-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mi0JrmoK2b8D9MNwYFi+t1ZEftlBF2YN5xc6sliPVhsIDfVhO4AEj75PR2mVD1Ig xoVjhCCwPnrjTabl9TuJxg== 0001012870-00-002475.txt : 20000502 0001012870-00-002475.hdr.sgml : 20000502 ACCESSION NUMBER: 0001012870-00-002475 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATG INC CENTRAL INDEX KEY: 0001054000 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 942657762 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-23781 FILM NUMBER: 616132 BUSINESS ADDRESS: STREET 1: 47375 FREMONT BLVD CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5104903008 MAIL ADDRESS: STREET 1: 47375 FREMONT BLVD CITY: FREMONT STATE: CA ZIP: 94538 10-K/A 1 FORM 10-K/A AMENDMENT ONE (12/31/99) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 [X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the fiscal year ended December 31, 1999. [_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from ________ to _________. Commission File Number 0-23781 ATG INC. (Exact name of registrant as specified in its charter) California 94-2657762 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 47375 Fremont Boulevard Fremont, California 94538 (Address of principal executive offices) (510) 490-3008 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(g) of the Act: Common Stock, No par value 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 at least the past 90 days: Yes [X] No [_] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (Paragraph 229.405 of this Chapter) 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. [_] On March 13, 2000, there were issued and outstanding 14,089,770 shares of Common Stock. The aggregate market value of Common Stock held by non-affiliates of the Registrant on that date was approximately $78,374,000 based on the closing sale price of the Common Stock, as reported by the NASDAQ National Market. Documents Incorporated By Reference None. 1 INTRODUCTION ATG Inc. hereby amends its Form 10-K for the fiscal year ended December 31, 1999 by: adding to Part III, Item 10, Directors and Executive Officers of the Registrant, the section entitled "Section 16(a) Beneficial Ownership Reporting Compliance;" adding to Part III, Item 11, Executive Compensation; adding to Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management; and adding to Part III, Item 13, Certain Relationships and Related Transactions. PART III Item 10. Directors and Executive Officers of the Registrant Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors and executive officers, and persons who own more than ten percent (10%) of the Company's Common Stock, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission and the NASDAQ national market. Officers, directors and greater than ten percent (10%) beneficial owners are required by the Securities and Exchange Commission regulations to furnish the Company with copies of all Section 16(a) forms they file. Specific due dates for these reports have been established and the Company is required to disclose in this Annual Report on Form 10-K any late filings during the most recent fiscal year. To the Company's knowledge, based solely on its review of the copies of such reports required to be furnished to the Company during the most recent fiscal year, all of these reports were timely filed with the Securities and Exchange Commission and the NASDAQ national market. 2 Item 11. Executive Compensation The following table discloses compensation received by the Company's Chief Executive Officer and the four (4) remaining most highly paid executive officers who received total compensation in excess of $100,000 for the previous years ended December 31, 1999, 1998 and 1997. Summary Compensation Table
Long-Term Compensation Annual Compensation (4) Awards ----------------------- ------ Securities Name and Principal Position Year Salary Bonus Underlying Options(#) - --------------------------- ---- ------ ----- --------------------- Doreen M. Chiu 1999 $245,154 $60,000 * Chief Executive Officer 1998 156,000 * 50,000 1997 150,000 * 150,000 Frank Y. Chiu 1999 225,846 60,000 * Executive Vice President 1998 130,000 * 50,000 1997 120,000 * 159,900 William M. Hewitt 1999 220,846 60,000 * President - Waste Management 1998 157,038 * 40,000 Services (1) 1997 103,269 * 70,000 Steven J. Guerrettaz 1999 159,308 30,000 20,000 Chief Financial Officer (2) 1998 150,000 * 10,000 1997 1,731 * 60,000 Eric C. Su 1999 140,000 50,000 * Vice President - Marketing & 1998 112,086 * 40,000 Planning (3) 1997 94,386 25,000 20,000
- ------------------------ * None (1) Joined the Company in April 1997. (2) Joined the Company in December 1997 and left the Company in February 2000. (3) Resigned as Corporate Officer in February 2000 and reassigned within the Company to a non-officer position. (4) Each of the named executive officers received perquisites and other personal benefits, the aggregate amount of which did not exceed the lesser of $50,000 or 10% of the annual base salary reported. 3 Stock Option Grants and Exercises The following table shows, as to the individuals named in the Summary Compensation Table above, information concerning stock options granted during the fiscal year ended December 31, 1999.
Option Grants in Last Fiscal Year Individual Grants Potential Realizable ------------------------------------------------------------------- Value at Assumed Number of % of Total Annual Rates of Stock Securities Options Price Appreciation Underlying Granted to Exercise for Option Term ($) (1) Options Employees in Price Per Expiration ----------------------- Name Granted (#) Fiscal Year Share ($) Date(2) 5% 10% - ---- --------------- ------------- ---------- ------------ ---------- ---------- Doreen M. Chiu 0 n.a n.a. n.a. n.a. n.a. Frank Y. Chiu 0 n.a n.a. n.a. n.a. n.a. William M. Hewitt 0 n.a n.a. n.a. n.a. n.a. Steven J. Guerrettaz 20,000 14.8% $7.00 7/15/09 $88,045 $223,124 Eric C. Su 0 n.a n.a. n.a. n.a. n.a.
(1) Potential realizable value is based on the assumption that the Common Stock appreciates at the annual rate shown (compounded annually) from the date of grant until the expiration of the ten-year option term. These numbers are calculated based on the requirements promulgated by the Securities and Exchange Commission and do not reflect the Company's estimate of future stock price growth. (2) Options may terminate before their expiration date if the optionee's status as an employee is terminated. The following table shows, as to the individuals named in the Summary Compensation Table above, information concerning stock options exercised during the fiscal year ended December 31, 1999 and the value of unexercised options at such date. Aggregated Option Exercises in Last Fiscal Year And Fiscal Year-End Option Values
Number of Securities Underlying Unexercised Value of Unexercised Options at In-the-Money Options December 31, 1999 (#) at December 31, 1999 ($)(1) --------------------- Shares Acquired Value Exercisable/ Exercisable/ On Exercise (#) Realized ($) Unexercisable Unexercisable --------------- ------------ ------------- ------------- Doreen M. Chiu......... 41,000 $167,437 500/158,500 $ 1,656/491,906 Frank Y. Chiu.......... 54,000 275,825 53,500/168,400 224,919/524,700 William M. Hewitt...... -- -- 66,666/43,334 0/0 Steven J. Guerrettaz... -- -- 70,000/20,000 0/0 Eric C. Su............. 60,000 440,525 63,333/26,667 192,625/0
________________________ (1) Based on the fair market value of the Common Stock at December 31, 1999 of $4.3125 per share, less the exercise price paid for such shares. 4 Employment Agreements None of the individuals named in the Summary Compensation Table above is a party to an employment agreement with the Company. REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION Notwithstanding anything to the contrary set forth in any of the Company's previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate future filings, including this Annual Report on Form 10-K, in whole or in part, the following report and the Performance Graph on page 9 shall not be incorporated by reference into any such filings. Compensation Philosophy The Compensation Committee of the Board of Directors of the Company (the "Committee") consists of the three (3) independent directors who are neither employees nor officers of the Company. The Committee reviews the Company's executive compensation program and policies, determines the compensation of the Company's Chief Executive Officer ("CEO"), and reviews and approves the CEO's recommendations for the compensation of the other senior executive officers of the Company. The Committee's philosophy regarding compensation of the Company's senior management is to link rewards to financial and operational performance, to encourage creation of shareholder value and to achieve the Company's strategic goals and objectives. Through its executive compensation policies, the Committee seeks to attract, retain and motivate highly qualified executives who will contribute to the Company's success. Thus, the Committee believes the Company's compensation arrangements must remain competitive with those offered by other companies of similar size and scope of operations. To achieve these goals, the executive compensation program consists of three primary components which, taken together, constitute a flexible and balanced method of establishing total compensation for senior management. These components are: (i) base salary which reflects individual performance and contribution to the Company; (ii) discretionary annual bonus awards payable in cash and tied to the Company's achievement of financial targets; and (iii) long-term stock based incentive awards designed to strengthen the mutuality of interests between the Company's executive officers and its shareholders. Beginning in 1998, option grants to executive officers are made under the Company's 1998 Stock Ownership Incentive Plan by the Committee. Cash Based Compensation Salary. Consistent with the Company's philosophy, the Committee's approach to base compensation is to offer competitive salaries in comparison with market practices. Salary decisions are based on an annual review with the CEO, considering the decision-making responsibilities of each position and the experience, work performance, and team-building skills of position incumbents, subject to existing employment agreements, if any. The cash salary of each of the Company's executive officers is determined by the individual's performance and past and potential contributions to the Company, as well as the overall financial performance and resources of the Company. Bonuses. The Committee has in the past and may in the future authorize the payment of discretionary bonus compensation based upon an assessment of an individual's exceptional contributions to the Company. Bonuses are based upon the overall achievement in increasing the Company's revenue and its level of profitability. 5 As a general matter, the Committee endorses the philosophy that executive compensation should reflect company performance. The Company, to date, has not yet adopted any compensation plans which are tied directly to Company performance by formula. Equity Based Compensation The executive officers have, from time to time, received grants of options to acquire Common Stock. The purpose of the option grants is to provide such individuals with additional incentives to maximize shareholder value. The Committee also utilizes vesting periods to encourage key employees to continue in the employ of the Company. The size of the option grant to each executive officer is set at a level which is intended to create a meaningful opportunity for stock ownership based on the individual's current position with the Company and may also be based in part upon Company performance factors such as earnings per share and revenue growth. However, the extent to which these latter factors are taken into consideration will vary from individual to individual at the Committee's sole discretion. Chief Executive Officer Compensation The process of determining the compensation for the CEO and the factors taken into consideration in such determination are generally the same as the process and factors used in determining the compensation of all of the executive officers of the Company. The Committee considers both the Company's overall performance and the CEO's individual performance. Bonuses for the CEO are based upon the overall achievements in increasing the Company's revenue and its level of profitability. Ms. Chiu's salary was determined based on analysis of salaries paid by peer companies and on Ms. Chiu's knowledge, experience and individual performance. The foregoing report has been furnished by the Compensation Committee of the Board of Directors of the Company. Andrew C. Kadak, Chairman Earl E. Gjelde George Doubleday, II COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The following persons served on the Compensation Committee of the Company's Board of Directors during fiscal year 1999: Andrew C. Kadak, Earl E. Gjelde, and George Doubleday, II. None of these persons is a current or former officer or employee of the Company. There are no "interlocks, " as defined by the Securities and Exchange Commission, with respect to any member of the Compensation Committee. 6 Item 12. Security Ownership of Certain Beneficial Owners and Management The following table sets forth the beneficial ownership of the Common Stock of the Company as of April 24, 2000, by each person known by the Company to own beneficially more than five percent of the Company's outstanding Common Stock, by each director, by each executive officer named in the Summary Compensation Table below and by all current directors and executive officers as a group. All shares are subject to the named person's sole voting and investment power, except where otherwise indicated. The address of each beneficial owner identified is in care of the Company, 47375 Fremont Boulevard, Fremont, California 94538.
Number Percent of Name of Shares (1) Shares Outstanding - ---- ------------- ------------------ Doreen M. Chiu (2) 2,719,926 19.3% George Doubleday, II (3) 507,243 3.6% Eric C. Su (4) 121,333 * William M. Hewitt (5) 83,954 * Steven J. Guerrettaz (6) 71,484 * Earl E. Gjelde (7) 15,000 * Andrew C. Kadak (7) 15,000 * All directors and executive officers as a group (9 persons) (8) 3,598,940 25.5%
- -------------------- * The number of shares owned is less than 1% (1) Beneficial ownership includes shares of Common Stock subject to options held by the named person that are currently exercisable or will become exercisable within 60 days. (2) Includes all shares beneficially owned by Frank Y. Chiu as community property and options to purchase 20,000 shares of Common Stock. (3) Includes options to purchase 15,000 shares of Common Stock (4) Includes options to purchase 63,333 shares of Common Stock. (5) Includes options to purchase 83,333 shares of Common Stock (6) Includes options to purchase 70,000 shares of Common Stock (7) Represents options to purchase 15,000 shares of Common Stock (8) Includes 370,666 shares of Common Stock that may be issued upon the exercise of options outstanding and beneficially owned by the directors and executive officers as a group. 7 Item 13. Certain Relationships and Related Transactions The following is a summary of certain transactions to which the Company was or is a party and in which certain executive officers, directors or shareholders of the Company had or have a direct or indirect material interest. From 1992 to 1997, Doreen M. Chiu, the Company's Chairman of the Board and Chief Executive Officer, extended a series of loans to the Company, each of which was repayable in full upon demand (collectively, the "Loan"). The Loan, which was unsecured, bore interest at an annual rate of 10%, payable concurrently with principal. The outstanding principal balance of the Loan, including accrued interest, at December 31, 1997 was $1,280,180. This Loan was repaid in full in 1998. Doreen M. Chiu and Frank Y. Chiu, the Executive Vice-President and a director of the Company, have each guaranteed the obligations of the Company under (i) two Promissory Notes in the principal amounts of $2,069,604 and $1,996,075 held by Safeco Credit Company, Inc.; (ii) an Equipment Lease between the Company and Great Western Leasing that provides for an aggregate rental amount of $32,522; and (iii) a Commercial Lease Agreement between the Company and U.S. Bancorp with an aggregate rental amount of $103,341. In connection with the issuance of certain bonds, undertakings and other instruments of guarantee in favor of the Company, Doreen M. Chiu and Frank Y. Chiu have each executed (i) a blanket Indemnity Agreement in favor of ACSTAR Insurance Company ("ACSTAR"), indemnifying ACSTAR against any losses that ACSTAR may incur in connection with the issuance of any such bonds, undertakings or other instruments of guarantee, and (ii) a blanket Continuing Agreement of Indemnity-Contractor's Form for the benefit of Reliance Insurance Company, United Pacific Insurance, Reliance National Indemnity Company and Reliance Surety Company, indemnifying such entities against any losses that such entities may incur in connection with the issuance of any such bonds, undertakings or other instruments of guarantee. As of December 31, 1999, the potential aggregate liability of Mr. and Mrs. Chiu under the blanket indemnities was approximately $35,500. In 1998, the Company entered into a contract to provide certain engineering, remediation and construction services to Mission Ranch Center, a California limited partnership ("Mission Ranch"). Doreen M. Chiu and Frank Y. Chiu are general partners and own a 50% partnership interest in Mission Ranch. The Company reported revenues of $1,403,000 and costs of $1,354,000 related to services provided under this contract in 1999. The Company reported revenues of $785,000 and costs of $432,000 related to services provided under this contract in 1998. The total project contract value is approximately $4,695,000 and is expected to be completed in fiscal 2000. 8 PERFORMANCE GRAPH The following graph demonstrates a comparison of cumulative total shareholder returns, calculated on a dividend reinvestment basis and based upon an initial investment of $100 in the Company's Common Stock as compared with the Russell 2000 Index and the Nasdaq Stock Market (U.S.) Index. No dividends have been declared or paid on the Company's Common Stock during such period. The stock price performance shown on the graph below is not necessarily indicative of future price performance. The Common Stock began trading on the Nasdaq National Market on May 7, 1998. The graph reflects the Company's stock price performance from the initial public offering through the end of fiscal 1999. [PERFORMANCE GRAPH APPEARS HERE]
Cumulative Total Return --------------------------------------------------------------------------- 5/7/98 6/98 9/98 12/98 3/99 6/99 9/99 12/99 ATG INC. 100 90 71 87 76 78 59 51 RUSSELL 2000 100 97 79 87 78 91 84 85 NASDAQ STOCK MARKET (U.S.) 100 103 93 121 135 148 152 224
9 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ATG INC. By: /s/ Doreen M. Chiu ---------------------------- Doreen M. Chiu Chairman of the Board President and CEO Date: May 1, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ Doreen M. Chiu - ---------------------------------------- Chairman, President and Chief May 1, 2000 Doreen M. Chiu Executive Officer /s/ Frank Y. Chiu - ---------------------------------------- Executive Vice-President May 1, 2000 Frank Y. Chiu Director /s/ William M. Hewitt - ---------------------------------------- President-Waste Mgmt. Services May 1, 2000 William M. Hewitt Director /s/Danyal F. Mutman - ---------------------------------------- Chief Financial Officer May 1, 2000 Danyal F. Mutman /s/ George Doubleday II - ---------------------------------------- Director May 1, 2000 George Doubleday II /s/ Earl E. Gjelde - ---------------------------------------- Director May 1, 2000 Earl E. Gjelde /s/ Andrew C. Kadak - ---------------------------------------- Director May 1, 2000 Andrew C. Kadak
10 EX-23.1 2 CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of ATG Inc. on Form S-8 (file No. 333-72349 and File No. 333-89115) of our reports dated March 28, 2000, on our audits of the consolidated financial statements and financial statement schedule of ATG Inc. as of December 31, 1999 and 1998 and for the years ended December 31, 1999, 1998 and 1997 which reports are included in this Annual Report on Form 10-K/A. /s/ PricewaterhouseCoopers LLP San Jose, California May 1, 2000 -----END PRIVACY-ENHANCED MESSAGE-----