-----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, HnxyqVzNQSO2Cc/PCBDLGLefazj6btaRnwPfx82uW7z9Bqz6/Io2iIs3in3ssV0W nmW0lrfUnlzHDJHm0MM9yQ== 0001027574-99-000027.txt : 19991117 0001027574-99-000027.hdr.sgml : 19991117 ACCESSION NUMBER: 0001027574-99-000027 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OUTSOURCING SOLUTIONS INC CENTRAL INDEX KEY: 0001027574 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 582197161 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867 FILM NUMBER: 99753784 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI SUPPORT SERVICES INC CENTRAL INDEX KEY: 0000076741 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-CONSUMER CREDIT REPORTING, COLLECTION AGENCIES [7320] IRS NUMBER: 391133219 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05589 FILM NUMBER: 99753785 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: PAYCO AMERICAN CORP DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION CORP CENTRAL INDEX KEY: 0000100817 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-CONSUMER CREDIT REPORTING, COLLECTION AGENCIES [7320] IRS NUMBER: 250848970 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 002-27974 FILM NUMBER: 99753786 BUSINESS ADDRESS: STREET 1: C/O OUTSOURCING SOLUTIONS STREET 2: 390 SOUTH WOOD MILL ROAD STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: C/O OUTSOURCING SOLUTIONS STREET 2: 390 SOUTH WOODS MILL RD STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: SUPER ELECTRIC PRODUCTS INC DATE OF NAME CHANGE: 19661121 FORMER COMPANY: FORMER CONFORMED NAME: UNION SPRING & MANUFACTURING CO DATE OF NAME CHANGE: 19660921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CFC SERVICES CORP CENTRAL INDEX KEY: 0001029300 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 133866487 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-01 FILM NUMBER: 99753787 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: A M MILLER & ASSOCIATES INC CENTRAL INDEX KEY: 0001029301 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 133866487 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-02 FILM NUMBER: 99753788 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL ALLIANCE INC CENTRAL INDEX KEY: 0001029303 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 133866487 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-03 FILM NUMBER: 99753789 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI COLLECTION SERVICES INC CENTRAL INDEX KEY: 0001029315 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 391314048 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-12 FILM NUMBER: 99753790 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: PAYCO GENERAL AMERICAN CREDITS INC DATE OF NAME CHANGE: 19961219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSITY ACCOUNTING SERVICE INC CENTRAL INDEX KEY: 0001029318 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 391357406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-14 FILM NUMBER: 99753791 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASSET RECOVERY & MANAGEMENT CORP CENTRAL INDEX KEY: 0001029319 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 391357406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-15 FILM NUMBER: 99753792 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDIANA MUTUAL CREDIT ASSOCIATION INC CENTRAL INDEX KEY: 0001029320 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 391357406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-16 FILM NUMBER: 99753793 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRABLE GREINER & WOLFF INC CENTRAL INDEX KEY: 0001029386 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 391758997 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-17 FILM NUMBER: 99753794 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: FURST & FURST INC DATE OF NAME CHANGE: 19961219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JENNIFER LOOMIS & ASSOCIATES INC CENTRAL INDEX KEY: 0001029387 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-18 FILM NUMBER: 99753795 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUALINK INC CENTRAL INDEX KEY: 0001029389 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-20 FILM NUMBER: 99753796 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROFESSIONAL RECOVERIES INC CENTRAL INDEX KEY: 0001029390 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-21 FILM NUMBER: 99753797 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAYCO AMERICAN INTERNATIONAL CORP CENTRAL INDEX KEY: 0001029391 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-22 FILM NUMBER: 99753798 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACCOUNT PORTFOLIOS INC /NEW CENTRAL INDEX KEY: 0001029715 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 510369044 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-07 FILM NUMBER: 99753799 BUSINESS ADDRESS: STREET 1: 3300 NORTHEAST EXPRESSWAY STREET 2: BUILDING 1 STE M CITY: ATLANTA STATE: GA ZIP: 30341 BUSINESS PHONE: 7704514862 MAIL ADDRESS: STREET 1: 3300 NORTHEAST EXPRESSWAY STREET 2: BUILDING 1 STE M CITY: ATLANTA STATE: GA ZIP: 30341 FORMER COMPANY: FORMER CONFORMED NAME: ACCOUNT PORTFOLIOS GP INC DATE OF NAME CHANGE: 19961227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGH PERFORMANCE SERVICES INC CENTRAL INDEX KEY: 0001058621 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 593383407 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-27 FILM NUMBER: 99753800 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGH PERFORMANCE SERVICES OF FLORIDA INC CENTRAL INDEX KEY: 0001058622 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 593473475 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-28 FILM NUMBER: 99753801 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERACTIVE PERFORMANCE INC CENTRAL INDEX KEY: 0001058624 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133861550 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-29 FILM NUMBER: 99753802 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERACTIVE PERFORMANCE OF FLORIDA INC CENTRAL INDEX KEY: 0001058625 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 593378200 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-30 FILM NUMBER: 99753803 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSWORLD SYSTEMS INC CENTRAL INDEX KEY: 0001058626 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 941728881 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-31 FILM NUMBER: 99753804 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UCO PROPERTIES INC CENTRAL INDEX KEY: 0001058627 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 941728881 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-32 FILM NUMBER: 99753805 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION FINANCIAL SERVICES GROUP INC CENTRAL INDEX KEY: 0001058628 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 222630947 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-33 FILM NUMBER: 99753806 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN RECOVERY CO INC CENTRAL INDEX KEY: 0001058629 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 520937211 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-34 FILM NUMBER: 99753807 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSN CORP CENTRAL INDEX KEY: 0001058630 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 251319485 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-35 FILM NUMBER: 99753808 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENAD CONNECTOR CORP CENTRAL INDEX KEY: 0001058631 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 042428227 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-36 FILM NUMBER: 99753809 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UCO MBA CORP CENTRAL INDEX KEY: 0001058632 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 231704744 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-37 FILM NUMBER: 99753810 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION SPECIAL STEEL CASTING CORP CENTRAL INDEX KEY: 0001058633 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 251154811 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-15867-38 FILM NUMBER: 99753811 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERACTIVE PERFORMANCE OF GEORGIA INC CENTRAL INDEX KEY: 0001067124 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 593487654 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-15867-41 FILM NUMBER: 99753812 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: C/O OUTSOURCING SOLUTIONS INC STREET 2: 390 SOUTH WOODS MILL RD STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH SHORE AGENCY INC CENTRAL INDEX KEY: 0001067125 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 113399772 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-15867-42 FILM NUMBER: 99753813 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: C/O OUTSOURCING SOLUTIONS INC STREET 2: 390 SOUTH WOODS MILL RD STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 10-Q 1 OUTSOURCING SOLUTION INC. 1999 3RD QUARTER 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 ------------------------------------- OR [ ] 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 333-16867 ----------- Outsourcing Solutions Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 58-2197161 - ----------------------------------- ---------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 390 South Woods Mill Road, Suite 350 Chesterfield, Missouri 63017 - ----------------------------------- ---------------------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (314) 576-0022 Indicate by checkmark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Outstanding at Class September 30, 1999 - ------------------------------------------ ---------------------- Voting common stock 3,477,126.01 Class A convertible nonvoting common stock 391,740.58 Class B convertible nonvoting common stock 400,000.00 Class C convertible nonvoting common stock 1,040,000.00 ------------ 5,308,866.59 ============ Transitional Small Disclosure (check one): Yes[ ] No[ X ] PAGE 2 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES TABLE OF CONTENTS Part I. Financial Information Page Item 1. Financial Statements Condensed Consolidated Balance Sheets September 30, 1999 (unaudited) and December 31, 1998........... 3 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 1999 and 1998 (unaudited).. 4 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 1999 and 1998 (unaudited)........... 5 Notes to Condensed Consolidated Financial Statements (unaudited)......................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...................................... 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 14 Part II. Other Information.............................................. 14 PAGE 3 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except share and per share amounts) - ------------------------------------------------
September 30, December 31, 1999 1998 Unaudited Audited ------------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,836 $ 8,814 Cash and cash equivalents held for clients 23,771 22,372 Current portion of purchased loans and accounts receivable portfolios 29,772 35,057 Accounts receivable - trade, less allowance for doubtful receivables of $706 and $1,309 46,415 40,724 Other current assets 10,754 8,777 --------- --------- Total current assets 115,548 115,744 PURCHASED LOANS AND ACCOUNTS RECEIVABLE PORTFOLIOS 11,115 20,436 PROPERTY AND EQUIPMENT, net 43,279 40,317 INTANGIBLE ASSETS, net 414,388 425,597 DEFERRED FINANCING COSTS, net 11,379 13,573 OTHER ASSETS 5,212 2,824 --------- --------- TOTAL $ 600,921 $ 618,491 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable - trade $ 6,740 $ 7,355 Collections due to clients 23,771 22,372 Accrued salaries, wages and benefits 13,134 13,274 Other current liabilities 46,416 55,071 Current portion of long-term debt 19,640 16,877 --------- --------- Total current liabilities 109,701 114,949 LONG-TERM DEBT 510,408 511,271 OTHER LONG-TERM LIABILITIES 21,602 22,303 STOCKHOLDERS' DEFICIT: 8% nonvoting cumulative redeemable exchangeable 13,686 12,167 preferred stock; authorized 1,250,000 and 1,000,000 shares, respectively; 1,094,855.24 and 973,322.32 shares, respectively, issued and outstanding, at liquidation value of $12.50 per share Voting common stock; $.01 par value; authorized 35 35 7,500,000 shares, 3,477,126.01 shares issued and outstanding Class A convertible nonvoting common stock; $.01 4 4 par value; authorized 7,500,000 shares, 391,740.58 shares issued and outstanding Class B convertible nonvoting common stock; $.01 4 4 par value; authorized 500,000 shares, 400,000 shares issued and outstanding Class C convertible nonvoting common stock; $.01 10 10 par value; authorized 1,500,000 shares, 1,040,000 shares issued and outstanding Paid-in capital 66,958 66,958 Retained deficit (121,487) (109,210) --------- --------- Total stockholders' deficit (40,790) (30,032) --------- --------- TOTAL $ 600,921 $ 618,491 ========= =========
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. PAGE 4 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands) - ----------------------------------------------------------
Three Months Ended Nine Months Ended September 30, September 30, ------------------- ----------------- 1999 1998 1999 1998 REVENUES $122,987 $119,903 $380,063 $358,634 EXPENSES: Salaries and benefits 60,076 58,050 182,238 171,203 Service fees and other operating and administrative expenses 37,440 35,130 117,334 105,100 Amortization of loans and accounts receivable purchased 9,317 12,840 29,794 35,198 Amortization of goodwill and other intangibles 4,112 4,045 12,316 11,588 Depreciation expense 3,735 3,486 10,960 9,963 -------- -------- -------- -------- Total expenses 114,680 113,551 352,642 333,052 -------- -------- -------- -------- OPERATING INCOME 8,307 6,352 27,421 25,582 OTHER EXPENSE - - 76 - INTEREST EXPENSE - Net 13,005 13,164 38,214 37,554 -------- -------- -------- -------- LOSS BEFORE INCOME TAXES AND MINORITY INTEREST (4,698) (6,812) (10,869) (11,972) PROVISION FOR INCOME TAXES - - 375 - MINORITY INTEREST - - - 572 -------- -------- -------- -------- NET LOSS (4,698) (6,812) (11,244) (12,544) PREFERRED STOCK DIVIDEND REQUIREMENTS 527 162 1,033 639 -------- -------- -------- -------- NET LOSS TO COMMON STOCKHOLDERS $ (5,225) $ (6,974) $(12,277) $(13,183) ======== ======== ======== ======== The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
PAGE 5 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands except share amounts) - --------------------------------------------------------------------------------
Nine Months Ended September 30, ------------------- 1999 1998 OPERATING ACTIVITIES: Net loss $(11,244) $(12,544) Adjustments to reconcile net loss to net cash from operating activities: Depreciation and amortization 25,645 23,654 Amortization of loans and accounts receivable 29,794 35,198 purchased Other 76 - Minority interest - 572 Change in assets and liabilities: Other current assets (7,783) 5,256 Accounts payable and other liabilities (9,625) (10,122) -------- -------- Net cash from operating activities 26,863 42,014 -------- -------- INVESTING ACTIVITIES: Payments for acquisitions, net of cash acquired (877) (167,305) Purchase of loans and accounts receivable portfolios (15,188) (38,030) Acquisition of property and equipment (14,163) (10,794) Investment in non-consolidated subsidiary (2,500) - Other 269 - -------- -------- Net cash from investing activities (32,459) (216,129) -------- -------- FINANCING ACTIVITIES: Proceeds from term loans - 225,469 Borrowings under revolving credit agreement 223,150 168,050 Repayments under revolving credit agreement (208,750) (177,900) Repayments of debt (12,607) (32,327) Deferred financing fees (175) (3,038) -------- -------- Net cash from financing activities 1,618 180,254 -------- -------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (3,978) 6,139 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 8,814 3,217 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,836 $ 9,356 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during period for interest $ 33,264 $ 28,407 ======== ======== Net cash paid (received) during period for taxes $ 158 $ (8,011) ======== ========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES - During the nine months ended September 30, 1999 and 1998, the Company paid preferred stock dividends of $1,519 and $468, respectively, through the issuance of 121,532.92 shares and 37,435.47 shares of preferred stock, respectively. The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands except share amounts) NOTE 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 1999 are not necessarily indicative of the results that may be expected for the year ended December 31, 1999. For purposes of comparability, certain prior year amounts have been reclassified to conform to current quarter presentation. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in the Company's Form 10-K for the year ended December 31, 1998. Comprehensive loss for the periods presented were equal to the Company's net loss as the Company had no comprehensive income (loss) items. NOTE 2. ACQUISITION On January 23, 1998, the Company acquired through a tender offer, approximately 77% of the outstanding shares of The Union Corporation's ("Union") common stock for $31.50 per share. On March 31, 1998, the Company acquired the remaining outstanding shares of Union. The aggregate purchase price of the Union acquisition was approximately $220,000 including transaction costs of $10,900 and assumed liabilities. The Company financed the acquisition primarily with funds provided by an amended credit agreement. Union, through certain of its subsidiaries, furnished a broad range of credit and receivables management outsourcing services as well as management and collection of accounts receivable. The acquisition was accounted for under the purchase method of accounting. The Company allocated the total purchase price including additional liabilities reserves to the fair value of the net assets acquired resulting in goodwill of approximately $219,000. The goodwill is being amortized over 30 years using the straight-line method. Union's consolidated operating results have been included in the Company's consolidated results since January 23, 1998, recognizing the minority interest through the completion date of the acquisition. The unaudited proforma consolidated financial data presented below provides proforma effect of the Union acquisition as if such acquisition had occurred as of the beginning of each period presented. The unaudited results have been prepared for comparative purposes only and do not necessarily reflect the results of operations of the Company that actually would have occurred had the acquisition been consummated as of the beginning of each period presented, nor does the data give effect to any transactions other than the acquisition. For the nine months ended September 30, -------------------------------- 1999 1998 ------ ------ Revenues $ 380,063 $ 365,988 ========= ========= Net loss $( 11,244) $ (13,665) ========= ========= NOTE 3. DEBT In January 1998, the Company finalized the Second Amended and Restated Credit Agreement for $466,663 (the "Agreement") with a group of banks to fund the Union acquisition and refinance existing outstanding indebtedness. The Agreement, as amended, consists of a $408,663 term loan facility and a $58,000 Revolving Credit Facility (the "Revolving Facility"). The term loan facility consists of a term loan of $59,187 ("Term Loan A"), a term loan of $124,476 ("Term Loan B") and a term loan of $225,000 ("Term Loan C"), which mature on October 15, 2001, 2003 and 2004, respectively. The Company is required to make quarterly principal repayments on each term loan. Term Loan A bears interest, at the Company's option, (a) at a base rate equal to the greater of the federal funds rate plus 0.5% or the lender's customary base rate plus 1.5% or (b) at the reserve adjusted Eurodollar rate plus 2.5%. Term Loan B and Term Loan C bear interest, at the Company's option, (a) at a base rate equal to the greater of the federal funds rate plus 0.5% or the lender's customary base rate, plus 2.0% or (b) at the reserve adjusted Eurodollar rate plus 3.0%. The Revolving Facility originally had a term of five years and is fully revolving until October 15, 2001. The Revolving Facility bears interest, at the Company's option, (a) at a base rate equal to the greater of the federal funds rate plus 0.5% or the lender's customary base rate plus 1.5% or (b) at the reserve adjusted Eurodollar rate plus 2.5%. Also, outstanding under the Revolving Facility are letters of credit of $2,025. The Agreement is guaranteed by all of the Company's present domestic subsidiaries and is secured by all of the stock of the Company's present domestic subsidiaries and by substantially all of the Company's domestic property assets except for OSI Funding Corp. as discussed in Note 6 below. The Agreement contains certain covenants the more significant of which limit cash dividends, asset sales, acquisitions and additional indebtedness, as well as requires the Company to satisfy certain financial performance ratios. NOTE 4. LITIGATION From time to time, the Company and certain of its subsidiaries are subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the normal course of business and are routine to the nature of the Company's businesses. In addition, as a result of the Union acquisition, certain subsidiaries of the Company are a party to several on-going environmental remediation investigations by federal and state governmental agencies and clean-ups and, along with other companies, has been named a "potentially responsible party" for certain waste disposal sites. While the results of litigation cannot be predicted with certainty, the Company has provided for the estimated uninsured amounts and costs to resolve the pending suits and management, in consultation with legal counsel, believes that reserves established for the ultimate resolution of pending matters are adequate at September 30, 1999. NOTE 5. 8% NONVOTING CUMULATIVE REDEEMABLE EXCHANGEABLE PREFERRED STOCK In January 1999, the Company increased its authorized 8% Nonvoting Cumulative Redeemable Exchangeable Preferred Stock from 1,000,000 shares to 1,250,000 shares. NOTE 6. PURCHASED LOANS AND ACCOUNTS RECEIVABLE PORTFOLIOS FINANCING In October 1998, a qualifying special-purpose finance company, OSI Funding Corp. ("FINCO"), formed by the Company, entered into a revolving warehouse financing arrangement (the "Warehouse Facility") for up to $100,000 of funding capacity for the purchase of loans and accounts receivable portfolios over its five year term. In connection with the establishment of the Warehouse Facility, FINCO entered into a servicing agreement with a subsidiary of the Company to provide certain administrative and collection services on a contingent fee basis (i.e., fee is based on a percent of amount collected) at prevailing market rates based on the nature and age of outstanding balances to be collected. Servicing revenue from FINCO is recognized by the company as collections are received. The following summarizes the transactions between the Company and FINCO for the three and nine months ended September 30, 1999:
For the Three For the Nine Months Ended Months Ended September 30, September 30, 1999 1999 --------------- ------------- Sales of purchased loans and accounts receivable portfolios by the Company to FINCO $15,161 $44,485 Servicing fees paid by FINCO to the Company $3,913 $9,758
Sales of purchased loans and accounts receivable portfolios by the Company to FINCO were in the same amount and occurred shortly after such portfolios were acquired by the Company from the various unrelated sellers. Accordingly, no gain or loss was recorded by the Company on the sales to FINCO. At September 30, 1999, FINCO had outstanding borrowings of $35,287. NOTE 7. SUBSEQUENT EVENT The Company, Madison Dearborn Capital Partners III, L.P. ("MDP"), and certain of the Company's stockholders, optionholders and warrantholders have entered into a Stock Subscription and Redemption Agreement, dated as of October 8, 1999, pursuant to which MDP will acquire a controlling interest in OSI for approximately $790 million and most of the currently outstanding capital stock of OSI will be redeemed (the "Recapitalization"). The Recapitalization is expected to be completed by December 31, 1999. The Company is pursuing a consent solicitation from the holders of its existing $100,000 11% Senior Subordinated Notes to obtain a waiver of the Change of Control provision of the Indenture in connection with the transaction. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - --------------------- Three Months Ended September 30, 1999 Compared to Three Months Ended September 30, 1998 - -------------------------------------------------------------------- Revenues for the three months ended September 30, 1999 were $123.0 million compared to $119.9 million in the same period last year - an increase of 2.6%. The revenue increase of $3.1 million was due to increased collection and outsourcing services revenue offset partially by lower portfolio services revenue, which resulted from the establishment of OSI Funding Corp. ("FINCO"), a qualifying special-purpose non-recourse financing company, as discussed below. Revenues from collection services were $88.2 million for the three months ended September 30, 1999 compared to $87.4 million in the comparable period in 1998. The increase in collection services revenues was due to an increase in existing net placements offset by the continued pressure on contingent fee rates in the highly competitive business. The outsourcing services revenue of $15.1 million compared favorably to prior year of $12.6 million due to increased revenue from new and existing business. Revenues from portfolio services decreased from $19.9 million for the three months ended September 30, 1998 to $19.7 million for the three months ended September 30, 1999. The decreased revenue was due primarily to the negative revenue effect of FINCO, which was formed in the fourth quarter of 1998 for the purpose of financing acquired loans and accounts receivable portfolios. Prior to forming FINCO, the Company would record as revenue the total collections on purchased portfolios. Currently, for all purchased portfolios which are sold to and financed by FINCO, the Company records as revenue a servicing fee on the total collections of FINCO purchased portfolios. During the quarter ended September 30, 1999, the Company recorded revenue from FINCO servicing fees of $3.9 million on total collections of $10.7 million. When compared to the three months ended September 30, 1998, the total collections of both on and off-balance sheet purchased portfolios, increased from $19.9 million in 1998 to $26.5 million in 1999, an increase of 33% or $6.6 million. The increased collections resulted primarily from an increase in the total levels of purchased portfolios primarily as a result of the increased buying capacity made available through FINCO. If all portfolios purchased by FINCO were accounted for on-balance sheet, the Company would have reported revenues, including total collections of portfolios, of $129.8 million, as compared to $119.9 million in 1998, an 8.3% increase. Operating expenses, exclusive of amortization and depreciation charges, were $97.5 million for the three months ended September 30, 1999 and $93.2 million for the comparable period in 1998 - an increase of 4.7%. The increase in operating expenses, exclusive of amortization and depreciation charges, resulted primarily from higher collection-related expenses associated with the increased revenues of collection and outsourcing services, increased collection-related expenses associated with the increase in collections of purchased portfolios, infrastructure costs as the Company aligns collection services by industry and related increases in advertising and promotional expenses. For the three months ended September 30, 1999, amortization and depreciation charges of $17.2 million compared to $20.4 million for the same period last year - a decrease of 15.7%. The lower amortization charges resulted primarily from lower on-balance sheet portfolio amortization as the majority of portfolio purchases were sold to FINCO. On portfolios owned by FINCO, the Company does not record amortization expense. As a result of the above, the Company's operating income of $8.3 million for the three months ended September 30, 1999 compared favorably to $6.4 for the same period in 1998. Earnings before interest expense, taxes, depreciation and amortization (EBITDA) for the three months ended September 30, 1999 was $25.5 million compared to $26.7 million for the same period in 1998. The decrease of $1.2 million was attributable to the decrease in portfolio services resulting from the manner in which revenues from off-balance sheet collections are recognized and the higher operating expenses. Net interest expense for the three months ended September 30, 1999 was $13.0 million compared to $13.2 million for the comparable period in 1998. The decrease was due primarily to lower interest rates. Due to the factors stated above, the net loss for the three months ended September 30, 1999 of $4.7 million compared to the net loss of $6.8 million for the three months ended September 30, 1998. Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30, 1998 - ------------------------------------------------------------------ Revenues for the nine months ended September 30, 1999 were $380.1 million compared to $358.6 million in the same period last year - an increase of 6.0%. The revenue increase of $21.5 million was due primarily to increased collection, outsourcing and portfolio services revenues of $14.2 million - an increase of 3.8% over last year, and $7.3 million from the acquisition of Union. Revenues from collection services were $275.0 million for the nine months ended September 30, 1999 compared to $265.1 million in the comparable period in 1998. The increase in collection services revenues was due to a 1.6% increase in existing business and $5.7 million from the Union acquisition. The outsourcing services revenue of $43.5 million compared favorably to prior year of $33.7 million due to increased revenue from new and existing business of 24.3% and $1.6 million from the Union acquisition. Revenues from purchased portfolio services increased to $61.6 million for the nine months ended September 30, 1999 compared to $59.8 million in 1998 - up 2.8%. The increased revenue was attributable to the servicing fee for the off-balance sheet receivable collections of portfolios which increased due to the formation of FINCO, offset by lower revenues from on-balance sheet portfolios. Prior to forming FINCO, the Company would record as revenue the total collections on purchased portfolios. Currently, for all purchased portfolios which are sold to and financed by FINCO, the Company records as revenue a servicing fee on the total collections of FINCO purchased portfolios. During the nine months ended September 30, 1999, the Company recorded revenue from FINCO servicing fees of $9.8 million on total collections of $25.9 million. When compared to the nine months ended September 30, 1998, the total collections of both on and off-balance sheet purchased portfolios increased from $59.8 million in 1998 to $77.7 million in 1999, an increase of 29.9% or $17.9 million. The increased collections resulted primarily from an increase in the total levels of purchased portfolios primarily as a result of the increased buying capacity made available through FINCO. If all portfolios purchased by FINCO were accounted for on-balance sheet, the Company would have reported revenues, including total collections of portfolios, of $396.2 million as compared to $358.6 million, an increase of 10.0%. Operating expenses, exclusive of amortization and depreciation charges, were $299.6 million for the nine months ended September 30, 1999 and $276.3 million for the comparable period in 1998 - an increase of 8.4%. The increase in operating expenses, exclusive of amortization and depreciation charges, resulted primarily from the Union acquisition, higher collection-related expenses associated with the increased revenues of collection and outsourcing services, increased collection-related expenses associated with the increase in collections of purchased portfolios, infrastructure costs as the Company aligns collection services by industry, and related increases in advertising and promotional expenses and consulting expenses of approximately $2.4 million. For the nine months ended September 30, 1999, amortization and depreciation charges of $53.0 compared to $56.8 million for the same period last year - a decrease of 6.5%. The lower amortization and depreciation charges resulted primarily from lower on-balance sheet portfolio amortization offset partially by additional depreciation and amortization of goodwill related to the Union acquisition and depreciation of current year capital expenditures. On portfolios owned by FINCO, the Company does not record amortization expense. As a result of the above, the Company generated operating income of $27.4 million for the nine months ended September 30, 1999 compared to $25.6 million for the comparable period in 1998. Earnings before interest expense, taxes, depreciation and amortization (EBITDA) for the nine months ended September 30, 1999 was $80.5 million compared to $82.3 million for the same period in 1998. The decrease was primarily attributable to the higher branding and industry focused expenses and the decreased portfolio services revenues resulting from the manner in which revenues from off-balance sheet collections are recognized. Net interest expense for the nine months ended September 30, 1999 was $38.2 million compared to $37.6 million for the comparable period in 1998. The increase was primarily due to the additional indebtedness incurred to finance the Union acquisition offset partially by lower interest rates. The provision for income taxes of $0.4 million was provided for state income taxes as the Company has income tax obligations in various states. Minority interest in 1998 resulted from the Union acquisition. On January 23, 1998, the Company acquired approximately 77% of the outstanding common stock of Union through a tender offer. The acquisition of all remaining outstanding common stock of Union was completed on March 31, 1998. The Company recognized minority interest in earnings of Union during the period from January 23, 1998 to March 31, 1998. Due to the factors stated above, the net loss for the nine months ended September 30, 1999 of $11.2 million compared favorably to the net loss of $12.5 million for the nine months ended September 30, 1998. Financial Condition, Liquidity and Capital Resources - ---------------------------------------------------- At September 30, 1999, the Company had cash and cash equivalents of $4.8 million. The Company's credit agreement provides for a $58.0 million revolving credit facility, which allows the Company to borrow for working capital, general corporate purposes and acquisitions, subject to certain conditions. As of September 30, 1999, the Company had outstanding $39.9 million under the revolving credit facility leaving $16.1 million, after outstanding letters of credit, available under the revolving credit facility. Since December 31, 1998, cash and cash equivalents decreased $4.0 million primarily due to cash utilized for the net repayment of debt of $12.6 million, purchases of loans and accounts receivable portfolios of $15.2 million and capital expenditures of $14.2 million offset by cash from operations of $26.9 million and increased borrowings under the revolving credit facility of $14.4 million. The Company also held $23.8 million of cash for clients in restricted trust accounts at September 30, 1999. For the first nine months in 1999, the Company made capital expenditures of $14.2 million primarily for the replacement and upgrading of equipment and expansion of the Company's information services systems. The Company anticipates spending approximately $18.0 million for capital expenditures in 1999. The Company, Madison Dearborn Capital Partners III, L.P. ("MDP"), and certain of the Company's stockholders, optionholders and warrantholders have entered into a Stock Subscription and Redemption Agreement, dated as of October 8, 1999, pursuant to which MDP will acquire a controlling interest in OSI for approximately $790 million and most of the currently outstanding capital stock of OSI will be redeemed (the "Recapitalization"). The Recapitalization is expected to be completed by December 31, 1999. The Recapitalization will be funded through an equity contribution of approximately $211 million from MDP and existing shareholders, $100 million from issuance of redeemable preferred shares and borrowings under a new senior credit facility of $475 million to replace the existing senior credit facility. The Company's existing $100 million 11% Senior Subordinated Notes will remain outstanding if the requisite consents are obtained from the holders thereof. On November 10, 1999, the Company began soliciting consents to the waiver of certain of the Company's obligations under the Indenture, including its obligation to make a change of control offer in connection with the Recapitalization and its failure to comply with certain technical requirements relating to the qualification and operation of FINCO as an unrestricted subsidiary under the Indenture as discussed below. Since the formation of FINCO, the Company has treated FINCO as an unrestricted subsidiary under the Indenture. However, it has recently come to the attention of the Company that, at the time of formation of FINCO, the Company failed to take certain ministerial actions to satisfy the technical requirements under the Indenture for the designation of FINCO as an unrestricted subsidiary, despite the fact that it could have been designated as such at the time. Management believes that its failure to properly qualify and operate FINCO as an unrestricted subsidiary under the Indenture is a technicality and that substantively FINCO should be treated as qualifying as an unrestricted subsidiary since its formation. If FINCO were not to be treated as having been an unrestricted subsidiary since its formation, the Company and FINCO would not be in compliance with certain restrictive covenants of the Indenture. In order to remove any doubt as to the status of FINCO, the Company began the consent solicitation as previously mentioned. Based on preliminary discussions with certain holders of its 11% Senior Subordinated Notes, management believes the consents will be obtained. Year 2000 - --------- As the Year 2000 approaches, many corporate systems worldwide could malfunction or produce incorrect results because they cannot process date-related information properly. Dates play a key role in dependable functioning of the software applications, software systems, information technology infrastructure, and embedded technology (i.e., non-technical assets such as time clocks and building services) the Company relies upon in day-to-day operations for innumerable tasks. This includes any tasks requiring date-dependent arithmetic calculations, sorting and sequencing data, and many other functions. The Company identified this problem as a key focus during 1997 and as part of any subsequent due-diligence procedures related to acquisitions completed during 1998. The Company has assessed the impact of Year 2000 issues on the processing date-related information for all of its information systems infrastructure (e.g., production systems) and significant non-technical assets. As the new millennium approaches, the Company has developed and implemented a Year 2000 program to deal with this important issue in an effective and timely manner. This problem has received significant senior management attention and resources. Management reviews have been held on this topic. During 1998 and 1999, the Company's Board of Directors received and will continue to receive quarterly reports at each regular Board meeting regarding the Company's overall Year 2000 compliance status and readiness. An independent consulting firm has been retained to provide independent verification and testing of the production systems. Under the direction of the Company's Senior Vice President and Chief Information Officer, the Company has established a program management structure, a management process and methodology and proactive client and vendor management strategies to manage the Year 2000 risk. Because many of the Company's client relationships are supported through computer-system interfaces, it is critical that the Company works proactively with its clients to achieve Year 2000 compliance. The Company has established a proactive client management strategy focused on enabling the Company to work together with clients to assure Year 2000 compliance between respective computer systems. The implementation of the client management strategy commenced in 1998. Letters were sent to significant clients, inquiring about their Year 2000 compliance plans and status. The Company has established a follow-up process with each key client, taking a proactive, customer-focused approach to achieving Year 2000 compliance with its customers. The Company has also communicated with its strategic suppliers and equipment vendors, including suppliers of non-technical assets, seeking assurances that they and their products will be Year 2000 ready. The Company's goal was to obtain as much detailed information as possible about its strategic suppliers and equipment vendors' Year 2000 plans to identify those companies which appear to pose any significant risk of failure to perform their obligations to the Company as a result of the Year 2000. The Company has compiled detailed information regarding all of its strategic suppliers and equipment vendors. This will be an ongoing process during the Year 2000 project. For those strategic suppliers and equipment vendors whose response was not satisfactory, the Company has developed contingency plans to ensure that sufficient alternative resources are available to continue with business operations. The target date for completion of all production systems and significant non-production systems (e.g., predictive dialer systems, phone switches, wide area network hardware), including non-technical assets, is November 1999. Testing is substantially complete for all systems with final completion anticipated to be no later than November 1999. Spending for modifications and updates are being expensed as incurred and is not to have a material impact on the results of operations or cash flows. The cost of the Company's Year 2000 project is being funded from cash flows generated from operations. The Company estimates that its total Year 2000 expenses will be in the range of $1.6 to $1.7 million. To date, the Company has expended approximately $1.6 million, primarily for contract programmers and consulting costs associated with the evaluation, assessment and remediation of computer systems. The Company is dependent upon its own internal computer technology and relies upon the timely performance of its suppliers and customers and their systems. A substantial part of the Company's day-to-day operations is dependent on power and telecommunications services, for which alternative sources of services may be limited. A large-scale Year 2000 failure could impair the Company's ability to provide timely performance results required by the Company's customers, thereby causing potential liability, lost revenues and additional expenses, the amounts which have not been estimated. The Company's Year 2000 project seeks to identify and minimize this risk and includes testing of its in-house applications, purchased software and hardware to ensure that all such systems will function before and after the Year 2000. The Company is continually refining its understanding of the risk the Year 2000 poses to its strategic suppliers and customers based upon information obtained through its surveys. This refinement will continue through 1999. The Company's Year 2000 project includes the development of contingency plans for business critical systems, as well as for strategic suppliers and customers to attempt to minimize disruption to its operations in the event of a Year 2000 failure. The Company is currently in the process of formulating plans to address a variety of failure scenarios, including failures of its in-house applications, as well as failures of strategic suppliers and customers. The Company anticipates that it will complete Year 2000 contingency planning by November 1999. Forward-Looking Statements - -------------------------- The following statements in this document are or may constitute forward-looking statements made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995: (1) statements concerning the cost and successful implementation of the Company's Year 2000 initiatives, (2) statements regarding the completion of the Recapitalization and obtaining consents to the waiver of certain of the Company's obligations under the Indenture, including its obligation to make a change of control offer in connection with the Recapitalization and its failure to comply with certain technical requirements relating to the qualification and operation of FINCO, (3) statements concerning the anticipated costs and outcome of legal proceedings and environmental liabilities, (4) statements regarding the Company's expected capital expenditures, (5) any statements preceded by, followed by or that include the word "believes," "expects," "anticipates," "intends," "should," "may," or similar expressions; and (6) other statements contained or incorporated by reference in this document regarding matters that are not historical facts. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: (1) the demand for the Company's services, (2) the demand for accounts receivable management generally, (3) general economic conditions, (4) changes in interest rates, (5) competition, including but not limited to pricing pressures, (6) changes in governmental regulations including, but not limited to the federal Fair Debt Collection Practices Act and comparable state statutes, (7) the status and effectiveness of the Company's Year 2000 efforts, (8) legal proceedings, (9) environmental investigations and clean up efforts, (10) the Company's ability to rationalize operations of recent acquisitions, and (11) the Company's ability to generate cash flow or obtain financing to fund its operations, service its indebtedness and continue its growth and expand successfully into new markets and services, (12) the failure of the holders of the Company's 11% Senior Subordinated Notes to consent to the waiver of certain obligations under the Indenture, and (13) the failure of any parts to consumate the Recapitalization transactions. These forward-looking statements speak only as of the date they were made. These cautionary statements should be considered in connection with any written or oral forward-looking statements that the Company may issue in the future. The Company does not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect later events or circumstances or to reflect the occurrence of unanticipated events. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is subject to the risk of fluctuating interest rates in the normal course of business. From time to time and as required by the Company's credit agreement, the Company will employ derivative financial instruments as part of its risk management program. The Company's objective is to manage risks and exposures and not to trade such instruments for profit or loss. Since December 31, 1998 (the most recent completed fiscal year), there have been no material changes in the reported market risks. PART II. OTHER INFORMATION Item 1. Legal Proceedings From time to time, the Company and certain of its subsidiaries are involved in various investigations, claims and legal proceedings covering a wide range of matters that arise in the normal course of business and are routine to the nature of the Company's business. Other information with respect to legal proceedings appears in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a). Exhibits 10.1 Amended and Restated Employment Agreement dated as of June 4, 1999 by and between the Company and Timothy G. Beffa. 10.2 Amended and Restated Employment Agreement dated as of June 4, 1999 by and between the Company and Michael A. DiMarco. 10.3 Amended and Restated Employment Agreement dated as of June 4, 1999 by and between the Company and C. Bradford McLeod. 10.4 Form of Non-Qualified Stock Option Award Agreement [E]. Exhibit 27 Financial Data Schedule (Unaudited) (b). Reports on Form 8-K There were no reports on Form 8-K filed for the three-month period ended September 30, 1999. 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 thereunto duly authorized. OUTSOURCING SOLUTIONS INC. (Registrant) /s/ Timothy G. Beffa -------------------------------------------- Timothy G. Beffa President and Chief Executive Officer /s/ Gary L. Weller -------------------------------------------- Gary L. Weller Executive Vice President and Chief Financial Officer /s/ Daniel T. Pijut -------------------------------------------- Daniel T. Pijut Vice President, Corporate Controller and Chief Accounting Officer Date: November 15, 1999 EX-10 2 EMPLOYMENT AGREEMENT AMENDED AND RESTATED EMPLOYMENT AGREEMENT This Agreement, dated as of the 4th day of June, 1999 amends and restates the Employment Agreement dated as of the 27th day of August, 1996, as amended on May 14, 1997 and August 27, 1997, between Outsourcing Solutions Inc. (formerly known as OSI Holdings Corp.), a Delaware corporation, with offices at 390 South Woods Mill Road, Suite 350, Chesterfield, Missouri 63017 (the "Company"), and Timothy G. Beffa, an individual residing in the State of Missouri (the "Employee"). R E C I T A L S WHEREAS, the Company desires to secure the services and employment of the Employee on behalf of the Company, and the Employee desires to enter into employment with the Company, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. Employment. The Company hereby employs the Employee as Chief Executive Officer of the Company, and the Employee accepts such employment for the term of the employment specified in Section 3 below. During the Employment Term (as defined below), the Employee shall serve as the Chief Executive Officer of the Company, performing such duties as shall be reasonably required of such an employee of the Company, and shall have such other powers and perform such other additional executive duties as may from time to time be assigned to him by the Board of Directors of the Company. During the Employment Term, the Employee shall serve as a member of the Board of Directors of the Company. The Employee's primary place of employment shall be St. Louis, Missouri. The Company and the Employee each acknowledge that the Employee shall be required to travel extensively in connection with the performance of his duties hereunder, particularly during the first year of employment. The Company and the Employee further acknowledge that the Company's headquarters shall be relocated to St. Louis. 2. Performance. The Employee will serve the Company faithfully and to the best of his ability and will devote substantially all of his time, energy, experience and talents during regular business hours and as otherwise reasonably necessary to such employment, to the exclusion of all other business activities; provided, however, that the Employee may continue to serve on outside boards of directors of which he is a member as of the date hereof. 3. Employment Term. The employment term shall begin on the date of this Agreement and continue until December 31, 1999, unless earlier terminated pursuant to Section 7 below (the "Employment Term"); provided, that on December 31, 1999 and on each anniversary thereafter, the Employment Term shall be automatically extended for an additional twelve month period unless 30 days prior to such anniversary date either the Company or the Employee shall give written notice of termination of the Agreement, in which case the Agreement will terminate at the end of the then existing Employment Term. 4. Compensation. (a) Salary. During the Employment Term, the Company shall pay the Employee a base salary, payable in equal semimonthly installments, subject to withholding and other applicable taxes, at an annual rate of no less than Three Hundred Seventy Five Thousand Dollars ($375,000.00). (b) Bonus. Commencing on January 1, 1999, the Employee shall be eligible for an annual bonus of up to 150% of his base salary. Annual bonuses shall be based on the satisfaction of performance targets established by the Board of Directors on or before March 31 of each year for such year. (c) Medical and Dental Health, Life and Disability Insurance Benefits. During the Employment Term, the Employee shall be entitled to medical and dental health, life insurance and disability insurance benefits in accordance with the Company's established practices with respect to its key employees. (d) Vacation; Sick Leave. During the Employment Term, the Employee shall be entitled to vacation and sick leave in accordance with the Company's established practices with respect to its key employees. (e) Automobile. The Company shall assume the Employee's lease obligations with respect to his current automobile and pay for all gas, oil, maintenance and insurance for such automobile. 5. Expenses. The Employee shall be reimbursed by the Company for all reasonable expenses incurred by him in connection with the performance of his duties hereunder in accordance with policies established by the Board from time to time and upon receipt of appropriate documentation. 6. Secret Processes and Confidential Information. For the Employment Term and thereafter, (a) the Employee will not divulge, transmit or otherwise disclose (except as legally compelled by court order, and then only to the extent required, after prompt notice to the Company of any such order), directly or indirectly, other than in the regular and proper course of business of the Company, any confidential knowledge or information with respect to the operations or finances of the Company or with respect to confidential or secret processes, services, techniques, customers or plans with respect to the Company and (b) the Employee will not use, directly or indirectly, any confidential information for the benefit of anyone other than the Company; provided, however, that the Employee has no obligation, express or implied, to refrain from using or disclosing to others any such knowledge or information which is or hereafter shall become available to the public other than through disclosure by the Employee. All new processes, techniques, know-how, inventions, plans, products, patents and devices developed, made or invented by the Employee, alone or with others, while an employee of the Company, shall be and become the sole property of the Company, unless released in writing by the Company, and the Employee hereby assigns any and all rights therein or thereto to the Company. During the term of this Agreement and thereafter, Employee shall not take any action to disparage or criticize to any third parties any of the services of the Company or to commit any other action that injures or hinders the business relationships of the Company. All files, records, documents, memorandums, notes or other documents relating to the business of Company, whether prepared by Employee or otherwise coming into his possession in the course of the performance of his services under this Agreement, shall be the exclusive property of Company and shall be delivered to Company and not retained by Employee upon termination of this Agreement for any reason whatsoever. 7. Termination. The employment of the Employee hereunder may be terminated at any time by the Company with or without "cause". For purposes of this Agreement, "cause" shall mean: (i) embezzlement, theft or other misappropriation of any property of the Company or any subsidiary, (ii) gross or willful misconduct resulting in substantial loss to the Company or any subsidiary or substantial damage to the reputation of the Company or any subsidiary, (iii) any act involving moral turpitude which results in a conviction for a felony involving moral turpitude, fraud or misrepresentation, (iv) gross neglect of his assigned duties to the Company or any subsidiary, (v) gross breach of his fiduciary obligations to the Company or any subsidiary, or (vi) any chemical dependence which materially affects the performance of his duties and responsibilities to the Company or any subsidiary; provided that in the case of the misconduct set forth in clauses (iv) and (vi) above, such misconduct shall continue for a period of 30 days following written notice thereof by the Company to the Employee. 8. Severance. (a) If (i) Employee's employment is terminated by the Company without "cause," (ii) the Company does not agree to extend the Employment Term upon the expiration thereof, (iii) Employee terminates his employment because the Company reduces his responsibilities or compensation in a manner which is tantamount to termination of Employee's employment, or (iv) within two years following a Sale of the Company (as defined in Section 8(c) of this Agreement), the Employee gives notice to the Company of his resignation for "Good Reason" (as defined in Section 8(b) hereof) setting forth in reasonable detail the circumstances claimed to constitute Good Reason and stating that it constitutes notice pursuant to this Section 8(a), and the stated basis for Good Reason has not been fully corrected within sixty (60) days from the date of such notice, the Employee shall be entitled to (x) receive an amount equal to his total cash compensation (base salary plus bonus) for the year preceding the date of the Employee's termination or the date on which the Employment Term expires, as the case may be, such amount to be payable in a lump sum on the date of termination or the date on which the Employment Term expires, as the case may be, and (y) continue to receive the benefits referred to in Section 4(c) during the one year period following the date of termination or expiration (the "Severance Period"). If the Employee's employment is terminated by the Company "for cause", the Employee shall not be entitled to severance compensation. The Employee covenants and agrees that he will not, during the one year period following the termination of the Employee's employment by the Company, within any jurisdiction or marketing area in which the Company or any of its Affiliates (as defined below) is doing business or is qualified to do business, directly or indirectly own, manage, operate, control, be employed by or participate in the ownership, management, operation or control of, or be connected in any manner with, any business of the type and character engaged in and competitive with that conducted by the Company or any of its Affiliates at the time of such termination; provided, however, that ownership of securities of 2% or less of any class of securities of a public company shall not be considered to be competition with the Company or any of its Affiliates. For the purposes of this Agreement, the term "Affiliate" shall mean, with respect to the Company, any person or entity which, directly or indirectly, owns or is owned by, or is under common ownership with, the Company. The term "own" (including, with correlative meanings, "owned by" and "under common ownership with") shall mean the ownership of 50% or more of the voting securities (or their equivalent) of a particular entity. (b) For purposes of this Agreement, "Good Reason" shall mean the occurrence, without the Employee's consent, of any of the following events during the Employment Term within two years following a Sale of the Company: (A) a relocation of the principal location of the performance of work by the Employee beyond a thirty mile radius of such location as of the time of the Sale of the Company; (B) an assignment to the Employee of duties that result in a material diminution of the Employee's duties and responsibilities under this Agreement, (C) a reduction of the Employee's base salary in effect as of the time of the Sale of the Company, (D) a material breach of the Company's obligations set forth in this Agreement, or (E) the failure of any acquiror of, or successor to, all or substantially all of the assets or business of the Company to expressly assume this Agreement and agree to perform all of the obligations of the Company hereunder. (c) For the purposes of this Agreement, "Sale of the Company" shall mean (i) a stock sale, merger, consolidation, combination, reorganization or other transaction resulting in less than fifty percent (50%) of the combined voting power of the surviving or resulting entity being owned by the shareholders of the Company immediately prior to such transaction or (ii) the sale or other disposition of all or substantially all of the assets or business of the Company (other than, in the case of either clause (i) or (ii) above, in connection with any employee benefit plan of the Company or an Affiliate); provided, however, that a public offering of the capital stock of the Company shall not be a "Sale of the Company." 9. Notice. Any notices required or permitted hereunder shall be in writing and shall be deemed to have been given when personally delivered or when mailed, certified or registered mail, postage prepaid, to the following addresses: If to the Employee: Timothy G. Beffa 2015 Kings Pointe Drive St. Louis, Missouri 63005 If to the Company: Outsourcing Solutions Inc. 390 South Woods Mill Road, Suite 350 Chesterfield, Missouri 63017 Attention: Vice President and General Counsel 10. General. (a) Governing Law; Jurisdiction. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Missouri applicable to contracts executed and to be performed entirely within said State. Any judicial proceeding brought against any of the parties to this Agreement or any dispute arising out of this Agreement or any matter related hereto may be brought in the courts of the State of Missouri or in the United States District Court for the Eastern District of Missouri, and, by execution and delivery of this Agreement, each of the parties to this Agreement accepts the jurisdiction of said courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. The foregoing consent to jurisdiction shall not be deemed to confer rights on any person other than the respective parties to this Agreement. (b) Assignability. The Employee may not assign his interest in or delegate his duties under this Agreement. Notwithstanding anything else in this Agreement to the contrary, the Company may assign this Agreement to and all rights hereunder shall inure to the benefit of any person, firm or corporation succeeding to all or substantially all of the business or assets of the Company by purchase, merger or consolidation. (c) Enforcement Costs. In the event that either the Company or the Employee initiates an action or claim to enforce any provision or term of this Agreement, or in the event of any dispute or controversy arising out of or relating to this Agreement, the costs and expenses (including attorney's fees and disbursements) of the prevailing party shall be paid by the other party, such party to be deemed to have prevailed if such action or claim is concluded pursuant to a court order or final judgment which is not subject to appeal, a settlement agreement or dismissal of the principal claims. Notwithstanding the foregoing, following a Sale of the Company, all reasonable costs and expenses (including attorney's fees and disbursements) incurred by the Employee in an action or claim to enforce any provision or term of this Agreement, and all costs and expenses of any court proceeding or arbitration in connection with any dispute or controversy arising out of or relating to this Agreement, shall be promptly paid or reimbursed by the Company or its successor; provided, however, that no payment or reimbursement shall be made of such costs or expenses if and to the extent that the court or arbitrator adjudicating or deciding the matter determines that any of the Employee's litigation assertions or defenses were in bad faith or frivolous. Pending the resolution of any court proceeding or arbitration described in this Section 10(c), the Company or its successor shall continue payment of all amounts and benefits due the Employee under this Agreement. (d) Binding Effect. This Agreement is for the employment of Employee, personally, and for the services to be rendered by him must be rendered by him and no other person. This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns. (e) Entire Agreement; Modification. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and may not be modified or amended in any way except in writing by the parties hereto. (f) Duration. Notwithstanding the term of employment hereunder, this Agreement shall continue for so long as any obligations remain under this Agreement. (g) Survival. The covenants set forth in Sections 6 and 8 of this Agreement shall survive and shall continue to be binding upon Employee notwithstanding the termination of this Agreement for any reason whatsoever. The covenants set forth in Sections 6 and 8 of this Agreement shall be deemed and construed as separate agreements independent of any other provision of this Agreement. The existence of any claim or cause of action by Employee against Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Company of any or all covenants. It is expressly agreed that the remedy at law for the breach or any such covenant is inadequate and that injunctive relief shall be available to prevent the breach or any threatened breach thereof. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have hereunto executed this Agreement the day and year first written above. OUTSOURCING SOLUTIONS INC. By: /s/ Eric R. Fencl ----------------------- Name: Eric R. Fencl Title: Vice President & General Counsel EMPLOYEE /s/ Timothy G. Beffa ------------------------- TIMOTHY G. BEFFA EX-10 3 EMPLOYMENT AGREEMENT AMENDED AND RESTATED EMPLOYMENT AGREEMENT This Agreement, dated as of the 4th day of June, 1999 amends and restates the Employment Agreement dated as of the 1st day of September, 1998 between Outsourcing Solutions Inc., a Delaware corporation, with offices at 390 South Woods Mill Road, Suite 350, Chesterfield, Missouri 63017 (the "Company"), and Michael A. DiMarco, an individual residing in the State of Missouri (the "Employee"). RECITALS WHEREAS, the Company desires to secure the services and employment of the Employee on behalf of the Company, and the Employee desires to enter into employment with the Company, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. Employment. The Company hereby employs the Employee as Executive Vice President--President of Fee Services of the Company, and the Employee accepts such employment for the term of the employment specified in Section 3 below. During the Employment Term (as defined below), the Employee shall serve as the Executive Vice President--President of Fee Services of the Company, performing such duties as shall be reasonably required of such an employee of the Company, and shall have such other powers and perform such other additional executive duties as may from time to time be assigned to him by the Board of Directors of the Company. The Employee's primary place of employment shall be St. Louis, Missouri. 2. Performance. The Employee will serve the Company faithfully and to the best of his ability and will devote substantially all of his time, energy, experience and talents during regular business hours and as otherwise reasonably necessary to such employment, to the exclusion of all other business activities. 3. Employment Term. The employment term shall begin on the date of this Agreement and continue until December 31, 1999, unless earlier terminated pursuant to Section 7 below (the "Employment Term"); provided, that on December 31, 1999 and on each anniversary thereafter, the Employment Term shall be automatically extended for an additional twelve month period unless 30 days prior to such anniversary date either the Company or the Employee shall give written notice of termination of the Agreement, in which case the Agreement will terminate at the end of the then existing Employment Term. 4. Compensation. (a) Salary. During the Employment Term, the Company shall pay the Employee a base salary, payable in equal semimonthly installments, subject to withholding and other applicable taxes, at an annual rate of no less than Three Hundred Twenty Five Thousand Dollars ($325,000.00). (b) Bonus. Commencing on January 1, 1999, the Employee shall be eligible for a target annual bonus of 67% of his base salary. Annual bonuses shall be based on the satisfaction of performance targets established by the Board of Directors on or before March 31 of each year for such year. (c) Medical and Dental Health, Life and Disability Insurance Benefits. During the Employment Term, the Employee shall be entitled to medical and dental health, life insurance and disability insurance benefits in accordance with the Company's established practices with respect to its key employees. (d) Vacation; Sick Leave. During the Employment Term, the Employee shall be entitled to vacation and sick leave in accordance with the Company's established practices with respect to its key employees. 5. Expenses. (a) The Employee shall be reimbursed by the Company for all reasonable expenses incurred by him in connection with the performance of his duties hereunder in accordance with policies established by the Board from time to time and upon receipt of appropriate documentation. (b) The Employee shall be reimbursed by the Company for normal moving and relocation expenses incurred by Employee to move his residence to the St. Louis metropolitan area, including reasonable and customary real estate commission, closing costs and discount points and reasonable expenses for temporary living, return home travel and family travel to St. Louis for house purchasing purposes. If requested by Employee, Company shall provide an advance of $115,000 to facilitate Employee's relocation, to be repaid to the Company no later than 48 hours following the closing of the sale of Employee's current residence in Fairview, Texas. 6. Secret Processes and Confidential Information. For the Employment Term and thereafter, (a) the Employee will not divulge, transmit or otherwise disclose (except as legally compelled by court order, and then only to the extent required, after prompt notice to the Company of any such order), directly or indirectly, other than in the regular and proper course of business of the Company, any confidential knowledge or information with respect to the operations or finances of the Company or with respect to confidential or secret processes, services, techniques, customers or plans with respect to the Company and (b) the Employee will not use, directly or indirectly, any confidential information for the benefit of anyone other than the Company; provided, however, that the Employee has no obligation, express or implied, to refrain from using or disclosing to others any such knowledge or information which is or hereafter shall become available to the public other than through disclosure by the Employee. All new processes, techniques, know-how, inventions, plans, products, patents and devices developed, made or invented by the Employee, alone or with others, while an employee of the Company, shall be and become the sole property of the Company, unless released in writing by the Company, and the Employee hereby assigns any and all rights therein or thereto to the Company. During the term of this Agreement and thereafter, Employee shall not take any action to disparage or criticize to any third parties any of the services of the Company or to commit any other action that injures or hinders the business relationships of the Company. During the term of this Agreement and for two years thereafter, Employee shall not employ, solicit for employment or otherwise contract for the services of any employee of the Company or any of its Affiliates (as defined below) at the time of this Agreement or who shall subsequently become an employee of the Company or any of its Affiliates, provided that Employee shall not be prohibited from such solicitation or employment if such employee (a) initiated discussions with Employee without any direct or indirect solicitation from Employee, (b) responded to a general public solicitation, or (c) has terminated employment with the Company prior to commencement of discussions with Employee. All files, records, documents, memorandums, notes or other documents relating to the business of Company, whether prepared by Employee or otherwise coming into his possession in the course of the performance of his services under this Agreement, shall be the exclusive property of Company and shall be delivered to Company and not retained by Employee upon termination of this Agreement for any reason whatsoever. 7. Termination. The employment of the Employee hereunder may be terminated at any time by the Company with or without "cause". For purposes of this Agreement, "cause" shall mean: (i) embezzlement, theft or other misappropriation of any property of the Company or any subsidiary, (ii) gross or willful misconduct resulting in substantial loss to the Company or any subsidiary or substantial damage to the reputation of the Company or any subsidiary, (iii) any act involving moral turpitude which results in a conviction for a felony involving moral turpitude, fraud or misrepresentation, (iv) gross neglect of his assigned duties to the Company or any subsidiary, (v) gross breach of his fiduciary obligations to the Company or any subsidiary, or (vi) any chemical dependence which materially affects the performance of his duties and responsibilities to the Company or any subsidiary; provided that in the case of the misconduct set forth in clauses (iv) and (vi) above, such misconduct shall continue for a period of 30 days following written notice thereof by the Company to the Employee. 8. Severance. (a) If (i) Employee's employment is terminated by the Company without "cause," (ii) the Company does not agree to extend the Employment Term upon the expiration thereof,(iii) Employee terminates his employment because the Company reduces his responsibilities or compensation in a manner which is tantamount to termination of Employee's employment, or (iv) within two years following a Sale of the Company (as defined in Section 9 of this Agreement), the Employee gives notice to the Company of his resignation for "Good Reason" (as defined in Section 8(b) hereof) setting forth in reasonable detail the circumstances claimed to constitute Good Reason and stating that it constitutes notice pursuant to this Section 8(a), and the stated basis for Good Reason has not been fully corrected within sixty (60) days from the date of such notice, the Employee shall be entitled to (x) receive an amount equal to his total cash compensation (base salary plus bonus, excluding, however, any Change in Control Bonus paid pursuant to Section 9 hereof) for the year preceding the date of the Employee's termination or the date on which the Employment Term expires, as the case may be, such amount to be payable in a lump sum on the date of termination or the date on which the Employment Term expires, as the case may be, and (y) continue to receive the benefits referred to in Section 4(c) during the one year period following the date of termination or expiration (the "Severance Period"); provided, however, if any such event occurs prior to the extension of the initial Employment Term, the Employee shall be entitled to (A) an amount equal to his then current salary, payable in a lump sum on the date of termination, (B) an amount equal to his target annual bonus, payable in a lump sum on the date of termination, and (C) continue to receive the benefits referred to in Section 4(c) during the Severance Period. If the Employee's employment is terminated by the Company "for cause", the Employee shall not be entitled to severance compensation. The Employee covenants and agrees that he will not, during the one year period following the termination of the Employee's employment by the Company, within any jurisdiction or marketing area in which the Company or any of its Affiliates (as defined below) is doing business or is qualified to do business, directly or indirectly own, manage, operate, control, be employed by or participate in the ownership, management, operation or control of, or be connected in any manner with, any business of the type and character engaged in and competitive with that conducted by the Company or any of its Affiliates at the time of such termination; provided, however, that ownership of securities of 2% or less of any class of securities of a public company shall not be considered to be competition with the Company or any of its Affiliates. For the purposes of this Agreement, the term "Affiliate" shall mean, with respect to the Company, any person or entity which, directly or indirectly, owns or is owned by, or is under common ownership with, the Company. The term "own" (including, with correlative meanings, "owned by" and "under common ownership with") shall mean the ownership of 50% or more of the voting securities (or their equivalent) of a particular entity. (b) For purposes of this Agreement, "Good Reason" shall mean the occurrence, without the Employee's consent, of any of the following events during the Employment Term within two years following a Sale of the Company: (A) a relocation of the principal location of the performance of work by the Employee beyond a thirty mile radius of such location as of the time of the Sale of the Company; (B) an assignment to the Employee of duties that result in a material diminution of the Employee's duties and responsibilities under this Agreement, (C) a reduction of the Employee's base salary in effect as of the time of the Sale of the Company, (D) a material breach of the Company's obligations set forth in this Agreement, or (E) the failure of any acquiror of, or successor to, all or substantially all of the assets or business of the Company to expressly assume this Agreement and agree to perform all of the obligations of the Company hereunder. 9. Change in Control Bonus. Upon consummation of a "Sale of the Company," if the Employee is employed by the Company immediately prior thereto, he will be entitled to receive a payment from the Company in the amount of 250% of his (i) then current base salary plus (ii) target annual bonus, reduced by his "Option Gain" and subject to any applicable withholding or employment taxes. Such amount (the "Change in Control Bonus") will be paid to the Employee in immediately available funds in a lump-sum at the time such Sale of the Company is consummated. The foregoing to the contrary notwithstanding, the Employee will only be entitled to receive the Change in Control Bonus if the Change in Control Bonus is previously approved by a vote of more than seventy-five percent (75%) of the voting power of the Company's outstanding stock immediately before any Sale of the Company. For purposes of this Agreement, the following terms have the meanings set forth below: "Sale of the Company" - a (i) a stock sale, merger, consolidation, combination, reorganization or other transaction resulting in less than fifty percent (50%) of the combined voting power of the surviving or resulting entity being owned by the shareholders of the Company immediately prior to such transaction or (ii) the sale or other disposition of all or substantially all of the assets or business of the Company (other than, in the case of either clause (i) or (ii) above, in connection with any employee benefit plan of the Company or an Affiliate); provided, however, that a public offering of the capital stock of the Company shall not be a "Sale of the Company." "Option Gain" - the aggregate amount computed for all of the options to purchase capital stock of the Company or other equity compensation awards theretofore granted to the Employee, of the excess of the consideration received by the holders of the Company's common stock for a share of such common stock in connection with the applicable Sale of the Company over the exercise price of the option or other award, if any, multiplied by the number of shares of the Company's common stock covered by each such option or award. The amount of the Option Gain shall be finally and conclusively determined by the Board of Directors of the Company in its good faith. 10. Notice. Any notices required or permitted hereunder shall be in writing and shall be deemed to have been given when personally delivered or when mailed, certified or registered mail, postage prepaid, to the following addresses: If to the Employee: Michael A. DiMarco 247 Doulton Place Town and Country, Missouri 63141 If to the Company: Outsourcing Solutions Inc. 390 South Woods Mill Road, Suite 350 Chesterfield, Missouri 63017 Attn: President 11. General. (a) Governing Law; Jurisdiction. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Missouri applicable to contracts executed and to be performed entirely within said State. Any judicial proceeding brought against any of the parties to this Agreement or any dispute arising out of this Agreement or any matter related hereto may be brought in the courts of the State of Missouri or in the United States District Court for the Eastern District of Missouri, and, by execution and delivery of this Agreement, each of the parties to this Agreement accepts the jurisdiction of said courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. The foregoing consent to jurisdiction shall not be deemed to confer rights on any person other than the respective parties to this Agreement. (b) Assignability. The Employee may not assign his interest in or delegate his duties under this Agreement. Notwithstanding anything else in this Agreement to the contrary, the Company may assign this Agreement to and all rights hereunder shall inure to the benefit of any person, firm or corporation succeeding to all or substantially all of the business or assets of the Company by purchase, merger or consolidation. (c) Enforcement Costs. In the event that either the Company or the Employee initiates an action or claim to enforce any provision or term of this Agreement, or in the event of any dispute or controversy arising out of or relating to this Agreement, the costs and expenses (including attorney's fees and disbursements) of the prevailing party shall be paid by the other party, such party to be deemed to have prevailed if such action or claim is concluded pursuant to a court order or final judgment which is not subject to appeal, a settlement agreement or dismissal of the principal claims. Notwithstanding the foregoing, following a Sale of the Company, all reasonable costs and expenses (including attorney's fees and disbursements) incurred by the Employee in an action or claim to enforce any provision or term of this Agreement, and all costs and expenses of any court proceeding or arbitration in connection with any dispute or controversy arising out of or relating to this Agreement, shall be promptly paid or reimbursed by the Company or its successor; provided, however, that no payment or reimbursement shall be made of such costs or expenses if and to the extent that the court or arbitrator adjudicating or deciding the matter determines that any of the Employee's litigation assertions or defenses were in bad faith or frivolous. Pending the resolution of any court proceeding or arbitration described in this Section 11(c), the Company or its successor shall continue payment of all amounts and benefits due the Employee under this Agreement. (d) Binding Effect. This Agreement is for the employment of Employee, personally, and for the services to be rendered by him must be rendered by him and no other person. This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns. (e) Entire Agreement; Modification. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and may not be modified or amended in any way except in writing by the parties hereto. (f) Duration. Notwithstanding the term of employment hereunder, this Agreement shall continue for so long as any obligations remain under this Agreement. (g) Survival. The covenants set forth in Sections 6 and 8 of this Agreement shall survive and shall continue to be binding upon Employee notwithstanding the termination of this Agreement for any reason whatsoever. The covenants set forth in Sections 6 and 8 of this Agreement shall be deemed and construed as separate agreements independent of any other provision of this Agreement. The existence of any claim or cause of action by Employee against Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Company of any or all covenants. It is expressly agreed that the remedy at law for the breach or any such covenant is inadequate and that injunctive relief shall be available to prevent the breach or any threatened breach thereof. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have hereunto executed this Agreement the day and year first written above. OUTSOURCING SOLUTIONS INC. By/s/ Timothy G. Beffa ------------------------------------- Timothy G. Beffa, President and Chief Executive Officer EMPLOYEE /s/ Michael A. DiMarco ------------------------------------- Michael A. DiMarco EX-10 4 EMPLOYMENT AGREEMENT AMENDED AND RESTATED EMPLOYMENT AGREEMENT This Agreement, dated as of the 4th day of June, 1999 amends and restates the Employment Agreement dated as of the 14th day of September, 1998 between Outsourcing Solutions Inc., a Delaware corporation, with offices at 390 South Woods Mill Road, Suite 350, Chesterfield, Missouri 63017 (the "Company"), and C. Bradford McLeod, an individual residing in the State of Missouri (the "Employee"). RECITALS WHEREAS, the Company desires to secure the services and employment of the Employee on behalf of the Company, and the Employee desires to enter into employment with the Company, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. Employment. The Company hereby employs the Employee as Senior Vice President--Human Resources of the Company, and the Employee accepts such employment for the term of the employment specified in Section 3 below. During the Employment Term (as defined below), the Employee shall serve as the Senior Vice President--Human Resources of the Company, performing such duties as shall be reasonably required of such an employee of the Company, and shall have such other powers and perform such other additional executive duties as may from time to time be assigned to him by the Board of Directors of the Company. The Employee's primary place of employment shall be St. Louis, Missouri. 2. Performance. The Employee will serve the Company faithfully and to the best of his ability and will devote substantially all of his time, energy, experience and talents during regular business hours and as otherwise reasonably necessary to such employment, to the exclusion of all other business activities. 3. Employment Term. The employment term shall begin on the date of this Agreement and continue until December 31, 1999, unless earlier terminated pursuant to Section 7 below (the "Employment Term"); provided, that on December 31, 1999 and on each anniversary thereafter, the Employment Term shall be automatically extended for an additional twelve month period unless 30 days prior to such anniversary date either the Company or the Employee shall give written notice of termination of the Agreement, in which case the Agreement will terminate at the end of the then existing Employment Term. 4. Compensation. (a) Salary. During the Employment Term, the Company shall pay the Employee a base salary, payable in equal semimonthly installments, subject to withholding and other applicable taxes, at an annual rate of no less than One Hundred Ninety Thousand Dollars ($190,000.00). (b) Bonus. Commencing on January 1, 1999, the Employee shall be eligible for a target annual bonus of 50% of his base salary. Annual bonuses shall be based on the satisfaction of performance targets established by the Board of Directors on or before March 31 of each year for such year. (c) Medical and Dental Health, Life and Disability Insurance Benefits. During the Employment Term, the Employee shall be entitled to medical and dental health, life insurance and disability insurance benefits in accordance with the Company's established practices with respect to its key employees. (d) Vacation; Sick Leave. During the Employment Term, the Employee shall be entitled to vacation and sick leave in accordance with the Company's established practices with respect to its key employees. 5. Expenses. (a) The Employee shall be reimbursed by the Company for all reasonable expenses incurred by him in connection with the performance of his duties hereunder in accordance with policies established by the Board from time to time and upon receipt of appropriate documentation. (b) The Employee shall be reimbursed by the Company for normal moving and relocation expenses incurred by Employee to move his residence to the St. Louis metropolitan area, including reasonable and customary real estate commission, closing costs and discount points and reasonable expenses for temporary living, return home travel and family travel to St. Louis for house purchasing purposes. Company shall reimburse Employee an amount equal to any loss sustained by him on the sale of his current residence, up to $50,000. If requested by Employee, Company shall provide an advance of $225,000 to facilitate Employee's relocation, to be repaid to the Company no later than 48 hours following the closing of the sale of Employee's current residence in Oak Hill, Virginia. Company shall reimburse Employee for duplicate housing expenses for up to six months following the closing of the purchase of Employee's residence in the St. Louis metropolitan area. Employee shall receive a lump sum payment in an amount sufficient to reimburse him for income taxes payable by him as a result of such moving and relocation expenses and the payment received under this Section 5(b). 6. Secret Processes and Confidential Information. For the Employment Term and thereafter, (a) the Employee will not divulge, transmit or otherwise disclose (except as legally compelled by court order, and then only to the extent required, after prompt notice to the Company of any such order), directly or indirectly, other than in the regular and proper course of business of the Company, any confidential knowledge or information with respect to the operations or finances of the Company or with respect to confidential or secret processes, services, techniques, customers or plans with respect to the Company and (b) the Employee will not use, directly or indirectly, any confidential information for the benefit of anyone other than the Company; provided, however, that the Employee has no obligation, express or implied, to refrain from using or disclosing to others any such knowledge or information which is or hereafter shall become available to the public other than through disclosure by the Employee. All new processes, techniques, know-how, inventions, plans, products, patents and devices developed, made or invented by the Employee, alone or with others, while an employee of the Company, shall be and become the sole property of the Company, unless released in writing by the Company, and the Employee hereby assigns any and all rights therein or thereto to the Company. During the term of this Agreement and thereafter, Employee shall not take any action to disparage or criticize to any third parties any of the services of the Company or to commit any other action that injures or hinders the business relationships of the Company. During the term of this Agreement and for two years thereafter, Employee shall not employ, solicit for employment or otherwise contract for the services of any employee of the Company or any of its Affiliates (as defined below) at the time of this Agreement or who shall subsequently become an employee of the Company or any of its Affiliates, provided that Employee shall not be prohibited from such solicitation or employment if such employee (a) initiated discussions with Employee without any direct or indirect solicitation from Employee, (b) responded to a general public solicitation, or (c) has terminated employment with the Company prior to commencement of discussions with Employee. All files, records, documents, memorandums, notes or other documents relating to the business of Company, whether prepared by Employee or otherwise coming into his possession in the course of the performance of his services under this Agreement, shall be the exclusive property of Company and shall be delivered to Company and not retained by Employee upon termination of this Agreement for any reason whatsoever. 7. Termination. The employment of the Employee hereunder may be terminated at any time by the Company with or without "cause". For purposes of this Agreement, "cause" shall mean: (i) embezzlement, theft or other misappropriation of any property of the Company or any subsidiary, (ii) gross or willful misconduct resulting in substantial loss to the Company or any subsidiary or substantial damage to the reputation of the Company or any subsidiary, (iii) any act involving moral turpitude which results in a conviction for a felony involving moral turpitude, fraud or misrepresentation, (iv) gross neglect of his assigned duties to the Company or any subsidiary, (v) gross breach of his fiduciary obligations to the Company or any subsidiary, or (vi) any chemical dependence which materially affects the performance of his duties and responsibilities to the Company or any subsidiary; provided that in the case of the misconduct set forth in clauses (iv) and (vi) above, such misconduct shall continue for a period of 30 days following written notice thereof by the Company to the Employee. 8. Severance. (a) (1) I (i) Employee's employment is terminated by the Company without "cause," (ii) the Company does not agree to extend the Employment Term upon the expiration thereof, (iii) Employee terminates his employment because the Company reduces his responsibilities or compensation in a manner which is tantamount to termination of Employee's employment, or (iv) within two years following a Sale of the Company (as defined in Section 9 of this Agreement), the Employee gives notice to the Company of his resignation for "Good Reason" (as defined in Section 8(a)(2) hereof) setting forth in reasonable detail the circumstances claimed to constitute Good Reason and stating that it constitutes notice pursuant to this Section 8(a), and the stated basis for Good Reason has not been fully corrected within sixty (60) days from the date of such notice, the Employee shall be entitled to (x) receive an amount equal to his total cash compensation (base salary plus bonus, excluding, however, any Change in Control Bonus paid pursuant to Section 9 hereof) for the year preceding the date of the Employee's termination or the date on which the Employment Term expires, as the case may be, such amount to be payable in a lump sum on the date of termination or the date on which the Employment Term expires, as the case may be, (y) continue to receive the benefits referred to in Section 4(c) during the one year period following the date of termination or expiration (the "Severance Period"), and (z) reasonable outplacement services during the Severance Period provided by an outplacement firm designated by the Employee; provided, however, if any such event occurs prior to the extension of the initial Employment Term, the Employee shall be entitled to (A) an amount equal to his then current salary, payable in a lump sum on the date of termination, (B) an amount equal to his target annual bonus, payable in a lump sum on the date of termination, (C) continue to receive the benefits referred to in Section 4(c) during the Severance Period, and (D) reasonable outplacement services during the Severance Period provided by an outplacement firm designated by Employee. (2) For purposes of this Agreement, "Good Reason" shall mean the occurrence, without the Employee's consent, of any of the following events during the Employment Term within two years following a Sale of the Company: (A) a relocation of the principal location of the performance of work by the Employee beyond a thirty mile radius of such location as of the time of the Sale of the Company; (B) an assignment to the Employee of duties that result in a material diminution of the Employee's duties and responsibilities under this Agreement, (C) a reduction of the Employee's base salary in effect as of the time of the Sale of the Company, (D) a material breach of the Company's obligations set forth in this Agreement, or (E) the failure of any acquiror of, or successor to, all or substantially all of the assets or business of the Company to expressly assume this Agreement and agree to perform all of the obligations of the Company hereunder. (b) If, prior to September 14, 2000, there is a Sale of the Company or Timothy G. Beffa no longer serves as Chief Executive Officer of the Company, then Employee may elect to terminate his employment with the Company and he shall be entitled to the severance set forth in Section 8(a) and relocation assistance to the Washington D.C. metropolitan area, equivalent to the assistance set forth in Section 5(b); provided, however, Employee may elect to relocate to an area other than Washington D.C., in which case such assistance shall be no greater than the assistance that would have been provided to relocate Employee to Washington D.C. (c) If the Employee's employment is terminated by the Company "for cause", the Employee shall not be entitled to severance compensation. (d) The Employee covenants and agrees that he will not, during the one year period following the termination of the Employee's employment by the Company, within any jurisdiction or marketing area in which the Company or any of its Affiliates (as defined below) is doing business or is qualified to do business, directly or indirectly own, manage, operate, control, be employed by or participate in the ownership, management, operation or control of, or be connected in any manner with, any business of the type and character engaged in and competitive with that conducted by the Company or any of its Affiliates at the time of such termination; provided, however, that ownership of securities of 2% or less of any class of securities of a public company shall not be considered to be competition with the Company or any of its Affiliates. For the purposes of this Agreement, the term "Affiliate" shall mean, with respect to the Company, any person or entity which, directly or indirectly, owns or is owned by, or is under common ownership with, the Company. The term "own" (including, with correlative meanings, "owned by" and "under common ownership with") shall mean the ownership of 50% or more of the voting securities (or their equivalent) of a particular entity. 9. Change in Control Bonus. Upon consummation of a "Sale of the Company," if the Employee is employed by the Company immediately prior thereto, he will be entitled to receive a payment from the Company in the amount of 250% of his (i) then current base salary plus (ii) target annual bonus, reduced by his "Option Gain" and subject to any applicable withholding or employment taxes. Such amount (the "Change in Control Bonus") will be paid to the Employee in immediately available funds in a lump-sum at the time such Sale of the Company is consummated. The foregoing to the contrary notwithstanding, the Employee will only be entitled to receive the Change in Control Bonus if the Change in Control Bonus is previously approved by a vote of more than seventy-five percent (75%) of the voting power of the Company's outstanding stock immediately before any Sale of the Company. For purposes of this Agreement, the following terms have the meanings set forth below: "Sale of the Company" - a (i) a stock sale, merger, consolidation, combination, reorganization or other transaction resulting in less than fifty percent (50%) of the combined voting power of the surviving or resulting entity being owned by the shareholders of the Company immediately prior to such transaction or (ii) the sale or other disposition of all or substantially all of the assets or business of the Company (other than, in the case of either clause (i) or (ii) above, in connection with any employee benefit plan of the Company or an Affiliate); provided, however, that a public offering of the capital stock of the Company shall not be a "Sale of the Company." "Option Gain" - the aggregate amount computed for all of the options to purchase capital stock of the Company or other equity compensation awards theretofore granted to the Employee, of the excess of the consideration received by the holders of the Company's common stock for a share of such common stock in connection with the applicable Sale of the Company over the exercise price of the option or other award, if any, multiplied by the number of shares of the Company's common stock covered by each such option or award. The amount of the Option Gain shall be finally and conclusively determined by the Board of Directors of the Company in its good faith. 10. Notice. Any notices required or permitted hereunder shall be in writing and shall be deemed to have been given when personally delivered or when mailed, certified or registered mail, postage prepaid, to the following addresses: If to the Employee: C. Bradford McLeod 14256 Manderleigh Woods Drive Town and Country, Missouri 63017 If to the Company: Outsourcing Solutions Inc. 390 South Woods Mill Road, Suite 350 Chesterfield, Missouri 63017 Attn: President 11. General. (a) Governing Law; Jurisdiction. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Missouri applicable to contracts executed and to be performed entirely within said State. Any judicial proceeding brought against any of the parties to this Agreement or any dispute arising out of this Agreement or any matter related hereto may be brought in the courts of the State of Missouri or in the United States District Court for the Eastern District of Missouri, and, by execution and delivery of this Agreement, each of the parties to this Agreement accepts the jurisdiction of said courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. The foregoing consent to jurisdiction shall not be deemed to confer rights on any person other than the respective parties to this Agreement. (b) Assignability. The Employee may not assign his interest in or delegate his duties under this Agreement. Notwithstanding anything else in this Agreement to the contrary, the Company may assign this Agreement to and all rights hereunder shall inure to the benefit of any person, firm or corporation succeeding to all or substantially all of the business or assets of the Company by purchase, merger or consolidation. (c) Enforcement Costs. In the event that either the Company or the Employee initiates an action or claim to enforce any provision or term of this Agreement, or in the event of any dispute or controversy arising out of or relating to this Agreement, the costs and expenses (including attorney's fees and disbursements) of the prevailing party shall be paid by the other party, such party to be deemed to have prevailed if such action or claim is concluded pursuant to a court order or final judgment which is not subject to appeal, a settlement agreement or dismissal of the principal claims. Notwithstanding the foregoing, following a Sale of the Company, all reasonable costs and expenses (including attorney's fees and disbursements) incurred by the Employee in an action or claim to enforce any provision or term of this Agreement, and all costs and expenses of any court proceeding or arbitration in connection with any dispute or controversy arising out of or relating to this Agreement, shall be promptly paid or reimbursed by the Company or its successor; provided, however, that no payment or reimbursement shall be made of such costs or expenses if and to the extent that the court or arbitrator adjudicating or deciding the matter determines that any of the Employee's litigation assertions or defenses were in bad faith or frivolous. Pending the resolution of any court proceeding or arbitration described in this Section 11(c), the Company or its successor shall continue payment of all amounts and benefits due the Employee under this Agreement. (d) Binding Effect. This Agreement is for the employment of Employee, personally, and for the services to be rendered by him must be rendered by him and no other person. This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns. (e) Entire Agreement; Modification. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and may not be modified or amended in any way except in writing by the parties hereto. (f) Duration. Notwithstanding the term of employment hereunder, this Agreement shall continue for so long as any obligations remain under this Agreement. (g) Survival. The covenants set forth in Sections 6 and 8 of this Agreement shall survive and shall continue to be binding upon Employee notwithstanding the termination of this Agreement for any reason whatsoever. The covenants set forth in Sections 6 and 8 of this Agreement shall be deemed and construed as separate agreements independent of any other provision of this Agreement. The existence of any claim or cause of action by Employee against Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Company of any or all covenants. It is expressly agreed that the remedy at law for the breach or any such covenant is inadequate and that injunctive relief shall be available to prevent the breach or any threatened breach thereof. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have hereunto executed this Agreement the day and year first written above. OUTSOURCING SOLUTIONS INC. By /s/ Timothy G. Beffa ------------------------------------ Timothy G. Beffa, President and Chief Executive Officer EMPLOYEE /s/ C. Bradford McLeod -------------------------------------- C. Bradford McLeod EX-10 5 NON-QUALIFIED STOCK OPTION AWARD AGREEMENT OUTSOURCING SOLUTIONS INC. NON-QUALIFIED STOCK OPTION AWARD AGREEMENT [E] This Non-qualified Stock Option Award Agreement (this "Agreement"), dated as of _____________, 199x, is made between Outsourcing Solutions Inc. (the "Company") and ____________ (the "Optionee"). All capitalized terms used herein that are not defined herein shall have the respective meanings given to such terms in the Outsourcing Solutions Inc.(formerly OSI Holdings Corp.) 1995 Stock Option and Stock Award Plan, as amended (the "Plan"). W I T N E S S E T H : 1. Grant of Option. Pursuant to the provisions of the Plan, the Company hereby grants to the Optionee, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, the right and option to purchase from the Company all or any part of an aggregate of __ shares of the $0.01 par value common stock of the Company (the "Stock"), at a per share purchase price equal to $_____ (the "Option"), such Option to be exercisable as hereinafter provided. The Option shall not be treated as an "incentive stock option," as defined in Section 422 of the Code. 2. Terms and Conditions. It is understood and agreed that the Award evidenced hereby is subject to the following terms and conditions: (a) Expiration Date. The Option shall expire ten (10) years after the date indicated above. (b) Exercise of Option. (i) Subject to the other terms of this Agreement and the Plan, the Option may be exercised on or after the dates indicated below as to that percentage of the total shares of Stock subject to the Option as set forth below opposite each such date, plus any shares of Stock as to which the Option could have been exercised previously, but was not so exercised. Date Percentage -------------- 25% -------------- 25% -------------- 25% -------------- 25% (ii) Notwithstanding the foregoing provisions of Section 2(b)(i) hereof, but subject to Section 2(a) and 2(d) hereof, immediately prior to a "Sale of the Business," as defined in and contemplated by Section 2.4 of the Stockholders Agreement, dated as of September 21, 1995, as amended and restated on January 10, 1996, and February 16, 1996, and as may be further amended from time to time, by and among OSI Holdings Corp., the MDC Entities, APT, the Management Stockholders and the Non-Management Stockholders (all as defined therein) (the "Stockholders Agreement"), the Option may be exercised with respect to all or any portion of the total number of shares of Stock covered by the then unexercised Option. (iii) Any exercise of all or any part of the Option shall be accompanied by a written notice to the Company specifying the whole number of shares of Stock as to which the Option is being exercised. Upon the valid exercise of all or any part of the Option, a certificate (or certificates) for the number of shares of Stock with respect to which the Option is exercised shall be issued in the name of the Optionee, subject to the other terms and conditions of this Agreement and the Plan. Notation of any partial exercise shall be made by the Company on Schedule I attached hereto. (c) Consideration. At the time of any exercise of the Option, the purchase price of the shares of Stock as to which the Option shall be exercised shall be paid to the Company (i) in United States dollars by personal check, bank draft or money order, (ii) if permitted by applicable law and approved by the Committee in accordance with the Plan, with Stock, duly endorsed for transfer to the Company, owned by the Optionee (or the Optionee and his spouse jointly) for at least six (6) months prior to the tender thereof and not used for another such exercise during such six-month period and having a total fair market value, as determined in accordance with Paragraph 6(a) of the Plan ("Fair Market Value"), on the date of such exercise of the Option equal to such purchase price of such shares of Stock, or (iii) a combination of the consideration provided for in the foregoing clauses (i) and (ii) of this Section 2(c) having a total Fair Market Value on the date of such exercise equal to the purchase price of such shares of Stock. (d) Exercise Upon Death, Disability or Termination of Employment. The Option shall terminate upon the termination, for any reason, of the Optionee's employment with the Company or a subsidiary of the Company, and no shares of Stock may thereafter be purchased under the Option, except as follows: (i) In the event of the death of the Optionee while an employee of the Company or a subsidiary of the Company, the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) at the time of his or her death, may be exercised after the Optionee's death by the legal representative of the Optionee's estate or the legatee of the Optionee under his last will until the earlier to occur of the second anniversary of the Optionee's death and the stated expiration date of the Option. (ii) If the Optionee's employment with the Company or a subsidiary of the Company shall terminate by reason of permanent disability (as defined in the last sentence of this Section 2(d)(ii)), the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such termination of employment, may be exercised after such termination until the earlier to occur of the first anniversary of such termination and the stated expiration date of the Option. For purposes of this Agreement, "permanent disability" shall mean an inability (as determined by the Committee) to perform duties and services as an employee of the Company or a subsidiary of the Company by reason of a medically determinable physical or mental impairment, supported by medical evidence, which can be expected to last for a continuous period of not less than eight (8) months. (iii) If (A) the Company or a subsidiary of the Company terminates the Optionee's employment with the Company or such subsidiary and such termination is not "for cause" (as defined in Section 2.5(d) of the Stockholders Agreement), or (B) the Optionee terminates employment with the Company or such subsidiary for "good reason" (as defined in Section 2.5(c) of the Stockholders Agreement), the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such termination of employment, may be exercised after such termination until the earlier to occur of the first anniversary of such termination and the stated expiration date of the Option. (iv) If the Optionee's employment with the Company or a subsidiary of the Company is terminated by reason of the Optionee's retirement after attaining both five (5) years of continuous service with the Company or a subsidiary of the Company and 59 1/2 years of age, the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such retirement, may be exercised after such retirement until the earlier to occur of the second anniversary of such retirement and the stated expiration date of the Option. (v) If the Optionee dies during the one-year or two-year period following termination of his or her employment specified in Section 2(d)(ii), 2(d)(iii) or 2(d)(iv), the Option, to the extent the Option would have been exercisable pursuant to Section 2(d)(ii), 2(d)(iii) or 2(d)(iv) as of the date of the Optionee's death, may be exercised after the Optionee's death by the legal representative of his estate or the legatee of the Optionee under his last will until the earlier to occur of the second anniversary of the Optionee's death and the stated expiration date of the Option. (vi) If the Optionee's employment is terminated by the Company or a subsidiary of the Company "for cause" (as defined in Section 2.5(d) of the Stockholders Agreement) or under circumstances not otherwise described in this Section 2(d), the Option shall automatically, without any further action required by the Company, terminate on the date of such termination of employment and shall cease to thereafter be exercisable with respect to any shares of Stock. (e) Nontransferability. The Option shall not be transferable otherwise than by will or the laws of descent and distribution, and are exercisable, during the lifetime of the Optionee, only by him. (f) Withholding Taxes. At the time of receipt of Stock upon the exercise of all or any part of the Option, the Optionee shall be required to pay to the Company in cash (or make other arrangements, in accordance with Section 12 of the Plan, for the satisfaction of) any taxes of any kind required by law to be withheld with respect to such Stock; provided, however, tax withholding obligations may be met, in whole or in part, by the withholding of shares of Stock otherwise deliverable to the Optionee upon such exercise pursuant to procedures approved by the Committee; provided further, however, the amount of shares so withheld may not exceed the amount necessary to satisfy required Federal, state, local and foreign withholding obligations using the minimum statutory rate. In no event shall Stock or other property be delivered to the Optionee until the Optionee has paid to the Company in cash, or made arrangements satisfactory to the Company regarding the payment of, the amount of any taxes of any kind required by law to be withheld with respect to the Stock subject to the Option, and the Company shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Optionee. (g) No Rights as Stockholder. The Optionee shall not become the beneficial owner of the shares of Stock subject to the Option, nor have any rights to dividends or other rights as a shareholder with respect to any such shares, until the Optionee has exercised the Option in accordance with the provisions hereof and of the Plan. (h) No Right to Continued Employment. The Option shall not confer upon the Optionee any right to be retained in the service of the Company or a subsidiary of the Company, nor restrict in any way the right of the Company or any subsidiary of the Company, which right is hereby expressly reserved, to terminate his employment at any time with or without cause. (i) Inconsistency with Plan. Notwithstanding any provision herein to the contrary, the Option provides the Optionee with no greater rights or claims than are specifically provided for under the Plan. If and to the extent that any provision contained in this Agreement is inconsistent with the Plan, the Plan shall govern. (j) Compliance with Laws, Regulations, Stockholders Agreement. The Option and the obligation of the Company to sell and deliver shares of Stock hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations, (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Committee shall, in its sole discretion, determine to be necessary or applicable and (iii) the terms of the Stockholders Agreement in all respects. Moreover, the Option may not be exercised if its exercise, or the receipt of shares of Stock pursuant thereto, would be contrary to applicable law. 3. Investment Representation. If at the time of exercise of all or part of the Option the Stock is not registered under the Securities Act of 1933, as amended (the "Securities Act"), and/or there is no current prospectus in effect under the Securities Act with respect to the Stock, the Optionee shall execute, prior to the issuance of any shares of Stock to the Optionee by the Company, an agreement (in such form as the Committee may specify) in which the Optionee, among other things, represents, warrants and agrees that the Optionee is purchasing or acquiring the shares acquired under this Agreement for the Optionee's own account, for investment only and not with a view to the resale or distribution thereof, that the Optionee has knowledge and experience in financial and business matters, that the Optionee is capable of evaluating the merits and risks of owning any shares of Stock purchased or acquired under this Agreement, that the Optionee is a person who is able to bear the economic risk of such ownership and that any subsequent offer for sale or distribution of any of such shares shall be made only pursuant to (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, it being understood that to the extent any such exemption is claimed, the Optionee shall, prior to any offer for sale or sale of such shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Committee, from counsel for or approved by the Committee, as to the applicability of such exemption thereto. 4. Disposition of Stock. In addition to the restrictions set forth in Section 3, no share of Stock received by the Optionee upon exercise of the Option (or any interest or right in such shares) can be sold, assigned, pledged or transferred in any manner except as permitted by the Stockholders Agreement. 5. Optionee Bound by Plan; Stockholders Agreement. The Optionee hereby acknowledges receipt of a copy of the Plan and the Stockholders Agreement and agrees to be bound by all of the terms and provisions of each thereof, including the terms and provisions adopted after the granting of the Option but prior to the complete exercise hereof, subject to the last paragraph of Section 16 of the Plan as in effect on the date hereof. 6. Notices. Any notice hereunder to the Company shall be addressed to it at 390 South Woods Mill Road, Suite 350, Chesterfield, Missouri 63017, Attention: Chief Financial Officer, and any notice hereunder to the Optionee, shall be addressed to him at, ______________________ Attention: ______________ , subject to the right of either party to designate at any time hereafter in writing some other address. 7. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware applicable to contracts executed and to be performed entirely within such state, without regard to the conflict of law provisions thereof. 8. Severability. If any of the provisions of this Agreement should be deemed unenforceable, the remaining provisions shall remain in full force and effect. 9. Modification. Except as otherwise permitted by the Plan, this Agreement may not be modified or amended, nor may any provision hereof be waived, in any way except in writing signed by the party against whom enforcement thereof is sought. 10. Counterparts. This Agreement has been executed in two counterparts, each of which shall constitute one and the same instrument. IN WITNESS WHEREOF, Outsourcing Solutions Inc. has caused this Agreement to be executed by a duly authorized officer and the Optionee has executed this Agreement, both as of the day and year first above written. OUTSOURCING SOLUTIONS INC. By ------------------------- Name: Timothy G. Beffa Title: President & Chief Executive Officer OPTIONEE --------------------------- NOTATIONS AS TO PARTIAL EXERCISE ================================================================================ Date of Number of Shares Balance of Shares Authorized Notation Exercise of Stock of Stock on Signature Date Purchased Option - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ EX-27 6 FDS -- OUTSOURCING SOLUTIONS INC.
5 Note: This schedule contains summary financial information extracted from the Form 10-Q for the Quarter Ended September 30, 1999 and is qualified in its entirety by reference to such financial statements. 0001027574 OUTSOURCING SOLUTIONS INC. 1,000 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 28,607 0 47,121 706 29,772 115,548 79,098 35,819 600,921 109,701 0 0 13,686 53 0 600,921 0 380,063 0 352,642 76 0 38,214 (10,869) 375 (11,244) 0 0 0 (11,244) 0 0
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