<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Section 240.14a-11(c) or Section 240.14a-12
ATC GROUP SERVICES INC.
______________________________________________
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement)
__________________________________________
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.
(3) Filing Party:
(4) Date Filed:
<PAGE>
ATC GROUP SERVICES INC.
104 East 25th Street
10th Floor
New York, New York 10010
(212) 353-8280
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 8, 1997 AT 10:00 A.M.
To the Stockholders of
ATC Group Services Inc.
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of ATC Group Services Inc., a Delaware corporation (the "Company"),
will be held at The Williams Club located at 24 East 39th Street, New York, New
York 10016 at the hour of 10:00 A.M. local time on October 8, 1997 for the
following purposes:
(1) To elect five Directors of the Company for the coming year; and
(2) To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on September 4, 1997
are entitled to notice of and to vote at the Meeting or any adjournment thereof.
Dated:September 4,1997 By Order of the Board of Directors
Morry F. Rubin, President
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. YOU ARE INVITED
TO ATTEND THE MEETING IN PERSON, BUT WHETHER OR NOT YOU PLAN
TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. IF YOU DO ATTEND
THE MEETING, YOU MAY, IF YOU PREFER, REVOKE YOUR PROXY AND VOTE
YOUR SHARES IN PERSON.
<PAGE>
ATC GROUP SERVICES INC
ATC GROUP SERVICES INC
104 East 25th Street
New York, New York 10010
(212) 353-8280
PROXY STATEMENT
This Proxy Statement and the accompanying proxy are furnished by the Board
of Directors of ATC Group Services, Inc. ("ATC" or the "Company" in connection
with the solicitation of proxies for use at the Annual Meeting of Stockholders
(the "Meeting") referred to in the foregoing notice. It is contemplated that
this Proxy Statement, together with the accompanying form of proxy and the
Company's Annual Report for the fiscal year ended February 28, 1997 will be
mailed together to stockholders on or about September 5, 1997. (The Company's
quarterly report to stockholders for its first quarter is also being provided to
stockholders. It is not intended that this report be considered part of the
proxy solicitation materials).
The record date for the determination of shareholders entitled to notice of
and to vote at the Meeting is September 4, 1997. On that date there were issued
and outstanding, approximately 7,805,000 shares of Common Stock, par value $.01
per share. The presence, in person or by proxy, of the holders of a majority of
the shares of Common Stock outstanding and entitled to vote at the Meeting is
necessary to constitute a quorum. In deciding all questions, a stockholder shall
be entitled to one vote, in person or by proxy, for each share held in his name
on the record date. Directors will be elected by a plurality of the votes cast
at the Meeting. All other proposals will be decided by a majority of the votes
cast at the Meeting.
All proxies received pursuant to this solicitation will be voted (unless
revoked) at the Annual Meeting of October 8, 1997 or any adjournment thereof in
the manner directed by a stockholder and, if no direction is made, will be voted
for the election of each of the management nominees for director in Proposal
No. 1. If any other matters are properly presented at the meeting for action,
which is not presently anticipated, the proxy holders will vote the proxies
(which confer authority to such holders to vote on such matters) in accordance
with their best judgment. A proxy given by a stockholder may nevertheless be
revoked at any time before it is voted by communicating such revocation in
writing to the transfer agent, American Stock Transfer & Trust Company, at 40
Wall Street, New York, New York 10005 or by executing and delivering a
later-dated proxy. Furthermore, any person who has executed a proxy but is
present at the Meeting may vote in person instead of by proxy; thereby canceling
any proxy previously given, whether or not written revocation of such proxy has
been given.
As of the date of this Proxy Statement, the Board of Directors knows of no
matters other than the foregoing that will be presented at the Meeting. If any
other business should properly come before the Meeting, the accompanying form of
proxy will be voted in accordance with the judgment of the persons named
therein, and discretionary authority to do so is included in the proxies. All
expenses in connection with the solicitation of this
2
<PAGE>
proxy will be paid by the Company. In addition to solicitation by mail,
officers, directors and regular employees of the Company who will receive no
extra compensation for their services, may solicit proxies by telephone,
telegraph or personal calls. Management does not intend to use specially engaged
employees or paid solicitors for such solicitation. Management intends to
solicit proxies which are held of record by brokers, dealers, banks, or voting
trustees, or their nominees, and may pay the reasonable expenses of such record
holders for completing the mailing of solicitation materials to persons for whom
they hold the shares. All solicitation expenses will be borne by the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of August 18, 1997 with
respect to the share ownership by ATC's directors individually, officers and
directors as a group, and for record and/or beneficial owners of more than 5% of
the outstanding amount of such stock. For purposes of calculating the amount of
beneficial ownership and the respective percentages, the number of shares of ATC
Common Stock which may be acquired by a person upon the exercise of outstanding
options, if any, notwithstanding the options vesting schedule, are considered
outstanding but are not deemed to be outstanding for the purpose of computing
the percentage of Common Stock owned by any other person.
Number of Approximate
Name and Address (1) Position Shares Owned Percent of Class
(2)
George Rubin (3) Chairman of the Board
and Secretary,
Director 1,512,542 18.2
Morry F. Rubin (4) President, Chief
Executive Officer,
Treasure, Direc 800,489 10.1
Richard L. Pruitt (5) Vice President,
Principal Accounting
Officer, Direct 49,050 *
Julia S. Heckman (6) Director 15,000 *
Richard S. Greenberg,Esq (7) Director 15,000 *
All Officers and
Directors of ATC as a
Group(11 persons)(8) Various 2,598,114 29.9
3
<PAGE>
Investment advisor
registered under
Corbyn Investment Section 8 of the
Management Inc., Investment Company
et al (9) Act of 1940 1,034,199 13.3
Investment advisor
registered under
Section 8 of the
The Parnassus Fund Investment Company
(10) Act of 1940 595,000 7.6
* Represents less than 1%.
____________
(1) Each person has sole voting power and investment power with respect to the
number of shares indicated as owned.
(2) Based upon 7,805,407 shares of American Stock outstanding as of August 18,
1997.
(3) Shares owned include Warrants to purchase 490,500 shares of Common Stock.
Address: 104 East 25th Street, 10th Floor, New York, NY 10010.
(4) Shares owned include options to purchase 161,750 shares of Common Stock.
Address: 104 East 25th Street, 10th Floor, New York, NY 10010
(5) Shares owned include options to purchase 10,800 shares of Common Stock.
Address: 1515 East Tenth Street, Sioux Falls, SD 57103.
(6) Shares owned include options to purchase 15,000 shares of Common Stock.
Address: Rodman & Renshaw, Inc, Two World Financial Center, Tower B, 30th
Floor, New York, NY 10281.
(7) Shares owned include options to purchase 15,000 shares of Common Stock.
Address: Coopers & Lybrand, 370 17th Street, Suite 3300, Denver, CO 80202.
(8) Shares owned include options and/or warrants to purchase 861,688 shares of
Common Stock.
(9) As reported in Schedule 13G to the Securities and Exchange Commission dated
January 6, 1997. Includes shares owned or beneficially owned by Corbyn
Investment Management, Inc. and Greenspring Fund, Inc. Address: 2330 West
Jappa Road, Suite 108, Lutherville, MD 21093.
(10) As reported in Schedule 13G to the Securities and Exchange Commission dated
February 10, 1997. Address: One Market, Stewart Tower, Suite 1600, San
Francisco, CA 94105.
The Company does not know of any arrangement or pledge of its securities by
persons now considered in control of the Company that might result in a change
of control of the Company.
4
<PAGE>
PROPOSAL
ELECTION OF DIRECTORS
Management recommends that you vote in favor of the
nominees named to the Board of Directors. Directors will be
elected by a plurality of the votes cast at the Meeting.
Five directors are to be elected at the meeting for terms of one year each and
until their successors shall be elected and qualified. It is intended that votes
will be cast pursuant to such proxy for the election of the five persons whose
names are first set forth below unless authority to vote for one or more of the
nominees is withheld by the enclosed proxy, in which case it is intended that
votes will be cast for those nominees, if any, with respect to whom authority
has not been withheld. All of the nominees are now members of the Board of
Directors. In the event that any of the nominees should become unable or
unwilling to serve as a director, a contingency which the Management has no
reason to expect, it is intended that the proxy be voted, unless authority is
withheld, for the election of such person, if any, as shall be designated by the
Board of Directors. The following table sets forth information concerning each
director of the Company, each of which has been nominated to continue as a
director of the Company.
<TABLE>
<CAPTION>
Term First
of Became Principal
Name Age Office Director Occupation
<S> <C> <C> <C> <C>
George Rubin 69 (1) 1988 Chairman of the
Board of ATC
Morry F. Rubin 37 (1) 1988 President and
CEO of ATC
Richard L. Pruitt 57 (1) 1988 Vice President
and Principal
Accounting
Officer of ATC
Richard S. Greenberg, 48 (1) 1995 Director of
Esq. Environmental
Management
Consulting
Services Group
at Coopers &
Lybrand
Julia S. Heckman 48 (1) 1995 Managing Director of
Rodman & Renshaw,
Inc.'s Investment
Banking Group
</TABLE>
(1) Directors are elected at the annual meeting of shareholders and hold office
until the following annual meeting.
5
<PAGE>
George Rubin has been Chairman of the Board of ATC since 1988. From 1961 to
1987, Mr. Rubin served as President, Treasurer and director of Staff Builders,
Inc. Staff Builders, Inc., was a publicly held corporation engaged in the
business of providing temporary personnel primarily in the health care field
operating through approximately 100 offices and with revenues over $100 million.
Since December 1986, Mr. Rubin has been a principal stockholder, executive
officer and a director of National Diversified Services, Inc., a publicly held
corporation which completed a public offering in December 1986 and currently has
no business operations. George Rubin is the father of Morry F. Rubin.
Morry F. Rubin has been President, Chief Executive Officer, Treasurer and a
director of ATC since 1988. Mr. Rubin was also President, Chief Executive
Officer and Treasurer of Aurora Environmental Inc. from May 1985 to June 1995,
and was a director of Aurora from September 1983 to June 1995. Since 1986, Mr.
Rubin has been a principal stockholder and from 1986 to July 1995, Mr. Rubin was
President and a director of National Diversified Services, Inc., a publicly held
corporation, which completed a public offering in December 1986 and currently
has no business operations. From 1981 to 1987, Mr. Rubin was employed in sales
and as director of acquisitions for Staff Builders, Inc., a publicly held
company engaged in providing temporary personnel primarily in the health care
field. Morry F. Rubin is the son of George Rubin.
Richard L. Pruitt is a Vice President, the Principal Accounting Officer and
a director of ATC. Mr. Pruitt has served as Vice President of ATC since
September 1990, as Principal Accounting Officer of ATC since April 1988 and as a
director of ATC since January 1988. Mr. Pruitt served as Principal Financial
Officer of ATC from September 1989 to April 1992 and from May 1993 to July 1995.
Mr. Pruitt served as the Principal Financial Officer and a director of Aurora
Environmental Inc. from May 1985 to June 1995 and served as Financial Manager of
Aurora from February 1982.
Richard S. Greenberg, Esq. has been a director of ATC since July 1995. Mr.
Greenberg has been a director of the Environmental Management Consulting
Services Group at Coopers & Lybrand since October 1989. Mr. Greenberg has over
20 years of experience in the areas of environmental management consulting,
environmental litigation support and legislative policy analysis.
Julia S. Heckman has been a director of ATC since August 1995. Mrs. Heckman
has been a Managing Director with Rodman & Renshaw, Inc.'s Investment Banking
Group since April 1995 and had been a Managing Director with Mabon Securities
Corp.'s Investment Banking Group since 1991. Prior to joining Mabon Securities
Corp., Mrs. Heckman was a Managing Director with Paine Webber Group Inc.'s
Corporate Finance Group. Mrs. Heckman serves as a member of the Company's Board
of Directors pursuant to the Underwriting Agreement dated October 10, 1995
between Rodman & Renshaw, Inc. and the Company. Mrs. Heckman is also a member of
the Board of Directors of Manhattan Bagel Company, Inc.
The Board of Directors took action by unanimous written consent in lieu of
a meeting on three occasions during fiscal 1997.
6
<PAGE>
In August 1995, the Company established an Executive Compensation Committee
and an Audit Committee with Morry F. Rubin, Julia S. Heckman and Richard S.
Greenberg, Esq. as members.
The Audit Committee will have the power to (i) select the independent
certified public accountant, (ii) satisfy itself on behalf of the Board that the
external and internal auditing procedures assure reliable and informative
accounting and financial reporting, (iii) have meetings with management, or with
the auditors, or with both management and auditors, to review the scope of the
auditor's examination, audit reports and the Corporation's internal auditing
procedures and reviews, (iv) monitor policies established to prohibit unethical,
questionable or illegal activities by those associated with the Corporation; and
(v) review the compensation paid to the auditors through annual audit and
non-audit fees and the effect on the independence of the auditors in relation
thereto, and it may exercise the powers and authority of the Board of Directors
to implement changes in connection with the foregoing or, at its option, may
make recommendations to the entire Board of Directors for its approval. Further,
the Audit Committee will be responsible for approving any transactions between
the Corporation and its officers, directors or affiliates.
The Compensation Committee will have the power to review compensation of
the Corporation's executive officers, including salaries, the granting of stock
options and other forms of compensation for executive officers whose salaries
are within the purview of the Board of Directors. In some cases, the
Compensation Committee may make recommendations to the entire Board of Directors
for its approval or, itself exercise the powers and authority of the Board of
Directors to designate compensation.
During the fiscal year ended February 28, 1997, the Audit Committee and
Compensation Committee had zero and eight meetings, respectively.
7
<PAGE>
The following table sets forth information concerning each executive
officer and a key employee of the Company. The officers of the Company serve at
the pleasure of the Board of Directors and until their successors are chosen and
qualify.
Name Age Position with Company
Officers and Directors
George Rubin 69 Chairman of the Board and Secretary
Morry F. Rubin 37 President, Chief Executive
Officer, Treasurer
Nicholas J. Malino 47 Senior Vice-President, Financial
and General Operations
Christopher P. Vincze 35 Senior Vice-President, Financial
and General Operations
Donald W. Beck 38 Senior Vice President
John J. (Jeff) Goodwin 48 President of ATC InSys Technology Inc
Wayne A. Crosby 44 Chief Financial Officer
Richard L. Pruitt 57 Vice President, Principal,
Accounting Officer
Key Employee
John J. Smith, Esq. 47 General Counsel
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission"). Officers, directors and greater than ten percent
stockholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Richard s. Greenberg, Julia Heckman, Christopher P. Vincze, Richard L.
Pruitt, Wayne A. Crosby, John J. Smith and Donald W. Beck each filed a Form 5
for the year ended February 28, 1997 to reflect a transaction that should have
been reported on Form 4 for the months of February 1997. Further, Christopher P.
Vincze filed the Form 5 and reported a transaction that occurred in January 1997
that should have been reported on a Form 4 for the month of January 1997.
8
<PAGE>
Executive Compensation
Summary Compensation Table - The following table provides information with
respect to the compensation of ATC's Chief Executive Officer (CEO) and its
executive officers, other than the CEO, who where serving as executive officers
at the end of fiscal 1997 whose total annual salary and bonus, if any, exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
- ---------------------------------------------------------------------------------- --------------------------- ---------- ---------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur- All
Other ities Other
Year Annual Restricted Under- Com-
Name and Ended Compen Stock lying LTIP pen-
Principal February Salary Bonus sation Award(s) Options Payouts sation
Position 28 (29) ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Morry F. Rubin, 1997 268,750 259,943 -0- -0- -0- -0- -0-
President and 1996 225,000 141,774 -0- -0- -0- (2) -0- -0-
Chief Executive Officer 1995 225,000 132,500 -0- -0- -0- -0- -0-
George Rubin, 1997 268,750 259,943 -0- -0- -0- -0- -0-
Chairman of the Board 1996 225,000 141,774 -0- -0- -0- (3) -0- -0-
and Secretary 1995 225,000 132,500 -0- -0- -0- -0- -0-
Christopher P. Vincze, 1997 170,000 100,000 6,000 (1) -0- 37,500 -0- -0-
Senior 1996 142,308 -0- 6,000 (1) -0- 30,000 -0- -0-
Vice President 1995 105,385 86,500 5,550 (1) -0- 17,500 -0- -0-
Nicholas J. Malino, 1997 170,000 100,000 -0- -0- 57,500 -0- -0-
Senior 1996 142,308 -0- -0- -0- 30,000 -0- -0-
Vice President 1995 105,385 86,500 -0- -0- 37,500 -0- -0-
John J. Goodwin 1997 140,000 51,335 -0- -0- -0- -0- -0-
President and Director 1996 140,000 -0- -0- -0- -0- -0- -0-
ATC InSys Technology 1995 70,000(4) N/A -0- -0- -0- -0- -0-
Inc.
</TABLE>
____________
(1) Represents compensation relating to a car allowance.
(2) Does not include options to purchase 81,750 shares of ATC Common Stock
issued in replacement of previously held options of Aurora Environmental
Inc. ("Aurora"), ATC's former parent company which was merged into ATC in
June, 1995, with ATC the surviving corporation.
(3) Does not include 490,500 warrants to purchase ATC Common Stock issued in
replacement of previously held warrants of Aurora.
(4) John J. Goodwin commenced employment September 1, 1994.
9
<PAGE>
Options Grants Table - The following table provides information with
respect to individual grants of stock options by ATC during fiscal 1997 to each
of the executive officers named in the preceding summary compensation table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realized Value at
Assumed Annual
Rates of Stock Price
Appreciation
for Option Term
Individual Grants (2)
- ---------------------------------------------------------------------------------------------- ----------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of
Number of Total
Securities Options
Underlying Granted to
Options Employees Exercise
Granted in Fiscal Price Expiration
Name (#) Year (1) ($/Sh) Date 5% ($) 10% ($)
- -------------------------- ----------------- ----------------- --------------- ------------------- ------------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Morry F. Rubin -0- -0- N/A N/A -0- -0-
George Rubin -0- -0- N/A N/A -0- -0-
7,500 (3) 2.1% 7.50 02-06-2007 (4) 35,375 89,648
20,000 (3) 5.7% 7.50 02-06-2007 (4) 94,334 239,061
Christopher P. Vincze 10,000 (3) 2.8% 7.50 02-06-2007 (4) 47,167 119,531
------------
27,500 (3) 7.8% 7.50 02-06-2007 (4) 129,710 328,709
20,000 (3) 5.7% 7.50 02-06-2007 (4) 94,334 239,061
Nicholas J. Malino 10,000 (3) 2.8% 7.50 02-06-2007 (4) 47,167 119,531
------------
John J. Goodwin -0- -0- N/A N/A -0- -0-
- -------------------------- ----------------- ----------------- --------------- ------------------- ------------------ ------------
</TABLE>
N/A - not applicable
______________
(1) The "% of Total Options Granted to Employees in Fiscal Year" (Column
(c)) is based upon options granted to ATC employees only and excludes
options granted to non-employees.
(2) The potential realizable value of each grant of options assumes that
the market price of ATC's Common Stock appreciates in value from the
date of grant to the end of the option term at annualized rates of 5%
and 10%, respectively, after subtracting out the applicable exercise
price.
(3) The options granted in fiscal 1997 represent replacement options of
previous grants.
(4) The options granted to Messrs. Vincze and Malino are in replacement of
prior grants which terminated. At the date of grant, the number of
options which were exercisable under the original grant became
exercisable under the replacement grant with the remaining options
vesting at varying dates over two to three years and expire within ten
years.
10
<PAGE>
Aggregated Option Exercises and Fiscal Year-End Option Table - The
following table provides information with respect to each exercise of stock
options during fiscal 1997 by each of the executive officers named in the
preceding summary compensation table and the fiscal year-end value of
unexercised options.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR - END
OPTION VALUES
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options
Shares FY-End (#) at FY-End ($)
Acquired on Value
Exercise Realized (1) Exercisable/ Exercisable/
Name (#) ($) Unexercisable (1) Unexercisable (1)
- -------------------------- -------------------- -------------------- ------------------------- ---------------------------
<S> <C> <C> <C> <C>
Morry F. Rubin -0- -0- 161,750 / -0- 701,128 / -0-
George Rubin -0- -0- 490,500 / -0- 3,184,625 / -0-
Christopher P. Vincze -0- 28,750 40,000 / 25,000 123,563 / 21,750
Nicholas J. Malino -0- -0- 36,100 / 33,400 32,775 / 28,350
John J. Goodwin -0- -0- -0- / -0- -0- / -0-
- -------------------------- -------------------- -------------------- ------------------------- ---------------------------
</TABLE>
____________
(1) The aggregate dollar values in column (c) and (e) are calculated by
determining the difference between the fair market value of the Common
Stock underlying the options (or warrants) and the exercise price of
the options (or warrants) at exercise or fiscal year end,
respectively. ATC's last sale price at the close of business on
February 28, 1997 was $8.25. Stock options and warrants of Aurora
converted into ATC options and warrants pursuant to the terms of the
Merger Agreement are included above.
11
<PAGE>
Ten-Year Option Repricing - The following table provides information with
respect to adjustments or amendments to previously awarded stock options to the
executive officers named in the preceding summary compensation table.
<TABLE>
<CAPTION>
TEN-YEAR OPTION REPRICINGS
(a) (b) (c) (d) (e) (f) (g)
Number Market Exercise Length of
of Price of Price Original
Securities Stock at at Option
Underlying Time time Term
Options of of Remaining
Repriced Repricing Repricing New at Date of
or or or Exercise Repricing
Amended Amendment Amendment Price or
Name Date (#) ($) ($) ($) Amendment
(1)
- -------------------------------- ------------ ---------------- ----------------- ----------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Morry F. Rubin
President and
Chief Executive Officer N/A N/A N/A N/A N/A N/A
George Rubin,
Chairman of the Board and
Secretary N/A N/A N/A N/A N/A N/A
Christopher P. Vincze 2/7/97 7,500 (2) 7.50 9.50 7.50 30.7
Senior 2/7/97 20,000 (2) 7.50 13.43 7.50 40.4
Vice President 2/7/97 10,000 (2) 7.50 11.50 7.50 45.4
Nicholas J. Malino, 2/7/97 27,500 (2) 7.50 9.50 7.50 30.7
Senior 2/7/97 20,000 (2) 7.50 13.43 7.50 40.4
Vice President 2/7/97 10,000 (2) 7.50 11.50 7.50 45.4
John J. Goodwin
President and Director
ATC InSys Technology Inc. N/A N/A N/A N/A N/A N/A
- -------------------------------- ------------ ----------------- ----------------- ----------------- --------------- ------------
</TABLE>
__________________
(1) The length of original option term remaining represents the number of
months determined as of February 28, 1997.
(2) The Company's Board of Directors determined the replacement grants
appropriate in order to compensate the individual for their
performance. The replacement option price represents the fair market
price based on the average of the high and low sales prices on the
date of the grant.
12
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of ATC is composed of three members, namely,
Morry F. Rubin, Chief Executive Officer ("CEO"), and outside directors, Julia S.
Heckman and Richard S. Greenberg. The Compensation Committee is responsible for
reviewing and determining the annual salary, bonuses, stock option grants and
other compensation of the executive officers of ATC.
This report describes the policies and rationales of the Compensation
Committee in establishing the principal components of executive compensation in
fiscal 1997. The Compensation Committee's review and determination of executive
compensation includes consideration of the following factors: (a) compensation
surveys of similar size companies, (b) past and future performance contributions
of each executive officer and (c) the performance of ATC, both separately and
relative to similar size companies.
Under the direction of the Compensation Committee, ATC has developed a
compensation strategy designed to compensate its executives on a performance
basis. The strategy is intended to (a) reward executives for long-term strategic
management and the enhancement of Stockholder value, (b) facilitate ATC's short
and long-term planning process and (c) attract and retain key executives
critical to the long-term success of ATC.
Compensation for the CEO and other named executives consists of a fixed
base salary and variable components, including both short-term and long-term
incentive compensation in the form of bonuses and stock option grants. In
evaluating the performance and setting the incentive compensation of executive
management, the Compensation Committee considered the factors described above
and that ATC completed various acquisitions and experienced growth in revenues
and earnings during the past three fiscal years.
Based on the foregoing, the Compensation Committee believes that ATC's
executive management is dedicated to its corporate objectives of achieving
significant improvements in long-term financial and operating performance. The
executive compensation program outlined below is designed to implement this
strategy by rewarding management for achieving these objectives.
Base Salary. ATC's base salary is designed to recognize the sustained and
cumulative effect on long-term results that its executives have demonstrated.
The base salary is a remuneration for services provided and is generally fixed
at levels which are competitive with amounts paid to executives at comparable
companies.
Short-Term Incentives. Short-term incentives in the form of bonuses are
paid to recognize performance that is related to the achievement of key
financial and operating objectives that have been established for a fiscal year.
Since short-term incentives should generally reflect one year contributions, the
size of the payments may vary considerably from year to year, depending on the
performance of ATC, the executive, his individual activities and terms of any
employment.
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Long-Term Incentives. The Compensation Committee recognizes that long-term
incentive compensation is a substantial component of the total pay package
linking executive pay and corporate performance, At ATC, long-term incentive
compensation in the form of equity based compensation is intended to link the
interests of its executives with the interests of ATC's Stockholders by
rewarding executives with stock options for both past and anticipated
achievements of the Executive.
Chief Executive Officer's Fiscal 1997 Compensation. As more specifically
set forth in the Summary Compensation Table, during fiscal 1997, Mr. Morry F.
Rubin earned an annual salary of $268,750 and an annual bonus equal to 2-1/2 %
of ATC's consolidated pre-tax profits. At June 1997, Mr. Rubin's salary is
$300,000 per annum.
In determining Mr. Rubin's 1997 compensation, the Compensation Committee
considered the factors applied to the compensation of all executive officers as
discussed above. The Compensation Committee decided that, based on these
criteria, ATC's performance based on the creation of Stockholder value, cash
flow, and net income and that his annual compensation is generally less than
that paid to CEO's of similar companies.
The foregoing report has been approved by all members of the Compensation
Committee.
Morry F. Rubin
Julia S. Heckman
Richard S. Greenberg
Comparative Performance by ATC
ATC is presenting a chart comparing the cumulative total stockholder return
on its Common Stock with the cumulative Stockholder return of (1) a broad equity
market index, and (2) a published industry index or peer group for the past five
years. Such chart compares the performance of the ATC's Common Stock with (1)
the NASDAQ Stock Market Index and (2) a group of public companies each of whom
are listed in the peer group sanitary and other services and assumes an
investment of $100 in ATC's Common Stock and on March 1, 1992 an investment of
$100 in each of the stock comprising the NASDAQ Stock Market Index and the
stocks of the peer group sanitary and other services.
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COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
ATC GROUP SERVICES INC.
Prepared by the Center for Research in Security Prices
Produced on 06/04/97 including data to 02/28/97
Date Company Market Market Peer Peer
Index Index Count Index Count
02/28/92, 100.000, 100.000, 3956, 100.000, 34
03/31/92, 91.071, 95.280, 3968, 83.041, 36
04/30/92, 80.357, 91.195, 3967, 72.965, 35
05/29/92, 76.786, 92.379, 3955, 73.113, 35
06/30/92, 71.429, 88.768, 3935, 68.455, 35
07/31/92, 92.857, 91.912, 3899, 67.447, 34
08/31/92, 75.000, 89.103, 3880, 63.925, 34
09/30/92, 76.786, 92.415, 3878, 63.433, 34
10/30/92, 64.286, 96.055, 3890, 61.283, 34
11/30/92, 125.000, 103.699, 3906, 64.795, 34
12/31/92, 132.143, 107.516, 3930, 62.644, 36
01/29/93, 117.857, 110.577, 3918, 65.465, 35
02/26/93, 114.286, 106.452, 3949, 64.355, 35
03/31/93, 105.357, 109.532, 3973, 63.571, 35
04/30/93, 87.500, 104.858, 4007, 58.415, 35
05/28/93, 126.786, 111.122, 4035, 58.091, 34
06/30/93, 162.500, 111.636, 4071, 55.098, 34
07/30/93, 178.572, 111.767, 4103, 55.871, 32
08/31/93, 145.536, 117.545, 4138, 53.027, 31
09/30/93, 171.429, 121.045, 4173, 53.430, 31
10/29/93, 192.857, 123.766, 4221, 53.579, 32
11/30/93, 217.857, 120.075, 4304, 53.355, 32
12/31/93, 203.572, 123.422, 4376, 52.352, 32
01/31/94, 192.857, 127.168, 4400, 54.973, 33
02/28/94, 196.429, 125.982, 4439, 53.893, 33
03/31/94, 242.857, 118.234, 4491, 49.629, 33
04/29/94, 285.714, 116.701, 4520, 46.261, 33
05/31/94, 332.143, 116.985, 4562, 43.911, 33
06/30/94, 303.572, 112.708, 4576, 42.199, 30
07/29/94, 300.000, 115.019, 4594, 40.696, 30
08/31/94, 271.429, 122.352, 4612, 41.005, 30
09/30/94, 285.714, 122.039, 4615, 43.044, 31
10/31/94, 389.286, 124.437, 4637, 44.147, 31
11/30/94, 492.858, 120.310, 4653, 42.222, 32
12/30/94, 464.286, 120.647, 4658, 43.038, 32
01/31/95, 416.072, 121.323, 4648, 43.292, 32
02/28/95, 378.572, 127.739, 4650, 42.526, 31
03/31/95, 403.572, 131.525, 4644, 42.349, 32
04/28/95, 496.429, 135.666, 4655, 43.838, 32
05/31/95, 428.572, 139.164, 4654, 52.546, 32
06/30/95, 428.572, 150.442, 4671, 55.994, 32
07/31/95, 460.715, 161.500, 4690, 66.420, 32
08/31/95, 428.572, 164.773, 4713, 66.467, 32
09/29/95, 428.572, 168.562, 4709, 69.357, 33
10/31/95, 392.857, 167.596, 4746, 66.808, 32
11/30/95, 357.143, 171.531, 4778, 73.412, 33
12/29/95, 335.715, 170.618, 4818, 82.598, 33
01/31/96, 364.286, 171.452, 4808, 79.912, 33
02/29/96, 350.000, 177.987, 4838, 78.788, 33
03/29/96, 357.143, 178.578, 4877, 82.207, 34
04/30/96, 360.715, 193.395, 4922, 86.209, 34
05/31/96, 435.715, 202.277, 4980, 115.643, 32
06/28/96, 375.000, 193.156, 5033, 125.759, 32
07/31/96, 407.143, 175.952, 5065, 102.635, 32
08/30/96, 367.857, 185.809, 5089, 112.108, 33
09/30/96, 367.857, 200.021, 5095, 124.898, 33
10/31/96, 310.715, 197.811, 5137, 129.359, 33
11/29/96, 300.000, 210.044, 5177, 135.417, 31
12/31/96, 264.286, 209.825, 5174, 130.770, 30
01/31/97, 225.000, 224.697, 5159, 163.711, 29
02/28/97, 235.714, 212.304, 5169, 144.099, 29
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Compensation Committee Interlocks and Insider Participation
The Board of Directors of ATC is composed of five members, namely, George
Rubin, Chairman of the Board, Morry F. Rubin, ATC's Chief Executive Officer
("CEO"), Richard L. Pruitt, Vice President, Principal Accounting Officer, Julia
S. Heckman, Managing Director with Rodman and Renshaw, Inc.'s. Investment
Banking Group and Richard S. Greenberg Esq., a director of the Environmental
Management Group at Coopers & Lybrand. The Board of Directors has an Audit
Committee and a Compensation Committee consisting of three directors including
Morry F. Rubin and outside directors Richard S. Greenberg and Julia S. Heckman.
The Audit Committee is responsible, among other things, for approving any
transactions between the Company and any of its directors, officers or
affiliates. Since August 1995, the Compensation Committee is responsible for
setting compensation of the executive officers of the Company and for granting
any further options to purchase Common Stock. Prior to August 1995, the Board
had sole responsibility for reviewing and determining the annual salary,
bonuses, stock option grants and other compensation of the executive officers of
ATC.
George Rubin and Morry F. Rubin are officers and/or directors of certain
ATC's subsidiaries. Morry F. Rubin and George Rubin each receive all of their
respective cash compensation through ATC.
George Rubin is one of two directors of National Diversified Services, Inc.
("National"). During National's fiscal year ended December 31, 1996, no cash
compensation was paid to any officer of ATC. During the past fiscal year ATC and
their subsidiaries had no business relationship with National.
Employment Contracts and other Compensating Arrangements
As of June 1997, George Rubin, Morry Rubin, Nicholas Malino and Christopher
P. Vincze receive annual salaries of approximately $300,000, $300,000, $170,000
and $170,000, respectively. Salaries of all executive officers of ATC (9
persons), currently aggregate approximately $1,400,000. ATC has no employment
contracts with its executive officers. All salaries and bonuses are at the
discretion of the Board of Directors, however, ATC pays annual bonuses of 2 1/2%
of pretax profits to each of George Rubin and Morry F. Rubin based upon the
prior years operating results and to Christopher Vincze and Nicholas Malino
based upon operating income exclusive of ATC's subsidiary, ATC InSys Technology,
Inc. ATC Group Services Inc. pays John J. Goodwin a bonus based upon a
percentage of pretax operating profits of ATC InSys Technology, Inc. The bonuses
to be paid to such officers are not pursuant to any written agreements.
During fiscal 1990, ATC approved an employee savings plan which allows
voluntary contributions by eligible employees into designated investment funds.
ATC may, at the discretion of its Board of directors, make additional
contributions on behalf of the Plan's participants. No contributions were made
by the Company in fiscal years 1995, 1996, and 1997.
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ATC has no other annuity, pension or retirement benefits for its employees.
ATC provides life, dental and health insurance, which is available to all
full-time employees. ATC has not afforded any of its executive officers any
personal benefits, the value of which exceeds 10% of his salary, which are not
directly related to job performance or provided generally to all salaried
employees.
Directors Compensation
During both fiscal 1996 and fiscal 1997, ATC granted options to purchase
7,500 shares to each of Julia S. Heckman and Richard S. Greenberg, Esq., ATC's
two outside directors. In fiscal 1997, ATC's Board approved the grant of
replacement options to both outside directors to extend the term of the options
and lower the exercise price. No other compensation was paid to ATC's directors
during fiscal 1997 for serving in the capacity of director and there are no
current arrangements for future compensation of directors. Depending upon the
number of meetings and the time required for ATC's operations, ATC may decide to
compensate its directors in the future.
ATC Stock Option Plans
On January 12, 1988, the board of directors of ATC adopted a Stock Option
Plan (the "1988 Plan") which was ratified by Stockholders on January 12, 1988.
The Plan covers 200,000 shares of Common Stock and was utilized to strengthen
ATC's ability to attract and retain in its employ experienced persons and to
attract other persons to become associated with, and/or to maintain their
association with, ATC and its subsidiaries in various capacities (e.g.
consultants, salespersons) other than that of an employee, by affording such
employees and other persons an opportunity to hold a proprietary interest in
ATC. The Plan authorizes the issuance of the options covered thereby as either
"Incentive Stock Options" within the meaning of the Internal Revenue Code of
1986, as amended, or as "Non-Statutory Options". While any person is eligible to
receive Non- Statutory options, only employees are eligible to receive an
Incentive Option under the provisions of applicable law. The Plan also provided
that no options may be granted after January 11, 1998.
The Plan is administered by ATC's Board of Directors, which has the
authority to determine the persons to whom options shall be an Incentive Option
or a Non-Statutory Option, the number of shares to be covered by each option,
the time or times at which options will be granted or may be exercised and the
other terms and provisions of the options except that the Plan prohibits the
exercise of an Incentive Stock Option unless the Optionee has been continuously
employed by ATC from the date of grant to the date of exercise. Accordingly,
Incentive Stock Options terminate upon termination of the Optionee's employment
with ATC for any reason whatsoever. The Plan also provides that: (i) the
exercise price of options granted thereunder shall not be less than 100% (or in
the case of an Incentive Option, 110% if the optionee owns 10% or more of the
outstanding voting securities of ATC) of the fair market value of such shares on
the date of grant, as determined by the Board, and (ii) no option by its terms
may be exercised more than ten years (five years in the case of an Incentive
Option, where the optionee owns 10% or more
17
<PAGE>
of the outstanding voting securities of ATC) after the date of grant. Any
options which are canceled or not exercised within the option period become
available for future grants.
On July 16, 1993, ATC adopted the 1993 Incentive and Non-Qualified Stock
Option Plan covering 200,000 shares (the "1993 Plan"). In 1995 the 1993 Plan was
amended to increase the number of shares covered to 500,000 shares. In 1996 the
1993 Plan was amended to increase the number of shares covered to 1,000,000
shares. The 1993 Plan provides no options may be granted after July 15, 2003.
The 1993 Plan is similar in all respects to the 1988 Stock Option Plan described
above.
On June 29, 1995 ATC adopted a new stock option plan (the "1995 Plan") to
replace Aurora's 1987 Stock Option Plan, except that the shares covered by the
new plan are limited to 81,750. These options were granted to Morry Rubin, in
replacement of Aurora's options previously held, at an exercise price of $5.32
per share and expire January 2004.
As of February 28, 1997, ATC has options outstanding to purchase 720,340
shares (under the 1988, 1993 and 1995 Plans and for grants outside of the Plans)
at exercise prices ranging from $1.88 per share to $17.00 per share. As of
February 28, 1997, options to purchase 457,550 shares of ATC's Common Stock are
currently exercisable.
Conflicts of Interest; Limitation of Directors' Liability; Indemnification
Certain of the Company's officers and directors are officers, directors
and/or employees of other companies. Accordingly, possible conflicts of interest
may arise in the future in connection with the performance of their duties. Such
potential conflicts of interest may include, among other things, time, effort
and corporate opportunity. As no policy has been established by ATC for the
resolution of any such conflicts, ATC may be adversely affected should they
choose to place their other business interests before that of ATC.
As permitted by the Delaware General Corporation Law, ATC's Certificate of
Incorporation provides that a director of ATC will not be personally liable to
ATC or its Stockholders for monetary damages for breach of the fiduciary duty of
care as a director, except under certain circumstances including breach of the
director's duty of loyalty to ATC or its Stockholders or any transaction from
which the director derived an improper personal benefit.
ATC's by-laws provide for the indemnification of ATC's officers and
directors to the fullest extent permitted by Delaware law. In this respect, ATC
has entered into indemnification agreements with its officers and directors to
hold them harmless and to indemnify each person from and against all fines,
amounts paid in settlements and expenses, including attorneys' fees incurred as
a result of or in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal or administrative or investigative,
by reason of the fact that the person was a director and/or officer of ATC or
served any other corporation in any capacity at the request of ATC, in the
manner and to the extent permitted by law.
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ATC has been advised that it is the position of the Securities and Exchange
Commission that insofar as the foregoing provisions may be invoked to disclaim
liability for damages arising under the Securities Laws, that such provisions
are against public policy as expressed in the Securities Laws and are therefore
unenforceable.
Certain Relationships and Related Transactions
Effective June 29, 1995, ATC and its parent, Aurora were merged pursuant to
an agreement approved by the majority of shareholders of each company, with ATC
as the surviving corporation (the "Aurora Merger"). Prior to the Aurora Merger,
Aurora was a holding company which owned approximately 57% of ATC's outstanding
Common Stock and had substantially no other assets. Under the terms of the
merger, each outstanding share of Aurora Common stock was exchanged for .545
shares of ATC Common Stock. ATC issued 3,341,356 shares of ATC Common Stock in
exchange for 6,131,104 shares of Aurora's common stock, and issued options and
warrants entitling the holders thereof to purchase up to 604,950 shares of ATC
Common Stock upon exercise in replacement of previously outstanding options and
warrants to purchase Auror's common stock. ATC common shares held by Aurora of
3,258,000 were canceled. Actual common shares outstanding increased by 83,356
shares. As a result of the Aurora Merger, ATC utilized Aurora's net operating
loss carry forward to reduce its taxable income and accordingly recorded a
one-time reduction in income tax expense of approximately $350,000 ($.05 per
share) in fiscal 1996. Certain officers and directors of ATC were stockholders
of Aurora and participated in the merger on a consistent basis with all Aurora
security holders.
ATC has in the past, and may in the future, enter into transactions with
officers, directors and other affiliates which may be deemed to be
non-arms-length transactions (i.e. transactions between related parties). Any
new transactions would be approved by a majority of disinterested Board of
Directors and would be expected to be made on terms no less favorable to ATC
than could be arranged with independent third parties. All material transactions
during the past three years between ATC and Aurora are set forth above.
AUDITORS
The firm of Deloitte & Touche LLP, independent certified public
accountants, is expected to be appointed to continue making the annual audit of
the financial statements of the Company for the upcoming 1998 fiscal year.
Deloitte & Touche LLP performed the audit services for the 1997 fiscal year
ended February 28, 1997. It is not expected that a representative of Deloitte &
Touche LLP will be present at the Annual Meeting of Stockholders.
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STOCKHOLDERS PROPOSALS FOR THE NEXT ANNUAL MEETING
No proposals by stockholders have been submitted to the Company to be
considered at the Annual Meeting of Stockholders. All proposals by stockholders
to be considered at the next Annual Meeting of Stockholders should be submitted
to the Company as soon as practicable but no later than May 15, 1998.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business which will be presented for consideration at
the Annual Meeting.
AVAILABILITY OF SECURITIES AND EXCHANGE COMMISSION'S
FORM 10-K
THE COMPANY'S REPORT FOR ITS FISCAL YEAR ENDED FEBRUARY 28, 1997, ON FORM
10-K, INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS THERETO, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS AVAILABLE WITHOUT CHARGE
TO THE STOCKHOLDERS UPON WRITTEN REQUEST. SUCH MATERIAL CAN BE OBTAINED BY
WRITING TO ATC GROUP SERVICES INC., ATTENTION: SHAREHOLDER RELATIONS, 104 EAST
25TH STREET, 10TH FLOOR, NEW YORK, NY 10010.
ANNUAL REPORT TO STOCKHOLDERS
A copy of the Company's 1997 Annual Report for the fiscal year ended
February 28, 1997, accompanies this Proxy Statement.
ATC GROUP SERVICES INC.
Dated: September 4, 1997 Morry F. Rubin, President
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ATC GROUP SERVICES INC. - 1997 ANNUAL MEETING
To be held on October 8, 1997 at 10:00 A.M.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of ATC Group Services Inc., a Delaware
corporation (the "Company"), acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, dated September 4, 1997 and hereby
onstitutes and appoints Morry F. Rubin and George Rubin or either of them
acting singly in the absence of the other, with a power of substitution in
either of them, the proxies of the undersigned to vote with the same force and
effect as the undersigned all shares of Common Stock of the Company held by the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
The Williams Club located at 24 East 39th Street, New York, N.Y. 10016, on
October 8, 1997 at 10:00 A.M. local time and at any adjournment or adjournments
thereof, hereby revoking any proxy or proxies heretofore given and ratifying and
confirming all that said proxies may do or cause to be done by virtue thereof
with respect to the following matters:
1. The election of the five directors nominated by the Board of Directors.
FOR all nominees listed below (except WITHHOLD AUTHORITY to vote
as indicated below), for all nominees listed below,
please check here [ ] please check here [ ]
George Rubin Morry F. Rubin Richard L. Pruitt
Richard S. Greenberg, Esq. Julia S. Heckman
To withhold authority to vote for any individual nominee or nominees write such
nominee's or nominees' name(s) in the space provided
__________________________________________________
2. In his discretion, the proxy is authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
adjournments thereof.
The Board of Directors favors a "FOR" designation for proposal 1. This proxy
when properly executed will be voted as directed. If no direction is indicated,
the proxy will be voted for the election of the five named individuals as
directors.
Dated __________________________________1997
_________________________________________(L.S.)
_________________________________________(L.S.)
Please sign your name exactly as it appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as it
appears hereon. When signing as joint tenants, all parties in the joint tenancy
must sign. When a proxy is given by a corporation, it should be signed by an
authorized officer and the corporate seal affixed. No postage is required if
returned in the enclosed envelope and mailed in the United States. PLEASE SIGN,
DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.
<PAGE>
LESTER MORSE P.C.
111 Great Neck Road, Suite 420
Great Neck, NY 11021
Telephone (516) 487-1446
Telecopier (516) 487-1452
September 5, 1997
Securities & Exchange Commission
450 Fifth Street NW
Washington, DC 20549
Re: ATC Environmental Inc.
File No. 1-10583
Proxy Statement
Gentlemen:
In accordance with Regulation 14a-6(b), we are hereby electronically
filing the Definitive Proxy Statement and Proxy of the above captioned
corporation. Preliminary copies of the Proxy Statement and Proxy were not
previously filed since the Proxy Statement relates solely to the election of
directors. The Definitive Annual Report will be mailed to your office together
with a copy of the Performance Graph. It is anticipated that the proxy
materials will be sent to stockholders on or about September 5, 1997.
Very truly yours,
LESTER MORSE P.C.
SM:sg Steven Morse
