
Harland C. Stonecipher 65 Director
Term as a Director expires in 2004.
Term as a Director expires in 2005.
Term as a Director expires in 2006.
Director Nominee.
John W. Hail is our founder and has served as our Chief Executive Officer
and Chairman of the Board of Directors since our inception in June 1988. During
1987 and through May 1988, Mr. Hail served as Executive Vice President, Director
and Agency Director of Pre-Paid Legal Services, Inc., a public company engaged
in the sale of legal services contracts, and also served as Chairman of the
Board of Directors of TVC Marketing, Inc., the exclusive marketing agent of
Pre-Paid Legal Services, Inc. Since 1998, Mr. Hail has served as a Director of
Pre-Paid Legal Services, Inc. In March 1999, Mr. Hail became a director of
DuraSwitch Industries, Inc., a company that develops and distributes electronic
switches.
David J. D'Arcangelo has served as our President since November 2002.
Before joining us, Mr. D'Arcangelo founded Entreport Corporation, a company that
went straight from the business plan, to the startup, to being listed on the
American Stock Exchange. Mr. D'Arcangelo is a nationally known speaker, speaking
with such recognized speakers as Zig Ziglar, Tommy Hopkins and Barbara Bush. Mr.
D'Arcangelo holds a Bachelor Degree in Economics/Business Administration from
the University of Redlands.
Reggie B. Cook has served as Vice President and Chief Financial Officer
since November 2000, and as a director since February 2001. From 1994 to 2000,
Mr. Cook served as Chief Financial Officer of Sequoiah Fuels Corporation, a
subsidiary of a Fortune 500 energy company that manufactured and internationally
distributed high-grade energy products. He has 18 years of senior management
experience guiding regulated industries that must operate under intense
regulatory scrutiny. Mr. Cook received his B.B.A. in Accounting, Management and
Finance, and his Masters in Business Administration from the University of
Oklahoma.
Steven M. Dickey has served as one of our directors since October 2002. Mr.
Dickey has been a practicing attorney in the Oklahoma City area since 1973, and
is a principal shareholder in the firm of Dickey and Dickey Attorneys.
Steven R. Hague has served as one of our directors since January 2003. Mr.
Hague has been a partner at One Source Advisors in Oklahoma City since 1999. One
Source Advisors is a management and actuarial consulting firm that provides
services related to product development; merger, acquisition and venture
development; bank insurance development and analysis; operational performance
analysis and financial reporting and forecasting. Previously, Mr. Hague was
Chief Executive Officer of American Southwest Holding Company from1998 to 1999,
and President and Chief Executive Officer of Bankers Protective Life Insurance
Company from 1993 to 1997. Mr. Hague also serves as a director and a member of
the Compensation Committee of Pre-Paid Legal Services, Inc. Mr. Hague holds a
Bachelor of Science degree from West Virginia University.
M. Thomas Buxton III has served as one of our directors since June 2001.
Mr. Buxton has practiced as a CPA in the Oklahoma City area and has been a
shareholder in Buxton and Cloud, CPA's since 1982. Mr. Buxton is a retired
lieutenant colonel in the United States Army Reserve.
Harland C. Stonecipher has served as one of our directors since August
1995. Mr. Stonecipher has been Chairman of the Board and Chief Executive Officer
of Pre-Paid Legal Services, Inc. since its inception in 1972.
Information About Each Executive Officer of Advantage Marketing Systems, Inc.
Name Age Position with Us
---- --- ----------------
David J. D'Arcangelo........... 48 President
Dennis P. Loney............ 49 Chief Operations Officer
Reggie B. Cook................. 49 Chief Financial Officer, Secretary and Treasurer
Mr. Loney is the son-in-law of Mr. Hail.
David J. D'Arcangelo is listed above in our directors' information.
Dennis P. Loney is Chief Operations Officer. Mr. Loney has served in this
capacity since July 1995. Prior to his current position, Mr. Loney served as the
Vice President of Administration of TVC Marketing, Inc. Mr. Loney brings over 20
years of business and 14 years of network marketing experience.
Reggie B. Cook is listed above in our directors' information.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers, and persons who beneficially own more than 10% of
our common stock to file certain reports with the Securities and Exchange
Commission concerning their beneficial ownership of our equity securities. The
SEC's regulations also require that a copy of all such Section 16(a) forms filed
must be furnished to us by the executive officers, directors, and greater than
10% shareholders. To our knowledge, based solely on a review of the copies of
such forms and amendments thereto received by us with respect to 2003, all
Section 16(a) filing requirements were met, although some were untimely. The
following persons failed to report one or more transactions (as denoted in
parenthesis) in a timely manner: M. Thomas Buxton III (5); Reggie Cook (1);
David D'Arcangelo (1); Steven M. Dickey (5); Steve Hague (4); John Hail (1);
Dennis Loney (2); and Harland Stonecipher (4).
Board Meetings and Committees
The Board of Directors has the responsibility for establishing our broad
corporate policies and for our overall performance. However, the Board is not
involved in our day-to-day operations. The Board is kept informed of our
business through discussions with our Chief Executive Officer and other
officers, by reviewing analyses and reports provided to it on a regular basis,
and by participating in Board and Committee meetings.
Meetings. The Board of Directors held four meetings during 2003. Messrs.
Hail, Cook, D'Arcangelo, Dickey, Hague and Buxton attended all of the Board
meetings. Mr. Stoncipher attended three of the Board meetings. The Board has
established an Audit Committee and a Compensation Committee. In accordance with
our By-laws, the Board of Directors annually elects from its members the members
of each Committee.
Audit Committee. Members: M. Thomas Buxton III, Steven M. Dickey and Steven
R. Hague.
The Audit Committee is composed of non-employee directors, each of which is
independent as defined in Section 121 (A) of the American Stock Exchange listing
standards. The Audit Committee annually considers the qualifications of our
independent auditor and makes recommendations to the Board on the engagement of
the independent auditor. The Audit Committee meets with representatives of the
independent auditor and is available to meet at the request of the independent
auditor. During these meetings, the Audit Committee receives reports regarding
our books of accounts, accounting procedures, financial statements, audit
policies and procedures, internal accounting and financial controls, and other
matters within the scope of the Audit Committee's duties. The Audit Committee
reviews the plans for and results of audits for us and our subsidiaries. The
Audit Committee reviews and approves the independence of the independent
auditor, and considers and authorizes the fees for both audit and nonaudit
services of the independent auditor. See the "Audit Committee Report" included
elsewhere herein.
The Board of Directors has determined that Mr. Buxton is a financial expert
as defined in Item 401(h)(2) of Regulation S-K. An audit committee financial
expert has the following attributes:
o An understanding of generally accepted accounting principles and
financial statements;
o The ability to assess the general application of such principles in
connection with the accounting for estimates, accruals and reserves;
o Experience preparing, auditing, analyzing or evaluating financial
statements that present a breadth and level of complexity of
accounting issues comparable to the breadth and complexity of
accounting issues reasonably expected to be raised by our financial
statements;
o An understanding of internal control over financial reporting; and
o An understanding of audit committee functions.
Mr. Buxton has practiced as a Certified Public Accountant in the State of
Oklahoma since 1982. In addition, he was previously the Chief Financial Officer
for a holding company. As such, Mr. Buxton possesses the attributes necessary to
qualify as an audit committee financial expert.
Mr. Buxton's determination as an audit committee financial expert does not:
o Deem Mr. Buxton an expert for any other purpose;
o Impose on Mr. Buxton any duties, obligations or liability that are
greater than the duties, obligations or liability imposed on other
Audit Committee members; nor
o Affect the duties, obligations or liability of any other member of the
Audit Committee or the Board of Directors.
During 2003, the Audit Committee met four times. Messrs. Buxton, Dickey and
Hague were present at all meetings.
We do not have a Corporate Governance and Nominating Committee. After
review, our Board of Directors concluded that formation of a separate committee
would be financially unreasonable and administratively burdensome, based on the
size and nature of the Company. As a result, the Audit Committee acts in place
of a Corporate Governance and Nominating Committee. The Audit Committee acts in
the following capacities:
o Evaluate our corporate governance effectiveness and recommend such
revisions as it deems appropriate to improve the corporate governance
of the Company, the Board or any committee of the Board; and
o Identify individuals qualified to become Board members and recommend
(i) candidates to fill newly created director positions or Board
vacancies, (ii) whether incumbent directors should be nominated for
re-election to the Board upon the expiration of their terms, and (iii)
directors to serve on committees of the Board.
In considering possible candidates for election as a director, the Audit
Committee is guided by the principles that each director should be an individual
of high character and integrity and have:
o Independence;
o Wisdom;
o Integrity;
o An understanding and general acceptance of our corporate philosophies;
o A valid business or professional knowledge and experience that can
bear on our challenges and deliberations and those of our Board of
Directors;
o A proven record of accomplishment with an excellent organization;
o An inquiring mind;
o A willingness to speak one's mind;
o An ability to challenge and stimulate management;
o A willingness to commit time and energy to our business affairs; and
o International and global experience.
Qualified candidates for membership as a director will be considered
without regard to race, color, religion, gender, ancestry, national origin or
disability. The Audit Committee will review the qualifications and background of
directors and nominees to become directors, without regard to whether a nominee
has been recommended by shareholders. The Audit Committee does not have a
charter specific to nominations of directors. A copy of the resolution setting
forth our nomination process may be obtained by writing Advantage Marketing
Systems, Inc., 711 NE 39th Street, Oklahoma City, OK 73105, Attn: Corporate
Secretary.
Notice of proposed shareholder nominations for directors must be delivered
not less than 120 days before any meeting at which directors are to be elected.
Nominations must include the full name of the proposed nominee, a brief
description of the proposed nominee's business experience for at least the
previous five years, and a representation that the nominating shareholder is the
beneficial record owner of our common stock. Such submission must be accompanied
by the written consent of the proposed nominee to be named as a nominee and to
serve as a director, if elected. Nominations should be delivered to the Audit
Committee at the following address: The Advantage Marketing Systems, Inc. Audit
Committee, c/o Steven R. Hague, Advantage Marketing Systems, Inc., 711 NE 39th
Street, Oklahoma City, Oklahoma 73105.
In addition to considering possible candidates for election as directors,
the Audit Committee may, in its discretion, review the qualifications and
backgrounds of existing directors and other nominees (without regard to whether
a nominee has been recommended by shareholders), as well as the overall
composition of our Board of Directors, and recommend the slate of directors to
be nominated for election at the ensuing annual meeting of shareholders.
Currently, we do not employ or pay a fee to any third party to identify or
evaluate, or assist in identifying or evaluating, potential director nominees.
In addition, the Audit Committee will evaluate our corporate governance
effectiveness and recommend such revisions as it deems appropriate to improve
our corporate governance. The areas of evaluation may include such matters as
the size and independence requirements of our Board of Directors, Board
committees, management success and planning, and regular meetings of our
non-management directors without management in executive sessions. We do not
have a policy requiring members of our Board of Directors to attend annual
meetings of our shareholders. Six of our directors attended our 2003 annual
meeting of shareholders.
Compensation Committee. Members: M. Thomas Buxton III and Steven R. Hague.
The members of the Compensation Committee are independent directors, but
are eligible to participate in any of the plans or programs that the
Compensation Committee administers. The Compensation Committee approves the
standards for setting salary ranges for our executive officers, reviews and
approves the salary budgets for all other of our officers, and specifically
reviews and approves the compensation of our senior executives. The Compensation
Committee reviews action taken by management in accordance with the salary
guidelines for executives and establishes the performance objectives for
variable compensation for executives. The Compensation Committee also
administers our stock option plans and approves stock option grants for our
executive officers. See the "Compensation Committee Report on Executive
Compensation" included elsewhere herein. During 2003, the Compensation Committee
met once and each committee member attended the meeting.
Compensation of Directors
Directors who are not our employees receive $500 for each Board or
Committee meeting attended. Directors who are also our employees receive no
additional compensation for serving as directors. We reimburse our directors for
travel and out-of-pocket expenses in connection with their attendance at
meetings of the Board of Directors. Our Bylaws provide for mandatory
indemnification of directors and officers to the fullest extent permitted by
Oklahoma law.
Compensation Committee Interlocks and Insider Participation
At December 31, 2003, our Compensation Committee consisted of Messrs.
Buxton and Hague. No member of the Compensation Committee was one of our
officers or employees, an officer or employee of any of our subsidiaries or
engaged in a related party transaction with us, during 2003. John W. Hail, our
Chairman of the Board and Chief Executive Officer, serves on the Board of
Directors of Pre-Paid Legal Services, Inc. Steve Hague, one of our directors and
a member of our Compensation Committee, is also on the Board of Directors and
Compensation Committee of Pre-Paid Legal Services, Inc. Harland Stonecipher, the
Chairman of the Board and Chief Executive officer of Pre-Paid Legal Services,
Inc. serves on our Board of Directors.
Other Matters
You can contact any member of our Board of Director by writing to him at
the same address provided above for delivery of director nominations. Our
shareholders, our employees and any others who wish to contact any
non-management member of our Board of Directors or any member of our Audit
Committee to report complaints or concerns with respect to accounting, internal
accounting, controls or auditing matters, may do so by using the above address.
Information explaining how our shareholders can contact our Board of Directors
is available in the Contact Us section of our website at www.amsonline.com under
the heading "Board of Directors."
We have adopted the Advantage Marketing Systems Code of Ethics for our
employees, officers and directors. Our Code of Ethics is publicly available on
our website at www.amsonline.com. If we make any substantive amendments to our
Code of Ethics or grant any waiver, including any implicit waiver, from a
provision of this Code to our executive officers, we will disclose the nature of
such amendment or waiver on our website.
PROPOSAL 2
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE
COMPANY FROM ADVANTAGE MARKETING SYSTEMS, INC. TO AMS HEALTH SCIENCES, INC.
The Board of Directors has determined that it is advisable to change our
corporate name of Advantage Marketing Systems, Inc. to AMS Health Sciences, Inc.
and has voted to recommend that the shareholders adopt an amendment to our
Certificate of Incorporation effecting the proposed name change. The full text
of the proposed amendment to our Certificate of Incorporation is attached to
this proxy statement as Appendix A.
The Board of Directors believes it is in our best interest to change our
name. We are recommending our name change to more accurately reflect the
substance and purpose of our business operation to our shareholders, associates
and the market. The addition of the words Health and Science reflect our
commitment to providing cutting-edge, high performance weight loss and
nutritional supplements to our customers. The retention of the initials "AMS"
ties us to our already branded product lines and our associates' promotional
materials. AMS Health Sciences, Inc. is a much stronger statement to the market
of whom we are and where our business focus resides.
The affirmative vote of the holders of a majority of the total combined
voting power of the shares represented and entitled to vote at the meeting will
be required to approve the amendment to our Certificate of Incorporation to
effect the proposed change in our name.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE AMENDMENT TO OUR
CERTIFICATE OF INCORPORATION, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED
IN FAVOR OF THE AMENDMENT UNLESS A SHAREHOLDER INDICATES OTHERWISE ON THE PROXY.
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Grant Thornton LLP as our independent
auditors for the year ending December 31, 2004, and has further directed that
management submit the selection of independent auditors for ratification by the
stockholders at our Annual Meeting. Grant Thornton LLP audited our 2003, 2002
and 2001 financial statements. Representatives of Grant Thornton LLP are
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
As previously reported, on July 10, 2001, upon the recommendation of our
Audit Committee and with the approval of our Board of Directors, we dismissed
our principal accountant, Deloitte & Touche LLP, in order to institute certain
cost saving measures. On the same date, we engage Grant Thornton LLP as our
principal accountant. At no time did any report by Deloitte & Touche LLP on our
financial statements contain an adverse opinion or a disclaimer of opinion; nor
was any such report qualified or modified as to uncertainty, audit scope or
accounting principles. Also, at no time did we have any disagreements with
Deloitte & Touche LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Deloitte & Touche LLP,
would have caused Deloitte & Touche LLP to reference the subject matter of the
disagreement in connection with their report on our financial statements.
We did not consult with Grant Thornton LLP during our two most recent
fiscal years and any subsequent interim period prior to engaging Grant Thornton
LLP regarding either (1) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on our financial statements, or (2) any matter that was either
the subject of a disagreement or a reportable event, as those terms are defined
in Item 304(a) of Regulation S-K.
Audit Fees
Audit fees billed to us during the last two fiscal years ended December 31,
2003 for audit or review of our annual financial statements and those financial
statements included in our quarterly reports on Forms 10-Q, and services
normally provided in connection with our regulatory filings, totaled $69,850 for
2002 and $62,360 for 2003.
Audit-Related Fees
Audit-related fees billed to us during the last two fiscal years ended
December 31, 2003 for assurance and related services reasonable related to the
audit or review of our financial statements, but not otherwise disclosed under
the heading "Audit Fees" above, totaled $9,855 for 2002 and $900 for 2003. These
fees related to the review of internal control documentation and preparation of
management advisory comments.
Tax Fees
Tax fees billed to us during the last two fiscal years ended December 31,
2003 for tax compliance, tax advice or tax planning totaled $9,990 for 2002 and
$9,015 for 2003. Services provided to us by Grant Thornton LLP include filing
corporate franchise and income tax returns.
All Other Fees
There were no fees billed to us during the last two fiscal years ended
December 31, 2003 for any other non-audit services. The Audit Committee has
determined that the provision of non-audit services by Grant Thornton LLP did
not impact the independence of Grant Thornton LLP.
Pursuant to pre-approval policies and procedures set forth in the existing
Audit Committee Charter, the Audit Committee approved 100% of the audit and
audit-related services in 2002 and 2003. The Audit Committee did not pre-approve
the provision of tax services in 2002 and 2003. The Audit Committee currently
approves in advance all audit and non-audit services to be performed for us by
our independent accountants.
Stockholder ratification of the selection of Grant Thornton LLP as our
independent auditors is not required by Grant Thornton, LLP, our Bylaws or
otherwise. However, the Board is submitting the selection of Grant Thorton LLP
to our stockholders for ratification as a matter of corporate practice. If the
stockholders fail to ratify the selection, the Board will reconsider whether or
not to retain that firm. Even if the selection is ratified, the Board in its
discretion may direct the appointment of a different independent accounting firm
at any time during the year if the Board determines that such a change would be
in our best interests and the best interests of our stockholders.
The affirmative vote of the holders of a majority of the total combined
voting power of the shares represented and entitled to vote at the meeting will
be required to ratify the selection of Grant Thornton LLP as our independent
auditors for the fiscal year ending December 31, 2004.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF GRANT
THORNTON LLP AS INDEPENDENT AUDITORS. PROXIES SOLICITED BY OUR BOARD OF
DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Summary Compensation Table
Our Executive Officers. The following Summary Compensation Table sets forth
certain information relating to compensation for services rendered during the
years ended December 31, 2003, 2002 and 2001, paid to or accrued for John W.
Hail, our Chief Executive Officer, and each of our executive officers whose 2003
salary and bonus exceed $100,000.
Long-Term
Compensation Awards
-------------------
Annual Compensation Securities Exercise
------------------- Underlying or Base
Name and Principal Position Year Salary Bonus Other Options Price
--------------------------- ---- ---------- ----- ----- ------- -----
John W. Hail............................... 2003 $498,661 $ - $ - 100,000 $ 1.31
Chief Executive Officer 2002 $456,041 $ - $ - - $ -
2001 $315,506 $ - $ - 100,000 $ 2.65
David J. D'Arcangelo................... 2003 $285,769 $ - $ - 500,000 $ 1.31
President 2002 $ - $ - $ - 200,000 $ 1.45
2001 $ - $ - $ - - $ -
Reggie Cook.............................. 2003 $167,985 $ - $ - 100,000 $ 1.31
Vice President and Chief Financial 2002 $162,028 $ - $ - - $ -
Officer 2001 $194,700 $ - $ - 50,000 $ 2.65
Dennis Loney........................... 2003 $147,985 $ - $ - 100,000 $ 1.31
Vice President and Chief 2002 $166,165 $ - $ - - $ -
Operating Officer 2001 $158,700 $ - $ - 50,000 $ 2.65
Dollar value of base salary earned during the year, including the use of
automobiles for Messrs. Hail, Cook, and Loney, the value of which is less
than 10% of each officers' total annual salary, is included in their annual
compensation.
Yearly salary was less than $100,000.
Mr. D'Arcangelo was not an executive officer in 2001.
Aggregate Option Grants and Exercises in 2003 and Year End Option Values
Stock Options and Option Values. The following table sets forth information
related to the grant of stock options during 2003.
Stock Options Granted Potential Realizable
--------------------- Value at Assumed Annual
Percentage of Rates of Stock
Number of Total Options Price Appreciation for
Shares Granted to Option Term
Underlying Employees Exercise Expiration -------------------------
Options in 2003 Price Date 5% 10%
------- ------- ----- ---- -- ---
John W. Hail........... 100,000 8% $1.31 January 1, 2013 $82,000 $209,000
Chief Executive
Officer
David J. D'Arcangelo 500,000 37% $1.31 January 1, 2013 $412,000 $1,044,000
President
Reggie Cook........... 100,000 8% $1.31 January 1, 2013 $82,000 $209,000
Vice President and
Chief Financial
Officer
Dennis Loney.......... 100,000 8% $1.31 January 1, 2013 $82,000 $209,000
Vice President and
Chief Operating
Officer
Aggregate Stock Option Exercises in 2003 and Year End Option Values. The
following table sets forth information related to the exercise of stock options
during 2003 and the number and value of options held by the named executive
officers at December 31, 2003.
Stock Option Exercises and Year End Option Value Table
Value of Unexercised
Number of Unexercised In-the-Money
Shares Options as of Options as of
Acquired on December 31, 2003 December 31, 2003
Value -------------------
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
-------- -------- ----------- ------------- ----------- ------------
John W. Hail........... - $ - 267,239 182,761 $553,292 $416,208
Chief Executive Officer
David J. D'Arcangelo... - $ - 300,000 400,000 $806,000 $1,112,000
President
Reggie Cook............ - $ - 62,724 113,395 $110,459 $266,443
Vice President and
Chief Financial Officer
Dennis Loney........... 2,100 $ 4,060 75,303 110,322 $114,288 $260,312
Vice President and
Chief Operating Officer
The closing sale price of our common stock as reported on the American
Stock Exchange on December 31, 2003 was $4.09. The per-share value is
calculated based on the applicable closing price per share, minus the
exercise price, multiplied by the number of shares of our common stock
underlying the options.
Employment Agreements
We have entered into a written employment with our President, David J.
D'Arcangelo. The contract is for an initial one-year term, commencing November
25, 2002, and automatically renewable for two successive one-year terms unless
rejected by either party. The contract calls for a base salary of $180,000 per
year, an annual incentive bonus of up to $200,000, contingent upon meeting
certain performance goals, and non-qualified options to purchase up to 700,000
shares of our common stock at an exercise price of $1.40 per share. A total of
200,000 of Mr. D'Arcangelo's options vested in 2002 and an additional 100,000
options vested in 2003. The employment agreement also contains provisions for
graduated severance payments of up to 12 months of base pay, based on length of
employment, if we terminate him without cause, disability payments, and a
non-competition agreement preventing Mr. D'Arcangelo from engaging in a business
deemed similar to ours for a period of one year from the cessation of his
employment.
On November 4, 2003, we entered into a written employment agreement with
John W. Hail, our Chief Executive Officer. The contract is for an initial
two-year term, commencing November 4, 2003, and may be extended for up to five
successive one-year terms if we and Mr. Hail agree in writing. The contract
calls for a base salary of $249,600 per year, a monthly variable salary equal to
one percent (1%) of our gross revenues, and a discretionary year-end bonus
determined by a majority vote of the Board of Directors. Mr. Hail will continue
to receive the fringe benefits he presently receives. The agreement also
contains provisions for graduated severance payments if we terminate Mr. Hail
without cause, ranging from $350,000 to $183,000. In addition, if the employment
period is extended beyond November 11, 2005, the monthly variable salary will
cease and be replaced by a fixed supplemental payment to Mr. Hail, which will be
in a gross amount necessary to cover all federal, state and local taxes and all
employment taxes, and pay a net amount of $7,000 per month.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The 2003 Compensation Committee was composed of Messrs. Buxton and Hague,
each of whom was one of our independent directors. The Compensation Committee
designs and administers the compensation programs for our executive officers and
other key employees and makes grants under our stock option plans. The
Compensation Committee, with the aid of internal staff, reviews and evaluates
our compensation programs to determine their effectiveness in attracting,
motivating and retaining highly skilled executive officers.
Compensation Philosophy. Our compensation program for our executive
officers is designed to preserve and enhance stockholder value by heavily
emphasizing performance-based compensation. The program is directed towards
motivating executives to achieve our business objectives, to reward them for
their achievement and to attract and retain executive officers who contribute to
our long-term success. Competition is intense for senior executives within the
network marketing industry, with established companies and start-ups
aggressively recruiting management talent. A key design criterion for our
compensation programs is therefore the retention of senior management and other
key employees.
Compensation Components. Our executive compensation program has four
primary components: base salary, variable salary, performance bonuses and stock
option grants. Each is discussed below.
Base Salary. The level of base salary paid to our executive officers is
determined on the basis of the importance of the position and on market data. In
2003, we increased the base salaries of most of our named executive officers.
Variable Salary. The level of variable salary paid to our executive
officers is determined as a percentage of monthly sales volume. In 2003, the
percentage varied for our named executive officers.
Performance Bonuses. For 2003, we employed a cash incentive compensation
program under which bonus amounts are based on a number of performance factors
that we considered relevant, including the following:
|X| Overseeing our financial results;
|X| Building and growing higher margin business;
|X| Strengthening our organization structure and management team; and
|X| Controlling non-personnel expenses while growing revenues.
Stock Option Grants. For 2003, we employed a stock option grant program
under which options were granted based on a number of performance factors that
we considered relevant, including the same factors considered for performance
bonuses.
Compensation of the Chief Executive Officer. As described above, we
determine compensation for all executives, including John W. Hail, our Chief
Executive Officer, considering both a pay-for-performance philosophy and market
rates of compensation. Mr. Hail's base salary was $249,600 for fiscal 2003,
which we believe is not inconsistent with the base salaries of chief executive
officers of peer companies. Mr. Hail's variable salary was $249,061 for fiscal
2003.
THE COMPENSATION COMMITTEE
M. Thomas Buxton III
Steven R. Hague
AUDIT COMMITTEE REPORT
The Audit Committee of the Board is responsible for providing independent,
objective oversight and review of our accounting functions and internal
controls. The Audit Committee is governed by a written Charter adopted and
approved by the Board in June, 2000.
In fulfilling our duties for the 2003 fiscal year pursuant to our Charter,
the Committee has also done each of the following:
|X| Reviewed our audited financial statements for 2003 and discussed the
financial statements with our management;
|X| Discussed with Grant Thornton, LLP the matters required to be
discussed with them by the Auditing Standards Board Statement on
Accounting Standards No. 61 (Codification of Statements on Auditing
Standards, AU 380) as may be modified or supplemented;
|X| Received written disclosure from Grant Thornton, LLP about any
relationships between them and us which they believe may effect their
independence;
|X| Received a confirmation letter from Grant Thornton, LLP that they are
independent of us; and
|X| Discussed Grant Thornton, LLP's independence with them.
Based on the review and discussions above, the Committee recommended to the
Board that the audited financial statements for 2003 be included in our Form
10-K filed with the Securities and Exchange Commission.
All of the members of the Audit Committee in 2003 were independent as
defined in Section 121(A) of the American Stock Exchange Listing Standards.
The Committee has considered the non-audit services rendered by our
principal accountant for the most recent fiscal year and has concluded that the
provisions of such services is compatible with maintaining Grant Thornton, LLP's
independence.
AUDIT COMMITTEE:
M. Thomas Buxton, III
Steven M. Dickey
Steven R. Hague
STOCK PERFORMANCE
The following performance graph compares our cumulative total stockholder
return on our common stock against the cumulative total return of the AMEX
Composite Index and the Morgan Stanley Consumer Index (CMR) compiled by
Prudential Securities Group, Inc. for the period from December 31, 1998 through
December 31, 2003. The performance graph assumes that the value of the
investment in our stock and each index was $100 on December 31, 1998 and that
any dividends were reinvested. We have never paid dividends on our common stock.
[GRAPHIC OMITTED and DESCRIBED IN THE TABLE BELOW]
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ADVANTAGE MARKETING SYSTEMS, INC.
AMEX COMPOSITE INDEX AND MORGAN STANLEY CONSUMER INDEX
December December December December December December
1998 1999 2000 2001 2002 2003
---- ---- ---- ---- ---- ----
Advantage Marketing Systems, Inc... 100.00 269.70 115.15 123.64 63.52 198.30
Morgan Stanley Consumer Index...... 100.00 97.30 113.49 106.19 94.52 106.92
AMEX Composite Index............... 100.00 128.98 134.50 129.93 129.21 188.23
The industry index chosen is the Morgan Stanley Consumer Index. This index
is an equal dollar weighted index designed to measure the performance of
consumer-oriented, stable growth industries through price changes in 30
component stocks representing 20 industries. Major industries include beverages,
food, pharmaceuticals, tobacco and personal products. To ensure that each
component stock continues to represent approximately equal weight in the index,
adjustments are made annually, based on closing prices on the third Friday in
December.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
General
The following table presents certain information as to the beneficial
ownership of our common stock as of June 21, 2004, of:
|X| Each person who is known to us to be the beneficial owner of more than
5% of our common stock;
|X| Each of our directors, nominees for directors and executive officers;
|X| Our executive officers and directors as a group; and
|X| Their percentage holdings of our outstanding shares of common stock.
For purposes of the following table, the number of shares and percent of
ownership of our outstanding common stock that the named person beneficially
owned on June 21, 2004, includes shares of our common stock that such person has
the right to acquire within 60 days of June 21, 2004, upon exercise of options
and warrants. However, such shares are not included for the purposes of
computing the number of shares beneficially owned and percent of our outstanding
common stock of any other named person.
Common Stock
------------
Shares Percent of
Beneficially Shares
Name and Address of Beneficial Owner Owned Outstanding
------------------------------------ ----- -----------
John W. Hail.............................. 642,278 9.4%
Harland C. Stonecipher........................ 202,768 3.0%
Steven M. Dickey.......................... 32,000 0.5%
M. Thomas Buxton III...................... 22,000 0.3%
Steven R. Hague........................... 30,000 0.4%
Reggie B. Cook............................ 67,611 1.0%
Dennis P. Loney........................... 135,264 2.0%
David J. D'Arcangelo...................... 300,000 4.4%
Executive Officers and Directors as a group
(nine persons).................................. 1,431,921 20.9%
A director or an executive officer with a business address of 711 NE 39th
Street, Oklahoma City, Oklahoma 73105.
The number of shares and the percentage presented includes 285,588 shares
of our common stock that are subject to currently exercisable stock
options.
Mr. Stonecipher is a director with a business address of 321 East Main
Street, Ada, Oklahoma 74820, and Chairman of the Board and Chief Executive
Officer of Pre-Paid Legal Services, Inc. The number of shares consist of
and each percentage presented is based upon 180,768 shares of our
outstanding common stock held by Pre-Paid Legal Services, Inc., which may
be deemed to be beneficially owned by Mr. Stonecipher and 22,000 shares of
our common stock that are subject to currently exercisable stock options.
The number of shares and the percentage presented represent shares of our
common stock that are subject to currently exercisable stock options.
The number of shares and the percentage presented includes 65,671 shares of
our common stock that are subject to currently exercisable stock options.
The number of shares and the percentage presented includes 119,500 shares
of our common stock that are subject to currently exercisable stock options
held by Mr. Loney.
CERTAIN TRANSACTIONS
Set forth below is a description of transactions entered into between us
and certain of our officers, directors and shareholders during the last fiscal
year. Certain of these transactions may result in conflicts of interest between
us and such individuals. Although these persons have fiduciary duties to us and
our shareholders, there can be no assurance that conflicts of interest will
always be resolved in our favor or in the favor of our shareholders.
During 2003, 2002 and 2001, we received approximately $8,520, $7,069 and
$15,231, respectively, from Pre-Paid Legal Services, Inc. ("Pre-Paid Legal"), a
shareholder, for commissions on sales of memberships for the services provided
by Pre-Paid Legal. As of July 1, 2000, we began offering our employees access to
the services provided by Pre-Paid Legal through an employee benefit option. We
pay half of the cost for each employee electing to participate in the plan.
During 2003, 2002 and 2001, we paid $5,532, $6,934 and $7,593, respectively, to
Pre-Paid Legal for these services. Our Chairman of the Board and Chief Executive
Officer, John W. Hail, is a director of Pre-Paid Legal.
During the first quarter of 1998, we agreed to loan John W. Hail up to
$250,000. Subsequently, we also agreed to loan up to an additional $75,000. In
2000, an additional $200,000 was approved. On January 1, 2001 the outstanding
balance on all the notes were combined into one note payable in monthly
installments. The loans and extension were unanimously approved by the board of
directors. These loans were collateralized by stock and property, and bear
interest at 8% per annum. These loans were fully paid in 2003.
Also during 2003, 2002 and 2001, we paid Mr. Loney and his wife sales
bonuses of $25,460, $30,887 and $38,028, respectively. These bonuses were based
upon purchases by them and their downline associates in accordance with our
network marketing program applicable to all independent associates in effect at
the time of the sales. Mr. Loney's wife is the daughter of John W. Hail.
On December 17, 1996, we adopted policies that loans and other transactions
with officers, directors and 5% or more shareholders will be on terms no less
favorable than could be obtained from unaffiliated parties and approved by a
majority of not less than two of the disinterested independent directors.
In 2003, we executed an employment agreement with our Chairman of the
Board, John W. Hail. In 2002, we executed an employment agreement with our
President, David D'Arcangelo. The terms of these agreements are summarized
elsewhere in this proxy.
OTHER BUSINESS TO BE BROUGHT BEFORE THE MEETING
Our Board of Directors knows of no business that will be presented for
action at the Annual Meeting other than that described in the Notice of Annual
Meeting of Shareholders and this Proxy Statement. However, if any other matters
should properly come before the Annual Meeting, it is the intention of the
persons named in the accompanying Proxy to vote such Proxies as they deem
advisable in accordance with their best judgment.
SHAREHOLDERS PROPOSALS FOR 2005 ANNUAL MEETING
Under the existing rules of the Securities and Exchange Commission, any of
our shareholders may present proposals on any matter that is a proper subject
for consideration by our shareholders at the 2005 annual shareholders meeting.
We currently anticipate that our 2005 annual shareholders meeting will be held
on or before August 20, 2005. In order to be included in the proxy statement (or
disclosure statement in the event proxies are not solicited by our Board of
Directors) for the 2005 annual shareholders meeting, any shareholder proposal
must be received by March 17, 2005. It is suggested that a shareholder
desiring to submit a proposal do so by sending the proposal certified mail,
return receipt requested, addressed to us at Advantage Marketing Systems, Inc.,
711 NE 39th Street, Oklahoma City, Oklahoma 73105. Attention: Corporate
Secretary. Detailed information for submitting proposals will be provided upon
written request, addressed to the Corporate Secretary.
In addition, pursuant to Rule 14a-4 under the Securities Exchange Act of
1934, as amended, a shareholder must give notice to us prior to May 31, 2005
of any proposal that such stockholder intends to raise at the 2005 Annual
Meeting. If we receive notice of such proposal on or after May 31, 2005, under
Rule 14a-4, the persons named in the proxy solicited by our Board of Directors
for the 2005 Annual Meeting may exercise discretionary voting with respect to
such proposal.
Your cooperation in giving this matter your immediate attention and in
returning your Proxy promptly will be appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
REGGIE B. COOK
Reggie B. Cook
Corporate Secretary
July 15, 2004
A copy of our annual report, which includes portions of our Form 10-K for
the fiscal year ended December 31, 2003, is enclosed herewith, and our annual
report on Form 10-K, excluding certain of the exhibits, may be obtained without
charge by writing Advantage Marketing Systems, Inc., 711 NE 39th Street,
Oklahoma City, Oklahoma 73105, Attention: Corporate Secretary.
Appendix A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
Advantage Marketing Systems, Inc.
Advantage Marketing Systems, Inc., an Oklahoma corporation (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Corporation's Board of Directors, by the unanimous written
consent of its members, filed with the minutes of the board, duly adopted
resolutions setting forth a proposed amendment to the Amended and Restated
Certificate of Incorporation of the Corporation, declaring said amendment to be
advisable, and recommending that the stockholders of the Corporation approve the
amendment.
SECOND: That Article First of the Corporation's Amended and Restated
Certificate of Incorporation is amended to read in its entirety as follows:
FIRST: The name of the Corporation is: AMS Health Sciences,
Incorporated.
THIRD: That a majority of the Corporation's shareholders entitled to vote
thereon voted in favor of the proposed amendment at the Corporation's annual
meeting duly called and held upon notice in accordance with the provisions of
Section 1067 of the Oklahoma General Corporation Act.
FOURTH: That said amendment was duly adopted in accordance with the
provisions of Section 1077 of the Oklahoma General Corporation Act.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its President and attested to by its Secretary on April 28, 2004.
DAVID J. D'ARCANGELO
David J. D'Arcangelo, President
Attest:
REGGIE B. COOK
Reggie B. Cook, Secretary
--------------------------------------------------------------------------------
PROXY PROXY
ADVANTAGE MARKETING SYSTEMS, INC.
711 NORTHEAST 39TH STREET
OKLAHOMA CITY, OKLAHOMA 73105
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF ADVANTAGE MARKETING SYSTEMS, INC.
THE UNDERSIGNED HEREBY APPOINT REGGIE B. COOK AND ROBIN L. JACOB AS PROXIES,
EACH WITH THE POWER TO APPOINT HIS SUBSTITUTE, AND HEREBY APPOINTS AND
AUTHORIZES EACH OF THEM TO REPRESENT AND VOTE AS DESIGNATED BELOW, ALL THE
SHARES OF COMMON STOCK, $0.0001 PAR VALUE, OF ADVANTAGE MARKETING SYSTEMS, INC.
(THE "COMPANY") HELD OF RECORD BY THE UNDERSIGNED ON JUNE 21, 2004, AT THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FRIDAY AUGUST 20, 2004, OR ANY
ADJOURNMENT THEREOF.
1. To consider and act upon the re-election of John W. Hail, as a
director for a term ending in 2007, and until his successor shall have
been duly elected and qualified. A vote "For" will represent a vote
for the nominee director.
/ / FOR / / WITHHOLD AUTHORITY
2. To consider and act upon the election of M. Thomas Buxton III, as a
director for a term ending in 2007, and until his successor shall have
been duly elected and qualified. A vote "For" will represent a vote
for the nominee director.
/ / FOR / / WITHHOLD AUTHORITY
3. To consider and act upon the election of David J. D'Arcangelo, as a
director for a term ending in 2007, and until his successor shall have
been duly elected and qualified. A vote "For" will represent a vote
for the nominee director.
/ / FOR / / WITHHOLD AUTHORITY
4. To approve the amendment of the Company's Certificate of Incorporation
changing the name of the Company from Advantage Marketing Systems,
Inc. to AMS Health Sciences, Inc.
/ / FOR / / AGAINST / / ABSTAIN
5. To consider and act upon the ratification and the appointment of Grant
Thornton LLP as the Company's independent auditor for the fiscal year
ending December 31, 2004. A vote "For" will represent a vote for such
ratification and appointment.
/ / FOR / / AGAINST / / ABSTAIN
To transact such other business as may properly
come before the meeting or any adjournment thereof
ADVANTAGE MARKETING SYSTEMS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
YOU CAN VOTE IN ONE OF TWO WAYS
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VOTE BY INTERNET
-------------------------------------------------------------------------------
Its fast, convenient, and your vote is immediately confirmed and posted.
1. Read the accompanying Proxy Statement.
2. Go to the website http://www.eproxyvote.com/amm and follow the
instructions on the screen.
Please note that all votes cast by Internet must be made prior to 5:00 p.m. CDT,
August 17, 2004.
IF YOU VOTE BY INTERNET, PLEASE DO NOT RETURN YOUR PROXY CARD BY MAIL
--------------------------------------------------------------------------------
VOTE BY MAIL
--------------------------------------------------------------------------------
To vote by mail, read the accompanying Proxy Statement then complete, sign and
date the proxy card below. Detach the card and return it in the envelope
provided herein.
IF YOU ARE NOT VOTING BY INTERNET, DETACH PROXY CARD AND RETURN.
--------------------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL PROPOSALS.
PLEASE SIGN EXACTLY AS THE NAME APPEARS TO LEFT. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
DATE: _________________, 2004
-----------------------------------------------
Signature
-----------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.