UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
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REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
PROXY
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SECURITIES
EXCHANGE ACT OF 1934
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AMS
HEALTH SCIENCES, INC.
_______________________________________________________________
(Name
of Registrant as Specified In Its Charter)
_______________________________________________________________
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Registrant)
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AMS
HEALTH
SCIENCES, 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 Courtyard
by Marriott Hotel
at
2 West Reno Avenue in Oklahoma City, Oklahoma, on June 18, 2007 commencing
at
10:00 A.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 2010 annual meeting
of
shareholders and until their successors shall have been duly elected
and
qualified;
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2.
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To
consider and act upon a proposal to ratify the appointment of Cole
&
Reed P.C. as our independent auditor for 2007;
and
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3.
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To
transact such other business as may properly come before the meeting
or
any adjournment thereof.
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Holders
of record of common stock at the close of business on April 27, 2007, 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 May 18, 2007.
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:
Robin
L.
Jacob, Corporate Secretary
Oklahoma
City, Oklahoma
May
18,
2007
PROXY
STATEMENT
AMS
Health Sciences, Inc.
711
NE 39th
Street
Oklahoma
City, Oklahoma 73105
(405)
842-0131
ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD ON JUNE 18, 2007
Solicitation
and Revocation of Proxies
We
at AMS
Health Sciences, Inc. are furnishing this proxy statement in connection with
the
solicitation of proxies by our Board of Directors to be used at the Annual
Meeting of our shareholders to be held at 10:00 A.M., Central
Daylight-Savings Time, on June 18, 2007, at the Courtyard by Marriott Hotel
at 2
West Reno Avenue 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 May 18, 2007, to our shareholders
of
record on April 27, 2007.
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, and “FOR” the ratification of the appointment of Cole & Reed P.C. as
our independent auditor for 2007. 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.
Quorum;
Vote Required; Absentions; Broker Non-Votes
Under
the
Company’s bylaws, the vote of a majority of the shares voted at a meeting of
shareholders duly held at which a quorum is present is required to take or
authorize action upon any matter which may properly come before the meeting,
including the election of directors and the ratification of appointment of
the
Company’s independent auditor.
Cost
of Proxy Solicitation
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 April 27, 2007, our record date, of our shares of common stock
then outstanding. As of April 27, 2007, we had 8,515,824 shares of our common
stock 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. As of April 27, 2006, our current officers
and
directors own a total of 465,717 shares, or 5.5% 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.
PROPOSAL
1
ELECTION
OF DIRECTORS
Our
Bylaws provide that our Board of Directors shall consist of not less than
one or
more than fifteen directors, as determined from time to time by resolution
of
our Board of Directors. Our Board currently consists of seven members and
is
divided into three classes of directors, with two directors in Class I, three
directors in Class II and two directors in Class III. Directors serve for
three-year terms with one class of directors being elected by the Company’s
shareholders at each annual meeting to succeed the directors of the same
class
whose terms are then expiring. Each director holds office for the term to
which
he is elected or until his successor is duly elected and qualified. 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 meeting of shareholders held in the third year following the year
of
his election. Richard C. Wiser and Robin L. Jacob currently are serving as
Class
I Directors under a term expiring at the 2009 annual meeting of shareholders;
Jerry W. Grizzle, James R. Lee and M. Thomas Buxton, III currently are serving
as Class II Directors under a term expiring at the 2007 Annual Meeting; and
Stephen E. Jones and Lawrence R. Moreau currently are serving as Class III
Directors under a term expiring at the 2008 annual meeting of
shareholders. Mr.
Buxton has chosen not to stand for re-election as a Class II director. Mr.
Buxton’s decision is not the result of a disagreement with us related to our
operations, policies or practices.
Our
Board
of Directors has nominated Jerry W. Grizzle and James R. Lee for re-election
as
directors, and has nominated Ronald L. Smith for election as a director,
each
for a term ending at the 2010 annual meeting of shareholders 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. Grizzle, Lee and Smith. 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 the shares voted at a meeting
of shareholders duly held at which a quorum is present is required to take
or
authorize action upon any matter which may properly come before the meeting,
including the election of directors. An abstention from voting , broker
non-votes and votes withheld will not be tabulated as shares voted, but will
be
included in computing the number of shares present for purposes of determining
the presence of a quorum for the Annual Meeting.
OUR
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RE-ELECTION OF JERRY W. GRIZZLE
AND JAMES R. LEE, AND THE ELECTION OF RONALD L. SMITH TO THE BOARD OF DIRECTORS.
PROXIES SOLICITED BY OUR BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS
SPECIFY A CONTRARY CHOICE.
Information
about Directors and Director Nominees
Set
forth
below is certain information regarding the directors of the Company, including
the Class II Directors who have been nominated for election at the Annual
Meeting, based on information furnished to us by each director or nominee.
The
following information is current as of April 20, 2007:
Directors
and Director Nominees of AMS Health Sciences, Inc.
Name
(Age)
|
Position
with the Company
|
Year
First Elected Director
|
Nominees
for Class II Directors to Serve for Three-Year Terms Expiring in
2010
|
Jerry
W. Grizzle (53)
|
Chairman
of the Board, President and Chief Executive Officer and
Director
|
2006
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James
R. Lee (46)
|
Director
|
2007
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Ronald
L. Smith (60)
|
Director
Nominee
|
--
|
|
|
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Continuing
Class I Directors-Terms Expiring in 2009
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Robin
L. Jacob (41)
|
Chief
Financial Officer, Secretary, Treasurer and Director
|
2006
|
Richard
C. Wiser (58)
|
Director
|
2006
|
Nominees
for Class III Directors to Serve for Three-Year Terms Expiring
in
2008
|
Stephen
E. Jones (37)
|
Director
|
2006
|
Lawrence
R. Moreau (63)
|
Director
|
2006
|
Jerry
W. Grizzle has
served as our President, Chief Executive Officer and Chairman of the Board
of
Directors since February 2006. Previously, Dr. Grizzle was the President
and CEO
of Orbit Finer Foods, Inc., a privately-held Mexican food manufacturing company,
Skolniks, Inc., a publicly-held bagel manufacturer, and, from 1996 to 2003,
CD
Warehouse, Inc., a publicly-held franchisor and operator of retail music
stores
that filed for Chapter 11 bankruptcy relief in 2002. Prior to his tenure
with CD
Warehouse, Dr. Grizzle was Vice President and Treasurer of Sonic Corporation,
an
operator and franchisor of fast food restaurants. Dr. Grizzle also began
a
military career as a Private in 1971 and retired as a Major General in 2005.
Dr.
Grizzle commanded the 45th
Infantry
Brigade in the Oklahoma National Guard. The last three years of his military
career were spent on active duty as the Commander of Joint Task Force Civil
Support (JTF-CS). JTF-CS is trained to respond to a weapons of mass destruction
attach inside the United States. Dr. Grizzle is the recipient of numerous
military awards and decorations, and holds a Masters of Business Administration
degree and a PhD in Business Administration (Marketing).
James
R. Lee
has
served as one of our directors since March 2007. Dr. Lee is a veteran of
marketing and communications, with over 20 years of experience. From 1998
to
2000, Dr. Lee served as vice president of CD Warehouse, Inc., as well as
a
former stockbroker with Hopper Soliday & Co. Dr Lee has also served on the
staffs of both a former Governor of New Hampshire and a United States Senator
from New Hampshire. Currently, Dr. Lee serves as an assistant professor of
marketing at The University of Tampa. He earned his undergraduate degree
in
Economics from the University of New Hampshire; his Master of Sciences in
International
Business
from the New Hampshire College Graduate School of Business; and a Ph.D. in
Business Administration from Oklahoma State University.
Ronald
L. Smith
has
accumulated over 25 years experience in direct sales and multi-level
marketing. Mr. Smith spent over 20 years with Mary Kay. Inc. as the
company’s global sales increased to over $1.2 billion. Mr. Smith held various
positions while at Mary Kay inc. including Vice President International
Operations, Chief Financial Officer and Treasurer, Sr. Vice President Global
Business Development, and finally, Sr. Vice President of International
Administration. Mr. Smith successfully directed the opening of
subsidiary operations in numerous markets including Mexico, Taiwan, Russia,
Europe, Latin America and Asia. The final market for which he directed opening
was Korea, in 2001. Currently, Mr. Smith is a results-oriented Business
Consultant advising clients in international direct sales including foreign
operations, independent sales force compensation, market evaluations, inter
company pricing and foreign subsidiary management structures. Mr.
Smith served in the US Navy (Vietnam) and received his Bachelors degree in
Business and Public Administration at the University of Texas, Dallas. In
addition, Mr. Smith is a licensed Certified Pubic Accountant.
Robin
L. Jacob has
served as Vice President, Secretary, Treasurer, Chief Financial Officer and
a
director since February 2006. Ms. Jacob served as our Controller and Assistant
Secretary from 2001 to 2006. She has over 19 years of accounting and financial
reporting experience. Ms. Jacob holds a Bachelor of Science degree in
Accounting, a Masters of Business Administration degree in Finance, and is
a
Certified Public Accountant, licensed in the state of Oklahoma.
Richard
C. Wiser has
served as one of our directors since November 2006. Mr. Wiser has over 30
years
experience in direct sales and multi-level marketing. Mr. Wiser spent over
25
years with Mary Kay, Inc. as it grew to over a $1 billion in sales. His final
assignment was Vice President of Strategic Planning. Subsequent to that,
Mr.
Wiser was Vice President, Forecasting and Business Analysis for The Pampered
Chef, at the time a $700 million international direct-selling company. Mr.
Wiser
served on an executive team that orchestrated the sale of Pampered Chef to
Warren Buffet’s Berkshire Hathaway. Currently, Mr. Wiser serves as Vice
President of Business Analysis and Forecasting for Creative Memories, an
international direct-selling company with over 90,000 independent sales
representatives. Mr.
Wiser
earned a Bachelor of Business Administration degree and a Master of Business
Administration degree in finance from the University of Texas. Mr. Wiser
is also
a Certified Public Accountant certified in the state of Texas.
Stephen
E. Jones
has
served
as one of our directors since March 2006. Mr. Jones is the Vice President
of
Mergers & Acquisitions for Newport Capital Consultants, Inc., a position he
has held for the past two years. Prior to Newport Capital, Mr. Jones was
a
Territory Manager for Ecolab and Johnson-Diversey since 1993. Mr. Jones holds
a
BSB degree in Marketing.
Lawrence
R. Moreau
has
served as one of our directors since December 2006. Mr. Moreau is currently
retired after a career spanning over 25 years experience in public accounting
and investment banking. He has served on the Board of Directors of both public
and private companies. Mr. Moreau currently serves on the Board of Directors
and
is the Chairman of the Audit Committee of Sequenom, Inc., a biotech company
and
Chatsworth Products, Inc., a leading manufacturer of computer racks and
enclosures. Prior to retirement, Mr. Moreau founded Moreau and Company, Inc.,
a
financial advisory firm, and Moreau Capital Corporation, an NASD registered
investment-banking firm. Mr. Moreau began his career with Touche Ross & Co.
(now Deloite & Touche), where he spent eleven years with the firm’s auditing
division. Mr. Moreau also spent five years overseeing international audit
engagements in the Touche Ross office in Paris, France. Mr. Moreau also served
as a senior financial executive with Pacific Enterprises, a multi-billion
dollar
diversified holding company. In this position, Mr. Moreau was responsible
for
assisting in financial planning and oversight of the diversified manufacturing,
financing and land development subsidiaries. Mr. Moreau was also the licensed
Financial Principal of an NYSE investment-banking firm. In this capacity,
he
participated in numerous public and private offerings of securities for
companies in a variety of industries. Mr. Moreau earned a Bachelor of Arts
in
Accounting degree and a Master of Accounting Science degree from the University
of Illinois,
Campaign/Urbana.
Mr. Moreau is also a Certified Public Accountant, as well as a licensed
Financial Principal and an Operations Principle with the NASD. Mr. Moreau
currently serves as a member of the planning committee for the SEC’s Annual
Small Business Forum.
Mr.
Jones
was appointed in March 2006 to fill the vacancy created by the resignation
of C.
Brent Haggard in January 2006. Mr. Wiser was appointed in November 2006 to
fill
the vacancy created by the resignation of Steven M. Dickey in November 2006.
Mr.
Moreau was appointed in December 2006 to fill the vacancy created by the
resignation of Harland C. Stonecipher in December 2005. James R. Lee was
appointed in March 2007 to fill the vacancy created by the resignation of
David
D’Arcangelo in May 2005. None of such directors indicated that their resignation
was the result of a disagreement with us related to our operations, policies
or
practices.
Information
about Executive Officers
Information
with respect to our executive officers as of April 20, 2007 is set forth
below.
Each officer serves a term of office of one year or until the election and
qualification of his or her successor.
Name
|
Age
|
Position
with Us
|
Jerry
W. Grizzle
|
53
|
President
and Chief Executive Officer
|
Robin
L. Jacob
|
41
|
Vice
President, Chief Financial Officer, Secretary and
Treasurer
|
Dennis
P. Loney
|
53
|
Vice
President of Operations
|
See—“Information
about Directors and Director Nominees,” above, for information on Dr.
Grizzle.
See—“Information
about Directors and Director Nominees,” above, for information on Ms.
Jacob.
Dennis
P. Loney
is Vice
President of Operations. 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 23 years of business
and network marketing experience to the Company.
2006
Board Meetings and Committees
The
Board
of Directors has the responsibility for establishing our corporate policies
and
for the broad overall performance of the Company. 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 2006. During the periods that
they
served, none of our directors attended fewer than 75% of the aggregate of
the
number of Board of Directors meetings and the number of committee meetings
of
which he or she served. The Board has established an Audit Committee and
a
Compensation Committee. In accordance with our By-laws, the Board of Directors
annually elects the members of each Committee from its members.
Audit
Committee.
Members: M. Thomas Buxton III, Richard C. Wiser and Stephen E.
Jones.
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. The
duties
and obligations of the Audit Committee are contained in the Audit Committee
Charter, a copy of which is attached as Appendix A. See the “Audit Committee
Report” included elsewhere herein.
During
2006, the Board of Directors determined that Mr. Buxton was qualified as
a
financial expert, as such term is defined in Item 401(e) of Regulation S-B.
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.
Corporate
Governance and Nominating Committee.
We do
not have a separate 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:
|
·
|
Evaluation
of our corporate governance effectiveness and recommendation of
such
revisions as it deems appropriate to improve the corporate governance
of
the Company, the Board or any committee of the Board;
and
|
· Identification
of individuals qualified to become Board members and recommendation of (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:
|
·
|
An
understanding and general acceptance of our corporate
philosophies;
|
|
·
|
A
valid business or professional knowledge and experience that can
bear on
our challenges and deliberations and those of our Board of
Directors;
|
|
·
|
A
proven record of accomplishment with an excellent
organization;
|
|
·
|
A
willingness to speak one’s mind;
|
|
·
|
An
ability to challenge and stimulate
management;
|
|
·
|
A
willingness to commit time and energy to our business affairs;
and
|
|
·
|
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 AMS Health Sciences, Inc.,
711 NE
39th
Street,
Oklahoma City, OK 73105, Attn: Corporate Secretary.
If
the
Audit Committee receives recommendations for nominees to our Board of Directors
from a shareholder or group of shareholder that beneficially own more than
5% of
our voting stock, not less than 120 days prior to the date of our proxy
statement for the previous year's annual meeting, we will include the name
of
the recommended nominee, the security holder or holders that recommended
such
nominee and disclose whether the Committee chose to nominate the candidate
for
election to our Board of Directors in our proxy statement related to that
meeting. 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 AMS Health Sciences, Inc. Audit
Committee, c/o Stephen E. Jones, AMS Health Sciences, 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.
Compensation
Committee.
Members: M. Thomas Buxton III, Stephen E. Jones and Lawrence R.
Moreau.
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.
Communications
with the Board
You
can
contact any member of our Board of Directors by writing to him or her 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.”
Director
Attendance at Annual Meeting
We
do not
have a policy requiring our Board members to attend the Annual Meeting; however,
Mr. Grizzle and Ms. Jacob are required to attend the Annual Meeting due to
their
positions as our executive officers. Last year, two directors attended our
Annual Meeting.
Code
of Ethics
We
have
adopted the AMS
Health Sciences 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.
Compensation
of Directors
Directors
who are not our employees receive $500 for each Board or Committee meeting
attended. Our Audit Committee chairman receives $1,000 for each Audit Committee
meeting attended, due to his designation as a financial expert. 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, 2006, our Compensation Committee consisted of Messrs. Buxton,
Moreau and Jones. No member of the Compensation Committee was an officer
or
employee of the Company, an officer or employee of any of our subsidiaries
or
engaged in a related party transaction with us during 2006.
PROPOSAL
2
RATIFICATION
OF SELECTION OF INDEPENDENT AUDITORS
The
Board
of Directors has selected Cole & Reed P.C. as our independent auditor for
the year ending December 31, 2007, and has further directed that management
submit the selection of independent auditor for ratification by the shareholders
at our Annual Meeting. Cole & Reed, P.C. audited our 2006 financial
statements. Representatives of Cole & Reed P.C. 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 June 20, 2005, upon the recommendation of our Audit
Committee and with the approval of our Board of Directors, we dismissed our
principal accountant, Grant Thornton LLP, in order to institute certain cost
saving measures. On the same date, we engaged Cole & Reed P.C. as our
principal accountant. At no time did any report by Grant Thornton 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
Grant
Thornton 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 Grant Thornton LLP, would have caused
Grant
Thornton LLP to reference the subject matter of the disagreement in connection
with their report on our financial statements.
We
did
not consult with Cole & Reed P.C. during our two most recent fiscal years
and any subsequent interim period prior to engaging Cole & Reed P.C.
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, 2006
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 $69,820
for
2005 and $69,435 for 2006, of which $8,020 was billed by Grant Thornton LLP
and
$131,255 was billed by Cole & Reed P.C.
Audit-Related
Fees
Audit-related
fees billed to us during the last two fiscal years ended December 31, 2006
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 $20,943 for 2005 and $37,068 for 2006, of which $16,114 was
billed by Grant Thornton LLP and $41,897 was billed by Cole & Reed P.C.
These fees related to the change of auditors from Grant Thornton LLP to Cole
& Reed P.C. and 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, 2006 for
tax
compliance, tax advice or tax planning totaled $585 for 2005 and $13,350
for
2006, all of which was billed by Cole & Reed P.C. Services provided to us
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,
2006 for any other non-audit services. The Audit Committee has determined
that
the provision of non-audit services by Cole & Reed P.C. did not impact the
independence of Cole & Reed P.C.
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 2006. The Audit Committee currently approves in
advance all audit, non-audit and tax services to be performed for us by our
independent auditor.
Shareholder
ratification of the selection of Cole & Reed P.C. as our independent auditor
is not required by Cole & Reed P.C., our bylaws or otherwise. However, the
Board is submitting the selection of Cole & Reed P.C. to our shareholders
for ratification as a matter of corporate practice. If the shareholders 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 shareholders.
The
affirmative vote of the holders of a majority of the shares voted at a meeting
of shareholders duly held at which a quorum is present is required to take
or
authorize action upon any matter which may properly come before the meeting,
including the ratification of selection of independent auditor. An abstention
from voting , broker non-votes and votes withheld will not be tabulated as
shares voted, but will be included in computing the number of shares present
for
purposes of determining the presence of a quorum for the Annual
Meeting.
OUR
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF COLE & REED
P.C. AS INDEPENDENT AUDITOR. PROXIES SOLICITED BY OUR BOARD OF DIRECTORS
WILL BE
SO VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
table
below summarizes the total compensation paid or earned by each of the named
executive officers for the fiscal year ended December 31, 2006. All of the
compensation paid to our named executive officers results from the terms
of
their employment agreements. Based on the fair value of equity awards granted
to
named executive officers in 2006 and the base salary of the named executive
officers, “Salary” accounted for approximately 92% of the total compensation of
the named executive officers while incentive compensation accounted for
approximately 7% of the total compensation of the named executive officers,
excluding John Hail.
Summary
Compensation Table
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($) (4)
|
Option
awards
($) (5)
|
All
other
compensation
($)
(6)
|
Total
($)
|
|
|
|
|
|
|
|
Jerry
W. Grizzle
|
2006
|
$137,308(1)
|
-
|
$ 19,068
|
$9,993
|
$166,369
|
Chairman
of the Board, President and Principal Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robin
L. Jacob
|
2006
|
97,140(2)
|
-
|
10,491
|
12,338
|
119,969
|
Vice
President, Secretary, Treasurer and Principal Financial
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis
P. Looney
|
2006
|
106,000(3)
|
-
|
2,164
|
13,226
|
120,390
|
Vice
President of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
W. Hail(7)
|
2006
|
63,600
|
-
|
-
|
-
|
63,600
|
Retired
President and Principal Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Mr.
Grizzle’s employment agreement specifies a base salary of $150,000. Mr. Grizzle
began his employment with us on January 25, 2006.
(2) Ms.
Jacob’s employment agreement specifies a base salary of $100,000, which was
executed on February 12, 2006.
(3) Mr.
Loney’s employment agreement specifies a base salary of $105,000, which was
executed on September 19, 2006.
(4) Our
Compensation Committee has not yet met to determine 2006 bonuses for our
named
executive officers, and a meeting date to discuss 2006 bonuses has not been
scheduled. We will disclose the amount of cash bonuses, if any, on a timely
filed Form 8-K.
(5) The
amounts in column (f) reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended December 31, 2006,
in
accordance with FAS 123(R) of option awards pursuant to our incentive stock
option plan.
(6)
The
amount shown in column (i) reflects for each named executive officer the
value
attributable to the personal use of Company-provided automobiles (each as
calculated in accordance with Internal Revenue Service guidelines).
(7) Mr.
Hail
resigned as our chief executive officer and director on February 12, 2006.
The
amounts in the table above reflect amounts paid to Mr. Hail during his tenure
as
our chief executive officer ($33,600) and as a consultant under his consulting
agreement dated March 1, 2006 ($30,000).
Outstanding
Equity Awards at Fiscal Year-End
The
following table includes certain information with respect to the value of
all
unexercised options previously awarded to the named executive officers at
December 31, 2006.
Outstanding
Equity Awards at Fiscal Year-End
|
Name
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|
|
|
|
|
Jerry
W. Grizzle
|
-
|
250,000(1)
|
$0.60
|
01/25/2016
|
|
|
|
|
|
Robin
L. Jacob
|
-
|
150,000(1)
|
0.64
|
04/01/2016
|
|
2,500
|
-
|
2.84
|
10/07/2014
|
|
20,000
|
-
|
1.31
|
01/01/2013
|
|
9,811
|
-
|
2.65
|
05/07/2011
|
|
|
|
|
|
Dennis
P. Loney
|
-
|
150,000(1)
|
0.63
|
09/19/2016
|
|
-
|
50,000(1)
|
0.61
|
12/05/2016
|
|
25,000
|
-
|
2.70
|
10/20/2014
|
|
50,000
|
-
|
2.84
|
10/07/2014
|
|
100,000
|
-
|
1.31
|
01/01/2013
|
|
50,000
|
-
|
2.65
|
05/07/2011
|
|
10,000
|
-
|
5.69
|
04/17/2010
|
|
8,625
|
-
|
3.13
|
10/25/2009
|
|
2,000
|
-
|
2.00
|
03/25/2008
|
(1) |
These
option grants vest in equal increments annually over a five-year
period
from the date of grant.
|
Employment
Agreements
We
have
entered into a written employment agreement with our Chairman of the Board,
President and Chief Executive Officer, Jerry W. Grizzle. The contract is
for a
two-year term, commencing January 25, 2006, for an initial term of two years,
followed by two successive one-year terms unless either party elects not
to
renew the Agreement. Mr. Grizzle’s base salary is $150,000 per year for the
first year of the Initial Term, $200,000 for the second year of the Initial
Term
and $250,000 for each year after the Initial Term. Additionally, Mr. Grizzle
will be eligible to receive certain performance-based incentive bonuses.
The
Company granted Mr. Grizzle 250,000 stock options on February 15, 2006, with
an
exercise price of $0.62 per share. The options vest in five equal annual
installments beginning February 15, 2007 and expire February 15, 2016.In
the
event the Company terminates Mr. Grizzle without cause, he will receive certain
severance pay based upon his length of employment with the Company.
We
have
entered into a written employment agreement with our Vice President, Secretary,
Treasurer and Chief Financial Officer, Robin L. Jacob. The contract is for
a
two-year term, commencing February 12, 2006, followed by two successive one-year
terms unless either party elects not to renew the Agreement. Ms. Jacob’s base
salary is $100,000 per year for the first year of the Initial Term, $112,500
for
the second year of the Initial Term and $125,000 for each year after the
Initial
Term. Additionally, she is eligible to receive certain performance-based
incentive bonuses. The Company granted Ms. Jacob options to purchase 150,000
shares of the Company’s common stock at an exercise price of $.64 per share,
which was the closing price of the Company’s common stock on March 31, 2006, the
last trading day prior to the date the options were granted. The options
vest in
five equal annual installments beginning April 1, 2007 and expire April 1,
2016.
In the event the Company terminates Ms. Jacob without cause, she will receive
certain severance pay based upon her length of employment with the
Company.
We
have
entered into a written employment agreement with our Vice President of
Operations, Dennis P. Loney. The contract is for a two-year term, commencing
September 19, 2006, followed by two successive one-year terms unless either
party elects not to renew the Agreement. Mr. Loney’s base salary is $106,000 per
year for the first year of the Initial Term, $112,500 for the second year
of the
Initial Term and $125,000 for each year after the Initial Term.
Additionally,
he is eligible to receive certain performance-based incentive bonuses.
The
Company granted Mr. Loney options to purchase 150,000 shares of the Company’s
common stock at an exercise price of $.63 per share, which was the closing
price
of the Company’s common stock on the last trading day prior to the date the
options were granted. The options vest in five equal annual installments
beginning September 18, 2007 and expire September 18, 2016. In the event
the
Company terminates Mr. Loney without cause, he will receive certain severance
pay based upon her length of employment with the Company.
Potential
Payments upon Termination or Change of Control
Pursuant
to each of our named executive officer’s employment agreements, we are obligated
to make certain lump-sum payments in the event of termination of such
executive’s employment. The triggering events for payment of and the terms of
payment of the lump-sum payments are the same for each of our named executive
officers. We have no similar obligations upon change of control.
Differing
amounts of compensation are payable to our named executive officers
upon:
· |
voluntary
termination by the named executive
officer;
|
· |
termination
by us without cause; and
|
· |
termination
in the event of disability or death.
|
The
amounts shown assume that such termination was effective as of December 31,
2006, and presume that all amounts due and owing as of that date, including
accrued and unpaid vacation pay, have been paid. The amounts shown are estimates
of the amounts which would be paid out to
the
terminated named executive officer. The actual amounts to be paid out can
only
be determined at the time of separation from us.
A
named
executive officer will be “disabled” if, as a result of the executive’s
incapacity due to physical or mental illness, the executive shall have been
substantially unable to perform the required duties (with or without reasonable
accommodation, as defined under the Americans With Disabilities Act), for
a
period of three (3) consecutive months. We will have “cause” to terminate an
executive’s employment upon:
· |
an
act of felony dishonesty taken by the executive which results or
is
intended to result in improper personal enrichment to the executive
and/or
expense to us; or
|
· |
the
executive’s failure to follow a direct, reasonable and lawful written
order from our board and/or our chairman, within the reasonable scope
of
the executive’s duties.
|
Cause
shall not exist unless we have delivered to the executive a copy of a resolution
duly adopted by not less than three-fourths (3/4ths) of our board (excluding
the
executive, if a director) at a meeting of the board called and held for such
purpose finding that in the good faith opinion of the board, the executive
was
guilty of the alleged conduct. Upon receipt of the board resolution, the
executive has 15 days to cure and avoid termination.
In
the event of an executive’s disability, we are obligated to continue to pay the
executive’s base salary until the earlier to occur of (i) the termination of the
employment agreement and (ii) the date the executive’s employment is terminated
without cause. If the executive’s employment is terminated without cause for
disability, we will:
· |
pay
to the executive (i) his or her base salary and accrued vacation
pay
through the date of termination and (ii) provide disability benefits
pursuant to the terms of our disability programs, if
any;
|
· |
reimburse
the executive for reasonable business expenses incurred, but not
reimbursed, prior to such termination of employment;
and
|
· |
provide
any other rights, compensation and/or benefits as may be due to the
executive following such termination to which the executive is otherwise
entitled in accordance with the terms and provisions of any of our
plans
or programs.
|
In
the
event an executive is terminated without cause, we will:
· |
pay
to the executive (i) his or her base salary and accrued vacation
pay
through the date of termination and (ii) severance pay, in equal
monthly
installments or a lump sum at our discretion, according to the following
schedule:
|
Length
of Employment as Executive under the Agreement
|
Months
of Base Salary Paid as Severance Pay
|
1
-
6 months
|
1
month
|
7
-
12 months
|
5
months
|
13
- 24 months
|
6
months
|
25
- 36 months
|
12
months
|
· |
eimburse
the executive for reasonable business expenses incurred, but not
reimbursed, prior to such termination of employment;
and
|
· |
provide
any other rights, compensation and/or benefits as may be due to the
executive following such termination to which the executive is otherwise
entitled in accordance with the terms and provisions of any of our
plans
or programs.
|
In
the
event an executive is terminated for cause, death or voluntarily by the
executive, we will:
· |
pay
the executive (or the executive’s legal representative or estate) his or
her base salary and accrued vacation pay (to the extent required
by law or
our vacation policy) through the date of
termination;
|
· |
reimburse
the executive (or the executive’s legal representative or estate) for
reasonable business expenses incurred, but not reimbursed, prior
to such
termination of employment, unless such termination resulted from
a
misappropriation of funds; and
|
· |
provide
to the executive (or the executive’s legal representative or estate) any
other rights, compensation and/or benefits as may be due to executive
following such termination to which the executive is otherwise entitled
in
accordance with the terms and provisions of any of our plans or
programs.
|
DIRECTOR
COMPENSATION
We
use a
combination of cash and stock-based incentive compensation to attract and
retain
qualified candidates to serve on our Board. Our non-employee directors receive
$500 for each board or committee meeting attended. Our Audit Committee chairman
receives $1,000 for each Audit Committee meeting attended, due to his
designation as a financial expert. Directors who are also our employees receive
no additional compensation for serving as directors. We reimburse our directors
for travel and out-of-pocket expenses in connection with their attendance
at
meetings of the board of directors. Our Bylaws provide for mandatory
indemnification of
directors
and officers to the fullest extent permitted by Oklahoma law. We expect
to
annually grant some amount of stock options to each non-employee director.
The
objective of this policy is to increase each director’s beneficial ownership in
us and more closely align the director’s interest in our long-term growth and
profitability with that of our shareholders. The amount of any grants will
be
within the discretion of the board.
On
December 5, 2006, we granted 45,000 stock options to each of Messrs. Buxton
and
Dickey. See footnote 3 below for a discussion regarding these option grants.
Director
Summary Compensation Table
The
table
below summarizes the compensation paid by us to non-employee directors for
the
fiscal year ended December 31, 2006.
Name
|
Fees
Earned or Paid
in Cash ($)
|
Option
Awards
($) (3)
|
All
Other Compensation
($)
|
Total
($)
|
|
|
|
|
|
M.
Thomas Buxton III
|
$6,000
|
$12,315
|
-
|
$18,315
|
Stephen
E. Jones(1)
|
3,000
|
-
|
-
|
3,000
|
Richard
C. Wiser(1)
|
-
|
-
|
-
|
-
|
Lawrence
R. Moreau(1)
|
-
|
-
|
-
|
-
|
Steven
Dickey(2)
|
$3,500
|
12,315
|
-
|
15,815
|
C.
Brent Haggard(2)
|
-
|
-
|
-
|
-
|
|
|
|
|
|
(1) |
Mr.
Jones joined our board of directors on March 10, 2006. Mr. Wiser
joined
our board of directors on November 29, 2006, and Mr.
Moreau
joined our board of directors on December 1,
2006.
|
(2) |
Mr.
Dickey resigned from our board of directors on November 29, 2006.
Mr
Haggard resigned from our board of directors on January 4,
2006.
|
(3) |
The
option grants to Messrs. Buxton and Dickey on December 5, 2006 at
an
exercise price of $0.51 per share, which was the market
value
of our common stock on that date.
|
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. Mr.
Haggard was a member of the Audit Committee until his resignation from the
Board
of Directors effective January 4, 2006. Mr. Jones replaced Mr. Haggard on
the
Audit committee effective March 10, 2006. Mr. Dickey was a member of the
Audit
Committee until his resignation from the Board of Directors effective November
27, 2006. Mr. Wiser replaced Mr. Dickey on the Audit committee effective
November 29, 2006. The Audit Committee is governed by a written Charter,
included herein as Appendix A, adopted and approved by the Board in June
2000
and amended in October 2004.
In
fulfilling our duties for the 2006 fiscal year pursuant to our Charter, the
Committee has also done each of the following:
|
§
|
Reviewed
our audited financial statements for 2006 and discussed the financial
statements with our management;
|
|
§
|
Discussed
with Cole & Reed P.C. 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;
|
|
§
|
Received
the written disclosure from Cole & Reed P.C. required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), about any relationships between them and us which
they
believe may effect their independence;
|
|
§
|
Received
a confirmation letter from Cole & Reed P.C. that they are independent
of us; and
|
|
§
|
Discussed
Cole & Reed P.C.’s independence with
them.
|
Based
on
the review and discussions above, the Committee recommended to the Board
that
the audited financial statements for 2006 be included in our Form 10-KSB
filed
with the Securities and Exchange Commission.
All
of
the members of the Audit Committee in 2006 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 Cole & Reed P.C.’s
independence.
M.
Thomas Buxton, III
|
Richard
C. Wiser
|
Stephen
E. Jones
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table presents certain information as to the beneficial ownership
of
our common stock as of April 27, 2007, of:
|
§
|
Each
person who is known to us to be the beneficial owner of more than
5% of
our common stock;
|
|
§
|
Each
of our directors, nominees for directors and executive
officers;
|
|
§
|
Our
executive officers and directors as a group;
and
|
|
§
|
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
April 27, 2006, includes shares of our common stock that such person has
the
right to acquire within 60 days of April 27, 2006, 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
|
|
|
|
Jerry
W. Grizzle(1)(2)
|
57,000
|
*
|
Richard
C. Wiser(1)
|
0
|
*
|
M.
Thomas Buxton III(1)(3)
|
87,500
|
1.0%
|
Stephen
E. Jones (1)
|
1,000
|
*
|
Lawrence
R. Moreau(1)
|
0
|
*
|
Robin
L. Jacob(1)(4)
|
63,311
|
*
|
Dennis
P. Loney(1)(5)
|
255,606
|
3.0%
|
James
R. Lee(1)
|
1,300
|
*
|
John
W. Hail (6)
|
611,955
|
7.2%
|
Ascendiant
Capital Group, LLC(7 )
|
745,543
|
8.8%
|
Executive
Officers and Directors as a group (nine persons)
|
1,077,672
|
12.7%
|
(1)
|
A
director or an executive officer with a business address of 711
NE
39th
Street, Oklahoma City, Oklahoma
73105.
|
(2)
|
The
number of shares and the percentage presented includes 50,000 shares
of
our common stock that are subject
to
currently exercisable stock
options.
|
(3)
|
The
number of shares and the percentage presented includes 87,500 shares
of
our common stock that are subject
to
currently exercisable stock
options.
|
(4)
|
The
number of shares and the percentage presented includes 62,311 shares
of
our common stock that are subject
to
currently exercisable stock
options.
|
(5)
|
The
number of shares and the percentage presented includes 237,000
shares of
our common stock that are subject
to
currently exercisable stock
options.
|
(6)
|
Mr.
Hail’s current address is 3809 Coachman Road, Edmond, Oklahoma 73013.
The
number of shares and the
percentage
presented includes 325,000 shares of our common stock that are
subject to
currently exercisable stock options.
|
(7)
|
The
shareholder’s address is 18881 Von Karman Avenue,Suite 1600, Irvine,
California 92612. The number assumes the
exercise
of the warrant for the maximum amount of shares issuable by Ascendiant
Securities, LLC under its warrant.
Ascendiant
Securities, LLC is a wholly-owned subsidiary of Ascendiant Capital
Group
LLC. Bradley J. Wilhite and
Mark
Bergendahl have voting and dispositive power
with respect to Ascendiant Capital Group
LLC.
|
CERTAIN
RELATIONSHIPS AND RELATED 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.
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
2006,
we executed new employment agreements with our Chairman of the Board, President
and Chief Executive Officer, Jerry W. Grizzle, with our Vice President,
Secretary, Treasurer and Chief Financial Officer, Robin L. Jacob, and with
our
Vice President of Operations, Dennis P. Loney. The terms of these agreements
are
summarized elsewhere in this proxy statement.
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.
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 2006, all Section 16(a)
filing
requirements were met, although some were untimely. The following persons
failed
to report one or more transactions (as defined in parenthesis) in a timely
manner: Jerry Grizzle (5); Robin Jacob (1); Dennis Loney (1); Stephen Jones
(1);
Richard Wiser (1); and Lawrence Moreau (1).
SHAREHOLDERS
PROPOSALS FOR 2008 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 2008 annual shareholders meeting.
We
currently anticipate that our 2008 annual shareholders meeting will be held
on
or before June 1, 2008. 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 2008 annual shareholders meeting, any shareholder proposal
must be received by January 30, 2008. 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 AMS Health Sciences, 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 April 16, 2008 of
any
proposal that such shareholder intends to raise at the 2008 Annual Meeting.
If
we receive notice of such proposal on or after April 16, 2008, under Rule
14a-4, the persons named in the proxy solicited by our Board of Directors
for
the 2008 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 is appreciated.
BY
ORDER OF THE BOARD OF DIRECTORS
|
|
Robin
L. Jacob
|
Corporate
Secretary
|
May
18,
2007
A
copy of our annual report on Form 10-KSB for the fiscal year ended December
31,
2006, is enclosed herewith, and our annual report on Form 10-KSB, excluding
certain of the exhibits, may be obtained without charge by writing AMS Health
Sciences, Inc., 711 NE 39th
Street, Oklahoma City, Oklahoma 73105, Attention: Corporate
Secretary.
Appendix
A
AUDIT
COMMITTEE CHARTER
Adopted
by the Board of Directors on
October
25, 2004
Purpose
The
Audit
Committee’s purpose is to assist the Board of Directors of AMS Health Sciences,
Inc. (the “Company”) with oversight of:
a)
The
integrity of the Company’s financial statements and reporting system;
b)
The
Company’s compliance with legal and regulatory requirements;
c)
The
independent auditor’s qualifications and independence;
d)
The
performance of the Company’s internal audit function and independent auditors;
and
e)
The
business practices and ethical standards of the Company.
The
Company’s independent auditor will report directly to the Audit Committee and is
ultimately accountable to the Board of Directors, as representatives of the
Company’s shareholders.
Composition
The
Audit
Committee will be appointed by the Board of Directors and will be composed
of
not less than three directors, all of whom will be financially literate and
able
to read and understand fundamental financial statements. At least one member
will be an “audit committee financial expert,” as defined by the Securities and
Exchange Commission. The Chairman of the Audit Committee will be designated
by
the Board of Directors.
All
members of the Audit Committee will be independent (as defined by Section
10A(m)(3) of the Securities and Exchange Commission Act of 1934 and regulations
promulgated thereunder, as well as the independence requirements of the
exchange(s) on which the Company’s securities are traded) and free from any
relationships that, in the opinion of the Board, would interfere with the
exercise of objective judgment as an Audit Committee member.
Audit
Committee members may not simultaneously serve on the audit committee of
more
than three public companies, unless the Board of Directors determines that
such
simultaneous service would not impair the ability of such member to effectively
serve on the Company’s Audit Committee.
Operation
The
Audit
Committee will be given the resources necessary to satisfy its responsibilities,
including the authority to institute special investigations and engage
independent counsel and other advisors, as the Audit Committee deems necessary.
The Company will provide funding for the ordinary administrative expenses
of the
Audit Committee and for special activities and engagements, when the Audit
Committee deems them necessary or appropriate.
The
Board
of Directors believes the duties and responsibilities of the Audit Committee
should remain flexible in order to best react to changing conditions and
to
enable it to assure to the Board of Directors and shareholders that the
Company’s financial systems and reporting practices are in accordance with all
requirements and are of the highest quality. The Audit
Committee
is therefore authorized to take such further actions as are consistent with
the
following described functions and to perform such other actions as required
by
law, the rules of the exchange(s) on which the Company’s securities are traded,
the Company’s charter documents and/or its Board of Directors.
The
Audit
Committee will meet a minimum of four times per year and will periodically
meet
separately with:
a)
Management;
b)
Internal
auditors of the Company; and
c)
The
Company’s independent auditors.
Annually,
the Audit Committee will review and assess the adequacy of this Charter and
conduct a self-evaluation of the Audit Committee and its activities.
Duties
and Responsibilities
The
Audit
Committee will perform the following duties and responsibilities:
a)
Directly
select, appoint, compensate, evaluate and where appropriate, terminate and
replace the Company’s independent auditors;
b)
Annually
obtain and review a report by the independent auditors describing:
· |
The
firm’s internal quality control
procedures;
|
· |
Any
material issue raised by the most recent internal quality control
review,
or peer reviews of the firm; or
|
· |
Any
inquiry or investigation by governmental or professional authorities,
within the preceding five years, respecting one or more independent
audits
carried out by the firm, and any steps taken to deal with any such
issues;
|
c)
Review
the competence of partners and managers of the independent auditors who lead
the
audit as well as possible rotation of the independent auditors;
d)
Establish
hiring policies for the Company of employees or former employees of the
independent auditors;
e)
Take
appropriate action to ensure that auditors are independent prior to their
appointment and oversee the independence of the outside auditor throughout
the
engagement; receive from the independent auditors a formal written statement
delineating all relationships between the independent auditors and the Company,
consistent with the Independence Standards Board Standard 1; engage in a
dialogue with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity and independence
of
the auditor as well as any other matters which could affect the independence
of
the auditors;
f)
Evaluate
the independent auditor’s qualifications, performance and independence and prior
to reappointment, present the conclusions of this evaluation to the Board
of
Directors;
g)
Pre-approve
all permissible, non-de-minimis, non-audit services and all audit, review
or
attestation engagements with the independent auditors; review the scope of
audit
and non-audit services provided to the Company and its subsidiaries by
the
independent
auditors and the fees for such services; disclose to investors information
related to audit and non-audit services provided by, and fees paid to, the
auditor;
h)
Have
sole
authority to approve all independent auditor engagement fees and terms,
including the scope of the audit of the financial statements of the Company
and
its subsidiaries; review and approve the independent auditors’ engagement
letters; direct the attention of the independent auditors to specific matters
or
areas deemed by the Audit Committee to be of special significance to the
Company
and its subsidiaries; authorize such auditors to perform such supplemental
reviews or audits as the Audit Committee may deem necessary or appropriate;
i)
Receive
from the independent auditor, prior to the filing of its audit report, a
report
concerning all matters required to be communicated by the independent auditors
to the audit committee under auditing standards generally accepted in the
United
States of America or the Securities and Exchange Commission rules and
regulations;
j)
Regularly
review with the independent auditor any audit problems or difficulties and
management’s response, including: difficulties the auditor encountered in the
course of the audit work; any restrictions on the scope of the independent
auditor’s activities or on access to requested information; any significant
disagreements with management; and a discussion of the responsibilities,
budget
and staffing of the Company’s internal audit function;
k)
Review
the Company’s significant accounting principles and policies and any significant
changes thereto; review proposed and implemented changes in accounting standards
and principles which have or may have a material impact on the Company’s
financial statements; review any material correcting adjustments and off-balance
sheet financings and relationships, if any; review significant management
judgments and accounting estimates used in financial statement preparation;
and
review the accounting for significant corporate transactions;
l)
Review
the adequacy of the Company’s system of internal control over financial
reporting including the reliability of its financial reporting systems; confer
with the Company’s independent auditors with respect to their consideration of
such controls and systems; and review management’s response to any significant
deficiencies and material weaknesses in the Company’s internal control over
financial reporting which are reasonably likely to adversely affect the issuer’s
ability to record, process, summarize and report financial data;
m)
Receive
reports from the Chief Executive Officer and Chief Financial Officer related
to
their certifications for the Forms 10-K and 10-Q including all significant
deficiencies in the design or operations of internal control and financial
reporting and any fraud, whether or not material, that involves management
or
other employees who have a significant role in the Company’s internal control
and financial reporting;
n)
Resolve
any disagreements or difficulties between the independent auditors and
management;
o)
Discuss
the annual audited financial statements and quarterly financial statements
with
management and the independent auditor, including the Company’s disclosures
under “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and the notes thereto which are included in the Company’s Annual
Report to Shareholders and quarterly reports on Form 10-Q; review the
independent auditors’ letter delivered in connection with their audit of the
annual financial statements to the Company and its subsidiaries;
p)
Review
and recommend approval of earnings press releases, as well as financial
information and earnings guidance provided to analysts and rating agencies;
q)
Discuss
policies with respect to risk assessment and risk management related to the
Company’s major financial risk exposures and the steps management has taken to
monitor and control such exposures;
r)
Establish
formal procedures for (i) the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls
or
auditing matters, (ii) the confidential, anonymous submission by Company
employees of concerns regarding questionable accounting or auditing matters,
and
(iii) the protection of reporting employees from retaliation;
s)
Initiate,
when appropriate, investigations of matters within the scope of its
responsibilities;
t)
Review
and oversee related party transactions and other potential conflicts of interest
situations where appropriate; and
u)
Prepare
the Audit Committee Report for the Company’s annual proxy statement as required
by the rules of the Securities and Exchange Commission.
Reporting
The
Audit
Committee will report to, and review with, the Board of Directors any issues
that arise with respect to:
a)
The
quality or integrity of the Company’s financial statements and reporting system;
b)
The
Company’s compliance with legal or regulatory requirements;
c)
The
performance and independence of the Company’s independent auditors or the
performance of the internal audit function; and
d)
All
other
significant issues which are discussed.
The
Audit
Committee will make recommendations for action by the full Board when
appropriate.
PROXY PROXY
AMS
HEALTH SCIENCES, INC.
711
NORTHEAST 39TH
STREET
OKLAHOMA
CITY, OKLAHOMA 73105
THIS
PROXY IS SOLICITED ON BEHALF OF THE
BOARD
OF
DIRECTORS OF AMS HEALTH SCIENCES, INC.
THE
UNDERSIGNED HEREBY APPOINT JERRY W. GRIZZLE 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 AMS HEALTH SCIENCES, INC. (THE “COMPANY”) HELD OF
RECORD BY THE UNDERSIGNED ON APRIL 27, 2007, AT THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MONDAY JUNE 18, 2007, OR ANY ADJOURNMENT
THEREOF.
1. |
To
consider and act upon the election of Jerry W. Grizzle, as a director
for
a term ending in 2010, 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 James R. Lee, as a director
for a
term ending in 2010, 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 Ronald L. Smith, as a director
for a
term ending in 2010, 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
consider and act upon the ratification and the appointment of Cole
&
Reed P.C. as the Company’s independent auditor for the fiscal year ending
December 31, 2007. 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.
AMS
HEALTH SCIENCES, INC.
PROXY
FOR
ANNUAL MEETING OF SHAREHOLDERS
YOU
CAN
VOTE IN ONE OF TWO WAYS
---------------------------------------------------------------------------------------------------------------------------------
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,
June
13, 2007.
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:
_________________, 2007
-----------------------------------------------
Signature
-----------------------------------------------
Signature
if held
jointly
PLEASE
MARK, SIGN, DATE AND
RETURN
THIS PROXY PROMPTLY
USING
THE ENCLOSED
ENVELOPE.