SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                              (Amendment No.     )

Filed by the Registrant                       [X]
Filed by a Party other than the Registrant   [  ]

Check the appropriate box:

[  ]Preliminary Proxy Statement
[ ] Confidential,  for  Use of the Commission Only (as permitted  by  Rule  14a-
     6(e)(2))
[X]  Definitive Proxy Statement
[  ]Definitive Additional Materials
[  ]Soliciting Material Pursuant to '240.14a-11(c) or '240.14a-12


                                    TMS, 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:

     2)   Aggregate number of securities to which transaction applies:

     3)   Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11 (Set forth amount on which the
          filing fee is calculated and state how it was determined):

     4)   Proposed maximum aggregate value of transaction:

     5)   Total fee paid:

[  ] Fee paid previously with preliminary materials.

[  ] Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.

     1)   Amount Previously Paid:

     2)   Form, Schedule or Registration Statement No.:

     3)   Filing Party:

     4)   Date Filed:

     <PAGE>





            NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                  To Be Held January 21, 2000


      Notice  is  hereby given that the Annual Meeting of Shareholders  of  TMS,
Inc.,  an Oklahoma corporation (the "Company"), will be held in Room 119 of  the
Stillwater  Public  Library, 1107 South Duck, Stillwater, Oklahoma,  on  Friday,
January  21,  2000,  at  10:00 a.m., Central Standard Time,  for  the  following
purposes:

     (1)  To elect five persons to serve as directors of the Company;

     (2)  To approve the adoption of the TMS, Inc. Employee Stock Purchase Plan;


     (3)  To  approve and ratify the selection of KPMG LLP as  independent
          auditors; and

     (4)  To  consider  and  act  upon any other  matters  which  may properly
          come before the Meeting or adjournments thereof.

      Shareholders of record at the close of business on December 1, 1999  shall
be entitled to notice of and to vote at the Meeting or any adjournment thereof.


                         BY ORDER OF THE BOARD OF DIRECTORS,




                         Marshall C. Wicker, Secretary

Stillwater, Oklahoma
December 8, 1999

<PAGE>   1


                           TMS, INC.
                     206 West Sixth Street
                   Stillwater, Oklahoma 74074

                    PROXY STATEMENT FOR THE
                 ANNUAL MEETING OF SHAREHOLDERS
                  TO BE HELD JANUARY 21, 2000

     This Proxy Statement is furnished to shareholders of TMS, Inc., an Oklahoma
corporation (the "Company"), in connection with the solicitation of proxies  for
the Annual Meeting of Shareholders (the "Meeting") to be held in Room 119 of the
Stillwater  Public  Library, 1107 South Duck, Stillwater,  Oklahoma  on  Friday,
January  21,  2000, at 10:00 a.m., Central Standard Time, or at any  adjournment
thereof.  The persons named as proxies in the enclosed form were selected by the
Board of Directors of the Company.

      This Proxy Statement and the accompanying proxy are first being mailed  to
shareholders  on  or  about December 8, 1999, along with the  Annual  Report  to
Shareholders,  including financial statements for the fiscal year  ended  August
31, 1999.

                            GENERAL

Outstanding Shares and Voting Rights; Voting Procedures

      At  December  1, 1999, the Company had 13,597,659 shares of common  stock,
$.05  par  value ("Common Stock"), outstanding.  The presence, in person  or  by
proxy, of the holders of at least a majority of the outstanding shares of Common
Stock  is  necessary  to  constitute a quorum of  such  class  at  the  Meeting.
Shareholders have no cumulative voting rights.

      Any person signing and mailing the enclosed proxy may vote in person if in
attendance at the Meeting.  Proxies may be revoked at any time before  they  are
voted by notifying the Secretary of such revocation, in writing, at the Meeting,
or  by  submitting a later dated proxy.  Shareholders are encouraged to vote  on
the  matters  to  come before the Meeting by marking their  preferences  on  the
enclosed  proxy and by dating, signing, and returning the proxy in the  enclosed
envelope.  If a preference is not indicated on a proxy, the proxy will be  voted
"FOR"  the nominees to serve as directors of the Company, "FOR" approval of  the
TMS,  Inc. Employee Stock Purchase Plan and "FOR" the ratification and selection
of independent auditors.

      It is not anticipated that matters other than those described above and in
the Notice of Annual Meeting, to which this Proxy Statement is appended, will be
brought  before the Meeting for action, but if any other matters  properly  come
before  the Meeting, it is intended that votes thereon will be cast pursuant  to
said proxies in accordance with the best judgment of the proxy holders.

      With respect to the tabulation of votes on any matter, all abstentions and
non-votes  for  nominees are treated as present or represented and  entitled  to
vote at the Meeting.

Record Date

     The close of business on December 1, 1999 has been fixed as the record date
for  the determination of shareholders entitled to receive notice of and to vote
at  the Meeting.  Each outstanding share of Common Stock is entitled to one vote
on all matters herein.

Expenses of Solicitation

      The expenses of this solicitation of proxies will be borne by the Company,
including expenses in connection with the preparation and mailing of this  Proxy
Statement and all documents which now accompany or may hereafter supplement  it.
Solicitations will be made only by the use of the mails, except that, if  deemed
desirable, officers and regular employees of the Company may solicit proxies  by
telephone.  It is contemplated that brokerage houses, custodians,  nominees  and
fiduciaries  will be requested to forward the proxy soliciting material  to  the
beneficial  owners of the Common Stock held of record by such persons  and  that
the  Company  will  reimburse  them for their reasonable  expenses  incurred  in
connection therewith.

<PAGE>   2


                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

      The  following  table  sets  forth information  regarding  the  beneficial
ownership  of shares of the Company's Common Stock as of December  1,  1999,  by
each  shareholder known to the Company to be a beneficial owner of more than  5%
of Company's Common Stock.  Unless otherwise indicated, the beneficial owner has
sole voting and investment power with respect to such shares of Common Stock.

                                Amount and Nature      Percent
      Name and Address       of Beneficial Ownership   of Class(1)
 ......................      .........................  ............

Dana R. Allen                       1,854,962             13.7%
433 Airport Boulevard, #414
Burlingame, California 94010

Theodore A. Walker                  920,000(2)             6.8%
P.O. Box 1580
Alvin, Texas 77512

James R. Rau, M.D.                  754,500(3)             5.5%
1203 South Hill Street
Alvin, Texas 77511
 .................................

(1)  Shares  of  Common  Stock subject to options exercisable  on  or  before
     February 1, 2000 ("Currently Exercisable Options") are deemed outstanding
     for purposes  of  computing  the percentage for such person  but  are  not
     deemed outstanding in computing the percent of any other person.

(2)  Includes 56,000 shares which are held by Mr. Walker in joint tenancy with
     his wife, Jerline, with whom he shares voting and investment power.

(3)  Includes  345,010 shares held by Dr. Rau's wife, Martha,  with  whom  he
     shares  voting  and  investment power as to such shares,  and  137,500
     shares subject to Currently Exercisable Options.

      As  of  the  close of business on October 31, 1999, Cede &  Co.  owned  of
record,  but not beneficially, 6,781,933 shares (50%) of Common Stock.   Cede  &
Co.,  the  nominee for the Depository Trust Company, holds securities of  record
for participating financial institutions such as banks and broker/dealers.

Market for the Company's Common Stock

  The  Company's  Common  Stock  is traded in the over-the-counter  market,  and
  prices  are  quoted by the National Quotation Bureau, Incorporated ("NQB")  on
  the  "pink  sheets" and the NASD Non-Nasdaq OTC Bulletin Board.  The following
  table  sets  forth  the  quarterly range of high and low  bid  prices  of  the
  Company's  Common  Stock for fiscal years 1999 and 1998.  The  quotations  are
  inter-dealer  prices without retail mark-ups, mark-downs, or  commissions  and
  may  not represent actual transactions.  The source of such quotations is  the
  NQB.

                                   Bid Prices
                                .................
           Fiscal 1999      High       Low
           ...........     .....       ....
           First Quarter  $ .375   $   .260
           Second Quarter   .380       .260
           Third Quarter    .350       .290
           Fourth Quarter   .340       .260

           Fiscal 1998     High        Low
           ...........     .....       ....
           First Quarter $  .562   $   .406
           Second Quarter   .500       .312
           Third Quarter    .687       .312
           Fourth Quarter   .593       .343

  <PAGE>   3


  The   Company  has  not  declared  or  paid  any  cash  dividends  since   its
  incorporation,  nor  does  it anticipate that it will  pay  dividends  in  the
  foreseeable future.  Any earnings realized by the Company are expected  to  be
  reinvested in the Company's business; however, the declaration and payment  of
  dividends in the future will be determined by the Board of Directors in  light
  of  conditions then existing, including, among others, the Company's earnings,
  its  financial  condition and capital requirements (including working  capital
  needs), and any arrangements restricting the payment of dividends.

  As  of  December  1,  1999, there were approximately  1,730  recordholders  of
  Common Stock, which is the only outstanding class of the capital stock of  the
  Company.


                     ELECTION OF DIRECTORS

General

     Pursuant to the Bylaws of the Company, the shareholders are to elect at the
Meeting,  directors to hold office until the next Annual Meeting of Shareholders
and  until  their successors shall be elected and shall qualify.  The  Board  of
Directors has fixed the number of directors at five for the ensuing year.

      The  Board  of  Directors has no reason to believe that any  nominee  will
become unavailable. However, in the event that any of the nominees should become
unavailable, proxies solicited by the Board of Directors will be voted  for  the
election  of substitute nominees or additional nominees designated by the  Board
of Directors.

      PROXIES  SOLICITED  BY  THE BOARD OF DIRECTORS,  IF  PROPERLY  SIGNED  AND
RETURNED, WILL BE VOTED "FOR" THE ELECTION OF THE FIVE NOMINEES LISTED BELOW  AS
DIRECTORS OF THE COMPANY.

Information Concerning Nominees

      Certain information as of December 1, 1999, concerning the nominees to the
Board  of  Directors of the Company, is set forth below based  upon  information
supplied by such persons.  Unless otherwise indicated, the beneficial owner  has
sole voting and investment power with respect to such shares of Common Stock.

                                        Common Stock Beneficially Owned
                                        ................................
                           Director    Term       Number    Percentage
                    Age     Since    Expires    of Shares   of Class(1)
                    .....  .......   ......    ...........  ...........
Dana R. Allen        46      1996     2000      1,854,962      13.7%
James R. Rau, M.D.   70      1990     2000        754,500(2)    5.5%
Doyle E.Cherry       57      1988     2000        330,903(3)    2.4%
Russell W. Teubner   43      1999     2000        400,000       3.0%
Marshall C. Wicker   73      1999     2000        361,828(4)    2.7%

All executive
officers and                                    3,720,193(5)   26.6%
directors as a
group (6 persons)


 .....................................

<PAGE>   4


(1)  Shares  of  Common  Stock subject to Currently Exercisable  Options  are
     deemed  outstanding  for  purposes of computing  the  percentage  for such
     person but are not deemed outstanding in computing the percent of any other
     person.

(2)  See footnote (3) to the table under heading "Security Ownership of Certain
     Beneficial Owners."

(3)  Includes 20,000 shares held by Mr. Cherry in joint tenancy with his wife,
     Theresa, with whom he shares voting and investment power; and 225,000
     shares subject to Currently Exercisable Options.

(4)  Includes 163,399 shares held by Mr. Wicker in joint tenancy with his wife,
     Bettye, with whom he shares voting and investment power; and  50,000 shares
     subject to Currently Exercisable Options.

(5)  Includes 530,409 shares as to which directors and executive officers share
     voting and investment power with others and 427,500 shares subject to
     Currently Exercisable Options.

Information Concerning Nominees

   The Company's nominees for the five directorships are listed below with brief
statements  setting  forth their principal occupations  and  other  biographical
information.

   Dana R. Allen has served as Chairman of the Board of Directors of the Company
since  August  1998,  and as a Director of the Company since  1996.   Mr.  Allen
served  as  Chief Executive Officer and President from January 1999 to September
1999, and as Executive Vice President of the Company and General Manager of  the
Company's  Image  Enhancement  and Forms line of business  from  March  1996  to
December   1998.  Mr.  Allen  was  President  of  Sequoia  Computer  Corporation
("Sequoia")  from  1987  until joining the Company  in  March  1996.   Prior  to
founding  Sequoia  in 1987, Mr. Allen was Data Development Manager  and  Product
Manager  for Triad Systems, Inc., a data services company.  Prior to that  time,
Mr.   Allen   served   as   President  of  H&A  Auto  Parts,   an   auto   parts
retailer/wholesaler.

   Doyle  E. Cherry served as Chairman of the Board of Directors of the  Company
from  October  1997  through August 1998, and has served as a  Director  of  the
Company  since  1988. Mr. Cherry is a chartered financial consultant  and  since
1961  has  worked in the insurance and securities industries and the  actuarial,
tax  and financial consulting fields.  From 1982 to 1993, Mr. Cherry also served
as  President  and Chief Executive Officer of First Market Corporation  and  the
First Market Group of Companies.  From 1993 through 1997, he served as President
of  Thiotech  USA,  Inc.,  a chemical manufacturer and  distributor  located  in
Houston,  Texas.  Mr. Cherry is currently serving as President of  C&H  Pipe,  a
pipe manufacturing company located in Houston, Texas.

   Dr. James R. Rau has served as a Director of the Company since 1990.  Dr. Rau
practiced medicine from 1956 to 1985 in a private practice and from 1985 to 1988
as  a  part-time physician with the Monsanto Company in Houston,  Texas.   Since
leaving Monsanto, Dr. Rau has managed his financial and real estate investments.

<PAGE>   5


   Marshall C. Wicker has served as a Director of the Company since 1994.  Since
1983,  he  has  owned  and operated Marwick Enterprises,  which  is  engaged  in
ranching and investments.  Mr. Wicker is a Professional Engineer and a member of
the  American  Association of Petroleum Geologists and  Society  of  Exploration
Geophysicists.

   Russell W. Teubner has served as a Director of the Company since 1999.  Since
March  1998,  he  has  been President of Esker, S.A., a publicly  held  software
company.   From  1983  to  1998 Mr. Teubner served as  President  of  Teubner  &
Associates,  a software firm which he founded.  Mr. Teubner also serves  on  the
Board of Directors of CustomerSoft.


Executive Officers

   The  following  sets forth the name and a description of the  background  and
principal  occupation  of each executive officer of the Company  who  is  not  a
director of the Company.

   Deborah D. Mosier, 32, has served as President of TMS since September,  1999.
She  joined  the Company in 1995 as Controller of Financial Operations  and  was
appointed Chief Financial Officer in 1996.  Prior thereto, Ms. Mosier worked for
six  years in the audit practice of KPMG LLP.  Ms. Mosier  received her
Bachelor  of Science Degree with a major in accounting from Oklahoma  State
University and is a Certified Public Accountant.

Board of Directors' Meetings

   During  the  1999  fiscal year, the Company's Board  of  Directors  held  six
meetings.  All members of the Board of Directors attended more than seventy-five
percent (75%) of the Board of Directors' meetings.

Committees of the Board

   The Board of Directors has a standing Compensation Committee.  Such committee
is  currently  comprised of Dr. Rau and Messrs. Cherry and Wicker, and  conducts
all  necessary  business during the regular meetings of  the  Board  or  through
action  by  written consent.  The Compensation Committee, which administers  the
Company's stock option plans, met 4 times during the 1999 fiscal year.   All  of
the  members  of  the  Compensation Committee attended  more  than  seventy-five
percent  (75%) of the Committee's meetings. The Company does not have a standing
nominating committee.

Certain Relationships and Related Transactions

  No officer or director had transactions with or indebtedness to the Company in
excess of $60,000 during the fiscal year ended August 31, 1999.

Changes in Control

   We  do not know of any arrangements (including any pledge by a person of  our
securities) which would result in a change of control.

<PAGE>   6


Compliance with Section 16(a) of the Securities Exchange Act

  Section 16(a) of the Securities Exchange Act of 1934 and the rules promulgated
thereunder require that certain officers, directors and beneficial owners of the
Company's  Common  Stock file various reports with the Securities  and  Exchange
Commission  (the "SEC").  Based solely upon a review of such reports filed  with
the  SEC,  the Company believes that no late reports were filed, for the  fiscal
year ended August 31, 1999.







                             EXECUTIVE COMPENSATION

Summary Compensation Table

   The following table sets forth the cash and noncash compensation for each  of
the  last three fiscal years awarded to or earned by the Chief Executive Officer
of the Company.


                            Annual Compensation
                                                         All Other
Name and Principal Position Year  Salary        Bonus    Compensation
 ........................... ....  ............  .......  .................
Dana R. Allen (1)           1999  $70,372       __       $2,903
Arthur D. Crotzer (2)       1999  $32,500       __       $1,725
                            1998  $97,621       $27,010  $2,840
Maxwell Steinhardt(3)       1998  $25,750       __       $773
                            1997  $121,200      __       $1,832


(1)  Mr. Allen  became Chief Executive Officer effective January 1,  1999, and
     resigned  effective  September 24, 1999. "All Other Compensation" includes
     employer matching contributions to the Company's defined contribution plan.

(2)  Mr. Crotzer became Chief Executive Officer effective October 23, 1997, and
     resigned effective January 1, 1999. "All Other Compensation" includes
     employer matching contributions to the Company's defined contribution plan.

(3)  Mr. Steinhardt became Chief Executive Officer in March 1996  and  resigned
     effective October 23, 1997.  "All Other Compensation" includes employer
     matching contributions to the Company's defined contribution plan.

Option Grants Table

No  director  or executive officer was granted any stock options or appreciation
rights during fiscal year 1999.

Compensation of Directors

     Each  non-employee  Director receives $1,000 per month for  services  as  a
Director.   The  non-employee Directors consist of Dr. Rau and  Messrs.,  Allen,
Cherry, Teubner and Wicker.

<PAGE>   7


               APPROVAL OF TMS, INC. EMPLOYEE STOCK PURCHASE PLAN

Introduction

      The  Board  of Directors has adopted and recommends that the  shareholders
approve  the  Employee Stock Purchase Plan. The purpose of  the  Employee  Stock
Purchase Plan is to assist the Company in attracting and retaining employees  by
offering  them  a  greater stake in the Company's success and a closer  identity
with  it,  and  to encourage ownership of the Company's stock by employees.  The
Employee  Stock  Purchase Plan will accomplish these goals by allowing  eligible
employees of the Company and its subsidiaries an ongoing opportunity to purchase
the  Company's Common Stock through payroll deduction at a discounted price. The
maximum  number of shares of the Company's Common Stock available  for  purchase
under the Employee Stock Purchase Plan is 1,000,000, subject to adjustments  for
stock splits, stock dividends and the like.

      The  following summary description of the Employee Stock Purchase Plan  is
qualified in its entirety by the full text of the Employee Stock Purchase  Plan,
which is included as Appendix A to this Proxy Statement.

The Employee Stock Purchase Plan

      Eligibility. Employees of the Company and its subsidiaries whose customary
employment  is at least 20 hours per week or at least five months per  year  are
eligible  to  participate in the Employee Stock Purchase Plan  after  they  have
completed  one month of service prior to the Effective Date if they continue  to
be  employed  by the Company. There are approximately 40 employees eligible  for
participation in the Employee Stock Purchase Plan. Participation in the Employee
Stock Purchase Plan automatically terminates upon an employee's ceasing to be an
employee of the Company or one of its subsidiaries.

      Participant  Contributions.  An  eligible  employee  participates  in  the
Employee Stock Purchase Plan by electing to make after-tax payroll contributions
in  an amount equal to not less than 1% and not more than 10% of his or her base
compensation.  A  participant's  payroll contributions  to  the  Employee  Stock
Purchase  Plan are allocated to a bookkeeping account ("Account")  and  used  to
purchase Common Stock on a quarterly basis.

      Because  the  number of shares of Common Stock purchased  by  an  eligible
employee  is dependent upon the amount such employee contributes to the Employee
Stock Purchase Plan, it is not possible at this time to determine the number  of
shares  of Common Stock that will be acquired under the Employee Stock  Purchase
Plan by any one employee or group of employees.

      Purchase  of  Common  Stock.  The Employee  Stock  Purchase  Plan  permits
participants  to  purchase Common Stock at a 15% discount  from  the  applicable
closing  price  of  the Common Stock (as described below).  The  Employee  Stock
Purchase  Plan operates on a quarterly basis ("Offering Periods"). Contributions
allocated to a participant's Account during an Offering Period are used  to  buy
shares  of  Common Stock on the last day of such Offering Period.  The  purchase
price of a share of Common Stock under the Employee Stock Purchase Plan will  be
the lesser of:

          Eighty-five percent (85%) of the official average of the bid  and  ask
     price  of  the Common Stock on the Offering Termination Date on the  Nasdaq
     OTC  Market (or on such other national securities exchange upon  which  the
     Stock may then be listed, hereinafter referred to as the "Exchange") or  if
     no sale of Stock occurred on such date, the official average of the bid and
     ask price on the preceding Business Day; or

<PAGE>   8


          Eighty-five percent (85%) of the official average of the bid  and  ask
     price of the Common Stock on the Offering Commencement Date on the Exchange
     (or  if  no sale of Stock occurred on such date, the closing price  on  the
     preceding business day).

     Each  participant  is  deemed to legally own all  shares  of  Common  Stock
allocated  to his or her Account and is entitled to exercise all of  the  rights
associated  with  ownership  of  the shares,  including  voting,  tendering  and
receiving dividends on, such Common Stock.

     The  Company  may  acquire Common Stock for use under  the  Employee  Stock
Purchase Plan from authorized but unissued shares, treasury shares, in the  open
market  or  in  privately  negotiated transactions. The  Company  will  pay  all
expenses  incident  to  the  operation of  the  Employee  Stock  Purchase  Plan,
including the costs of recordkeeping, accounting and legal fees and the cost  of
delivery of stock certificates to participants.

     Administration.  An individual or committee, designated  by  the  Board  of
Directors  (the  "Administrator"), has exclusive  authority  to  administer  the
Employee Stock Purchase Plan. The Administrator will interpret the provisions of
the  Employee Stock Purchase Plan and make all determinations necessary for  the
administration of the Employee Stock Purchase Plan.

     Amendment  and Termination. The Board of Directors has authority  to  amend
the  Employee  Stock  Purchase Plan at any time. However, the  approval  of  the
Company's shareholders is required to: (i) increase the maximum number of shares
available  for purchase under the Employee Stock Purchase Plan; (ii) modify  the
Employee  Stock  Purchase Plan's eligibility requirements; or  (iii)  cause  the
Employee  Stock  Purchase Plan to fail the requirements of Section  423  of  the
Code.

     The  Board of Directors also has authority to terminate the Employee  Stock
Purchase Plan at any time. In any event, if not earlier terminated by the  Board
of Directors, the Employee Stock Purchase Plan will automatically terminate when
the  participants  have  purchased all of the shares of Common  Stock  available
under the Employee Stock Purchase Plan.

     Federal  Tax  Treatment. The Employee Stock Purchase Plan is  an  "employee
stock purchase plan" under Section 423 of the Code. Therefore, a participant who
purchases shares of Common Stock under the Employee Stock Purchase Plan will not
be subject to Federal income tax on the difference between the fair market value
of  the  shares  and  the price actually paid for such shares  at  the  time  of
purchase. The Company is not entitled to a deduction for the difference  between
the fair market value of the shares and the price paid for such shares.

     If  a  participant  disposes of Common Stock purchased under  the  Employee
Stock  Purchase  Plan  after  owning the shares for  at  least  two  years,  the
participant will be treated as having ordinary compensation income equal to  the
lesser  of  (i) the excess of the fair market value of the Common Stock  on  the
date it was purchased over the actual purchase price; or (ii) the excess of  the
fair market value of the Common Stock at the time of disposition over the actual
purchase  price.  The amount of the compensation income is  then  added  to  the
participant's  basis  in  the Common Stock. The difference  between  the  amount
realized  on  the sale of the Common Stock and the participant's adjusted  basis
will be treated as a capital gain or loss.

<PAGE>   9


       If  a  participant disposes of Common Stock purchased under the  Employee
Stock  Purchase  Plan before owning it for at least two years,  the  participant
will  be  treated as having ordinary compensation income equal to the excess  of
the  fair market value of the Common Stock on the date it was purchased over the
actual  purchase  price.  Any additional appreciation in  the  Common  Stock  is
treated  as  a  capital gain. In addition, if a participant disposes  of  Common
Stock before owning it for at least two years, the Company is entitled to a  tax
deduction  equal  to  the  amount  of income  treated  as  compensation  by  the
participant.

     THE  BOARD  OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION  OF
THE TMS, INC. EMPLOYEE STOCK PURCHASE PLAN.


                        APPROVAL OF SELECTION OF AUDITORS

  Subject  to approval by the shareholders, the Board of Directors has  selected
  the  firm  of  KPMG  LLP, certified public accountants  (the  "Auditors"),  as
  auditors  of  the  Company  for  the  fiscal  year  ending  August  31,  2000.
  Representatives of the Auditors are expected to be present at the  Meeting  to
  respond to questions of shareholders.

      The Company has been advised by the Auditors that neither the firm nor any
of  its associates has any relationship with the Company or any affiliate of the
Company other than the usual relationship that exists between independent public
accountants  and  their clients.  To the knowledge of the  Board  of  Directors,
neither  the  Auditors  nor any of its associates has  any  direct  or  material
indirect  financial  interest  in  the  Company  and  its  subsidiaries  in  the
capacities  of  promoter,  underwriter, voting trustee,  director,  officer,  or
employee.

      During  the  past  fiscal year, the Auditors have  audited  the  financial
statements  of the Company and provided other services with respect  to  certain
filings of the Company with the Securities and Exchange Commission.

      The  affirmative vote of the holders of a majority of the shares of Common
Stock  present  at  the Meeting in person or by proxy and entitled  to  vote  is
required to approve this proposal.

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE SELECTION OF KPMG LLP AS
AUDITORS  OF  THE  COMPANY FOR THE CURRENT FISCAL YEAR  AND  THE  PROXY,  UNLESS
OTHERWISE INDICATED THEREON, WILL BE VOTED "FOR" THE RATIFICATION OF KPMG LLP AS
AUDITORS OF THE COMPANY FOR THE CURRENT FISCAL YEAR.



                             SHAREHOLDERS' PROPOSALS

      Proposals  by  shareholders intended to be presented at  the  2001  Annual
Meeting  of Shareholders must be received by the Company prior to September  30,
2000, in order for the proposals to be included in the proxy statement and proxy
card  relating to such meeting.  It is suggested that proposals be submitted  to
the Company by certified mail, return receipt requested.

<PAGE>   10


                         OTHER MATTERS

      Management knows of no other business which is likely to be brought before
the  Meeting.   If  other matters not now known to management  come  before  the
Meeting,  however, it is the intention of the persons named in the  accompanying
proxy to vote in accordance with their best judgment.



                         BY ORDER OF THE BOARD OF DIRECTORS,




                         MARSHALL C. WICKER, Secretary


December 8, 1999




      A  copy  of  the  Company's Form 10-KSB Annual Report as  filed  with  the
Securities  and  Exchange  Commission  will  be  furnished  without  charge   to
shareholders  on request to the Chief Financial Officer of the Company,  at  its
address stated herein.

<PAGE>   11




                                   APPENDIX A



                                   TMS, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

     The  TMS,  Inc.  Employee Stock Purchase Plan (the "Plan") is  intended  to
provide  the  eligible employees of TMS, Inc. (the"Company") and its  qualifying
subsidiaries  a  convenient means of purchasing shares of the  Company's  common
stock,  par value $.05 per share (the "Stock"). The Plan is intended to  qualify
as  an  "employee stock purchase plan" under Section 423 of the Internal Revenue
Code  of  1986, as amended (the "Code"), and shall be administered,  interpreted
and  construed in a manner consistent with the requirements of that  section  of
the Code.

                                    ARTICLE I
                                   DEFINITIONS
                                  ............

     1.1. "Account" means the book keeping account established on behalf of each
participant by the Administrator to record payroll deduction contributions  made
by such Participant and shares of Stock purchased on his behalf.

     1.2.  "Administrator" means the individual or committee appointed  pursuant
to Article VIII to administer the Plan.

     1.3. "Board" means the Board of Directors of the Company.

     1.4.  "Business  Day" means each day on which the Exchange (as  defined  in
Section 4.2) is open for business.

     1.5.  "Compensation" means all regular salary, wages or earnings, including
but excluding overtime, commissions, bonuses, amounts realized from the exercise
of  a  qualified  or  non-qualified stock option  and  other  special  incentive
payments, fees or allowances.

     1.6.  "Effective Date" means August 1, 1999, subject to the  provisions  of
Section 9.8 of the Plan.

     1.7.  "Employee" means any person who is employed by the Company except  an
employee whose customary employment is:

          (a)  less than 20 hours per week; or

          (b)  less than 5 months a year.

For  the  purpose  of  determining whether an individual  is  an  Employee,  the
definition of Company shall also include the Company's subsidiaries, if any,  as
defined under Code section 424(f).

     1.8.  "Entry Date" means October 15, January 15, April 15, July 15 of  each
Plan Year.

     1.9.  "Offering Commencement Date" means the first  Business
Day of each Offering Period.

<PAGE>   12


     1.10. "Offering Period" means each three month period.

     1.11. "Offering Termination Date" means the last Business Day
of each Offering Period.

     1.12. "One Month of Service" means a one-month period  during
which an individual was an Employee.

     1.13. "Participant"  means  an  Employee  who  has  met   the
eligibility  requirements of Article II and who  has  elected  to
participate pursuant to an election under Section 3.1.

     1.14. "Plan  Year" means the 12-month period ending  December
31.

     1.15. "Shares" means shares of Stock that have been allocated
to a Participant's Account.



                           ARTICLE II
                           ELIGIBILITY
                          .............

     2.1.  Eligibility.  Except as provided in  Section  3.6,  an
Employee  who  has completed One Month of Service  prior  to  the
Effective  Date and who continues to be employed by  the  Company
shall  be eligible to participate in the Plan as of the Effective
Date.   All  other  Employees,  except  as  provided  in  Section
3.6, shall be eligible to participate in the Plan as of the Entry
Date  coinciding  with or next following the  completion  of  One
Month of Service.

     2.2. Eligibility Restrictions.  A Participant who elects  to
terminate  participation in the Plan in accordance  with  Section
3.5  shall be prohibited from participating in the Plan until the
Entry Date next following the date of such termination.

                           ARTICLE III
                          PARTICIPATION
                         ..............

     3.1.  Commencement  of Participation.  An eligible  Employee
may  become  a  Participant in the Plan  on  any  Entry  Date  by
completing   an  enrollment  and  payroll  deduction   form   and
delivering  it  to  the  Company in  accordance  with  procedures
established by the Administrator.

     3.2. Payroll Deduction.  At the time a Participant files his
enrollment  and payroll deduction form, he shall  elect  to  have
after-tax  deductions  made  from his  Compensation  by  a  whole
percentage  that  is not less than 1% nor more than  10%  of  his
Compensation.

     3.3.  Participants' Accounts.  All payroll  deductions  made
from  a  Participant's  Compensation shall  be  credited  to  his
Account  and used to purchase shares of Stock in accordance  with
Article  V.  Contributions credited to  a  Participant's  Account
shall not accrue interest or earnings during the period prior  to
being used to purchase shares of Stock in accordance with Article
V.

<PAGE>   13


     3.4.   Changes   in  Payroll  Deductions.   The   percentage
designated  by  a  Participant as his rate of contribution  under
Section  3.2 shall automatically apply to increases and decreases
in  his  Compensation.  Except as  provided  in  Section  3.5,  a
Participant  may  elect to change the rate of  his  contributions
to  any  other permissible rate effective as of the first day  of
the  first  payroll  period of any Offering Period  provided  the
Participant  files  written notice with the Administrator  of  an
election  to  change  his contribution rate  at  least  ten  (10)
Business Days before the effective date of the election.

     3.5.  Suspension  and Resumption of Payroll  Deductions.   A
Participant may terminate contributions under the Plan as of  the
first  day of any payroll period by filing written notice thereof
with the Administrator at least ten (10) Business Days before the
effective  date  of  the  termination.   A  Participant  who  has
terminated his participation in the Plan in accordance  with  the
preceding   provisions,   shall  be  prohibited   from   resuming
contributions  under the Plan until the following Entry  Date.  A
Participant   whose   contributions  have  been   terminated   in
accordance   with   the   preceding   provisions,   may    resume
contributions under the Plan in accordance with Section 2.2.

     3.6.  Restrictions  on Participation.   Notwithstanding  any
provisions  of  the  Plan to the contrary, no Employee  shall  be
granted  an option to participate in the Plan under the following
conditions:

          (a)   No  Employee  shall  be  granted  an  option  if,
     immediately after the grant, such Employee would own  stock,
     and/or   hold   outstanding  options  to   purchase   stock,
     possessing 5% or more of the total combined voting power  or
     value  of  all classes of stock of the Company (for purposes
     of  this paragraph, the rules of Section 424(d) of the  Code
     shall apply in determining stock ownership of any Employee);
     or

          (b)   No  Employee  shall be granted  an  option  which
     permits his rights to purchase Stock under the Plan and  all
     other employee stock purchase plans (as described in Section
     423  of  the Code) of the Company to accrue at a rate  which
     exceeds   $25,000  of  fair  market  value  of  such   Stock
     (determined  at  the time such option is granted)  for  each
     calendar  year  in which such option is outstanding  at  any
     time. For purposes of this Section 3.6(b):

               (i)   the right to purchase Stock under an  option
          accrues when the option (or any portion thereof)  first
          becomes exercisable during the calendar year;

               (ii)  the right to purchase Stock under an  option
          accrues at the rate provided in the option, but  in  no
          case  may such rate exceed $25,000 of fair market value
          of  such  Stock (determined at the time such option  is
          granted) for any one calendar year; and

               (iii) a  right to purchase Stock which has  accrued
          under one option granted pursuant to a plan may not  be
          carried over to any other option.

                           ARTICLE IV
                            OFFERINGS
                           ...........

     4.1.  Quarterly  Offerings.  The Plan shall  be  implemented
through  quarterly  offerings  of  the  Company's  Stock.    Each
Offering Period shall begin on the Offering Commencement Date and
shall end on the Offering Termination Date; provided, however, if
the first Offering Period commences prior to stockholder approval
of  the  Plan,  the  Offering Termination Date for  such  initial
Offering  Period shall not occur until the end of the quarter  in
which stockholder approval of the Plan is secured.

<PAGE>  14


     4.2.  Purchase  Price.  The "Purchase Price"  per  share  of
Stock  with  respect to each Offering Period shall be the  lesser
of:

          (a)   Eighty-five percent (85%) of the official average
     of  the  bid  and  ask price of the  Stock on  the  Offering
     Termination Date on the Nasdaq OTC Market (or on such  other
     national  securities exchange upon which the Stock may  then
     be  listed, hereinafter referred to as the "Exchange") or if
     no sale of Stock occurred on such date, the official average
     of the bid and ask price on the preceding Business Day; or

          (b)   Eighty-five percent (85%) of the official average
     of  the  bid  and  ask price of the Stock  on  the  Offering
     Commencement  Date on the Exchange (or if no sale  of  Stock
     occurred  on  such date, the closing price on the  preceding
     business day).

     4.3.  Maximum  Offering.  The maximum number  of  shares  of
Stock which shall be issued under the Plan, subject to adjustment
upon  changes  in capitalization of the Company  as  provided  in
Section 9.3, shall be 1,000,000 shares.  At the beginning of each
Offering  Period,  the Board shall specify a  maximum  number  of
shares  which  may  be purchased by any Employee  as  well  as  a
maximum aggregate number of shares which may be purchased by  all
eligible Employees pursuant to such quarterly offering.   If  the
total  number  of  shares  which would be  purchased  during  any
Offering  Period exceeds the maximum number of available  shares,
the  Administrator  shall  make a  pro  rata  allocation  of  the
available  shares in a manner that it determines to be  equitable
and  the  balance of payroll deductions credited to the  Accounts
of Participants shall be returned to such Participants as soon as
administratively practicable.




                            ARTICLE V
                        PURCHASE OF STOCK
                        .............

     5.1. Automatic Exercise.  On each Offering Termination Date,
each  Participant shall automatically and without any act on  his
part be deemed to have purchased Stock to the full extent of  the
payroll  deductions credited to his Account during  the  Offering
Period ending on such Offering Termination Date.

     5.2. Fractional Shares.  Fractional shares of Stock may  not
be purchased under the Plan.

     5.3.  Acquisition of Stock.  The Company may  acquire  Stock
for  use  under  the  Plan from authorized but  unissued  shares,
treasury  shares,  in the open market or in privately  negotiated
transactions.

     5.4.  Accounting for Purchased Stock.  All shares  of  Stock
purchased pursuant to Section 5.1 shall be allocated as Shares to
the   appropriate  Participant's  Account  as  of  the   Offering
Termination Date on which such shares are purchased.

<PAGE>   15


                           ARTICLE VI
                           ACCOUNTING
                           ...........

     6.1.  General.  The Administrator shall establish procedures
to  account  for  payroll deductions made by a  Participant,  the
number of Shares of Stock purchased on a Participant's behalf and
the number of Shares allocated to a Participant's Account.

     6.2. Registration of Stock.  Shares of Stock allocated to  a
Participant's  Account shall be registered in  the  name  of  the
Company  or  its  nominee for the benefit of the  Participant  on
whose behalf such shares were purchased.

     6.3.   Accounting  for  Distributions.   Shares   of   Stock
distributed or sold from a Participant's Account shall be debited
from his Account on a first-in, first-out basis.

     6.4. Account Statements.  Each Participant shall receive  at
least semi-annual statements of all payroll deductions and shares
of  Stock  allocated  to  his Account  together  with  all  other
transactions affecting his Account.


                           ARTICLE VII
                  WITHDRAWALS AND DISTRIBUTIONS
                 ...............................

     7.1.  Withdrawal  of  Shares.  A Participant  may  elect  to
withdraw  any  number  of  Shares allocated  to  his  Account  by
providing   notification  to  the  Company  in  accordance   with
procedures   established   by   the   Administrator.   As    soon
as  administratively  practicable  following  notification  of  a
Participant's  election  to  withdraw Shares,  the  Administrator
shall cause a certificate representing the number of Shares to be
withdrawn to be delivered to the Participant.

     7.2.   Distribution   Upon   Termination.    As   soon    as
administratively practicable after a Participant's termination of
employment with the Company or a participating subsidiary for any
reason,  a  certificate  representing all of  such  Participant's
Shares  shall  be  distributed to him (or his  executor,  in  the
event of his death).

     7.3.  Distribution of Payroll Deductions.  In  the  event  a
Participant  terminates his employment  with  the  Company  or  a
participating  subsidiary or his participation  in  the  Plan  is
terminated  pursuant  to  Section  3.5,  any  payroll  deductions
allocated  to  his Account and not yet applied to purchase  Stock
in  accordance with Section 5.1 shall be distributed to him in  a
cash lump sum as soon as administratively practicable thereafter.


                          ARTICLE VIII
                         ADMINISTRATION
                         ...............

     8.1.  Appointment of Administrator.  The Board shall appoint
an  individual or committee comprised of so many members  as  the
Board shall determine to administer the Plan.  The Board may from
time to time, if the Plan is administered by a committee, appoint
members  to  the committee in substitution for or in addition  to
members  previously  appointed and may  fill  vacancies,  however
caused, in the committee.

<PAGE>   16


     8.2.  Authority  of Administrator.  The Administrator  shall
have  the  exclusive power and authority to administer the  Plan,
including,  without limitation, the right and power to  interpret
the  provisions  of  the Plan and make all determinations  deemed
necessary  or advisable for the administration of the  Plan.  All
such  actions, interpretations and determinations which are  done
or  made  by  the  Administrator in good faith  shall  be  final,
conclusive and binding on the Company, the Participants  and  all
other  parties  and  shall not subject the Administrator  to  any
liability.

     8.3. Administrator Procedures.  The Administrator shall hold
its  meetings at such times and places as it shall deem advisable
and   may  hold  telephone  meetings.   In  the  event  that  the
Administrator  is  a committee, a majority of its  members  shall
constitute  a  quorum and all determinations  shall  be  made  by
a majority of its members.  Any decision or determination reduced
to  writing  and signed by the Administrator shall  be  as  fully
effective as if it had been made by a majority vote at a  meeting
duly  called and held.  The Administrator may appoint a secretary
and  shall make such rules and regulations for the conduct of its
business as it shall deem advisable.

     8.4.  Expenses.  The Company will pay all expenses  incident
to  the  operation  of the Plan, including the  costs  of  record
keeping, accounting fees, legal fees and the costs of delivery of
stock certificates to Participants.

                           ARTICLE IX
                          MISCELLANEOUS
                          .............

     9.1.  Transferability.  Neither payroll deductions  credited
to  a  Participant's Account nor any rights with  regard  to  the
purchase  of  Stock under the Plan may be assigned,  transferred,
pledged  or  otherwise disposed of in any way by the  Participant
other than by will or the laws of descent and distribution.

     9.2.  Status as Owner.  Each Participant shall be deemed  to
legally  own  all  shares of Stock allocated to his  Account  and
shall  be  entitled  to  exercise  all  rights  associated   with
ownership of the shares, including, without limitation, the right
to  vote  such shares in all matters for which Stock is  entitled
to  vote,  receive dividends, if any, and tender such  shares  in
response to a tender offer.

     9.3.  Adjustment  Upon  Changes in Capitalization.   In  the
event   of  a  reorganization,  recapitalization,  stock   split,
spin-off,  split-off,  split-up, stock dividend,  combination  of
shares,  merger,  consolidation  or  any  other  change  in   the
corporate  structure of the Company, or a sale by the Company  of
all  or  part  of  its  assets, the Board  may  make  appropriate
adjustments in the number and kind of shares which are subject to
purchase  under the Plan and in the exercise price applicable  to
outstanding options.

     9.4.  Amendment  and  Termination.   The  Board  shall  have
complete  power  and authority to terminate  or  amend  the  Plan
(including without limitation the power and authority to make any
amendment  that  may  be deemed to affect the  interests  of  any
Participant  adversely); provided, however, that the Board  shall
not, without the approval of the shareholders of the Company  (i)
increase the maximum number of shares which may be offered  under
the  Plan  (except  pursuant to Section  9.3);  (ii)  modify  the
requirements as to eligibility for participation in the Plan;  or
(iii)  in  any  other way cause the Plan to fail the requirements
of Section 423 of the Code.

     The  Plan  and  all  rights  of  Employees  hereunder  shall
terminate:  (i) at any time, at the discretion of the  Board,  in
which  case any cash balance in Participants' Accounts  shall  be
refunded   to  such  Participants  as  soon  as  administratively
possible;   or   (ii)  on  the  Offering  Termination   Date   on
which Participants become entitled to purchase a number of shares
of  Stock  that  exceeds the maximum number of  shares  available
under the Plan.

<PAGE>   17


     9.5.  No Employment Rights.  The Plan does not, directly  or
indirectly,  create  in any Employee any right  with  respect  to
continuation  of employment by the Company and it  shall  not  be
deemed  to  interfere  in  any way with the  Company's  right  to
terminate, or otherwise modify, an Employee's terms of employment
at any time.

     9.6.   Withholding.    To  the  extent   any   payments   or
distributions  under this Plan are subject to Federal,  state  or
local taxes, the Company is authorized to withhold all applicable
taxes. The Company may satisfy its withholding obligation by  (i)
withholding shares of Stock allocated to a Participant's Account,
(ii)  deducting  cash  from  a Participant's  Account,  or  (iii)
deducting  cash  from  a  Participant's  other  compensation.   A
Participant's election to participate in the Plan authorizes  the
Company  to  take any of the actions described in  the  preceding
sentence.

     9.7.  Use  of  Funds.  All payroll deductions  held  by  the
Company  under  this  Plan may be used by  the  Company  for  any
corporate purpose and the Company shall not be obligated to  hold
such  payroll  deductions  in trust or otherwise  segregate  such
amounts.

     9.8. Shareholder Approval.  Notwithstanding the provision of
Section  1.6  of the Plan, the Plan shall not take  effect  until
approved by the shareholders of the Company.

     9.9.  Choice  of  Law.  Except to the extent  superseded  by
Federal  law, the laws of the State of Oklahoma will  govern  all
matters relating to the Plan.


     To record the adoption of the Plan, TMS, Inc. has caused its
authorized  officers to affix its Corporate name  and  seal  this
29th day of June, 1999.





                              TMS, INC.



(SEAL)                   By: /s/   Dana R. Allen
                              ___________________
                              Dana R. Allen, President and
                              Chief Executive Officer

ATTEST:



/s/ Marshall C. Wicker
   ___________________
     Secretary

<PAGE>   18
















(INSTRUCTION):  To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.



______________________________________________________________

                         TMS, Inc.
                      206 West Sixth Street
                   Stillwater, Oklahoma 74074

      This Proxy is solicite  on behalf of the Board of Directors
of  TMS,  Inc. (the "Company").  The undersigned hereby  appoints
Doyle E. Cherry, Russell W. Teubner, Dana R. Allen, James R. Rau,
M.D., and Marshall C. Wicker, as proxies, each with the power  to
appoint  his substitute, and hereby appoints and authorizes  them
to  represent  and vote as designated below, all  the  shares  of
common stock of the Company held of record by the undersigned  on
December  1,  1999, at the Annual Meeting of Shareholders  to  be
held on January 21, 2000, or any adjournment thereof.

1.ELECTION OF DIRECTORS [ ]FOR all nominees              [ ]WITHHOLD AUTHORITY
                           listed below                  to vote for all
                           (except as marked             nominees
                           to the contrary below)        listed below


     Dana R. Allen     Doyle E. Cherry  James R. Rau, M.D.
        Russell W.  Teubner      Marshall C. Wicker


[  ]  FOR  [  ]  AGAINST           [  ]  ABSTAIN

2.PROPOSAL  to  approve and ratify the TMS, Inc.  Employee  Stock
  Purchase Plan.

  [  ]  FOR             [  ]  AGAINST            [  ]  ABSTAIN

3.PROPOSAL to approve and ratify the selection of KPMG LLP as the
  Company's  independent  auditors for  the  fiscal  year  ending
  August 31, 2000.

     [  ]  FOR           [  ]  AGAINST            [  ]  ABSTAIN

4.  In  their discretion, the Proxies are authorized to vote upon
  such other business as may properly come before the meeting  or
  any adjournment thereof.

                (Continued and to be signed on the reverse side.)

<PAGE>   19


  This  proxy, when properly executed, dated and delivered,  will
  be  voted  in  the  manner directed herein by  the  undersigned
  shareholder.   If  no  direction is made, this  proxy  will  be
  voted FOR Proposals 1, 2 3 and 4.

                    Please  sign  exactly as name appears  below.
                    When  shares are held by joint tenants,  both
                    should sign.  When signing as attorney or  as
                    executor, administrator, trustee or guardian,
                    please   give   full  title  as   such.    If
                    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:________________________________,19_____

                    X____________________________________________
                                    (Signature)
                    X____________________________________________
                    (Signature, if held jointly)

                    PLEASE SIGN, DATE AND RETURN THE PROXY CARD
                    PROMPTLY USING THE ENCLOSED ENVELOPE.

<PAGE>   20