<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
X Annual report pursuant to Section 13 or 15(d) of the
----- Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended June 30, 1996
----- Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
----------- -------------
Commission file number: 0-14315
ATC COMMUNICATIONS GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 75-2050538
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5950 BERKSHIRE LANE, SUITE 1650, DALLAS, TEXAS 75225
-----------------------------------------------------
(Address of principal executive offices, Zip Code)
Registrant's telephone number, including area code: (214) 361-9870
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
----------------------------
(Title of Class)
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------- ----------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
--------
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of September 30, 1996 was approximately $245.9 million.
As of September 30, 1996, 16,060,911 shares of Common Stock were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
<PAGE> 2
ATC COMMUNICATIONS GROUP, INC.
AMENDMENT TO FORM 10-K
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the names and ages of all directors and
executive officers of the Company as well as all positions and offices held by
each such person and his term in each such position or office.
<TABLE>
<CAPTION>
Position with the Held
Name and Age Company or Subsidiary Position Since
----------------- -------------------------------------------------- ------------------
<S> <C> <C>
Michael G. Santry Chairman of the Board February 1986
48
Arthur Chavoya President, Chief Executive Officer, Director September 1996
49
Thomas Bijou Chairman of Advanced Telemarketing Corporation August 1992
45 Director February 1993
Jerry L. Sims, Jr. Chief Financial Officer September 1996
35 Secretary February 1994
Director November 1993
J. Frank Mermoud Director March 1994
40
Patrick V. Stark Director December 1991
42
Mike Allred Director February 1993
51
Darryl D. Pounds Director March 1996
46
David Malcolm Director May 1996
42
</TABLE>
MICHAEL G. SANTRY has been a Director of the Company since February 1986,
Chairman of the Company since September 1996 and was the President, Chief
Executive Officer and Chief Financial Officer of the Company from February 1986
through September 1996. Since 1980 Mr. Santry has been President and a
Director of Lakewood Financial Consultants, Inc., a privately held corporation
providing financial consulting services. Mr. Santry is a Certified Public
Accountant.
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<PAGE> 3
ARTHUR CHAVOYA joined the Company in September 1996 as President and Chief
Executive Officer. From 1986 through September 1996, Mr. Chavoya held various
positions with EDS, including his most recent position as President of EDS'
Global Travel Services strategic business unit.
THOMAS BIJOU has been a Director of the Company since February 1993,
Chairman of the Company's operating subsidiary, Advanced Telemarketing
Corporation, since September 1996 and was President of Advanced Telemarketing
Corporation from August 1992 through September 1996. Mr. Bijou was a Vice
President for Tigon Corporation, a voice mail services subsidiary of Ameritech
Corporation, from 1983 to August 1992.
JERRY L. SIMS, JR. has been a Director of the Company since November 1993,
Chief Financial Officer since September 1996, Secretary of the Company since
February 1994, and Controller of the Company since September 1991. From 1985
to 1991 Mr. Sims was Vice President of Finance for the Company's subsidiary,
Advanced Telemarketing Corporation.
J. FRANK MERMOUD has been a Director of the Company since March 1994 and
has acted as a consultant to the Company since May 1993. Mr. Mermoud was a
Legislative Director of Congressional Affairs with the U.S. Department of State
from 1992 to 1993 and, prior to joining the U.S. Department of State, Mr.
Mermoud was a Congressional Liaison Officer with U.S. Information Agency since
1988.
PATRICK V. STARK has been a Director of the Company since December 1991 and
has been a Shareholder and Director of the law firm Kane, Russell, Coleman and
Logan since 1992. Prior to joining the law firm, Mr. Stark was Executive Vice
President and General Counsel for Lifetime Automotive Products since May 1991,
and prior to joining Lifetime Automotive Products, Mr. Stark was a Director and
Shareholder with the law firm Geary, Glast & Middleton.
MIKE ALLRED has been a Director of the Company since February 1993 and has
been a Director of Spencer Stuart since April 1994. Prior to joining Spencer
Stuart, Mr. Allred was a Vice President of E-Systems from May 1992 to March
1994 and, from 1987 to 1992, Mr. Allred was President/Chief Executive Officer
of VI-Tec.
DARRYL D. POUNDS has been a Director of the Company since March 1996 and
has been a Partner of Chartwell Partners, Ltd., a Dallas based investment firm,
since 1995. From 1993 until 1995, Mr. Pounds served as Chairman and CEO of the
Trust Company of Texas and, from 1972 through 1993, Mr. Pounds held a variety
of positions within First City Bancoporation, including Chairman and CEO of
First City Bank of Dallas.
DAVID MALCOLM has been a Director of the Company since May 1996. Mr.
Malcolm has been Chairman of Suncoast Financial Corporation, a mortgage banking
and real estate development firm, since 1977. Currently, Mr. Malcolm also
serves as a Commissioner on the San Diego Unified Port District, a commission
that owns and operates San Diego International Airport and properties on the
San Diego Bay.
Each director serves until the next annual meeting of the Company's
shareholders and until the director's successor is duly elected. Officers
serve at the discretion of the Board of Directors. There is no family
relationship among any of the above named officers and directors of the
Company.
ITEM 11: EXECUTIVE COMPENSATION
Furnished below is a table containing individual compensation information
on the Chief Executive Officer of the Company and the two other most highly
paid executive officers of the Company and its operating
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subsidiary whose total annual salary and bonus amounts totaled $100,000 or more
for services rendered in all capacities during the fiscal years ended June 30,
1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
----------------------------------- -------------------------- -------
Name and Principal Salary Bonus Other Annual Restricted Options/ LTIP All Other
Position Year $ $ Compensation Stock Awards SARs (5) Payouts Compensation
- -------------------- ---- ------- ------ ------------ ------------ -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael G. Santry 1996 293,750 (1) -- -- -- 950,000 (5) -- --
Chairman 1995 275,000 -- -- -- -- -- --
1994 331,250 -- -- -- -- -- --
Thomas Bijou 1996 260,892 150,000(2) -- -- -- -- --
Chairman of Advanced 1995 250,016 125,000(2) -- -- 2,410,880 (3) -- --
Telemarketing Corp. 1994 228,079 175,000(2) -- -- -- -- (3)
RICHARD F. MARINARO 1996 -- -- 1,690,928 (4) -- -- -- --
Senior Vice President 1995 -- -- 1,063,024 (4) -- -- -- --
of Advanced 1994 -- -- 404,018 (4) -- -- -- --
Telemarketing
Corporation
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Option Term
------------------------
Number of Securities % of Total Options Granted Exercise Expiration
Name Underlying Options Granted to Employees In Fiscal Year Price Date 5% 10%
- ----------------- -------------------------- --------------------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Michael G. Santry 950,000 95.7% $9.00 4/1/06 5,377,049 13,626,498
</TABLE>
(1) Effective April 1, 1996, the Compensation Committee of the Board of
Directors set Mr. Santry's annual base salary at $350,000. Mr. Santry is
also entitled to receive bonus compensation up to $125,000 upon the
achievement of certain financial objectives for the 1997 fiscal year.
(2) Mr. Bijou was paid $150,000, $125,000 and $175,000 in bonus compensation
in fiscal 1996, 1995 and 1994, respectively, pursuant to the achievement
of certain operating results at ATC for the 1995, 1994 and 1993 calendar
years.
(3) In 1994 Mr. Bijou was granted fully vested options to purchase 10% of the
common stock of Advanced Telemarketing Corporation at an option price of
$.01 per share. In management's opinion, the option price approximated
the fair market value of the stock at the date of grant. With such grant
Mr. Bijou held fully vested options to purchase 15% of the common stock
of Advanced Telemarketing Corporation. In March 1995, Mr. Bijou
surrendered such options in exchange for stock options to purchase a
total of 2,410,880 shares of the Company's Common Stock at $0.8125 per
share, the market price at the date of grant. The options granted became
fully exercisable on August 1, 1995 and are exercisable for ten years
from the date of grant.
(4) Mr. Marinaro's compensation is derived from commissions earned on
revenues at Advanced Telemarketing Corporation. Mr. Marinaro serves as
an account representative for Advanced Telemarketing Corporation's
largest customer. His compensation is derived from commissions earned on
revenues generated by such customer. Because Mr. Marinaro is not an
officer or director of the
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Company and therefore does not participate in policy making decisions for
the Company, the Company disclaims that Mr. Marinaro is an "executive
officer" of the Company.
(5) In February 1993 the Company's shareholders approved the the Company's
1992 Stock Option Plan (the "1992 Plan") to grant options to purchase up
to 3,000,000 shares of Common Stock to key employees, officers, and
directors of the Company and its subsidiaries. Options may be granted at
any time prior to December 11, 2002. In 1996, Mr. Santry was granted
950,000 options to purchase shares at the market price on the date of
grant pursuant to the 1992 Plan. To date no options have been granted
pursuant to the 1992 Plan to other executive officers named in the table
above. In March 1995, the Company's Board of Directors approved the
Company's 1995 Stock Option Plan (the "1995 Plan") to grant options to
purchase up to 2,410,880 shares of Common Stock to key employees of the
Company and its subsidiaries. Options to purchase all 2,410,880 shares
were then granted to Mr. Bijou. See also Note 3 above.
Advanced Telemarketing Corporation and Thomas Bijou are parties to an
employment agreement which provides for an employment term through December
31,1997 at an annual base salary of $262,500. The employment agreement also
contains confidentiality and non-competition provisions.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 30, 1996, certain
information with respect to the beneficial ownership of Common Stock by (i)
each person known by the Company to be a beneficial owner of five percent (5%)
or more of the Company's Common Stock, (ii) each director and each of the three
executive officers listed in the Summary Compensation Table above who
beneficially own Common Stock of the Company, and (iii) all officers and
directors who
beneficially own Common Stock as a group:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership (1)
---------------------------------- --------------------------------- --------------------
<S> <C> <C>
Codinvest Limited 4,200,000 (2) 20.73% (2)
Road Town
Tortola
British Virgin Islands
Societe Bancaire Julius Baer 1,569,545 (3) 9.77% (4)
2 Boulevard du Theatre
1211 Geneva 11
Switzerland
Michael G. Santry 2,934,590(5) 17.25% (5)
5950 Berkshire Lane, #1650
Dallas, TX 75225
Arthur Chavoya 600,000 (6) 3.60% (6)
8001 Bent Branch Drive
Irving, TX 75063
</TABLE>
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<TABLE>
<CAPTION>
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership Class (1)
- ----------------------------------- ----------------- ------------
<S> <C> <C>
Jerry L. Sims, Jr. 300,000 (7) 1.83% (7)
5950 Berkshire Lane, #1650
Dallas, TX 75225
Thomas F. Bijou 200,000 (8) 1.23% (8)
8001 Bent Branch Drive
Irving, TX 75063
J. Frank Mermoud 135,000 (9) 0.83% (9)
5004 Klingle St., N.W.
Washington, DC 20016
Darryl D. Pounds 135,000 (9) 0.83% (9)
5950 Berkshire Lane, Suite 1650
Dallas, TX 75225
David Malcolm 135,000 (9) 0.83% (9)
750 "B" Street, Suite 3130
San Diego, CA 92101
Patrick V. Stark 123,000 (10) 0.76% (10)
1601 Elm St.
Suite 3700
Dallas, TX 75201
Mike Allred 111,000 (11) 0.69% (11)
1201 W. Peachtree St.
Suite 3230
Atlanta, GA 30309
Richard F. Marinaro -- --
8001 Bent Branch Drive
Irving, TX 75063
All directors and officers as a group 4,673,590 (12) 24.94% (12)
(10 persons)
</TABLE>
(1) Reported in accordance with the beneficial ownership rules of the
Securities and Exchange Commission. Unless otherwise noted, the
shareholders listed in the table have both sole voting power and sole
dispositive power with respect to such shares, subject to community
property laws where applicable and the information contained in the other
footnotes to the table.
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(2) Represents beneficial ownership of 4,200,000 shares of Common Stock
issuable upon conversion of the Company's Series C Preferred Stock. The
Series C Preferred Stock is entitled to vote on an as converted basis on
all matters submitted to a vote of shareholders.
(3) Based on information available to the Company and Societe Bancaire Julius
Baer's representations to the Company, Societe Bancaire Julius Baer's
holdings of record of Common Stock are held for the account of other
entities, none of which individually would equal five percent (5%) or
more of the Company's Common Stock. Societe Bancaire Julius Baer
disclaims beneficial ownership of such common stock.
(4) Based on 16,060,911 shares of Common Stock outstanding at September 30,
1996.
(5) Mr. Santry's shares are owned of record by Lakewood Financial
Consultants, Inc. which is 99% owned by Mr. Santry. Includes beneficial
ownership of 950,000 shares of Common Stock issuable upon exercise of
stock options granted pursuant to the Company's 1992 Stock Option Plan.
(6) Includes beneficial ownership of 600,000 shares of Common Stock issuable
upon exercise of stock options granted pursuant to the ATC Communications
Group, Inc. 1996 Stock Option Plan.
(7) Includes beneficial ownership of 300,000 shares of Common Stock issuable
upon exercise of stock options granted pursuant to the Company's 1992
Stock Option Plan.
(8) Pursuant to an employment agreement, described above in Item 11.
Executive Compensation, Mr. Bijou was previously granted fully vested
options to purchase 15% of the common stock of Advanced Telemarketing
Corporation. In March 1995, Mr. Bijou surrendered such options in
exchange for stock options to purchase a total of 2,410,880 shares of the
Company's Common Stock at $0.8125 per share, the market price at the date
of grant. The options granted became fully exercisable on August 1, 1995
and are exercisable for ten years from the date of grant. Mr. Bijou
assigned options to purchase 482,176 shares of the Company's Common Stock
to another employee of Advanced Telemarketing Corporation effective as of
the same date of grant and consequently held options to purchase
1,928,704 shares of the Company's Common Stock. Mr. Bijou has exercised
options to purchase 1,728,704 shares of Common Stock. His remaining
ownership includes 200,000 shares of Common Stock issuable upon the
exercise of the above described stock options.
(9) Includes beneficial ownership of 135,000 shares of Common Stock issuable
upon exercise of stock options granted pursuant to the Company's 1992
Stock Option Plan.
(10) Includes beneficial ownership of 110,000 shares of Common Stock issuable
upon exercise of stock options granted pursuant to the Company's 1992
Stock Option Plan.
(11) Includes beneficial ownership of 111,000 shares of Common Stock issuable
upon exercise of stock options granted pursuant to the Company's 1992
Stock Option Plan.
(12) Includes certain beneficial ownership as set forth in footnotes (5), (6),
(7), (8), (9), (10) and (11) above.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At June 30, 1996 and 1995, Michael G. Santry, Chairman of the Company, had
outstanding borrowings and accrued interest of approximately $566,045 and
$793,773 respectively, pursuant to a line of credit. The borrowing bears 6%
annual interest and is due in full on June 30, 1997.
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During each of the three years ended June 30, 1996, the Company held a note
receivable from Freiburghaus & Partners, S.A. ("F&P"), a shareholder of record.
The note bears interest at 11% per annum. At June 30, 1996 the note receivable
was paid in full. At June 30, 1995, unpaid principal and accrued interest
amounted to $73,696. In 1996, 1995, and 1994, the Company applied $82,225,
$21,440, and $56,456 respectively, of accrued preferred stock dividends due to
F&P towards the note receivable due to ATC.
In return for consulting and administrative services, the Company paid FEM,
Inc. ("FEM"), a company controlled by a shareholder of the Company, $165,000
per year in monthly installments of $13,750 through March 1994. ATC paid FEM
consulting fees of $110,000 for the year ended June 30, 1994. At June 30, 1996
and 1995 FEM had outstanding borrowings and accrued interest of $27,051 and
$123,650, respectively, pursuant to a note receivable to the Company. The note
bears 6% annual interest and is due in full on June 30, 1997.
In August 1994 the Company sold certain of the assets of its list services
subsidiaries to an officer of such subsidiaries. See further discussion in
Note 14.
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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.
Dated: October 28, 1996 By: /s/ Jerry L. Sims, Jr.
---------------- -------------------------
Jerry L. Sims, Jr.
Chief Financial Officer
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