10-K/A 1 a2046872z10-ka.txt 10-K/A -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 10-K/A AMENDMENT NO. 1 TO FORM 10-K ~~/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 OR ~~/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

COMMISSION FILE NUMBER: 0-24417 ------------------------ AZTEC TECHNOLOGY PARTNERS, INC. (Exact name of registrant as specified in its charter) DELAWARE 04-3408450 (State or other jurisdiction of (IRS Employer Identification No.) incorporation) 50 BRAINTREE HILL OFFICE PARK, SUITE 220 BRAINTREE, MASSACHUSETTS 02184 (Address of principal executive offices)

------------------------ (781) 849-1702 (Registrant's telephone number, including area code) ------------------------ Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.001 per share ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / The aggregate market value of voting stock of the registrant held by non-affiliates of the registrant as of April 25, 2001 was approximately $2,382,897. As of April 25, 2001, 24,009,781 shares of the registrant's common stock were outstanding. This Amendment No. 1 on Form 10-K/A to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2000 is being filed to add the information required to be set forth in Part III and to amend and restate the information required to be set forth in Part IV. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES Our executive officers and directors and their ages as of April 6, 2001 are as follows:

------------------------ CLIFFORD MITMAN, JR. has served as one of our directors since May 1998 and currently serves as Chairman of the Board of Directors. Mr. Mitman has been President of Mitman Associates, a firm that provides executive compensation and organization planning consulting services to a wide range of companies since October 1991. Prior to October 1991, Mr. Mitman was a Vice President and Senior Consultant with the firms of Towers, Perrin and The Wyatt Company, both management consulting firms. Mr. Mitman graduated from Yale University and the Wharton School of Business. IRA COHEN has served as one of our directors since December 2000, as President of Aztec since September 1999 and as Chief Operating Officer of Aztec since June 1998. From 1996 to April 1998, Mr. Cohen worked as an independent consultant and from September 1996 to June 1997 as the Chief Operating Officer of DataTrend, Inc. a computer remanufacturing company. In 1993, Mr. Cohen was employed by CIC Systems, Inc. as Chief Operating Officer of its Copley Division where he continued to work through 1996. Mr. Cohen founded Copley Management Associates, a technology management consulting company in 1979 which he merged with DataTrend in 1984 to form Copley Systems, Inc. Mr. Cohen sold Copley Systems, Inc. in 1993. ROSS J. WEINTRAUB has served as Chief Financial Officer and Vice President of Finance since July of 1999. From February 1999 to July 1999, Mr. Weintraub served as our Corporate Controller. From June 1994 through May 1998, Mr. Weintraub served as Chief Financial Officer of Domain Solutions Corp. a software developer for the pharmaceutical and manufacturing industries. BENJAMIN TANDOWSKI has served as one of our directors since May 1998. From 1985 to the present, Dr. Tandowski has served as President of Blueflame, a provider of comprehensive enterprise solutions and a wholly-owned subsidiary of Aztec, which Dr. Tandowski founded in 1985. From January 1999 to March 2000, Dr. Tandowski served as the Chief Technology Officer of Aztec prior to resigning to focus his efforts on Blueflame. Previously, Dr. Tandowski was employed by Exxon Research and the Chemical and Plastics Division of Union Carbide, both diversified chemical companies where he managed the implementation of large databases and developed computing facilities for research. Dr. Tandowski holds a Ph.D. in mechanical engineering from the City University of New York, where he was a National Science Fellow. ROBERT F. BURLINSON is a private investor and financial consultant. He has served as one of our directors since July 2000 and serves on the Audit and Special Committees of the Board. Mr. Burlinson was the Executive Vice President and Chief Financial Officer of Audio Visual Services Corporation, formerly Caribiner International, Inc., an international provider of corporate meetings and business communications services, from June 1998 to July 2000. From September 1996 until June 1998, Mr. Burlinson served as Vice President, Treasurer and Principal Financial Officer of Handy & Harman, 1 a manufacturer providing engineering products, system components and precious metal fabrication. From October 1986 until September 1996, Mr. Burlinson served as Senior Vice President and Chief Financial Officer and was a director of National Guardian Corp., a security services company. Mr. Burlinson received a Masters of Business Administration degree from the Stern School of New York University and holds a Bachelor of Arts degree in economics from Fordham University. Mr. Burlinson is a certified public accountant. JOSEPH L. GAGNON has served as one of our directors since August 2000 and currently serves on the Audit and Special Committees of the Board. Mr. Gagnon has served as Senior Vice President of Mainspring, Inc. since October 1999. From 1996 to October 1999, Mr. Gagnon was a partner at Ernst & Young in New York where he provided technology consulting services. Mr. Gagnon received his Bachelor of Arts degree in economics from Fordham University. LEON KOPYT has served as one of our directors since March 2000 and currently serves on the Compensation and Special Committees of the Board. Mr. Kopyt has held the positions of Chairman of the Board of Directors, President and Chief Executive Officer of RCM Technologies, Inc., a provider of business, technology and resource management solutions to information technology and professional engineering customers since 1991. Prior to his association with RCM Technologies, Inc., Mr. Kopyt was the President and CEO of a European-based industrial corporation which designed and manufactured a broad range of transportation and defense products. ELECTION OF DIRECTORS We have a classified Board of Directors which consists of two Class I directors, two Class II directors and two Class III directors. The Class I, Class II and Class III directors will serve until the annual meetings of stockholders to be held in 2001, 2002 and 2003, respectively, and until their respective successors are elected and qualified. At each annual meeting of stockholders, directors are elected for a full three-year term to succeed those directors whose terms are expiring. Messrs. Kopyt and Burlinson are currently serving as Class I directors. Mr. Mitman and Dr. Tandowski are currently serving as Class II directors and Messrs. Gagnon and Cohen are currently serving as Class III directors. There are no familial relationships among any of our directors, nominees for director and executive officers. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company's directors, executive officers and holders of more than 10% of the Company's Common Stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Based solely upon a review of reports submitted, and representations made to the Company, to the Company's knowledge, its directors and executive officers timely filed all required forms under Section 16(a) of the Exchange Act during fiscal year 2000 except that, in a Form 4 filed in February 2000, Mr. Mitman inadvertently reported that he had been granted 10,000 options when the correct grant amount was 15,000 options and each of Messrs. Gagnon and Burlinson failed to file a Form 3 within the requisite time period upon becoming a reporting person. 2 ITEM 11. EXECUTIVE COMPENSATION The following table sets forth information with respect to the compensation that we paid to the named executive officers for services rendered during the fiscal year ending December 31, 2000. SUMMARY COMPENSATION TABLE (1)

------------------------ (1) In accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits has been omitted because such perquisites and other personal benefits constituted less than the lesser of $50,000 or ten percent of the total annual salary and bonus for the Named Executive Officers for the years reflected above. (2) In October and November 2000 our wholly-owned subsidiary, Blueflame, granted options to purchase its common stock to Messrs. Cohen and Weintraub and Dr. Tandowski. These options were issued at the fair market value as determined by our board of directors at $.80 per share, and expire in 10 years. STOCK OPTION GRANTS The following table sets forth certain information regarding options granted to our named executive officers during the fiscal year ended December 31, 2000. OPTION GRANTS IN LAST FISCAL YEAR

-------------------------- (1) Represents options granted pursuant to our 1998 Stock Incentive Plan and options granted by our subsidiary, Blueflame. (2) Calculated for the purpose of our stock options, on the total number of options to purchase 2,525,897 shares of our common stock; and calculated for the purposes of Blueflame stock options, on the total number of 3 options to purchase 10,181,000 shares of Blueflame common stock, each type of option granted during the year ended December 31, 2000 (3) Potential realizable value is based on an assumption that the market price of the stock will appreciate at the stated rate, compounded annually, from the date of grant until the end of the term. These values are calculated based on rules promulgated by the Securities and Exchange Commission and do not reflect the Company's estimate or projection of future stock prices. Actual gains, if any, on stock option exercises will depend on the future performance of the Company's Common Stock, the optionholder's continued employment through the option period and the date on which the options are exercised. (4) In October 2000, our wholly-owned subsidiary, Blueflame, granted options to purchase its common stock to Messrs. Cohen and Weintraub and Dr. Tandowski. These options were issued at the then fair market value as determined by our board of directors at $.80 per share, and expire in 10 years. During 2000, Blueflame granted options to purchase an aggregate of 10,181,000 shares of its common stock. FISCAL YEAR-END OPTION VALUE TABLE The following table summarizes certain information regarding the stock options exercised during 2000 and unexercised stock options held as of December 31, 2000 by each of our named executive officers. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

------------------------ (1) Value based upon the last sales price per share $.22 on the our common stock on December 29, 2000, as reported on the Nasdaq SmallCap Market, less the exercise price. Value for options granted by our subsidiary Blueflame is based on the good faith estimate of our board of directors, using valuations of comparable public corporations. (2) Represents options granted by Blueflame. COMPENSATION OF DIRECTORS All of our directors are reimbursed for expenses incurred in connection with their attendance at board meetings and committee meetings. Each non-employee director is paid $1,500 as a quarterly retainer, $500 for participating in a telephonic board of directors meeting or committee meeting, and $1,000 for attendance at each in person board of directors meeting or committee meeting. During the year ended December 31, 2000, Mr. Mitman received options to purchase 150,000 shares of common stock as consideration for his service as chairman of the board. Mr. Mitman received a one-time grant of an option to purchase 50,000 shares of common stock for his appointment as a member of the executive committee. Our non-employee directors receive stock options under our Amended and Restated 1998 non-employee director stock option plan. The plan is administered by the board and provides that each non-employee director is automatically granted (i) an option to purchase 30,000 shares of common 4 stock upon his or her initial election to the board; (ii) an option to purchase 15,000 shares of common stock on the date of each annual meeting of stockholders, provided that he or she is serving as a director immediately following such annual meeting; (iii) an option to purchase 10,000 shares of common stock upon initial appointment as chairperson of a committee of the board; and (iv) an option to purchase 10,000 shares of common stock on the date of each annual meeting of stockholders if serving as a chairperson of a committee of the board, provided that he or she will continue to serve as chairperson immediately following such annual meeting. Since October 2000, Mr. Burlinson served as chairman of the executive committee of the board and in that capacity was compensated $20,000 per month until March 31, 2001. Additionally, since March 31, 2001, Mr. Burlinson has served as a consultant, and is paid $1,250 for each day of his services. On March 2, 2000, we granted options to purchase 15,000 shares of common stock to Mr. Kopyt, at an exercise price of $8.75 per share, for his election to the board; (ii) on June 29, 2000, we granted options to purchase an additional 15,000 shares of common stock to Mr. Kopyt at an exercise price of $2.0625, pursuant to the increase in the number of shares for which options are granted for election to the board under the director plan from 15,000 to 30,000; (iii) on July 10, 2000, we granted options to purchase 30,000 shares of common stock to Mr. Burlinson at an exercise price of $2.1875 per share, for his election to the board; (iv) on August 2, 2000, we granted options to purchase 30,000 shares of common stock to Mr. Gagnon, at an exercise price of $1.875 per share, for his election to the board; (v) on December 12, 2000, we, at our annual meeting, granted to each of Messrs. Mitman, Kopyt, Burlinson and Gagnon options to purchase 15,000 shares of common stock for their continued service as directors or re-election to the board and options to purchase 40,000 shares of common stock to Mr. Mitman for his service as chairman of committees of the board. At our 2001 annual meeting, we expect to grant to each of Messrs. Burlinson, Kopyt, Mitman and Gagnon options to purchase 15,000 shares of common stock for their continued service as directors or re-election to the board and options to purchase 30,000 shares of common stock to Mr. Mitman for his service as chairman of the committees of the board. EMPLOYMENT CONTRACTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 We entered into an employment agreement with Mr. Cohen, effective as of June 1, 2000, for a one-year term as our chief operating officer. The agreement automatically renews for an additional one year term unless either party gives 90 days' notice of termination. Pursuant to the agreement, Mr. Cohen is entitled to receive a base salary of $200,000, with the potential for a cash bonus of up to 50% of Mr. Cohen's annual base salary. We may terminate Mr. Cohen with or without cause. Termination without cause entitles Mr. Cohen to (i) a pro rata portion of a severance bonus amount (based on the number of days between the first day of the then current fiscal year and the date termination is effective), (ii) his annual base salary, and (iii) the continuation of his health benefits for a period of one year. The severance bonus amount for a fiscal year equals the average amount of the bonuses paid to Mr. Cohen for the fiscal years proceeding such fiscal year. In the event that his employment is terminated within 24 months following a change in control, Mr. Cohen is entitled to a lump sum payment in an amount equal to his annual base salary at the time of the termination plus the above-described severance bonus amount. We agreed to provide Mr. Cohen with a retention bonus of $125,000 and the following bonuses at the completion of a number of milestones: $75,000 on the sale of our three voice and data subsidiaries in June 2000, and $37,500 on the sale of one of our subsidiaries in our other business segment in December 2000. In addition, Mr. Cohen will be eligible to receive bonuses in the event that our remaining subsidiaries are liquidated or sold in the aggregate amount of $137,500. Mr. Cohen is entitled to these payments only if he remains employed at the time the respective transactions are consummated and he is in compliance with his employment agreement. 5 We entered into an employment agreement with Mr. Weintraub, effective June 1, 2000, for a one year term as our vice president of finance. The agreement automatically renews for an additional one year term unless either party gives 90 days notice of termination. Mr. Weintraub is entitled to receive a base salary of $160,000 per year, with the potential for a cash bonus of up to 25% of his annual base salary. We may terminate Mr. Weintraub with or without cause. Termination without cause entitles Mr. Weintraub to (i) a pro rata portion of the severance bonus amount (based on the number of days between the first day of the then current fiscal year and the date termination is effective), (ii) his annual base salary, and (iii) the continuation of his health benefits for a period of one year. The severance bonus amount for a fiscal year equals the average amount of the bonuses paid to Mr. Weintraub for the fiscal years proceeding such fiscal year. In the event that his employment is terminated within 24 months following a change in control, Mr. Weintraub is entitled to a lump sum payment in an amount equal to his annual base salary at the time of termination plus the severance bonus amount. We agreed to provide Mr. Weintraub with a retention bonus of $125,000 and the following bonuses at the completion of a number of milestones: $75,000 on the sale of our three voice and data subsidiaries in June 2000, and $37,500 on the sale of one of our subsidiaries in our other business segment in December 2000. In addition, Mr. Weintraub will be eligible to receive bonuses in the event that our remaining subsidiaries are liquidated or sold in the aggregate amount of $137,500. Mr. Weintraub is entitled to these payments only if he remains employed at the time the respective transactions are consummated and he is in compliance with his employment agreement. Blueflame, Inc., our wholly-owned subsidiary, entered into an employment agreement with Benjamin Tandowski, effective April 26, 1997. Dr. Tandowski serves as president of Blueflame at a base annual salary of $300,385. Blueflame may terminate Dr. Tandowski with or without cause. Termination without cause entitles Dr. Tandowski to the base salary in effect at the date of termination for the longer of (i) three months from the date of termination, or (ii) whatever time period remains under the term of his employment agreement. Dr. Tandowski's employment agreement with Blueflame contains noncompetition and confidentiality provisions. Unless extended by the parties, the contract terminates on June 30, 2001. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION As of December 31, 2000, the members of the Compensation Committee were Messrs. Kopyt and Mitman. No executive officer of the Company has served as a director or member of the Compensation Committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served as a director of or member of the Compensation Committee of the Company. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information as of March 31, 2001, on which 24,009,781 shares of Common Stock were outstanding, with respect to the beneficial ownership of the Company's Common Stock by (i) each person known by the Company to beneficially own more than 5% of the outstanding shares of Common Stock, (ii) the directors and nominees for director of the Company, (iii) the Company's President, the next two most highly compensated executive officers of Aztec who earned in excess of $100,000 during the year ended December 31, 2000 (the "Named Executive Officers"), and (iv) all executive officers, directors and nominees for director of the Company as a 6 group. Unless otherwise indicated, the business address of each of the following is 50 Braintree Hill Office Park, Braintree, Massachusetts 02184: AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)

------------------------ * Less than 1%. (1) The number of shares beneficially owned by each stockholder, director and executive officer is determined under rules promulgated by the Securities and Exchange Commission, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days after March 31, 2001 through the exercise of any stock option, warrant or other right. The inclusion herein of such shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of such shares. Unless otherwise indicated, each person or entity listed above has sole voting and investment power (or shares such power with his or her spouse) with respect to all shares of capital stock listed as owned by such person or entity. (2) Information is based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2001, by Liberty Wanger Asset Management, L.P. ("Liberty Wanger Asset"). Liberty Wanger Asset is a registered investment advisor. The number of shares beneficially owned by this entity includes those purchased on behalf of discretionary clients of Liberty Wanger Asset. Liberty Wanger Asset reported that it has shared power to vote or direct the vote all of its shares. (3) Consists of 45,000 shares subject to our options exercisable within 60 days after March 31, 2001. (4) Includes 164,977 shares of our common stock and 19,444 shares of Blueflame common stock subject to options exercisable within 60 days of March 31, 2001. (5) Consists of 45,000 shares subject to our options exercisable within 60 days after March 31, 2001. (6) Consists of 440,000 shares subject to our options exercisable within 60 days after March 31, 2001. 7 (7) Dr. Tandowski serves as the President of Blueflame, Inc., a wholly-owned subsidiary of the Company. Includes 87,500 shares of our common stock and 194,442 shares of Blueflame common stock subject to options exercisable within 60 days after March 31, 2001. (8) Consists of 102,250 shares of our common stock and 14,584 shares of Blueflame common stock subject to options exercisable within 60 days after March 31, 2001. (9) Consists of 945,213 shares subject to our options exercisable within 60 days after March 31, 2001. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS One of our subsidiaries, Blueflame, entered into an agreement with Howell Capital for the provision of consulting services for the planning of the proposed public sale of Blueflame equity securities in an initial public offering. The agreement provided for Howell Capital to receive a fee in the form of an option to purchase one half of one percent of the outstanding shares. In October 2000, Blueflame granted Howell Capital an option to purchase 250,000 shares of its common stock at a purchase price of $.80 per share. Lawrence Howell, a former member of our board of directors, is the managing partner of Howell Capital. 8 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K (a) Documents filed as part of this Annual Report 1. Consolidated Financial Statements. The Consolidated Financial Statements listed in the Index to Consolidated Financial Statements and Financial Statement Schedule are filed as part of this Annual Report. 2. Financial Statement Schedule. The Financial Statement Schedule listed in the Index to Consolidated Financial Statements and Financial Statement Schedule is filed as part of this Annual Report. 3. Exhibits. The Exhibits listed in the Exhibit Index immediately preceding such Exhibits are filed as part of this Annual Report. (b) Reports on Form 8-K. None (c) Exhibits

------------------------ * Management contract or compensatory plan or arrangement filed herewith in response to Item 14(a)(3) of the Instructions to the Annual Report on Form 10-K. The exhibits listed above are not contained in the copy of the Annual Report distributed to stockholders. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission, 450 Fifth Street, N.W., Room 1024, Washington, D.C., and at the Securities and Exchange Commission's regional offices at 219 South Dearborn Street, Room 1204, Chicago, Illinois; 26 Federal Plaza, Room 1102, New York, New York and 5757 Wilshire Boulevard, Suite 1710, Los Angeles, California. Copies of such material can also be obtained from the Public Reference Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. 10 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 27, 2001. AZTEC TECHNOLOGY PARTNERS, INC. By: /s/ IRA COHEN ----------------------------------------- Ira Cohen President and Chief Operating Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant the capacities and on the dates indicated.

AZTEC TECHNOLOGY PARTNERS INC /DE/ 10-K/A