UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 13, 2006
American Telecom Services, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 1-32736 77-0602480
(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
2466 Peck Road
City of Industry, California 90601
(Address of principal executive offices)
Registrant's telephone number: (562) 908-1287
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On November 13, 2006, we appointed Edward R. James as our Chief Financial
Officer. He replaces Bruce Layman, who continues to serve as our Chief Operating
Officer.
Prior to joining us and from September 2001, Mr. James was employed by
Carter's, Inc., an Atlanta-based branded marketer of baby and young children's
apparel. His last position at Carter's was as Director of Finance, with
responsibilities for its wholesale and mass distribution channels.
Mr. James has entered into an employment agreement with us for a term
through December 31, 2008 pursuant to which he will be paid an annualized base
salary of $135,000. He will be entitled to the following bonuses based on our
net sales (defined as our revenues collected during a period less allowances
granted to retailers, markdowns, discounts, commissions, reserves for service
outages, customer hold backs and expenses):
- one percent of the amount by which our net sales during our fiscal
year ending June 30, 2007 exceed $5,000,000;
- one percent of the amount by which our net sales for our fiscal year
ending June 30, 2008 exceed our net sales during our fiscal year
ending June 30, 2007; and
- one percent of the amount by which our net sales for our six-month
fiscal period ending December 31, 2008 exceed our net sales during our
six-month fiscal period ending June 30, 2008.
The bonus described above will be limited to an amount no greater than 75% of
Mr. James' then current annual base salary or, in the case of the six-month
period ending December 31, 2008, his base salary during such period.
Mr. James will also be entitled to the following bonuses based on our net
profits (defined as our net income, after taxes, as determined in accordance
with generally accepted accounting principles (GAAP)):
- one percent of our net profits for each of our fiscal years ending
June 30, 2007 and June 30, 2008, respectively; and
- one percent of our net profits for our six-month fiscal period ending
December 31, 2008.
Mr. James' employment agreement further provides that his aggregate bonuses
from net sales and net profits for any bonus period will in no event exceed 112%
of his base salary during such period.
As called for in his employment agreement, we granted Mr. James 15,000
options under our 2005 stock option plan, initially exercisable at $3.25 per
share, being the closing price of our
common stock on November 13, 2006. These options expire on November 13, 2011. Of
these 15,000 options, 7,500 will vest on the first anniversary of employment
under his employment agreement and the remaining 7,500 will vest on the second
anniversary of employment under such employment agreement. As also called for by
his employment agreement, we also granted Mr. James 20,000 performance
accelerated restricted stock (PARS) on November 13, 2006. The PARS will vest, if
at all, in partial increments based upon our achievement of specified net sales
and net profits benchmarks.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 17, 2006
AMERICAN TELECOM SERVICES, INC.
By: /s/Lawrence Burstein
-----------------------------------
Name: Lawrence Burstein
Title: Chairman