<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended SEPTEMBER 30, 1996 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number: 0-14315
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ATC COMMUNICATIONS GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 75-2050538
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(State of Incorporation) (I.R.S. Employer Identification No.)
5950 BERKSHIRE LANE, SUITE 1650 DALLAS, TEXAS 75225
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 361-9870
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Title of Each Class Number of Shares Outstanding
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at November 8, 1996
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COMMON STOCK $.01 PAR VALUE 16,085,911
<PAGE> 2
ATC COMMUNICATIONS GROUP, INC.
SEPTEMBER 30, 1996
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1996 and June 30, 1996 . . . . . . . . . . . . 3
Consolidated Statements of Operations
Three Months Ended September 30, 1996
and September 30, 1995 . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flow
Three Months Ended September 30, 1996
and September 30, 1995 . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . 7-8
PART II OTHER INFORMATION
Item 5. Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
Page 2 of 10
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
ATC COMMUNICATIONS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, 1996 June 30, 1996
ASSETS: (Unaudited) (Audited)
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<S> <C> <C>
Current Assets:
Cash $ 2,185,446 $ 1,723,702
Notes receivable 825,637 825,428
Accounts receivable, less allowance for doubtful
accounts of $100,016 and $175,016 18,859,519 21,699,793
Prepaid expenses 604,312 292,632
Deferred tax asset 506,539 506,539
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Total Current Assets 22,981,453 25,048,094
Equipment and Other Assets:
Equipment net of accumulated depreciation of
$7,682,824 and $6,912,196 11,485,281 10,807,739
Cost in excess of net assets acquired, net of
accumulated amortization of $989,621 and $970,669 1,250,788 1,269,740
Other assets 624,617 654,609
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Total Equipment and Other Assets 13,360,686 12,732,088
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$ 36,342,139 $ 37,780,182
================ ================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 2,042,349 $ 2,576,068
Revolving line of credit 254,080 2,382,165
Unearned revenues and customer deposits 509,280 1,072,662
Accrued compensation 3,338,816 1,958,413
Accrued telephone expense 554,616 1,129,703
Other accrued liabilities 3,309,841 5,389,319
Current portion of long-term debt 1,171,981 1,156,547
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Total Current Liabilities 11,180,963 15,664,877
Long-term Debt 2,161,040 2,455,022
Deferred Tax Liability 218,507 218,507
Shareholders' Equity:
Preferred Stock, $.01 par value, 1,000,000 shares authorized;
29,778 convertible, $.36 cumulative Series B shares and 840,000
convertible, $.11 cumulative Series C shares issued and
outstanding 8,698 8,698
Common Stock, $.01 par value, 27,500,000 shares authorized;
16,060,911 and 15,032,161 issued and outstanding at September 30,
1996 and June 30, 1996, respectively 160,609 150,322
Additional paid-in capital 11,301,261 10,092,956
Retained earnings 11,311,061 9,189,800
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Total Shareholders' Equity 22,781,629 19,441,776
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$ 36,342,139 $ 37,780,182
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</TABLE>
See accompanying note.
Page 3 of 10
<PAGE> 4
ATC COMMUNICATIONS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Revenues $ 26,545,074 $ 18,037,810
Cost of services 17,465,050 12,301,728
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Gross profit 9,080,024 5,736,082
Selling, general and administrative expense 4,957,232 3,636,647
Depreciation and amortization expense 809,196 690,446
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Income from operations 3,313,596 1,408,989
Interest expense 118,573 192,243
Interest income 19,013 25,417
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Income before provision for income taxes 3,214,036 1,242,163
Income tax expense 1,092,775 422,335
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Net income $ 2,121,261 $ 819,828
=============== ===============
Earnings per common share and common share
equivalents (primary and fully diluted):
Net income $ 0.09 $ 0.04
=============== ===============
Weighted average common and common
equivalent shares outstanding 22,458,072 20,647,722
=============== ===============
</TABLE>
See accompanying note.
Page 4 of 10
<PAGE> 5
ATC COMMUNICATIONS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 2,121,261 $ 819,828
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 809,196 690,446
Changes in certain other assets and liabilities:
Accounts receivable 2,840,274 (4,379,757)
Notes receivable (209) 476,868
Prepaid expenses (311,680) 106,554
Other assets 10,376 8,204
Accounts payable (533,719) 371,477
Unearned revenue and customer deposits (563,382) (150,497)
Accrued liabilities (802,412) 920,774
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Net cash provided by (used in) operating activities 3,569,705 (1,136,103)
Cash Flow From Investing Activities:
Capital expenditures (1,448,170) (743,474)
Proceeds from sale of equipment -- 175,000
Proceeds from exercise of stock options 746,842 --
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Net cash used in investing activities (701,328) (568,474)
Cash Flow From Financing Activities:
Net proceeds from (payments on) line of credit (2,128,085) 1,462,572
Payments on capital leases (195,214) (134,466)
Payments on long-term debt (83,334) (167,174)
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Net cash provided by (used in) financing activities (2,406,633) 1,160,932
Net change in cash 461,744 (543,645)
Cash at beginning of the period 1,723,702 2,481,170
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Cash at end of the period $ 2,185,446 $ 1,937,525
============ ============
Supplemental information on non-cash transactions is as follows:
Tax benefit of stock options exercised $ 471,750 --
</TABLE>
See accompanying note.
Page 5 of 10
<PAGE> 6
ATC COMMUNICATIONS GROUP, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
Earnings per share:
Primary and fully diluted earnings per common share are computed by dividing
net income applicable to common stock by the weighted average number of shares
of common stock and dilutive common stock equivalents outstanding during the
period. Common stock equivalents consist of common stock issuable under the
assumed exercise of stock options and warrants, computed based on the treasury
stock method, and the assumed conversion of the Company's issued and
outstanding preferred stock. Net income applicable to common stock for the
three month periods ended September 30, 1996 and 1995 were adjusted to reflect
the income attributable to stock options issued to key employee and officers by
Advanced Telemarketing Corporation ("Advanced"), the operating subsidiary of
the Company.
Primary and fully diluted weighted average shares outstanding at September 30,
1996 and 1995 was computed as follows:
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Primary
Weighted average shares outstanding 15,169,544 13,563,361
Common stock equivalents:
Net effect of dilutive stock options and warrants 2,888,638 2,824,805
Net effect of assumed conversion of dilutive preferred stock 4,259,556 4,259,556
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Primary and fully diluted shares 22,317,738 20,647,722
========== ==========
Fully Diluted
Weighted average shares outstanding 15,169,544 13,563,361
Common stock equivalents:
Net effect of dilutive stock options and warrants 3,028,971 2,824,805
Net effect of assumed conversion of dilutive preferred stock 4,259,556 4,259,556
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Primary and fully diluted shares 22,458,072 20,647,722
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</TABLE>
Net income applicable to common stock for the three month periods ended
September 30, 1996 and 1995 were computed as follows:
<TABLE>
<CAPTION>
Three months ended Three months ended
September 30, 1996 September 30, 1995
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<S> <C> <C>
Net income $ 2,121,261 $ 819,828
Less: income applicable to Advanced stock options
(204,497) (91,679)
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Net Income applicable to common stock $ 1,916,764 $ 728,149
============== ==============
</TABLE>
Page 6 of 10
<PAGE> 7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The accompanying consolidated financial statements, in the opinion of
the Company's management, contain all material, normal and recurring
adjustments necessary to present accurately the consolidated financial
condition of the Company and the consolidated results of its operations for the
quarter ended September 30, 1996. The consolidated results of operations for
the period reported are not necessarily indicative of the results to be
experienced for the entire current fiscal year.
Results of Operations
For the three month period ended September 30, 1996, the Company
earned income from operations of $3,313,596 on $26,545,074 in revenue, compared
to the prior year quarter when the Company earned income from operations of
$1,408,989 on revenues of $18,037,810. As a percentage of revenues, income
from operations was 12.5% in the first quarter of fiscal 1996 versus 7.8% in
the prior year's first quarter.
Revenues generated in the quarter ended September 30, 1996 increased
$8,507,264 (47.2%) over revenues earned in the corresponding quarter of the
previous fiscal year. One of the Company's customers represented approximately
49.5% of the Company's revenues produced by the Company during the current year
quarter. The Company is continuing its efforts to reduce the concentration in
business with this customer by pursuing its strategy to secure recurring
revenues from long-term relationships with targeted, large corporate customers
which use telecommunications as an integral, ongoing element in their marketing
and/or customer service programs. The Company also continues to perform
project- based services for certain of its customers and there can be no
assurance that these clients will continue existing projects or provide new
ones. However, based on the Company's historical ability to increase revenues
generated by existing clients and to attract new clients, management believes
it should be able to continue to build revenues despite the lack of long-term
contracts with these project-based customers.
For the quarter ended September 30, 1996, the gross profit earned on
revenues increased $3,343,942 (58.3%) over the first quarter of the previous
fiscal year due both to the 47.2% growth in revenues and to increased operating
efficiencies. As a percentage of revenues, the gross profit margin increased
to 34.2% in the first quarter of the current fiscal year from 31.8% in the
comparable prior year period. The increase in operating efficiencies resulted
primarily from renegotiation of the Company's telecommunications tariff and
from management's ongoing efforts to derive economies of scale from the
increased revenue base.
Selling, general and administrative expenses ("SG&A") increased
$1,320,585 (36.3%) in the current year quarter versus the prior year quarter;
however, as a percentage of revenues, SG&A decreased to 18.7% in the current
year quarter from 20.2% in the comparable prior year period. The dollar
increase in SG&A emanated primarily from the addition of personnel and
infrastructure, increased recruiting and training costs and increased sales
commissions relating to the revenue gains in the current year. Management's
continuing efforts to improve efficiencies while maintaining the Company's
growth and high quality standards resulted in the decrease in SG&A as a
percentage of revenues.
Page 7 of 10
<PAGE> 8
The increase in depreciation and amortization expense of $118,750
(17.2%) in the current year quarter versus the comparable prior year quarter is
due primarily to the expansion of operating capacity during the fiscal year
ended June 30, 1996. The impact on operating income of the capacity expansion
and the resulting increase in depreciation and amortization expense was
mitigated by increased revenues in the current year. As a percentage of
revenues, the expense for the current year quarter was 3.0% versus 3.8% in the
prior year quarter.
Net interest expense decreased $67,266 (40.3%) in the first quarter of
the current fiscal year compared to the prior year period due in part to
deminished utilization of the Company's working capital borrowing facility
resulting from improved profitability by the Company. Additionally, interest
expense decreased as a result of the reduction in long-term debt from
$5,009,563 at September 30, 1995 to $3,333,021 at September 30, 1996 and the
interest expense associated with such debt.
The Company's effective tax rate was approximately 34% for the three
month periods ended September 30, 1995 and 1996. Effective October 1, 1996, a
federal program was reenacted which created federal tax credits related to the
employment of certain qualifying individuals. This federal program should have
the effect of lowering the Company's effective tax rate during the remainder of
the 1997 fiscal year.
Management knows of no trends or uncertainties other than those
mentioned above that are expected to have a material favorable or unfavorable
impact on operating results.
Liquidity and Capital Resources
As a consequence of increased profitability and the securing of a $15
million working capital line of credit with a major bank, the Company currently
has the liquidity and access to working capital necessary to meet its near-term
growth demands. In an effort to respond to revenue growth generated by
existing customers and the addition of several new customers, the Company is in
the process of adding approximately 300 workstations by reconfiguring certain
production and administrative areas. The Company will fund this expansion
primarily with operating cash flow and anticipates the increased capacity will
be sufficient to meet client near-term demands.
As growth continues, additional call centers will be needed to
accommodate the increased business, and such additional facilities will require
furniture, equipment and technological enhancement commensurate with the
quality standards of its existing facilities. Although no assurances can be
made in this regard, management anticipates that, based on the Company's recent
profitability and its ability to secure such financing to date, the Company
should be able to secure debt or equity funding for such future capital
equipment needs.
The $15 million accounts receivable credit facility and $1.5 million
equipment term loan mentioned above contain various covenants which limit,
among other things, the operating subsidiary's indebtedness, capital
expenditures, investments, payments and dividends to the Company and requires
the operating subsidiary to meet certain financial covenants. Similarly, under
the terms of the guaranty arrangement, the Company is subject to certain
covenants limiting, among other things, its ability to incur indebtedness,
enter into guaranties, and acquire other companies. These credit facilities
are secured by liens on the operating subsidiary's accounts receivables,
furniture and equipment, and are guaranteed by the Company.
Page 8 of 10
<PAGE> 9
PART II OTHER INFORMATION
ITEM 5: OTHER INFORMATION
Effective September 23, 1996, the Company named Arthur Chavoya
as President and Chief Executive Officer of the Company and its operating
subsidiary, Advanced Telemarketing Corporation ("Advanced"). Michael G.
Santry, who relinquished the position as President and CEO of the Company,
was named Chairman of the Board of the Company. Thomas F. Bijou was named
Chairman of the Board of Advanced after relinquishing his position as
President and CEO of Advanced. Both Mr. Santry and Mr. Bijou remain as
Directors of the Company and Mr. Chavoya assumes a newly created director
position.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit 10.19 Employment Agreement by and between Advanced
Telemarketing Corporation, ATC Communications Group,
Inc. and Arthur Chavoya, dated September 5, 1996 (filed
herewith)
Exhibit 10.20 ATC Communications Group, Inc. 1996 Stock Option and
Restricted Stock Plan (filed herewith)
Exhibit 10.21 Form of ATC Communications Group, Inc. Restricted
Stock Agreement (filed herewith)
Exhibit 10.22 Form of ATC Communications Group, Inc. Stock Option
Agreement (filed herewith)
Exhibit 10.23 Restricted Stock Agreement by and between ATC
Communications Group, Inc. and Arthur Chavoya, dated
as of September 5, 1996. (filed herewith)
Exhibit 10.24 Stock Option Agreement by and between ATC
Communications Group, Inc. and Arthur Chavoya, dated as
of September 5, 1996. (filed herewith)
Exhibit 27.1 Financial Data Schedule (filed herewith)
(B) Reports of Form 8-K
None.
Page 9 of 10
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
ATC COMMUNICATIONS GROUP, INC.
By: /s/ Jerry L. Sims
-----------------------------------------
Dated: Jerry L. Sims, Jr.
November 14, 1996 Chief Financial Officer
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Page 10 of 10
<PAGE> 11
EXHIBITS INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
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<S> <C>
10.19 Employment Agreement by and between Advanced
Telemarketing Corporation, ATC Communications Group,
Inc. and Arthur Chavoya, dated September 5, 1996
(filed herewith)
10.20 ATC Communications Group, Inc. 1996 Stock Option and
Restricted Stock Plan (filed herewith)
10.21 Form of ATC Communications Group, Inc. Restricted
Stock Agreement (filed herewith)
10.22 Form of ATC Communications Group, Inc. Stock Option
Agreement (filed herewith)
10.23 Restricted Stock Agreement by and between ATC
Communications Group, Inc. and Arthur Chavoya, dated
as of September 5, 1996. (filed herewith)
10.24 Stock Option Agreement by and between ATC
Communications Group, Inc. and Arthur Chavoya, dated
as of September 5, 1996. (filed herewith)
27.1 Financial Data Schedule (filed herewith)
</TABLE>
<PAGE> 1
EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of September 5, 1996 by and between Advanced Telemarketing Corporation, a
Nevada corporation (the "Company"), ATC Communications Group, Inc., a Delaware
corporation and the Company's parent corporation (the "Parent") and Arthur
Chavoya ("Employee").
R E C I T A L S
The Company and the Parent have special expertise in their businesses
that has enabled them to provide unique career opportunities for their
employees.
The Company's and the Parent's growth depends, to a significant degree,
on their possession of more and better information than that available to their
competitors concerning a number of matters, including but not limited to,
research, systems, development, marketing, management and other information not
generally known to others in the Company's industry. To obtain such
information and use it successfully, the Company and the Parent have made
significant investments in research, business development, customer
satisfaction methods and techniques, business process improvements and other
developments in marketing methods and providing services to their customers.
This unique and special expertise in pooling this information has enabled the
Company and the Parent to conduct their businesses successfully and thus
provide potential employment opportunities for their employees.
The parties acknowledge that Employee has his own valuable knowledge and
training in certain of the areas in which the Company and the Parent conduct
their businesses but that his knowledge will be enhanced by this employment.
Employee recognizes that unless the Company and the Parent impart to him
their special expertise, he would be less effective and of less benefit to the
Company and the Parent. Employee further acknowledges that without the
additional knowledge to be imparted to him by the Company and the Parent, he
will be less valuable than would otherwise be the case in the Company's and the
Parent's businesses.
Employee understands and acknowledges that a covenant not to compete and
a restriction on disclosure of confidential information is essential to the
continued growth and stability of the Company's and the Parent's business and
to the continuing viability of such businesses in the event the Employee's
employment is terminated as expressly permitted under the terms and limitations
of this Agreement.
The Employee desires employment as an Employee of the Company and the
Parent under the terms and conditions of this Agreement and further desires to
be given access to the Company's and the Parent's proprietary information.
<PAGE> 2
The Company and the Parent desire to employ Employee under the terms and
conditions of this Agreement, Employee hereby representing that Employee is
free from any other obligation of continuing employment with his former
employer.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the parties agree as follows:
1. Employment. Subject to the terms and conditions set forth in
this Agreement, each of the Company and the Parent hereby employ Employee, and
Employee hereby accepts such employment by the Company and the Parent.
2. Duties of Employee.
(a) Employee shall serve in the capacities of President and
Chief Executive Officer of each of the Company and the Parent, subject in each
case to the supervision of the Board of Directors of such corporation. In such
capacities, Employee shall have all necessary powers to discharge his
responsibilities, including general supervision of the affairs of the Company
and the Parent and active control of their businesses, again subject in each
case to the respective Board's supervision and control. Employee shall have
all the powers granted by the Bylaws of each of the Company and the Parent to
the President and Chief Executive Officer of such corporation, and Employee
shall report to the Board of Directors of such corporation. For so long as
Employee serves in the capacities of President and Chief Executive Officer of
each corporation, Parent and the Company shall nominate and support the
election of Employee as a member of the Board of Directors of each corporation.
(b) Commencing September 23, 1996 and during the remaining
term of this Agreement, Employee shall devote his full business time and effort
to the performance of his duties and responsibilities as President and Chief
Executive Officer of the Company and the Parent. Notwithstanding the
foregoing, Employee may spend reasonable amounts of time on his personal civic
and charitable activities that do not interfere with the performance of his
duties and responsibilities to the Company and the Parent.
(c) Employee shall observe and comply with the written rules
and regulations of the Company and the Parent respecting their businesses and
shall carry out and perform the directives and policies of the Company and the
Parent as they may from time to time be stated to Employee in writing by the
Chairman of the Board or the Board of Directors of each corporation.
(d) Employee shall maintain accurate business records as may
from time to time be required by the Company or the Parent. Such records may
be examined by the Company or the Parent, as the case may be, at all reasonable
times after written request is delivered to Employee. Any such document shall
be delivered to the Company or the Parent, as the case may be, promptly upon
request.
2
<PAGE> 3
(e) Employee agrees not to solicit or receive any income or
other compensation from any third party in connection with his employment with
the Company and the Parent. The Employee agrees, upon written request by the
Company or the Parent, to render an accounting of all transactions relating to
his business endeavors during the term of this employment hereunder.
3. Term. The term of this Agreement (the "Term") shall commence
effective as of September 5, 1996 (the "Effective Date") and continue until the
fifth anniversary of the Effective Date; provided, however, that at the end of
such initial term, and on each subsequent anniversary of the Effective Date,
the term shall automatically extend for an additional year unless a party
provides, at least 90 days prior to the end of such initial term or such
subsequent anniversary, written notice that it does not wish to extend the
term. Notwithstanding the foregoing, this Agreement may be earlier terminated
in accordance with Section 8 of this Agreement.
4. Salary. Commencing on September 23, 1996, the Parent will pay
Employee a minimum base annual salary during the term of this Agreement for his
services as President and Chief Executive Officer of the Parent of $400,000,
which shall be payable in accordance with the Parent's standard payroll
practice, but not less than monthly. Such base salary shall not include any
benefits made available to Employee or any contributions or payments made on
his behalf pursuant to any employee benefit plan or program of the Parent,
including any health, disability or life insurance plan or program, 401-K plan,
cash bonus plan, stock incentive plan, retirement plan or similar plan or
program of any nature. The Parent shall review Employee's salary on a semi-
annual basis in connection with the performance review referred to in Section
12 hereof. The Parent shall increase the annual salary of Employee from time
to time as may be warranted in accordance with the Parent's compensation
policies. The Company shall have no separate salary obligation to Employee.
5. Bonus Compensation. The Parent shall pay Employee annual
performance-based cash bonuses in accordance with Exhibit A attached to this
Agreement. The Parent shall review and revise Exhibit A on an annual basis
thereafter to provide for comparable annual cash bonuses payable during the
remaining term of this Agreement. The Company shall have no separate bonus
obligation to Employee.
6. Employee Benefits. During the term of this Agreement, the Parent
shall provide Employee with all benefits made available from time to time by
the Parent to its employees generally and to employees who hold positions
similar to that of Employee (including the benefits granted to other officers
of the Parent), such benefits to be in accordance with the Parent's policies.
Specifically, Employee's benefits shall include participation in medical,
dental and vision benefit plans or programs (providing coverage for Employee's
immediate family); disability insurance; 401-K plans (full match) to be
provided within 90 days from the Effective Date; life insurance payable to
Employee's designated beneficiary (two times base salary); on-going personal
development (executive education); an annual physical exam at the Cooper Clinic
(or equivalent); a Cadillac STS every three (3) years (including coverage of
taxes, insurance and maintenance); paid vacation; membership, dues and
reasonable expenses at the Las Colinas Sports Club; spouse travel when Employee
travels for business purposes; and first-class air travel (when available).
The Company shall have no separate obligations to Employee with respect to
employee benefits.
3
<PAGE> 4
7. Office Set-Up; Reimbursement of Expenses. The Company shall
provide Employee with appropriate and adequate personal computer and
telecommunications equipment for his office, home, car and travel, including a
personal computer with fax capability for home use, a laptop computer for
travel use and a car telephone. The Company shall reimburse Employee for all
expenses actually and reasonably incurred by him in the business interests of
the Company. Such reimbursement shall be made to Employee upon appropriate
documentation of such expenditures in accordance with the Company's written
policies.
8. Early Termination. It is the desire and expectation of each
party that the employer-employee relationship shall continue for the full term
specified herein and be a pleasant and rewarding experience for the parties
hereto. The Company or the Parent shall, however, be entitled to terminate
Employee's employment at any time with or without Cause (as defined in this
Section 8). If Employee's employment is terminated without Cause, however, the
Parent shall pay Employee severance compensation equal to two times Employee's
then current base annual salary plus the bonus paid to Employee for the prior
year. The Company shall have no separate obligation to Employee in this
regard.
If Employee dies, is unable to perform his duties and responsibilities
as a result of disability that continues for 90 consecutive days or more
("Disability"), voluntarily resigns from the Company or the Parent, or is
terminated for Cause, the Parent shall pay Employees (or his estate, executor
or legal representative, as appropriate) any salary and bonus that has accrued
to the date employment ceases, and the Parent's obligations to pay additional
salary or cash compensation or benefits shall terminate as of such date.
"Cause," for the purpose of this Agreement, shall mean the occurrence of
any of the following events:
(a) Performance by Employee of illegal or fraudulent acts,
criminal conduct or willful misconduct relating to the activities of the
Company or the Parent;
(b) A conviction of or nolo contendere plea by Employee for
any criminal acts involving moral turpitude having or reasonably likely to have
a material adverse effect upon the Company or the Parent, including, without
limitation, upon their profitability, reputation or goodwill;
(c) Willful or grossly negligent failure by Employee to
perform his duties in a manner contrary to the Company's or the Parent's best
interests;
(d) Willful refusal by Employee to carry out reasonable
written instructions of the Company's or the Parent's Boards of Directors not
inconsistent with the provisions of this Agreement;
(e) Violation by Employee of any of Employee's covenants and
agreements contained in Sections 9, 10 or 11 of this Agreement;
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(f) Any other material breach of Employee's obligations
hereunder, which he fails to cure within thirty (30) days after receiving
written notice thereof.
9. Non-Competition Agreement. Employee understands that during the
course of his employment by the Company and the Parent, Employee will have
access to and the benefit of the information referred to in the Recitals above,
and will represent the Company and the Parent and their affiliates and develop
contacts and relationships with other persons and entities on behalf of such
entities, including but not limited to customers, potential customers and other
employees of such entities. To protect such entities' interest in this
information and in these contacts and relationships, Employee agrees and
covenants that during the term of his employment by the Company and the Parent,
and for a period of two years after the termination of such employment for any
reason, without prior written approval of the Company and the Parent, Employee
will not, in connection with any business that is engaged in, or is about to be
engaged in, by the Company or the Parent, which includes but is not limited to
inbound and outbound telecommunications-based marketing services and customer
service functions, and the consulting, design and implementation of these
services, including organization and investment in related industries or
professions (the "Business"), directly or indirectly, either as an individual
or as an employee, partner, officer, director, shareholder, advisor, or
consultant or in any other capacity whatsoever, of any person (other than
ownership of less than 5% of the issued and outstanding voting securities of a
publicly held corporations): (a) recruit, hire, assist others in recruiting or
hiring, discuss employment with, or refer to others for employment any person
who is, or within the 12 month period immediately preceding the date of any
such activity was, an employee of the Company or the Parent or their
affiliates; or (b) conduct or assist others in conducting any business or
activity that competes with the Business in the United States, its territories
or possessions.
It is understood and agreed that the scope of the foregoing covenant is
reasonable as to time, area and persons and is necessary to protect the
legitimate business interests of the Company, the Parent and their affiliates.
It is further agreed that such covenant will be regarded as divisible and will
be operative as to time, area and persons to the extent that it may be so
operative, and if any part of such covenant is declared invalid, unenforceable,
or void as to time, area or persons, the validity and enforceability of the
remainder will not be affected.
If Employee violates the restrictive covenants of this Section 9 and the
Company or the Parent brings legal action for injunctive or other relief,
neither the Company nor the Parent shall be deprived of the benefit of the full
period of the restrictive covenant, as a result of the time involved in
obtaining the relief. Accordingly, Employee agrees that the restricted period
following the term of employment shall have a duration of two years, and the
regularly scheduled expiration date of such covenant shall be extended by the
same amount of time that Employee is determined to have violated such covenant.
10. Confidentiality. Employee acknowledges that he has learned and
will learn Confidential Information (as defined herein) relating to the
business conducted and to be conducted by the Company, the Parent or their
affiliates. Employee agrees that he will not, except in the normal and proper
course of his duties hereunder, disclose or use or authorize any third party to
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<PAGE> 6
disclose or use any such Confidential Information, without prior written
approval of the Company or the Parent. As used in this Section 10,
"Confidential Information" shall mean information disclosed to or known to
Employee as a direct or indirect consequence of or through his employment with
the Company or the Parent, about any customer's, supplier's or the Company's or
the Parent's business, methods, business plans, operations, products,
processes, and services, including, but not limited to, information relating to
research, development, inventions, recommendations, programs, systems, and
systems analyses, flow charts, finances, and financial statements, marketing
plans and strategies, merchandising, pricing strategies, merchandise sources,
client sources, system designs, procedure manuals, automated data programs,
financing methods, financial projections, terms and conditions of arrangements
of any business, computer software, terms and conditions of business
arrangements with clients or suppliers, reports, personnel procedures, supply
and services resources, names and addresses of clients, the Company's or the
Parent's contacts, names of professional advisors, and all other information
pertaining to clients and suppliers, including, but not limited to assets,
business interests, personal data and all other information pertaining to the
Company or the Parent, clients or suppliers whatsoever, including all
accompanying documentation therefor. All information disclosed to Employee, or
to which Employee has access during the period of his employment, for which
there is any reasonable basis to be believed is, or which appears to be treated
by the Employer as Confidential Information, shall be presumed to be
Confidential Information hereunder. Confidential Information shall not,
however, include information that (i) is publicly known or becomes publicly
known through no fault of Employee, or (ii) is generally or readily obtainable
by the public, or (iii) constitutes general skills, knowledge and experience
acquired by Employee before and/or during his employment with the Company and
the Parent .
Employee agrees that all documents of any nature pertaining to
activities of the Company, the Parent or their affiliates, or that include any
Confidential Information, in his possession now or at any time during the term
of his employment, including without limitation, memoranda, notebooks, notes,
data sheets, records and computer programs, are and shall be the property of
such entity and that all copies thereof shall be surrendered to the appropriate
entity upon termination of his employment.
11. Inventions; Developments. Employee agrees to notify the Company
and the Parent of any discovery, invention, innovation, or improvement which is
related to the Business or to the business of any customer or supplier
(collectively called "Developments") conceived or developed by Employee during
the term of the Employee's employment. Developments shall include, without
limitation, developments in computer software, logical systems, algorithms, and
any or all other intellectual properties related to the Business. All
Developments, including but not limited to all written documents pertaining
thereto, shall be the exclusive property of the Company or the Parent, as the
case may be, and shall be considered Confidential Information subject to the
terms of this Agreement. Employee agrees that when appropriate, and upon
written request of the Company or the Parent, as the case may be, the Employee
will acknowledge that Developments are "works for hire" and will file for
patents or copyrights with regard to any or all Developments and will sign
documentation necessary to evidence ownership of Developments in the Company or
the Parent, as the case may be.
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<PAGE> 7
12. Performance Review. In April and September of each year during
the term of this Agreement, Employee and representatives of the Company and the
Parent will meet to review and discuss Employee's performance during the
preceding six months. Employee and the representatives will discuss in good
faith Employee's positive contributions to the Company's and the Parent's
business, areas in which improvement in performance is expected, and to the
extent possible, objective metrics for the measure of improvement over the
ensuing six months. The Parent shall review Employee's salary and bonus
compensation in connection with this review and provide for such increases from
time to time as may be warranted in accordance with the Parent's compensation
policies. The Company and the Parent shall deliver to Employee a written
summary of the meeting, no later than seven (7) days after the meeting, which
summary shall include, among other things, the objective metrics that Employee
shall be expected to satisfy, and the salary and bonus compensation to be paid
to Employee.
13. Exit Interview. To insure a clear understanding of this
Agreement, including but not limited to the protection of the Company's and the
Parent's business interests, Employee agrees, at no additional expense to the
Company and the Parent, to engage in an exit interview with the Company and the
Parent prior to Employee's departure from the Company and the Parent at a time
and place designated by the Company and the Parent.
14. Right of Setoff. The Company and the Parent shall be entitled,
at their option and not in lieu of any other remedies to which they may be
entitled, to set off any amounts due Employee or any affiliate of Employee
against any amount due and payable by Employee or any affiliate of Employee to
the Company and the Parent ("Set-Offs") pursuant to this Agreement or
otherwise, provided that the Set-Offs are set forth in detail in writing with
supporting evidence to substantiate each Set-Off.
15. Miscellaneous.
(a) Any notice, demand or request required or permitted to be
given or made under this Agreement shall be in writing and shall be deemed
given or made when delivered in person, when sent by United States registered
or certified mail, or postage prepaid, or when telecopied to a party at its
address or telecopy number specified below:
If to the Company:
Advanced Telemarketing Corporation
8001 Bent Branch Drive
Irving, Texas 75063
Telecopy number: (214) 830-1801
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If to the Parent:
ATC Communications Group, Inc.
5950 Berkshire Lane
Suite 1650
Dallas, Texas 75225
Telecopy number: (214) 361-9874
If to Employee:
Arthur Chavoya
7 Southern Hills Court
Frisco, Texas 75034
Telecopy number: (972)-625-6662
The parties to this Agreement may change their addresses for notice in
the manner provided above.
(b) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions
hereof.
(c) Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.
(d) The parties shall execute all documents, provide all
information and take or refrain from taking all actions as may be reasonably
necessary or appropriate to achieve the purposes of this Agreement.
(e) This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their representatives and permitted successors
and assigns. Except for the provisions of Sections 9, 10 and 11 of this
Agreement, which are intended to benefit the Company's and the Parent's
affiliates as third party beneficiaries, or as otherwise expressly provided in
this Agreement, nothing in this Agreement, express or implied, is intended to
confer upon any person other than the parties to this Agreement, their
respective representatives and permitted successors and assigns, any rights,
remedies or obligations under or by reason of this Agreement.
(f) This Agreement constitutes the entire agreement among the
parties hereto pertaining to the specific subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto.
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<PAGE> 9
(g) None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the parties, except as otherwise
expressly provided herein.
(h) No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
(i) This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.
(J) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAW. All claims, disputes, and controversies arising out of or
relating to this Agreement or the performance, breach, validity,
interpretation, application or enforcement hereof, including any claims for
equitable relief or claims based on contract, tort, statute, or any alleged
breach, default, or misrepresentation in connection with any of the provisions
hereof, will be resolved by binding arbitration. A party may initiate
arbitration by sending written notice of its intention to arbitrate to the
other party and to the American Arbitration Association ("AAA") office located
in Dallas, Texas (the "Arbitration Notice"). The Arbitration Notice will
contain a description of the dispute and the remedy sought. The arbitration
will be conducted at the offices of the AAA in Dallas, Texas before an
independent and impartial arbitrator who is selected by mutual agreement, or,
in the absence of such agreement, before three independent and impartial
arbitrators, of whom each party will appoint one, with the third being chosen
by the two appointed by the parties. In no event may the demand for
arbitration be made after the date when the institution of a legal or equitable
proceeding based on such claim, dispute, or other matter in question would be
barred by the applicable statute of limitations. The arbitration and any
discovery conducted in connection therewith will be conducted n accordance with
the Commercial Rules of arbitration and procedures established by AAA in effect
at the time of the arbitration, including without limitation the expedited
procedures set forth therein (the "AAA Rules"). The decision of the
arbitrator(s) will be final and binding on all parties and their successors and
permitted assignees. The judgment upon the award rendered by the arbitrator(s)
may be entered by any court having jurisdiction thereof. The arbitrator(s)
will be selected no later than 30 days after the date of the Arbitration
Notice. The arbitration hearing will commence no later than 60 days after the
arbitrator(s) is selected. The arbitrator(s) will render a decision no later
than 30 days after the close of the hearing, in accordance with AAA Rules. The
arbitrator's fees and costs will conform to the then current AAA fee schedule
and will be borne equally by the parties.
(k) If any provision of this Agreement is declared or found to
be illegal, unenforceable, or void, in whole or in part, then the parties shall
be relieved of all obligations arising under such provision, but only to the
extent that it is illegal, unenforceable or void, it being the intent and
agreement of the parties that this Agreement shall be deemed amended by
modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent
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<PAGE> 10
or, if that is not possible, by substituting therefor another provision that is
legal and enforceable and achieves the same objectives.
(l) No supplement, modification or amendment of this agreement
or waiver of any provision of this Agreement shall be binding unless executed
in writing by all parties to this Agreement. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision of this Agreement (regardless of whether similar), nor
shall any such waiver constitute a continuing wavier unless otherwise expressly
provided.
(m) Employee acknowledges and agrees that the Company and the
Parent would be irreparably harmed by any violation of Employee's obligations
under Sections 9, 10 and 11 hereof and that, in addition to all other rights or
remedies available at law or in equity, the Company and the Parent will be
entitled to injunctive and other equitable relief to prevent or enjoin any such
violation. The provisions of Sections 9, 10 and 11 hereof will survive any
termination of this Agreement, in accordance with their terms.
(n) No party may assign this Agreement or any rights or
benefits thereunder without the written consent of the other parties to this
Agreement.
EXECUTED as of the date first above written.
ADVANCED TELEMARKETING
CORPORATION
By:
-------------------------------------
Michael G. Santry,
Chairman of the Board
ATC COMMUNICATIONS GROUP, INC.
By:
-------------------------------------
Michael G. Santry,
Chairman of the Board
----------------------------------------
Arthur Chavoya
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EXHIBIT A
The bonus program contains three broad segments: (i) net revenues; (ii)
EBIT; and (iii) intangibles. Two of the segments have subsections. Each
individual measurement set forth has a dollar value assigned which can be
earned independent of the results of any other individual measurement. The
measurements' period for the bonus is July 1, 1996 through June 30, 1997 and
applies to consolidated financial results for ATC Communications Group, Inc.
I. Net Revenues (total possible bonus of $70,000)
a. Increase of at least 30% over the fiscal year ended June
30, 1996...$40,000.
b. Increase of at least 50% over the 1996 fiscal year
...$15,000 additional to (a) above.
c. Increase of 60% or more over the 1996 fiscal
year...$15,000 additional to (a) and (b) above.
II. EBIT (total possible bonus of $40,000)
EBIT equals 11% or more of net revenues...$40,000.
III. Intangibles (total possible bonus of $90,000)
a. Resolution of the AT&T matter in a manner acceptable to
the Board of Directors...$25,000.
b. Signing of the American Airlines Cargo
contract....$25,000.
c. Legal protection established for ATC's intellectual
property...$10,000.
d. Development and implementation of a strategic marketing
plan to include a sales process and tactical execution
steps...$10,000.
e. System wide implementation of the "Timekeeper" system (or
a similar process)...$10,000.
f. Development of and at least partial implementation of a
financial control system to include budgeting, profit and
loss responsibility and capital expenditures...$10,000.
<PAGE> 1
EXHIBIT 10.20
ATC COMMUNICATIONS GROUP, INC.
1996 STOCK OPTION
AND RESTRICTED STOCK PLAN
1. Purpose of the Plan. This Plan shall be known as the ATC
Communications Group, Inc. 1996 Stock Option and Restricted Stock Plan. The
purpose of the Plan is to attract and retain the best available personnel for
positions of substantial responsibility and to provide incentives to such
personnel to promote the success of the business of ATC Communications Group,
Inc. and its subsidiaries.
Certain options granted under this Plan are intended to qualify as
"incentive stock options" pursuant to Section 422 of the Internal Revenue Code
of 1986, as amended from time to time, while certain other options granted
under the Plan will constitute nonqualified options.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Board" shall mean the Board of Directors of the
Corporation.
(b) "Common Stock" shall mean the Common Stock, $.01 par value
per share, of the Corporation. Except as otherwise provided herein, all Common
Stock issued pursuant to the Plan shall have the same rights as all other
issued and outstanding shares of Common Stock, including but not limited to
voting rights, the right to dividends, if declared and paid, and the right to
pro rata distributions of the Corporation's assets in the event of liquidation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(d) "Committee" shall mean the committee described in Section
19 that administers the Plan.
(e) "Corporation" shall mean ATC Communications Group, Inc.,
a Delaware corporation.
(f) "Date of Grant" shall mean the date on which an Option is
granted or Restricted Stock is awarded pursuant to this Plan or, if the Board
or the Committee so determines, the date specified by the Board or the
Committee as the date the award is to be effective.
(g) "Employee" shall mean any officer or other key employee of
the Corporation or one of its Subsidiaries (including any director who is also
an officer or key employee of the Corporation or one of its Subsidiaries).
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(h) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(i) "Fair Market Value" shall mean the closing sale price (or
average of the quoted closing bid and asked prices if there is no closing sale
price reported) of the Common Stock on the date specified as reported by NASDAQ
or by the principal national stock exchange on which the Common Stock is then
listed. If there is no reported price information for the Common Stock, the
Fair Market Value will be determined by the Board or the Committee, in its sole
discretion. In making such determination, the Board or the Committee may, but
shall not be obligated to, commission and rely upon an independent appraisal of
the Common Stock.
(j) "Non-Employee Director" shall mean an individual who is a
"non-employee director" within the meaning set forth therefor in Rule 16b-3
under the Exchange Act and also an "outside director" within the meaning of
Treasury Regulation Section 1.162-27(e)(3).
(k) "Nonqualified Option" shall mean any Option that is not a
Qualified Option.
(l) "Option" shall mean a stock option granted pursuant to
Section 6 of this Plan.
(m) "Optionee" shall mean any Employee or director who
receives an Option.
(n) "Participant" shall mean an Employee or director who
receives an Option or Restricted Stock pursuant to this Plan.
(o) "Plan" shall mean the ATC Communications Group, Inc. 1996
Stock Option and Restricted Stock Plan, as amended from time to time.
(p) "Qualified Option" shall mean any Option that is intended
to qualify as an "incentive stock option" within the meaning of Section 422 of
the Code.
(q) "Restricted Stock" shall mean Common Stock awarded to an
Employee or director pursuant to Section 7 of this Plan.
(r) "Rule 16b-3" shall mean Rule 16b-3 of the rules and
regulations under the Exchange Act as Rule 16b-3 may be amended from time to
time and any successor provisions to Rule 16b-3 under the Exchange Act.
(s) "Subsidiary" shall mean any now existing or hereinafter
organized or acquired company of which more than fifty percent (50%) of the
issued and outstanding voting stock is owned or controlled directly or
indirectly by the Corporation or through one or more Subsidiaries of the
Corporation.
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<PAGE> 3
3. Term of Plan. The Plan has been adopted by the Board effective
as of September 5, 1996. To permit the granting of Qualified Options under the
Code, and to qualify awards of Options or Restricted Stock hereunder as
"performance based" under Section 162(m) of the Code, the Plan will be
submitted for approval by the shareholders of the Corporation by the
affirmative votes of the holders of a majority of the shares of Common Stock
then issued and outstanding, for approval no later than the next annual meeting
of shareholders. The Plan shall continue in effect until terminated pursuant
to Section 19(a).
4. Shares Subject to the Plan. Except as otherwise provided in
Section 18 hereof, the aggregate number of shares of Common Stock issuable upon
the exercise of Options or upon the grant of Restricted Stock pursuant to this
Plan shall be 2,000,000 shares; provided, however, that the number of shares of
Common Stock subject to Awards granted to any single Participant during any
fiscal year shall not exceed 1,000,000 shares of Common Stock. Such shares may
either be authorized but unissued shares or treasury shares. The Corporation
shall, during the term of this Plan, reserve and keep available a number of
shares of Common Stock sufficient to satisfy the requirements of the Plan. If
an Option should expire or become unexercisable for any reason without having
been exercised in full, or Restricted Stock should fail to vest and be
forfeited in whole or in part for any reason, then the shares that were subject
thereto shall, unless the Plan shall have terminated, be available for the
grant of additional Options or Restricted Stock under this Plan, subject to the
limitations set forth above.
5. Eligibility. Qualified Options may be granted under Section 6 of
the Plan to such Employees of the Corporation or its Subsidiaries as shall be
determined by the Board or the Committee. Nonqualified Options may be granted
under Section 6 of the Plan to such Employees and directors of the Corporation
or its Subsidiaries as shall be determined by the Board or the Committee.
Restricted Stock may be granted under Section 7 of the Plan to such Employees
and directors of the Corporation or its Subsidiaries as shall be determined by
the Board or the Committee. Subject to the limitations and qualifications set
forth in this Plan, the Board or the Committee shall also determine the number
of Options or shares of Restricted Stock to be granted, the number of shares
subject to each Option or Restricted Stock grant, the exercise price or prices
of each Option, the vesting and exercise period of each Option and the vesting
and/or forfeiture provisions relating to Restricted Stock, whether an Option
may be exercised as to less than all of the Common Stock subject thereto, and
such other terms and conditions of each Option or grant of Restricted Stock, if
any, as are consistent with the provisions of this Plan. In connection with
the granting of Qualified Options, the aggregate Fair Market Value (determined
at the Date of Grant of a Qualified Option) of the shares with respect to which
Qualified Options are exercisable for the first time by an Optionee during any
calendar year (under all such plans of the Optionee's employer corporation and
its parent and subsidiary corporations as defined in Section 424(e) and (f) of
the Code, or a corporation or a parent or subsidiary corporation of such
corporation issuing or assuming an Option in a transaction to which Section
424(a) of the Code applies (collectively, such corporations described in this
sentence are hereinafter referred to as "Related Corporations")) shall not
exceed $100,000 or such other amount as from time to time provided in Section
422(d) of the Code or any successor provision.
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<PAGE> 4
6. Grant of Options. The Board or the Committee shall determine the
number of shares of Common Stock to be offered from time to time pursuant to
Options granted hereunder and shall grant Options under the Plan. The grant of
Options shall be evidenced by Option agreements containing such terms and
provisions as are approved by the Board or the Committee and executed on behalf
of the Corporation by an appropriate officer. In connection with the granting
of any Options under the Plan, the aggregate number of shares of Common Stock
issuable to any single Participant shall not exceed the number of shares
subject to the Plan referred to in Section 4.
7. Restricted Stock. The Board or the Committee shall determine the
number of shares of Common Stock to be granted as Restricted Stock from time to
time under the Plan. The grant of Restricted Stock shall be evidenced by
Restricted Stock agreements containing such terms and provisions as are
approved by the Board or the Committee and executed on behalf of the
Corporation by an appropriate officer.
8. Time of Grant of Options. The date of grant of an Option or
Restricted Stock under the Plan shall be the date on which the Board or the
Committee awards the Option or Restricted Stock or, if the Board or the
Committee so determines, the date specified by the Board or the Committee as
the date the award is to be effective. Notice of the grant shall be given to
each Participant to whom an Option or Restricted Stock is granted promptly
after the date of such grant.
9. Price. The Option price for each share of Common Stock subject
to an Option (the "Exercise Price") granted pursuant to Section 6 of the Plan
shall be determined by the Board or the Committee at the Date of Grant;
provided, however, that (a) the Exercise Price for any Option shall not be less
than 100% of the Fair Market Value of the Common Stock at the Date of Grant,
and (b) if the Optionee owns on the Date of Grant more than 10 percent of the
total combined voting power of all classes of stock of the Corporation or its
parent or any of its subsidiaries, as more fully described in Section
422(b)(6) of the Code or any successor provision (such shareholder is referred
to herein as a "10-Percent Stockholder"), the Exercise Price for any Qualified
Option granted to such Optionee shall not be less than 110% of the Fair Market
Value of the Common Stock at the Date of Grant. The Board or the Committee in
its discretion may award shares of Restricted Stock under Section 7 of the Plan
to Participants without requiring the payment of cash consideration for such
shares.
10. Vesting. Subject to Section 12 of this Plan, each Option and
Restricted Stock award under the Plan shall vest or be subject to forfeiture in
accordance with the provisions set forth in the applicable Option agreement or
Restricted Stock agreement. The Board or the Committee may, but shall not be
required to, permit acceleration of vesting or termination of forfeiture
provisions upon any sale of the Corporation or similar transaction. A
Participant's Option or Restricted Stock agreement may contain such additional
provisions with respect to vesting as the Board or the Committee shall specify.
11. Exercise. A Participant may pay the Exercise Price of the shares
of Common Stock as to which an Option is being exercised by the delivery of
cash, check or, at the
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<PAGE> 5
Corporation's option, by the delivery of shares of Common Stock having a Fair
Market Value on the date immediately preceding the exercise date equal to the
Exercise Price.
If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended, any Option granted
under the Plan may be exercised by a broker-dealer acting on behalf of an
Optionee if (a) the broker-dealer has received from the Optionee or the
Corporation a fully- and duly-endorsed agreement evidencing such Option,
together with instructions signed by the Optionee requesting the Corporation to
deliver the shares of Common Stock subject to such Option to the broker-dealer
on behalf of the Optionee and specifying the account into which such shares
should be deposited, (b) adequate provision has been made with respect to the
payment of any withholding taxes due upon such exercise, and (c) the
broker-dealer and the Optionee have otherwise complied with Section 220.3(e)(4)
of Regulation T, 12 CFR Part 220, or any successor provision.
12. When Qualified Options May be Exercised. No Qualified Option
shall be exercisable at any time after the expiration of ten (10) years from
the Date of Grant; provided, however, that if the Optionee with respect to a
Qualified Option is a 10-Percent Stockholder on the Date of Grant of such
Qualified Option, then such Option shall not be exercisable after the
expiration of five (5) years from its Date of Grant. In addition, if an
Optionee of a Qualified Option ceases to be an employee of the Corporation or
any Related Corporation for any reason, such Optionee's vested Qualified
Options shall not be exercisable after (a) 90 days following the date such
Optionee ceases to be an employee of the Corporation or any Related
Corporation, if such cessation of service is not due to the death or permanent
and total disability (within the meaning of Section 22(e)(3) of the Code) of
the Optionee, or (b) twelve months following the date such Optionee ceases to
be an employee of the Corporation or any Related Corporation, if such cessation
of service is due to the death or permanent and total disability (as defined
above) of the Optionee. Upon the death of an Optionee, any vested Qualified
Option exercisable on the date of death may be exercised by the Optionee's
estate or by a person who acquires the right to exercise such Qualified Option
by bequest or inheritance or by reason of the death of the Optionee, provided
that such exercise occurs within both the remaining option term of the
Qualified Option and twelve months after the date of the Optionee's death.
This Section 12 only provides the outer limits of allowable exercise dates with
respect to Qualified Options; the Board or the Committee may determine that the
exercise period for a Qualified Option shall have a shorter duration than as
specified above.
13. Option Financing. Upon the exercise of any Option granted under
the Plan, the Corporation may, but shall not be required to, make financing
available to the Participant for the purchase of shares of Common Stock
pursuant to such Option on such terms as the Board or the Committee shall
specify.
14. Withholding of Taxes. The Board or the Committee shall make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of any taxes that the Corporation is required by any law or
regulation of any governmental authority to withhold in connection with any
Option or Restricted Stock including, but not limited to, withholding the
issuance of all or any portion of the shares of Common Stock subject to such
Option or
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<PAGE> 6
Restricted Stock until the Participant reimburses the Corporation for the
amount it is required to withhold with respect to such taxes, canceling any
portion of such issuance in an amount sufficient to reimburse the Corporation
for the amount it is required to withhold or taking any other action reasonably
required to satisfy the Corporation's withholding obligation.
15. Conditions Upon Issuance of Shares. The Corporation shall not be
obligated to sell or issue any shares upon the exercise of any Option granted
under the Plan or to deliver Restricted Stock unless the issuance and delivery
of shares shall comply with all provisions of applicable federal and state
securities laws and the requirements of any stock exchange upon which shares of
the Common Stock may then be listed.
As a condition to the exercise of an Option or the grant of
Restricted Stock, the Corporation may require the person exercising the Option
or receiving the grant of Restricted Stock to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of applicable federal and state securities laws.
The Corporation shall not be liable for refusing to sell or issue
any shares covered by any Option or for refusing to issue Restricted Stock if
the Corporation cannot obtain authority from the appropriate regulatory bodies
deemed by the Corporation to be necessary to lawfully sell or issue such
shares. In addition, the Corporation shall have no obligation to any
Participant, express or implied, to list, register or otherwise qualify the
shares of Common Stock covered by any Option or Restricted Stock.
No Participant will be, or will be deemed to be, a holder of any
Common Stock subject to an Option unless and until such Participant has
exercised his or her Option and paid the purchase price for the subject shares
of Common Stock. Each Qualified Option under this Plan shall be transferable
only by will or the laws of descent and distribution and shall be exercisable
during the Participant's lifetime only by such Participant. Each nonqualified
Option under this Plan shall be transferable only by will, the laws of descent
and distribution, pursuant to a domestic relations order issued by a court of
competent jurisdiction, or to a trust established by the Participant for estate
planning purposes.
16. Restrictions on Shares. Shares of Common Stock issued pursuant
to the Plan may be subject to restrictions on transfer under applicable federal
and state securities laws. The Board may impose such additional restrictions
on the ownership and transfer of shares of Common Stock issued pursuant to the
Plan as it deems reasonably desirable; any such restrictions shall be set forth
in any Option agreement entered into hereunder.
17. Modification of Options. At any time and from time to time, the
Board or the Committee may execute an instrument providing for modification,
extension or renewal of any outstanding Option, provided that no such
modification, extension or renewal shall impair the Option without the consent
of the holder of the Option. Notwithstanding the foregoing, in the event of
such a modification, substitution, extension or renewal of a Qualified Option,
the Board or the Committee may increase the exercise price of such Option if
necessary to retain the qualified status of such Option.
6
<PAGE> 7
18. Effect of Change in Stock Subject to the Plan. In the event that
each of the outstanding shares of Common Stock (other than shares held by
dissenting stockholders) shall be changed into or exchanged for a different
number or kind of shares of stock of the Corporation or of another corporation
(whether by reason of merger, consolidation, recapitalization,
reclassification, split-up, combination of shares or otherwise), or in the
event a stock split or stock dividend shall have occurred, then there shall be
substituted for each share of Common Stock then subject to Options or
Restricted Stock awards or available for Options or Restricted Stock awards the
number and kind of shares of stock into which each outstanding share of Common
Stock (other than shares held by dissenting stockholders) shall be so changed
or exchanged, or the number of shares of Common Stock as is equitably required
in the event of a stock split or stock dividend, together with an appropriate
adjustment of the Exercise Price. The Board may, but shall not be required to,
provide additional anti-dilution protection to a Participant under the terms of
the Participant's Option or Restricted Stock agreement.
19. Administration.
(a) The Plan shall be administered by the Board or by a
committee comprised solely of two or more Non- Employee Directors appointed by
the Board (the "Committee"). Options and Restricted Stock may be granted under
Sections 6 and 7, respectively, only (i) the Board as a whole, or (ii) by
majority agreement of the members of the Committee. Option agreements and
Restricted Stock agreements, in the forms as approved by the Board or the
Committee, and containing such terms and conditions consistent with the
provisions of this Plan as shall have been determined by the Board or the
Committee, may be executed on behalf of the Corporation by the Chairman of the
Board, the President or any Vice President of the Corporation. The Board or
the Committee shall have complete authority to construe, interpret and
administer the provisions of this Plan and the provisions of the Option
agreements and Restricted Stock agreements granted hereunder; to prescribe,
amend and rescind rules and regulations pertaining to this Plan; to suspend or
discontinue this Plan; and to make all other determinations necessary or deemed
advisable in the administration of the Plan. The determinations,
interpretations and constructions made by the Board or the Committee shall be
final and conclusive. No member of the Board or the Committee shall be liable
for any action taken, or failed to be taken, made in good faith relating to the
Plan or any award thereunder, and the members of the Board or the Committee
shall be entitled to indemnification and reimbursement by the Corporation in
respect of any claim, loss, damage or expense (including attorneys' fees)
arising therefrom to the fullest extent permitted by law.
(b) Members of the Committee shall be specified by the Board,
and shall consist solely of Non-Employee Directors. Non-Employee Directors may
not possess an interest in any transaction for which disclosure is required
under Section 404(a) of Regulation S-K under the Exchange Act or be engaged in
a business relationship that must be disclosed under Section 404(a).
(c) Although the Board or the Committee may suspend or
discontinue the Plan at any time, all Qualified Options must be granted within
ten (10) years from the effective
7
<PAGE> 8
date of the Plan or the date the Plan is approved by the shareholders of the
Corporation, whichever is earlier.
20. Continued Employment Not Presumed. Nothing in this Plan or any
document describing it nor the grant of any Option or Restricted Stock shall
give any Participant the right to continue in the employment of the Corporation
or affect the right of the Corporation to terminate the employment of any such
person with or without cause.
21. Liability of the Corporation. Neither the Corporation, its
directors, officers or employees or the Committee, nor any Subsidiary which is
in existence or hereafter comes into existence, shall be liable to any
Participant or other person if it is determined for any reason by the Internal
Revenue Service or any court having jurisdiction that any Qualified Option
granted hereunder does not qualify for tax treatment as an incentive stock
option under Section 422 of the Code.
22. GOVERNING LAW. THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF STATE OF DELAWARE AND THE UNITED STATES, AS
APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
23. Severability of Provisions. If any provision of this Plan is
determined to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforceability shall not affect the remaining provisions of the Plan, but
such invalid, illegal or unenforceable provision shall be fully severable, and
the Plan shall be construed and enforced as if such provision had never been
inserted herein.
8
<PAGE> 1
EXHIBIT 10.21
ATC COMMUNICATIONS GROUP, INC.
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of __________, 199__ (the
"Effective Date"), is made and entered into by and between ATC Communications
Group, Inc., a Delaware corporation (the "Corporation"), and __________________
(the "Participant").
R E C I T A L S:
The Corporation has implemented the ATC Communications Group, Inc.
1996 Stock Option and Restricted Stock Plan (the "Plan"), which was adopted by
the Corporation's Board of Directors (the "Board") and will be submitted for
approval by the Corporation's stockholders, and which provides for the grant of
stock options and restricted stock to certain selected officers, directors and
key employees of the Corporation or its subsidiaries with respect to shares of
Common Stock, $.01 par value, of the Corporation (the "Common Stock").
[The Corporation and the Participant are parties to an Employment
Agreement dated as of ______________, 199__ (the "Employment Agreement").]
[Certain identified terms used herein have the same meaning they have
in the Employment Agreement.]
The stock options and restricted stock provided for under the Plan are
intended to comply with the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.
The committee appointed by the Board to administer the Plan (the
"Committee") has selected the Participant to participate in the Plan and has
awarded the shares of restricted stock described in this Agreement to the
Participant.
The parties hereto desire to evidence in writing the terms and
conditions of such restricted stock.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to the
Participant to continue as an employee of the Corporation or its subsidiary and
to promote the success of the business of the Corporation or its subsidiary,
the parties hereby agree as follows:
1. Grant of Restricted Stock. The Corporation hereby grants to
the Participant, upon the terms and subject to the conditions, limitations and
restrictions set forth in the Plan and in this Agreement, ________ shares of
Common Stock (the "Shares"), effective as of the date of this Agreement (the
"Award Date"). The Participant hereby accepts the Shares from the Corporation
and agrees to pay the Corporation an amount equal to the aggregate par value of
the Shares in cash or by check on the Award Date.
<PAGE> 2
2. Vesting.
(a) The Shares will vest in their entirety on
___________, 199__, unless the Participant's employment with the Corporation
and Advanced Telemarketing Corporation has previously terminated for any reason
other than termination without Cause [(as defined in the Employment Agreement,
or, if no agreement exists, define here)].
(b) Subject to the terms of this Agreement, when Shares
become vested hereunder, the Participant will be entitled to all rights
represented by such vested Shares, including, without limitation, the right to
receive any cash and non-cash distributions. Except as provided in Section 5
hereof, no distributions will be paid with respect to unvested Shares. The
Participant will have full voting rights (to the extent granted on such Shares)
with respect to all vested Shares.
(c) Upon any "Sale of the Corporation" the Shares shall
immediately vest in full. A "Sale of the Corporation" shall occur if the
Corporation shall engage in a merger, consolidation, recapitalization,
reorganization or sale, lease or transfer of all or substantially all of the
Corporation's assets and the Corporation or its stockholders or affiliates
immediately before such transaction shall beneficially own, immediately after
or as a result of such transaction, equity securities of the surviving or
acquiring corporation or such corporation's parent corporation possessing less
than fifty-one percent (51%) of the voting power of the surviving or acquiring
corporation or such corporation's parent corporation, provided that a Sale of
the Corporation shall not be deemed to occur upon any public offering or series
of such offerings of securities of the Corporation or its affiliates that
results in any such change in beneficial ownership.
(d) Notwithstanding anything in this Agreement to the
contrary, if at any time following __________, 199__ but prior to the fifth
anniversary of the Effective Date, the Participant's employment with the
Corporation and Advanced Telemarketing Corporation is terminated for any
reason, other than termination without Cause, the Participant (or Participant's
estate, administrator, executor, guardian or other legal representative, as the
case may be), shall transfer, assign and deliver to the Corporation a number of
the shares of Common Stock granted under this Agreement equal to the product of
(i) ______ multiplied by (ii) a fraction, the numerator of which shall equal
the number of calendar months following the date of termination, divided by 60.
In the event that the Participant has sold any of the shares of Common Stock
that are otherwise required to be transferred, assigned or delivered to the
Corporation, the Participant (or Participant's estate, administrator, executor,
guardian or other legal representative, as the case may be) shall pay to the
Corporation an amount in cash equal to the number of shares that have been
sold, multiplied by $_______. Notwithstanding the foregoing, if following any
Sale of the Corporation, Participant is not terminated but Participant's duties
and responsibilities are materially curtailed or diminished, his authority is
materially reduced, or his compensation is reduced, Participant may treat such
occurrence as a "termination without Cause" for purposes of this subsection
(d).
<PAGE> 3
3. Transfer of Shares. The Participant shall not, directly or
indirectly, sell, transfer, pledge, encumber or hypothecate ("Transfer") any
unvested Shares or the rights and privileges pertaining thereto. In addition,
the Participant shall not, directly or indirectly, Transfer any vested Shares
other than (i) with the prior written consent of the Corporation, (ii) by will
or the laws of descent and distribution, (iii) pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended (the
"Act"), or (iv) pursuant to any exemption from the registration requirements of
the Act. Any permitted transferee to whom the Participant shall Transfer the
Shares pursuant to (i) or (ii) above shall agree to be bound by this Agreement.
The Shares are not liable for or subject to, in whole or in part, the debts,
contracts, liabilities or torts of the Participant, nor shall they be subject
to garnishment, attachment, execution, levy or other legal or equitable
process.
4. Tax Withholding. Any provision of this Agreement to the
contrary notwithstanding, the Corporation may take such steps as it deems
necessary or desirable for the withholding of any taxes that it is required by
law or regulation of any governmental authority, federal, state or local,
domestic or foreign to withhold in connection with any of the Shares subject
hereto.
5. Dilution. The number of Shares set forth in Section 1 hereof
shall be subject to adjustment for any Dilutive Event. A "Dilutive Event"
shall include any of the following events that results in dilution to the
Shares acquired hereunder: any increase or decrease in the Shares or any other
capital stock of the Corporation or any change or exchange of any such
securities for a different number or kind of securities, any of which results
from one or more stock splits, reverse stock splits, stock dividends or other
corporate actions with a similar effect. A "Dilutive Event" shall not include,
however, among other things: (i) the issuance or exercise of options granted
pursuant to the Plan or pursuant to any other stock-based compensation plan
adopted by the Corporation's Board of Directors; or (ii) any issuance of
capital stock by the Corporation or any issuance or grant to any person or
entity of any right to subscribe for or to purchase any capital stock or
securities convertible into any capital stock of the Corporation for
consideration deemed adequate and appropriate by the Board of Directors.
6. Certain Legal Restrictions. The Corporation shall not be
obligated to issue any Shares vesting hereunder unless the issuance and
delivery of such Shares shall comply with all relevant provisions of law and
other legal requirements including, without limitation, any applicable federal
or state securities laws and the requirements of any stock exchange upon which
shares of the Corporation's Common Stock may then be listed. The Corporation
has filed a Registration Statement on Form S-8 and agrees to keep such
Registration Statement in effect thereafter for so long as the shares of Common
Stock acquired hereunder may be resold thereunder. As a condition to the sale
by the Corporation of any additional shares of Common Stock to the Participant,
the Corporation may require the Participant to make such representations and
warranties as may be reasonably necessary to assure compliance with applicable
federal or state securities laws. The Corporation shall not be liable for
refusing to issue any Shares if the Corporation cannot obtain authority from
the appropriate regulatory bodies deemed by the Corporation to be necessary to
lawfully sell or issue such shares. Except as provided above, the Corporation
shall have no obligation to the Participant, express or
<PAGE> 4
implied, to list, register or otherwise qualify any of the Participant's
Shares. The Shares may not be transferred except in accordance with applicable
federal or state securities laws.
7. Plan Incorporated. The Participant accepts the Shares herein
subject to all the provisions of the Plan, which are incorporated into this
Agreement, including the provisions that authorize the Committee to administer
and interpret the Plan and which provide that the Committee's decisions,
determinations and interpretations with respect to the Plan are final and
conclusive on all persons affected thereby. Terms not otherwise defined in
this Agreement have the meanings given in the Plan.
8. Miscellaneous.
(a) The rights and obligations arising under this
Agreement are not intended to and do not affect the employment relationship
that otherwise exists between the Corporation and the Participant, whether such
employment relationship is at will or defined by an employment contract.
[Moreover, this Agreement is not intended to and does not amend the Employment
Agreement between the Corporation and the Participant; to the extent there is a
conflict between this Agreement and the Employment Agreement, the Employment
Agreement shall govern and take priority.]
(b) Neither the Participant nor any person claiming under
or through the Participant shall be or shall have any of the rights or
privileges of a stockholder of the Corporation in respect of any of the Shares
issuable hereunder unless and until such Shares have vested pursuant to the
terms of this Agreement.
(c) Any notice to be given to the Corporation under the
terms of this Agreement shall be addressed to the Corporation at its principal
executive offices, and any notice to be given to the Participant shall be
addressed to the Participant at the address set forth beneath his or her
signature hereto, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed
to have been duly given if mailed, postage prepaid, addressed as aforesaid.
(d) Subject to the limitations herein on the
transferability by the Participant of Shares, this Agreement shall be binding
upon and inure to the benefit of the representatives, executors, successors or
beneficiaries of the parties hereto.
(e) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND THE
UNITED STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
(f) If any provision of this Agreement is declared or
found to be illegal, unenforceable or void, in whole or in part, then the
parties shall be relieved of all obligations arising under such provision, but
only to the extent that it is illegal, unenforceable or void, it being the
intent and agreement of the parties that this Agreement shall be deemed amended
by modifying such provision to the extent necessary to make it legal and
enforceable while
<PAGE> 5
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(g) All section titles and captions in this Agreement are
for convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions
of this Agreement.
(h) The parties shall execute all documents, provide all
information, and take or refrain from taking all actions as may be reasonably
necessary or appropriate to achieve the purposes of this Agreement.
(i) This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
(j) No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
(k) This Agreement may be executed in counterparts, all
of which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.
(l) At any time and from time to time the Committee may
execute an instrument providing for modification, extension, or renewal of the
terms of any outstanding Shares, provided that no such modification, extension
or renewal shall impair the Shares in any respect without the consent of the
holder of the Shares. Except as provided in the preceding sentence, no
supplement, modification or amendment of this Agreement or waiver of any
provision of this Agreement shall be binding unless executed in writing by all
parties to this Agreement. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
of this Agreement (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
(m) In addition to all other rights or remedies available
at law or in equity, the Corporation shall be entitled to injunctive and other
equitable relief to prevent or enjoin any violation of the provisions of this
Agreement.
(n) The Participant's spouse joins this Agreement for the
purpose of agreeing to and accepting the terms of this Agreement and to bind
any community property interest he or she has or may have in any vested or any
unvested portion of the Shares, and any other shares of Common Stock held by
the Participant.
<PAGE> 6
(o) The Corporation shall issue and deliver to
Participant certificates representing the vested Shares issued under this
Agreement. The Corporation may place an appropriate legend on any certificates
representing Shares referencing the restrictions on Transfer imposed hereunder
and by applicable law. The Corporation may retain all stock certificates
representing unvested Shares.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CORPORATION:
ATC COMMUNICATIONS GROUP, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
PARTICIPANT:
-----------------------------------------
Name:
------------------------------------
Address:
---------------------------------
-----------------------------------------
-----------------------------------------
PARTICIPANT'S SPOUSE:
-----------------------------------------
Name:
------------------------------------
<PAGE> 1
EXHIBIT 10.22
ATC COMMUNICATIONS GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of ___________, 199__, is
made and entered into by and between ATC Communications Group, Inc., a Delaware
corporation (the "Corporation"), and ___________________ (the "Participant").
R E C I T A L S:
The Corporation has implemented the ATC Communications Group, Inc. 1996
Stock Option and Restricted Stock Plan (the "Plan"), which was adopted by the
Corporation's Board of Directors (the "Board") and will be submitted for
approval by the Corporation's shareholders, and which provides for the grant of
stock options and restricted stock to certain selected officers, directors and
key employees of the Corporation or its subsidiaries with respect to shares of
Common Stock, $.01 par value, of the Corporation (the "Common Stock").
[The Corporation and the Participant are parties to an Employment
Agreement dated as of _____________, 199__ (the "Employment Agreement").]
[Certain identified terms used herein have the same meaning they have in
the Employment Agreement.]
The stock options and restricted stock provided for under the Plan are
intended to comply with the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.
The committee appointed by the Board to administer the Plan (the
"Committee") has selected the Participant to participate in the Plan and has
awarded the non-qualified stock option described in this Agreement (the
"Option") to the Participant.
The parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to the
Participant to continue as an employee of the Corporation or its subsidiaries
and to promote the success of the business of the Corporation and its
subsidiaries, the parties hereby agree as follows:
1. Grant of Option. The Corporation hereby grants to the
Participant, upon the terms and subject to the conditions, limitations and
restrictions set forth in the Plan and in this Agreement, the Option to acquire
______ shares of Common Stock, at an exercise price per share of $_______,
effective as of the date of this Agreement (the "Award Date"). The Participant
hereby accepts the Option from the Corporation.
<PAGE> 2
2. Vesting. The shares of Common Stock subject to the Option shall
vest as follows:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES
---- ----------------
<S> <C>
_________, 199__ (date hereof) ______
_________, 199__ ______
_________, 199__ ______
</TABLE>
Notwithstanding the foregoing, the Option shall immediately vest in full as to
all shares of Common Stock subject hereto upon any "Sale of the Corporation".
A "Sale of the Corporation" shall occur if the Corporation shall engage in a
merger, consolidation, recapitalization, reorganization or sale, lease or
transfer of all or substantially all of the Corporation's assets and the
Corporation or its stockholders or affiliates immediately before such
transaction shall beneficially own, immediately after or as a result of such
transaction, equity securities of the surviving or acquiring corporation or
such corporation's parent corporation possessing less than fifty-one percent
(51%) of the voting power of the surviving or acquiring corporation or such
corporation's parent corporation, provided that a Sale of the Corporation shall
not be deemed to occur upon any public offering or series of such offerings of
securities of the Corporation or its affiliates that results in any such change
in beneficial ownership.
3. Exercise. In order to exercise the Option with respect to any
vested portion, the Participant shall provide written notice to the Corporation
at its principal executive office. At the time of exercise, the Participant
shall pay to the Corporation the exercise price per share set forth in Section
1 times the number of vested shares as to which the Option is being exercised.
The Participant shall make such payment in (a) cash, (b) check, (c) at the
Corporation's option, by the delivery of shares of Common Stock having a Fair
Market Value (as defined in the Plan) on the date immediately preceding the
exercise date equal to the aggregate exercise price or (d) at the Committee's
option, by the delivery of any other consideration that the Committee
determines is consistent with the Plan and applicable law. If the Option is
exercised in full, the Participant shall surrender this Agreement to the
Corporation for cancellation. If the Option is exercised in part, the
Participant shall surrender this Agreement to the Corporation so that the
Corporation may make appropriate notation hereon or cancel this Agreement and
issue a new agreement representing the unexercised portion of the Option.
If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), the Option
may be exercised by a broker-dealer acting on behalf of the Participant if (a)
the broker-dealer has received from the Participant or the Corporation a fully-
and duly-endorsed agreement evidencing such option, together with instructions
signed by the Participant requesting the Corporation to deliver the shares of
Common Stock subject to such option to the broker-dealer on behalf of the
Participant and specifying the account into which such shares should be
deposited, (b) adequate provision has been made with respect to the payment of
any withholding taxes due upon such exercise, and (c) the broker-dealer and the
Participant have otherwise complied with Section 220.3(e)(4) of Regulation T,
12 CFR Part 220, or any successor provision.
<PAGE> 3
4. Who May Exercise. The Option shall be exercisable during the
lifetime of the Participant only by the Participant. To the extent exercisable
after the Participant's death, the Option shall be exercised only by the
Participant's representatives, executors, successors or beneficiaries.
5. Expiration of Option. The Option shall expire, and shall not be
exercisable with respect to any vested portion as to which the Option has not
been exercised, on the first to occur of: (a) the tenth anniversary of the
Award Date; or (b) thirty (30) days after the expiration of the "Term" [(as
defined in the Employment Agreement, or define here)] of employment under the
Employment Agreement; (c) 30 days after the voluntary resignation by the
Participant from employment by the Optionee; (d) six (6) months after any
termination of the Optionee's employment with the Company for any reason other
than "Cause" [(as defined in the Employment Agreement, or define here)],
excluding the circumstances described in Sections 5(b) and (d) of this
Agreement; or (e) twelve (12) months after the death of the Optionee; provided,
however, that if the Optionee is terminated for Cause [(as defined in the
Employment Agreement, or define here)], [or violates any of the covenants
contained in Sections ____ of the Employment Agreement,] the Option shall
automatically expire, and shall not be exercisable with respect to any vested
shares of Common Stock as to which the Option has not been exercised,
simultaneously with such termination. The Option shall expire, and shall not
be exercisable, with respect to any unvested portion, immediately upon the
termination of the Participant's employment with the Corporation for any
reason, including death.
6. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Corporation may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto.
7. Dilution. The number of shares of Common Stock subject to the
Option and the exercise price therefor set forth in Section 1 shall be subject
to adjustment for any Dilutive Event. A "Dilutive Event" shall include any of
the following events that results in dilution to the shares of Common Stock
acquired or acquirable upon exercise of the Option: any increase or decrease
in the shares of Common Stock or any other capital stock of the Corporation or
any change or exchange of any such securities for a different number or kind of
securities, any of which results from one or more stock splits, reverse stock
splits, stock dividends or other corporate actions with a similar effect. A
"Dilutive Event" shall not include, however, among other things: (i) the
issuance or exercise of options granted pursuant to the Plan or pursuant to any
other stock-based compensation plan adopted by the Corporation's Board of
Directors; or (ii) any issuance of capital stock by the Corporation or any
issuance or grant to any person or entity of any right to subscribe for or to
purchase any capital stock or securities convertible into any capital stock of
the Corporation for consideration deemed adequate and appropriate by the Board
of Directors.
8. Transfer of Option. The Participant shall not, directly or
indirectly, sell, transfer, pledge, encumber or hypothecate ("Transfer") any
unvested portion of the Option or the rights
<PAGE> 4
and privileges pertaining thereto. In addition, the Participant shall not,
directly or indirectly, Transfer any vested portion of the Option or any shares
of Common Stock acquired upon exercise of the Option other than (i) with the
prior written consent of the Corporation, (ii) by will or the laws of descent
and distribution, (iii) with respect to shares of Common Stock acquired upon
exercise of the Option, pursuant to an effective registration statement filed
under the Act, or (iv) with respect to shares of Common Stock acquired upon
exercise of the Option, pursuant to an exemption from the registration
requirements of the Act. Any permitted transferee to whom the Participant
shall Transfer the Option pursuant to (i) or (ii) above shall agree to be bound
by this Agreement. Neither the Option nor the underlying shares of Common
Stock is liable for or subject to, in whole or in part, the debts, contracts,
liabilities or torts of the Participant, nor shall they be subject to
garnishment, attachment, execution, levy or other legal or equitable process.
9. Certain Legal Restrictions. The Corporation shall not be
obligated to sell or issue any shares of Common Stock upon the exercise of the
Option or otherwise unless the issuance and delivery of such shares shall
comply with all relevant provisions of law and other legal requirements
including, without limitation, any applicable federal or state securities laws
and the requirements of any stock exchange upon which shares of the Common
Stock may then be listed. The Corporation has filed a Registration Statement on
Form S-8 and agrees to use its best efforts to keep such Registration Statement
in effect thereafter for so long as the Option is outstanding or the shares of
Common Stock acquired on the exercise of the Option may be resold thereunder.
As a condition to the exercise of the Option or the sale by the Corporation of
any additional shares of Common Stock to the Participant, the Corporation may
require the Participant to make such representations and warranties as may be
reasonably necessary to assure compliance with applicable federal or state
securities laws. The Corporation shall not be liable for refusing to sell or
issue any shares if the Corporation cannot obtain authority from the
appropriate regulatory bodies deemed by the Corporation to be necessary to
lawfully sell or issue such shares. Except as provided above, the Corporation
shall have no obligation to the Participant, express or implied, to list,
register or otherwise qualify any of the Participant's shares of Common Stock.
The shares of Common Stock issued upon the exercise of the Option may not be
transferred except in accordance with applicable federal or state securities
laws.
10. Plan Incorporated. The Participant accepts the Option subject to
all the provisions of the Plan, which are incorporated into this Agreement,
including the provisions that authorize the Committee to administer and
interpret the Plan and which provide that the Committee's decisions,
determinations and interpretations with respect to the Plan are final and
conclusive on all persons affected thereby. Except as otherwise set forth in
this Agreement, terms defined in the Plan have the same meanings herein.
11. Miscellaneous.
(a) The Option is intended to be a non-qualified stock option
under applicable tax laws, and it is not to be characterized or treated as an
incentive stock option under such laws.
(b) The granting of the Option shall impose no obligation upon
the Participant to exercise the Option or any part thereof. Nothing contained
in this Agreement shall affect the
<PAGE> 5
right of the Corporation to terminate the Participant at any time, with or
without Cause [(as defined in the Employment Agreement)], or shall be deemed to
create any rights to employment on the part of the Participant.
(c) The rights and obligations arising under this Agreement
are not intended to and do not affect the employment relationship that
otherwise exists between the Corporation and the Participant, whether such
employment relationship is at will or defined by an employment contract.
[Moreover, this Agreement is not intended to and does not amend the Employment
Agreement between the Corporation and the Participant; to the extent there is a
conflict between this Agreement and the Employment Agreement, the Employment
Agreement shall govern and take priority.]
(d) Neither the Participant nor any person claiming under or
through the Participant shall be or shall have any of the rights or privileges
of a stockholder of the Corporation in respect of any of the shares issuable
upon the exercise of the Option herein unless and until certificates
representing such shares shall have been issued and delivered to the
Participant or such Participant's agent.
(e) Any notice to be given to the Corporation under the terms
of this Agreement or any delivery of the Option to the Corporation shall be
addressed to the Corporation at its principal executive offices, and any notice
to be given to the Participant shall be addressed to the Participant at the
address set forth beneath his or her signature hereto, or at such other address
for a party as such party may hereafter designate in writing to the other. Any
such notice shall be deemed to have been duly given if mailed, postage prepaid,
addressed as aforesaid.
(f) Subject to the limitations in this Agreement on the
transferability by the Participant of the Option and any shares of Common
Stock, this Agreement shall be binding upon and inure to the benefit of the
representatives, executors, successors or beneficiaries of the parties hereto.
(g) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND THE UNITED
STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
(h) If any provision of this Agreement is declared or found to
be illegal, unenforceable or void, in whole or in part, then the parties shall
be relieved of all obligations arising under such provision, but only to the
extent that it is illegal, unenforceable or void, it being the intent and
agreement of the parties that this Agreement shall be deemed amended by
modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if that is not possible, by
substituting therefor another provision that is legal and enforceable and
achieves the same objectives.
(i) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions
of this Agreement.
<PAGE> 6
(j) The parties shall execute all documents, provide all
information, and take or refrain from taking all actions as may be reasonably
necessary or appropriate to achieve the purposes of this Agreement.
(k) This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
(l) No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
(m) This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.
(n) At any time and from time to time the Committee may
execute an instrument providing for modification, extension, or renewal of any
outstanding option, provided that no such modification, extension or renewal
shall impair the Option in any respect without the consent of the holder of the
Option. Except as provided in the preceding sentence, no supplement,
modification or amendment of this Agreement or waiver of any provision of this
Agreement shall be binding unless executed in writing by all parties to this
Agreement. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision of this Agreement
(regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
(o) In addition to all other rights or remedies available at
law or in equity, the Corporation shall be entitled to injunctive and other
equitable relief to prevent or enjoin any violation of the provisions of this
Agreement.
(p) The Participant's spouse joins this Agreement for the
purpose of agreeing to and accepting the terms of this Agreement and to bind
any community property interest he or she has or may have in the Option, any
vested portion or any unvested portion of the Option, any shares of Common
Stock acquired upon exercise of the Option and any other shares of Common Stock
held by the Participant.
[remainder of page intentionally left blank]
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ATC COMMUNICATIONS GROUP, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
PARTICIPANT:
------------------------------------------
Name:
-------------------------------------
Address:
----------------------------------
------------------------------------------
------------------------------------------
PARTICIPANT'S SPOUSE:
------------------------------------------
Name:
-------------------------------------
<PAGE> 1
EXHIBIT 10.23
ATC COMMUNICATIONS GROUP, INC.
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of __________, 199__ (the
"Effective Date"), is made and entered into by and between ATC Communications
Group, Inc., a Delaware corporation (the "Corporation"), and __________________
(the "Participant").
R E C I T A L S:
The Corporation has implemented the ATC Communications Group, Inc. 1996
Stock Option and Restricted Stock Plan (the "Plan"), which was adopted by the
Corporation's Board of Directors (the "Board") and will be submitted for
approval by the Corporation's stockholders, and which provides for the grant of
stock options and restricted stock to certain selected officers, directors and
key employees of the Corporation or its subsidiaries with respect to shares of
Common Stock, $.01 par value, of the Corporation (the "Common Stock").
[The Corporation and the Participant are parties to an Employment
Agreement dated as of ______________, 199__ (the "Employment Agreement").]
[Certain identified terms used herein have the same meaning they have in
the Employment Agreement.]
The stock options and restricted stock provided for under the Plan are
intended to comply with the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.
The committee appointed by the Board to administer the Plan (the
"Committee") has selected the Participant to participate in the Plan and has
awarded the shares of restricted stock described in this Agreement to the
Participant.
The parties hereto desire to evidence in writing the terms and
conditions of such restricted stock.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to the
Participant to continue as an employee of the Corporation or its subsidiary and
to promote the success of the business of the Corporation or its subsidiary,
the parties hereby agree as follows:
1. Grant of Restricted Stock. The Corporation hereby grants to the
Participant, upon the terms and subject to the conditions, limitations and
restrictions set forth in the Plan and in this Agreement, ________ shares of
Common Stock (the "Shares"), effective as of the date of this Agreement (the
"Award Date"). The Participant hereby accepts the Shares from the Corporation
<PAGE> 2
and agrees to pay the Corporation an amount equal to the aggregate par value of
the Shares in cash or by check on the Award Date.
2. Vesting.
(a) The Shares will vest in their entirety on ___________,
199__, unless the Participant's employment with the Corporation and Advanced
Telemarketing Corporation has previously terminated for any reason other than
termination without Cause [(as defined in the Employment Agreement, or, if no
agreement exists, define here)].
(b) Subject to the terms of this Agreement, when Shares become
vested hereunder, the Participant will be entitled to all rights represented by
such vested Shares, including, without limitation, the right to receive any
cash and non-cash distributions. Except as provided in Section 5 hereof, no
distributions will be paid with respect to unvested Shares. The Participant
will have full voting rights (to the extent granted on such Shares) with
respect to all vested Shares.
(c) Upon any "Sale of the Corporation" the Shares shall
immediately vest in full. A "Sale of the Corporation" shall occur if the
Corporation shall engage in a merger, consolidation, recapitalization,
reorganization or sale, lease or transfer of all or substantially all of the
Corporation's assets and the Corporation or its stockholders or affiliates
immediately before such transaction shall beneficially own, immediately after
or as a result of such transaction, equity securities of the surviving or
acquiring corporation or such corporation's parent corporation possessing less
than fifty-one percent (51%) of the voting power of the surviving or acquiring
corporation or such corporation's parent corporation, provided that a Sale of
the Corporation shall not be deemed to occur upon any public offering or series
of such offerings of securities of the Corporation or its affiliates that
results in any such change in beneficial ownership.
(d) Notwithstanding anything in this Agreement to the
contrary, if at any time following __________, 199__ but prior to the fifth
anniversary of the Effective Date, the Participant's employment with the
Corporation and Advanced Telemarketing Corporation is terminated for any
reason, other than termination without Cause, the Participant (or Participant's
estate, administrator, executor, guardian or other legal representative, as the
case may be), shall transfer, assign and deliver to the Corporation a number of
the shares of Common Stock granted under this Agreement equal to the product of
(i) ______ multiplied by (ii) a fraction, the numerator of which shall equal
the number of calendar months following the date of termination, divided by 60.
In the event that the Participant has sold any of the shares of Common Stock
that are otherwise required to be transferred, assigned or delivered to the
Corporation, the Participant (or Participant's estate, administrator, executor,
guardian or other legal representative, as the case may be) shall pay to the
Corporation an amount in cash equal to the number of shares that have been
sold, multiplied by $_______. Notwithstanding the foregoing, if following any
Sale of the Corporation, Participant is not terminated but Participant's duties
and responsibilities are materially curtailed or diminished, his authority is
materially reduced, or his compensation is reduced, Participant may treat such
occurrence as a "termination without Cause" for purposes of this subsection
(d).
2
<PAGE> 3
3. Transfer of Shares. The Participant shall not, directly or
indirectly, sell, transfer, pledge, encumber or hypothecate ("Transfer") any
unvested Shares or the rights and privileges pertaining thereto. In addition,
the Participant shall not, directly or indirectly, Transfer any vested Shares
other than (i) with the prior written consent of the Corporation, (ii) by will
or the laws of descent and distribution, (iii) pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended (the
"Act"), or (iv) pursuant to any exemption from the registration requirements of
the Act. Any permitted transferee to whom the Participant shall Transfer the
Shares pursuant to (i) or (ii) above shall agree to be bound by this Agreement.
The Shares are not liable for or subject to, in whole or in part, the debts,
contracts, liabilities or torts of the Participant, nor shall they be subject
to garnishment, attachment, execution, levy or other legal or equitable
process.
4. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Corporation may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign to withhold in connection with any of the Shares subject hereto.
5. Dilution. The number of Shares set forth in Section 1 hereof
shall be subject to adjustment for any Dilutive Event. A "Dilutive Event"
shall include any of the following events that results in dilution to the
Shares acquired hereunder: any increase or decrease in the Shares or any other
capital stock of the Corporation or any change or exchange of any such
securities for a different number or kind of securities, any of which results
from one or more stock splits, reverse stock splits, stock dividends or other
corporate actions with a similar effect. A "Dilutive Event" shall not include,
however, among other things: (i) the issuance or exercise of options granted
pursuant to the Plan or pursuant to any other stock-based compensation plan
adopted by the Corporation's Board of Directors; or (ii) any issuance of
capital stock by the Corporation or any issuance or grant to any person or
entity of any right to subscribe for or to purchase any capital stock or
securities convertible into any capital stock of the Corporation for
consideration deemed adequate and appropriate by the Board of Directors.
6. Certain Legal Restrictions. The Corporation shall not be
obligated to issue any Shares vesting hereunder unless the issuance and
delivery of such Shares shall comply with all relevant provisions of law and
other legal requirements including, without limitation, any applicable federal
or state securities laws and the requirements of any stock exchange upon which
shares of the Corporation's Common Stock may then be listed. The Corporation
has filed a Registration Statement on Form S-8 and agrees to keep such
Registration Statement in effect thereafter for so long as the shares of Common
Stock acquired hereunder may be resold thereunder. As a condition to the sale
by the Corporation of any additional shares of Common Stock to the Participant,
the Corporation may require the Participant to make such representations and
warranties as may be reasonably necessary to assure compliance with applicable
federal or state securities laws. The Corporation shall not be liable for
refusing to issue any Shares if the Corporation cannot obtain authority from
the appropriate regulatory bodies deemed by the Corporation to be necessary to
lawfully
3
<PAGE> 4
sell or issue such shares. Except as provided above, the Corporation shall
have no obligation to the Participant, express or implied, to list, register or
otherwise qualify any of the Participant's Shares. The Shares may not be
transferred except in accordance with applicable federal or state securities
laws.
7. Plan Incorporated. The Participant accepts the Shares herein
subject to all the provisions of the Plan, which are incorporated into this
Agreement, including the provisions that authorize the Committee to administer
and interpret the Plan and which provide that the Committee's decisions,
determinations and interpretations with respect to the Plan are final and
conclusive on all persons affected thereby. Terms not otherwise defined in
this Agreement have the meanings given in the Plan.
8. Miscellaneous.
(a) The rights and obligations arising under this Agreement
are not intended to and do not affect the employment relationship that
otherwise exists between the Corporation and the Participant, whether such
employment relationship is at will or defined by an employment contract.
[Moreover, this Agreement is not intended to and does not amend the Employment
Agreement between the Corporation and the Participant; to the extent there is a
conflict between this Agreement and the Employment Agreement, the Employment
Agreement shall govern and take priority.]
(b) Neither the Participant nor any person claiming under or
through the Participant shall be or shall have any of the rights or privileges
of a stockholder of the Corporation in respect of any of the Shares issuable
hereunder unless and until such Shares have vested pursuant to the terms of
this Agreement.
(c) Any notice to be given to the Corporation under the terms
of this Agreement shall be addressed to the Corporation at its principal
executive offices, and any notice to be given to the Participant shall be
addressed to the Participant at the address set forth beneath his or her
signature hereto, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed
to have been duly given if mailed, postage prepaid, addressed as aforesaid.
(d) Subject to the limitations herein on the transferability
by the Participant of Shares, this Agreement shall be binding upon and inure to
the benefit of the representatives, executors, successors or beneficiaries of
the parties hereto.
(e) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND THE UNITED
STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
(f) If any provision of this Agreement is declared or found to
be illegal, unenforceable or void, in whole or in part, then the parties shall
be relieved of all obligations arising under such provision, but only to the
extent that it is illegal, unenforceable or void, it
4
<PAGE> 5
being the intent and agreement of the parties that this Agreement shall be
deemed amended by modifying such provision to the extent necessary to make it
legal and enforceable while preserving its intent or, if that is not possible,
by substituting therefor another provision that is legal and enforceable and
achieves the same objectives.
(g) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions
of this Agreement.
(h) The parties shall execute all documents, provide all
information, and take or refrain from taking all actions as may be reasonably
necessary or appropriate to achieve the purposes of this Agreement.
(i) This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
(j) No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
(k) This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.
(l) At any time and from time to time the Committee may
execute an instrument providing for modification, extension, or renewal of the
terms of any outstanding Shares, provided that no such modification, extension
or renewal shall impair the Shares in any respect without the consent of the
holder of the Shares. Except as provided in the preceding sentence, no
supplement, modification or amendment of this Agreement or waiver of any
provision of this Agreement shall be binding unless executed in writing by all
parties to this Agreement. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
of this Agreement (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
(m) In addition to all other rights or remedies available at
law or in equity, the Corporation shall be entitled to injunctive and other
equitable relief to prevent or enjoin any violation of the provisions of this
Agreement.
(n) The Participant's spouse joins this Agreement for the
purpose of agreeing to and accepting the terms of this Agreement and to bind
any community property interest he or she has or may have in any vested or any
unvested portion of the Shares, and any other shares of Common Stock held by
the Participant.
5
<PAGE> 6
(o) The Corporation shall issue and deliver to Participant
certificates representing the vested Shares issued under this Agreement. The
Corporation may place an appropriate legend on any certificates representing
Shares referencing the restrictions on Transfer imposed hereunder and by
applicable law. The Corporation may retain all stock certificates representing
unvested Shares.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CORPORATION:
ATC COMMUNICATIONS GROUP, INC.
By:
---------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
PARTICIPANT:
------------------------------------------
Name:
-----------------------------------
Address:
----------------------------------
------------------------------------------
------------------------------------------
PARTICIPANT'S SPOUSE:
------------------------------------------
Name:
-------------------------------------
6
<PAGE> 1
EXHIBIT 10.24
ATC COMMUNICATIONS GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of September 5, 1996, is
made and entered into by and between ATC Communications Group, Inc., a Delaware
corporation (the "Corporation"), and Arthur Chavoya (the "Participant").
R E C I T A L S:
The Corporation has implemented the ATC Communications Group, Inc. 1996
Stock Option and Restricted Stock Plan (the "Plan"), which was adopted by the
Corporation's Board of Directors (the "Board") and will be submitted for
approval by the Corporation's shareholders, and which provides for the grant of
stock options and restricted stock to certain selected officers, directors and
key employees of the Corporation or its subsidiaries with respect to shares of
Common Stock, $.01 par value, of the Corporation (the "Common Stock").
The Corporation and the Participant are parties to an Employment
Agreement dated as of September 5, 1996 (the "Employment Agreement").
Certain identified terms used herein have the same meaning they have in
the Employment Agreement.
The stock options and restricted stock provided for under the Plan are
intended to comply with the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.
The committee appointed by the Board to administer the Plan (the
"Committee") has selected the Participant to participate in the Plan and has
awarded the non-qualified stock option described in this Agreement (the
"Option") to the Participant.
The parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to the
Participant to continue as an employee of the Corporation or its subsidiaries
and to promote the success of the business of the Corporation and its
subsidiaries, the parties hereby agree as follows:
1. Grant of Option. The Corporation hereby grants to the
Participant, upon the terms and subject to the conditions, limitations and
restrictions set forth in the Plan and in this Agreement, the Option to acquire
600,000 shares of Common Stock, at an exercise price per share of $16.1875,
effective as of the date of this Agreement (the "Award Date"). The Participant
hereby accepts the Option from the Corporation.
<PAGE> 2
2. Vesting. The shares of Common Stock subject to the Option shall
vest as follows:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES
---- ----------------
<S> <C>
September 5, 1996 (date hereof) 100,000
September 5, 1997 100,000
September 5, 1998 100,000
September 5, 1999 100,000
September 5, 2000 100,000
September 5, 2001 100,000
</TABLE>
Notwithstanding the foregoing, the Option shall immediately vest in full as to
all shares of Common Stock subject hereto upon any "Sale of the Corporation".
A "Sale of the Corporation" shall occur if the Corporation shall engage in a
merger, consolidation, recapitalization, reorganization or sale, lease or
transfer of all or substantially all of the Corporation's assets and the
Corporation or its stockholders or affiliates immediately before such
transaction shall beneficially own, immediately after or as a result of such
transaction, equity securities of the surviving or acquiring corporation or
such corporation's parent corporation possessing less than fifty-one percent
(51%) of the voting power of the surviving or acquiring corporation or such
corporation's parent corporation, provided that a Sale of the Corporation shall
not be deemed to occur upon any public offering or series of such offerings of
securities of the Corporation or its affiliates that results in any such change
in beneficial ownership.
3. Exercise. In order to exercise the Option with respect to any
vested portion, the Participant shall provide written notice to the Corporation
at its principal executive office. At the time of exercise, the Participant
shall pay to the Corporation the exercise price per share set forth in Section
1 times the number of vested shares as to which the Option is being exercised.
The Participant shall make such payment in (a) cash, (b) check, (c) at the
Corporation's option, by the delivery of shares of Common Stock having a Fair
Market Value (as defined in the Plan) on the date immediately preceding the
exercise date equal to the aggregate exercise price or (d) at the Committee's
option, by the delivery of any other consideration that the Committee
determines is consistent with the Plan and applicable law. If the Option is
exercised in full, the Participant shall surrender this Agreement to the
Corporation for cancellation. If the Option is exercised in part, the
Participant shall surrender this Agreement to the Corporation so that the
Corporation may make appropriate notation hereon or cancel this Agreement and
issue a new agreement representing the unexercised portion of the Option.
If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), the Option
may be exercised by a broker-dealer acting on behalf of the Participant if (a)
the broker-dealer has received from the Participant or the Corporation a fully-
and duly-endorsed agreement evidencing such option, together with instructions
signed by the Participant requesting the Corporation to deliver the shares of
Common Stock subject to such option to the broker-dealer on behalf of the
Participant and specifying the account into which such shares should be
deposited, (b) adequate provision has been made with respect to the payment of
any withholding taxes due upon such exercise, and (c)
2
<PAGE> 3
the broker-dealer and the Participant have otherwise complied with Section
220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor provision.
4. Who May Exercise. The Option shall be exercisable during the
lifetime of the Participant only by the Participant. To the extent exercisable
after the Participant's death, the Option shall be exercised only by the
Participant's representatives, executors, successors or beneficiaries.
5. Expiration of Option. The Option shall expire, and shall not be
exercisable with respect to any vested portion as to which the Option has not
been exercised, on the first to occur of: (a) the tenth anniversary of the
Award Date; or (b) thirty (30) days after the expiration of the "Term" (as
defined in Section 3 of the Employment Agreement) of employment under the
Employment Agreement; (c) 30 days after the voluntary resignation by the
Participant from employment by the Optionee; (d) six (6) months after any
termination of the Optionee's employment with the Company for any reason other
than "Cause" (as defined in Section 8 of the Employment Agreement), excluding
the circumstances described in Sections 5(b) and (d) of this Agreement; or (e)
twelve (12) months after the death of the Optionee; provided, however, that if
the Optionee is terminated for Cause (as defined in Section 8 of the Employment
Agreement), or violates any of the covenants contained in Sections 9, 10 or 11
of the Employment Agreement, the Option shall automatically expire, and shall
not be exercisable with respect to any vested shares of Common Stock as to
which the Option has not been exercised, simultaneously with such termination.
The Option shall expire, and shall not be exercisable, with respect to any
unvested portion, immediately upon the termination of the Participant's
employment with the Corporation for any reason, including death.
6. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Corporation may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto.
7. Dilution. The number of shares of Common Stock subject to the
Option and the exercise price therefor set forth in Section 1 shall be subject
to adjustment for any Dilutive Event. A "Dilutive Event" shall include any of
the following events that results in dilution to the shares of Common Stock
acquired or acquirable upon exercise of the Option: any increase or decrease
in the shares of Common Stock or any other capital stock of the Corporation or
any change or exchange of any such securities for a different number or kind of
securities, any of which results from one or more stock splits, reverse stock
splits, stock dividends or other corporate actions with a similar effect. A
"Dilutive Event" shall not include, however, among other things: (i) the
issuance or exercise of options granted pursuant to the Plan or pursuant to any
other stock-based compensation plan adopted by the Corporation's Board of
Directors; or (ii) any issuance of capital stock by the Corporation or any
issuance or grant to any person or entity of any right to subscribe for or to
purchase any capital stock or securities convertible into any capital stock of
the Corporation for consideration deemed adequate and appropriate by the Board
of Directors.
3
<PAGE> 4
8. Transfer of Option. The Participant shall not, directly or
indirectly, sell, transfer, pledge, encumber or hypothecate ("Transfer") any
unvested portion of the Option or the rights and privileges pertaining thereto.
In addition, the Participant shall not, directly or indirectly, Transfer any
vested portion of the Option or any shares of Common Stock acquired upon
exercise of the Option other than (i) with the prior written consent of the
Corporation, (ii) by will or the laws of descent and distribution, (iii) with
respect to shares of Common Stock acquired upon exercise of the Option,
pursuant to an effective registration statement filed under the Act, or (iv)
with respect to shares of Common Stock acquired upon exercise of the Option,
pursuant to an exemption from the registration requirements of the Act. Any
permitted transferee to whom the Participant shall Transfer the Option pursuant
to (i) or (ii) above shall agree to be bound by this Agreement. Neither the
Option nor the underlying shares of Common Stock is liable for or subject to,
in whole or in part, the debts, contracts, liabilities or torts of the
Participant, nor shall they be subject to garnishment, attachment, execution,
levy or other legal or equitable process.
9. Certain Legal Restrictions. The Corporation shall not be
obligated to sell or issue any shares of Common Stock upon the exercise of the
Option or otherwise unless the issuance and delivery of such shares shall
comply with all relevant provisions of law and other legal requirements
including, without limitation, any applicable federal or state securities laws
and the requirements of any stock exchange upon which shares of the Common
Stock may then be listed. The Corporation agrees to file a Registration
Statement on Form S-8 promptly following the execution of this Agreement and to
use its best efforts to keep such Registration Statement in effect thereafter
for so long as the Option is outstanding or the shares of Common Stock acquired
on the exercise of the Option may be resold thereunder. As a condition to the
exercise of the Option or the sale by the Corporation of any additional shares
of Common Stock to the Participant, the Corporation may require the Participant
to make such representations and warranties as may be reasonably necessary to
assure compliance with applicable federal or state securities laws. The
Corporation shall not be liable for refusing to sell or issue any shares if the
Corporation cannot obtain authority from the appropriate regulatory bodies
deemed by the Corporation to be necessary to lawfully sell or issue such
shares. Except as provided above, the Corporation shall have no obligation to
the Participant, express or implied, to list, register or otherwise qualify any
of the Participant's shares of Common Stock. The shares of Common Stock issued
upon the exercise of the Option may not be transferred except in accordance
with applicable federal or state securities laws.
10. Plan Incorporated. The Participant accepts the Option subject to
all the provisions of the Plan, which are incorporated into this Agreement,
including the provisions that authorize the Committee to administer and
interpret the Plan and which provide that the Committee's decisions,
determinations and interpretations with respect to the Plan are final and
conclusive on all persons affected thereby. Except as otherwise set forth in
this Agreement, terms defined in the Plan have the same meanings herein.
11. Miscellaneous.
4
<PAGE> 5
(a) The Option is intended to be a non-qualified stock option
under applicable tax laws, and it is not to be characterized or treated as an
incentive stock option under such laws.
(b) The granting of the Option shall impose no obligation upon
the Participant to exercise the Option or any part thereof. Nothing contained
in this Agreement shall affect the right of the Corporation to terminate the
Participant at any time, with or without Cause (as defined in Section 8 of the
Employment Agreement), or shall be deemed to create any rights to employment on
the part of the Participant.
(c) The rights and obligations arising under this Agreement
are not intended to and do not affect the employment relationship that
otherwise exists between the Corporation and the Participant, whether such
employment relationship is at will or defined by an employment contract.
Moreover, this Agreement is not intended to and does not amend the Employment
Agreement between the Corporation and the Participant; to the extent there is a
conflict between this Agreement and the Employment Agreement, the Employment
Agreement shall govern and take priority.
(d) Neither the Participant nor any person claiming under or
through the Participant shall be or shall have any of the rights or privileges
of a stockholder of the Corporation in respect of any of the shares issuable
upon the exercise of the Option herein unless and until certificates
representing such shares shall have been issued and delivered to the
Participant or such Participant's agent.
(e) Any notice to be given to the Corporation under the terms
of this Agreement or any delivery of the Option to the Corporation shall be
addressed to the Corporation at its principal executive offices, and any notice
to be given to the Participant shall be addressed to the Participant at the
address set forth beneath his or her signature hereto, or at such other address
for a party as such party may hereafter designate in writing to the other. Any
such notice shall be deemed to have been duly given if mailed, postage prepaid,
addressed as aforesaid.
(f) Subject to the limitations in this Agreement on the
transferability by the Participant of the Option and any shares of Common
Stock, this Agreement shall be binding upon and inure to the benefit of the
representatives, executors, successors or beneficiaries of the parties hereto.
(g) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND THE UNITED
STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
(h) If any provision of this Agreement is declared or found to
be illegal, unenforceable or void, in whole or in part, then the parties shall
be relieved of all obligations arising under such provision, but only to the
extent that it is illegal, unenforceable or void, it being the intent and
agreement of the parties that this Agreement shall be deemed amended by
modifying such provision to the extent necessary to make it legal and
enforceable while
5
<PAGE> 6
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(i) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions
of this Agreement.
(j) The parties shall execute all documents, provide all
information, and take or refrain from taking all actions as may be reasonably
necessary or appropriate to achieve the purposes of this Agreement.
(k) This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
(l) No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
(m) This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.
(n) At any time and from time to time the Committee may
execute an instrument providing for modification, extension, or renewal of any
outstanding option, provided that no such modification, extension or renewal
shall impair the Option in any respect without the consent of the holder of the
Option. Except as provided in the preceding sentence, no supplement,
modification or amendment of this Agreement or waiver of any provision of this
Agreement shall be binding unless executed in writing by all parties to this
Agreement. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision of this Agreement
(regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
(o) In addition to all other rights or remedies available at
law or in equity, the Corporation shall be entitled to injunctive and other
equitable relief to prevent or enjoin any violation of the provisions of this
Agreement.
(p) The Participant's spouse joins this Agreement for the
purpose of agreeing to and accepting the terms of this Agreement and to bind
any community property interest he or she has or may have in the Option, any
vested portion or any unvested portion of the Option, any shares of Common
Stock acquired upon exercise of the Option and any other shares of Common Stock
held by the Participant.
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ATC COMMUNICATIONS GROUP, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
PARTICIPANT:
------------------------------------------
Name: Arthur Chavoya
-------------------------------------
Address:
----------------------------------
------------------------------------------
------------------------------------------
PARTICIPANT'S SPOUSE:
------------------------------------------
Name:
-------------------------------------
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,185,446
<SECURITIES> 0
<RECEIVABLES> 19,685,156
<ALLOWANCES> 100,016
<INVENTORY> 0
<CURRENT-ASSETS> 22,981,453
<PP&E> 19,168,105
<DEPRECIATION> 7,682,824
<TOTAL-ASSETS> 36,342,139
<CURRENT-LIABILITIES> 11,180,963
<BONDS> 0
0
8,698
<COMMON> 160,609
<OTHER-SE> 22,612,322
<TOTAL-LIABILITY-AND-EQUITY> 36,342,139
<SALES> 0
<TOTAL-REVENUES> 26,545,074
<CGS> 17,465,050
<TOTAL-COSTS> 5,766,428
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99,560
<INCOME-PRETAX> 3,214,036
<INCOME-TAX> 1,092,775
<INCOME-CONTINUING> 2,121,261
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,121,261
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
