<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
Aztec Technology Partners, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[LOGO]
50 Braintree Hill Office Park
Braintree, Massachusetts 02184
April 23, 1999
Dear Stockholder:
It is my pleasure to invite you to the 1999 Annual Meeting of Stockholders
of Aztec Technology Partners, Inc. The 1999 Annual Meeting will be held on
Wednesday, June 2, 1999 at 10:00 a.m., local time, at the offices of Hale and
Dorr LLP, 60 State Street, Boston, Massachusetts 02109. At the meeting,
stockholders will be asked to elect two Class II Directors and ratify the
Company's selection of independent accountants.
Your vote is important. To ensure that your shares will be represented at
the meeting, please complete, sign, date and mail your proxy card to American
Stock Transfer & Trust Company in the enclosed postage-paid envelope. If your
shares are held in the name of a broker, bank or other holder of record, you
will receive instructions from the holder of record which you must follow in
order for your shares to be voted. If you plan to attend the meeting, please
mark the appropriate box on the enclosed proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ James E. Claypoole
James E. Claypoole
Chairman, Chief Executive Officer
and President
<PAGE>
AZTEC TECHNOLOGY PARTNERS, INC.
50 BRAINTREE HILL OFFICE PARK
BRAINTREE, MASSACHUSETTS 02184
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 2, 1999
The Annual Meeting of Stockholders of Aztec Technology Partners, Inc.
("Aztec" or the "Company") will be held on Wednesday, June 2, 1999 at the
offices of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109 at
10:00 a.m., local time, to consider and act upon the following matters:
1. To elect two Class II Directors to serve until the 2002 Annual Meeting.
2. To ratify the selection of the firm of PricewaterhouseCoopers LLP as the
Company's independent accountants for the current fiscal year.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Stockholders of record at the close of business on April 9, 1999 will be
entitled to notice of and to vote at the meeting or any adjournment thereof. The
stock transfer books of the Company will remain open and may be examined at the
offices of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109.
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, which contains financial statements and other information of
interest to stockholders, accompanies this Notice and the enclosed Proxy
Statement.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
/s/ Douglas R. Johnson
--------------------------------------
Douglas R. Johnson
SECRETARY
Braintree, Massachusetts
April 23, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY
IS MAILED IN THE UNITED STATES.
<PAGE>
AZTEC TECHNOLOGY PARTNERS, INC.
50 BRAINTREE HILL OFFICE PARK
BRAINTREE, MASSACHUSETTS 02184
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 2, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders to be held on June 2, 1999 at 10:00 a.m., local time, at the
offices of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109 and
at any adjournment of that meeting (the "Annual Meeting"). All proxies will be
voted in accordance with the stockholders' instructions, and if no choice is
specified, the proxies will be voted in favor of the matters set forth in the
accompanying Notice of Meeting. Any proxy may be revoked by a stockholder at any
time before its exercise by delivery of written revocation or a subsequently
dated proxy to the Secretary of the Company or by voting in person at the Annual
Meeting. Attendance at the Annual Meeting will not itself be deemed to revoke a
proxy unless the stockholder gives affirmative notice at the Annual Meeting that
the stockholder intends to revoke the proxy and vote in person.
The Notice of Meeting, this Proxy Statement, the enclosed Proxy and the
Company's Annual Report on Form 10-K for the interim fiscal year from April 26,
1998 to December 31, 1998 are being mailed to stockholders beginning on or about
April 28, 1999.
VOTING SECURITIES AND VOTES REQUIRED
At the close of business on April 9, 1999, the record date for the
determination of stockholders entitled to vote at the Annual Meeting, there were
outstanding and entitled to vote an aggregate of 22,016,405 shares of Common
Stock of the Company. Stockholders are entitled to one vote per share.
The presence or representation of holders of a majority of the number of
shares of the capital stock of the Company issued, outstanding and entitled to
vote at the Annual Meeting constitutes a quorum for the transaction of business
at the Annual Meeting. Shares of Common Stock present in person or represented
by proxy (including shares which abstain or do not vote with respect to one or
more matters) will be counted for purposes of determining whether a quorum is
present.
The affirmative vote of the holders of a plurality of the votes cast by the
stockholders entitled to vote at the Annual Meeting is required for the election
of directors. The affirmative vote of the holders of a majority of the shares
present or represented and voting is required to ratify the selection of the
firm of PricewaterhouseCoopers LLP as the Company's independent accountants for
the current fiscal year.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter and will also not
be counted as shares voting on such matter. Accordingly, abstentions and broker
non-votes will have no effect on the outcome of voting on any matter which
requires the affirmative vote of the majority of the shares present or
represented and voting on such matter, and will be counted as a vote against any
matter which requires the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 11, 1999 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) each director and each person nominated to become a
director of the Company, (iii) each executive officer of the Company named in
the Summary Compensation Table set forth under the caption "Executive
Compensation" below and (iv) all directors and executive officers of the Company
as a group. Unless otherwise indicated, the business address of each of the
following is 50 Braintree Hill Office Park, Braintree, Massachusetts 02184:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF PERCENTAGE OF
AZTEC AZTEC
COMMON STOCK COMMON
BENEFICIALLY STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OUTSTANDING(2)
- ---------------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS:
James E. Claypoole (3).......................................................... 727,682 3.22%
Douglas R. Johnson (4).......................................................... 23,199 *
Ira Cohen (5)................................................................... 20,410 *
Lawrence M. Howell (6).......................................................... 100,199 *
Howell Capital
177 Stuart Street, Suite 700
San Francisco, CA 94105-1206
Jonathan J. Ledecky (7)......................................................... 1,277,906 5.58%
Building One Services Corp.
800 Connecticut Avenue, NW
Suite 1111
Washington, DC 20006
Clifford Mitman, Jr. (8)........................................................ 34,999 *
Mitman Associates
P.O. Box 543
Cohasset, MA 02025
Benjamin Tandowski.............................................................. 11,402 *
Professional Computer Solutions, Inc.
3 University Place
Suite 600
Hackensack, NJ 07601
All executive officers and directors as a group (seven persons) (9)............. 2,195,797 9.33%
OTHER 5% STOCKHOLDERS:
The Baupost Group, L.L.C. (10).................................................. 3,732,150 16.95%
44 Brattle Street, 5th Floor
Cambridge, Massachusetts 02138
Wanger Asset Management, L.P. (11).............................................. 2,030,000 9.22%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
</TABLE>
- ------------------------
* Less than 1%.
(1) The number of shares beneficially owned by each stockholder 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
2
<PAGE>
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 April 11, 1999 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 with respect to the shares listed.
(2) Number of shares of Common Stock deemed outstanding includes 22,016,405
shares issued and outstanding as of April 11, 1999, plus any shares subject
to options held by the referenced beneficial owner that such owner has the
right to acquire within 60 days after such date.
(3) Includes 550,103 shares subject to options exercisable within 60 days after
April 11, 1999. Also includes 30,887 shares held in a Charitable Remainder
Trust for which Mr. Claypoole disclaims beneficial ownership.
(4) Includes 19,537 shares subject to options exercisable within 60 days after
April 11, 1999.
(5) Includes 19,537 shares subject to options exercisable within 60 days after
April 11, 1999.
(6) Includes 34,999 shares subject to options exercisable within 60 days after
April 11, 1999.
(7) Includes 865,121 shares subject to options exercisable within 60 days after
April 11, 1999.
(8) Includes 34,999 shares subject to options exercisable within 60 days after
April 11, 1999.
(9) Includes 1,524,296 shares subject to options exercisable within 60 days
after April 11, 1999.
(10) Information is based on a Schedule 13G filed with the Securities and
Exchange Commission on August 10, 1998, as amended on February 12, 1999, by
The Baupost Group, L.L.C. (the "Baupost Group"). The Baupost Group is a
registered investment advisor. The number of shares beneficially owned by
this entity includes those purchased on behalf of a registered investment
company and various limited partnerships. The Baupost Group reported that
it has the sole power to vote or direct the vote of all 3,732,150 shares.
(11) Information is based on a Schedule 13G filed with the Securities and
Exchange Commission on January 29, 1999, as amended on February 25, 1999,
by Wanger Asset Management, L.P. ("Wanger Asset"). 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
Wanger Asset. Wanger Asset reported that it has the sole power to vote or
direct the vote of all 2,030,000 shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, except that
Mr. Claypoole inadvertently filed one form late covering one purchase
transaction.
3
<PAGE>
PROPOSAL 1--ELECTION OF DIRECTORS
Pursuant to the Company's Amended and Restated Certificate of Incorporation
and Amended and Restated By-laws, the Company has a classified Board of
Directors consisting of one Class I Director, whose term expires in 2001, two
Class II Directors, whose terms expire at the Annual Meeting, and two Class III
Directors, whose terms expire in 2000 (in each case until their respective
successors are elected and qualified). Mr. Ledecky presently serves as the Class
I Director. Mr. Mitman and Dr. Tandowski presently serve as Class II Directors.
Messrs. Howell and Claypoole presently serve as Class III Directors. At each
annual meeting of stockholders, directors are elected for a term of three years
to succeed those whose terms are expiring. The Board of Directors has nominated
Mr. Mitman and Dr. Tandowski for re-election as Class II Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS
PROPOSAL.
The person(s) named in the enclosed proxy will vote each proxy to elect Mr.
Mitman and Dr. Tandowski as Class II Directors, unless the proxy is marked
otherwise.
The Class II Directors will be elected to hold office until the 2002 Annual
Meeting and until their successors are elected and qualified. The nominees have
indicated their willingness to serve, if elected; however, if either or both of
the nominees should be unable to serve, the person acting under the proxy may
vote the proxy for substitute nominees. The Board of Directors has no reason to
believe that the nominees will be unable to serve if elected.
4
<PAGE>
Following is certain information concerning each director, including his
principal occupation and other business experience for the past five years, the
names of other publicly held companies which such person serves as a director
and such person's age and length of service.
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION, OTHER BUSINESS EXPERIENCE
NAME AGE SINCE DURING PAST FIVE YEARS AND OTHER DIRECTORSHIPS
- ------------------------------------ --- ---------------- ---------------------------------------------------
<S> <C> <C> <C>
NOMINEES FOR TERM EXPIRING IN 1999 (CLASS II DIRECTORS)
Clifford Mitman, Jr................. 60 May 1998 Mr. Mitman has been President since October 1991 of
Mitman Associates, a firm that provides executive
compensation and organization planning consulting
services to a wide range of companies. 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.
Benjamin Tandowski.................. 51 May 1998 Dr. Tandowski has served as Aztec's Chief
Technology Officer since January 1999. Dr.
Tandowski has served since 1985, and continues to
serve, as President of Professional Computer
Solutions, Inc., a wholly-owned subsidiary of Aztec
and a provider of comprehensive enterprise
solutions, which Dr. Tandowski founded in 1985.
Previously, Dr. Tandowski was employed by Exxon
Research and the Chemical and Plastics Division of
Union Carbide, where he 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.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C> <C>
DIRECTORS WHOSE TERM EXPIRES IN 2000 (CLASS III DIRECTORS)
James E. Claypoole*................. 65 February 1998 Mr. Claypoole is Chairman of the Board of
Directors, Chief Executive Officer and President of
Aztec. He was named Chief Executive Officer and
Director of Aztec on February 12, 1998. He actively
assumed the duties of those positions and became
Chairman in June 1998 after the spin-off from U.S.
Office Products Company ("U.S. Office Products").
He became President of Aztec in July 1998. Mr.
Claypoole founded and served as President of Bay
State Computer Group ("Bay State"), an enterprise
design and implementation company, from 1984 to
March 1998, before Bay State became an operating
company of Aztec. He served as Chairman of U.S.
Office Products' Technology Solutions Division from
October 1996 to June 1998.
Lawrence M. Howell.................. 53 May 1998 Mr. Howell has been Managing Partner of Howell
Capital, an investment banking advisory firm since
January 1996. From January 1993 to January 1996,
Mr. Howell was employed by Morgan Stanley & Co.
Incorporated, an international investment banking
firm, where he served as Managing Director and as
Advisory Director; and he was employed by Goldman,
Sachs & Co. from 1970 to 1993. Mr. Howell holds a
Bachelor of Business Administration from the
University of Texas and a Master of Business
Administration from Southern Methodist University.
Mr. Howell is a Director of ULTRADATA Corporation,
an information management software company serving
the financial institution industry.
- ------------------------
* Executive Officer
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C> <C>
DIRECTOR WHOSE TERM EXPIRES IN 2001 (CLASS I DIRECTOR)
Jonathan J. Ledecky................. 41 May 1998 Mr. Ledecky currently serves as an employee of
Aztec and other companies which, like Aztec, were
spun off from U.S. Office Products in June 1998.
Since June 1998, Mr. Ledecky has served as a member
of the Board of Directors of each of the companies
spun off from U.S. Office Products, consisting of,
in addition to Aztec, Workflow Management, Inc.,
Navigant International, Inc. and School Specialty,
Inc. Mr. Ledecky founded U.S. Office Products, a
diversified provider of office products and
services, in October 1994, and served as its Chief
Executive Officer until November 1997 and as
Chairman of the Board until June 1998. Mr. Ledecky
founded Building One Services Corp. (f/k/a
Consolidation Capital Corporation), an investment
management company, in February 1997 and currently
serves as its Chairman of the Board and Chief
Executive Officer. Mr. Ledecky also serves as a
director of USA Floral Products, Inc., an importer
and wholesaler of floral products, and since
October 1997 as a director of UniCapital
Corporation, a financial leasing company. Since
June 1998, Mr. Ledecky has also served on the Board
of Directors of Microstrategy Corporation, a
decision support software company. Mr. Ledecky
served from June 1991 to October 1994 as President
and Chief Executive Officer of Legacy Dealer
Capital Fund, Inc., a wholly-owned subsidiary of
Steelcase Inc., a manufacturer of office furniture
products.
</TABLE>
7
<PAGE>
EXECUTIVE OFFICERS
In addition to Mr. Claypoole, the following individuals are executive
officers of Aztec:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ --- ---------------------------------------------------------------------
<S> <C> <C>
Douglas R. Johnson.................. 46 Executive Vice President, Chief Financial Officer, Treasurer and
Secretary
Ira Cohen........................... 45 Chief Operating Officer
</TABLE>
DOUGLAS R. JOHNSON has served as Executive Vice President, Chief Financial
Officer, Treasurer and Secretary of Aztec since June 1998. Prior to coming to
Aztec, during 1997 Mr. Johnson held the position of Vice President and Chief
Financial Officer of Clam Associates Incorporated, an information technology
services company. Mr. Johnson was Executive Vice President and Chief Financial
Officer of Discreet Logic Incorporated, a computer software development and
marketing company from 1995 to 1996. He also held the position of Vice President
of Finance and Administration and Chief Financial Officer of Fusion Systems
Corporation, a semiconductor equipment manufacturing company, from 1993 to 1995.
Mr. Johnson is a Certified Public Accountant.
IRA COHEN has served as Chief Operating Officer of Aztec since June 1998.
From 1996 to April 1998, Mr. Cohen worked as an independent consultant. In
addition, from September 1996 to June 1997 Mr. Cohen was the Chief Operating
Officer of DataTrend, Inc., a computer remanufacturing company. Mr. Cohen
founded Copley Management Associates, a technology management consulting
company, in 1979. In 1984, Mr. Cohen merged Copley Management Associates with
DataTrend to form Copley Systems, Inc. In 1993, after selling Copley Systems,
Inc., Mr. Cohen was employed by CIC Systems as Chief Operating Officer of its
Copley Division from 1993 through 1996.
LEGAL PROCEEDINGS
On March 3, 1999, Professional Network Services, Inc. ("PNS"), an Aztec
subsidiary, Philip Arturi, the President of PNS, and Bruce Torello, a PNS
employee, sued U.S. Office Products, Jonathan Ledecky, a Director of Aztec and
the former Chairman of U.S. Office Products, and Aztec. They claim approximately
$2 million in damages in their three count complaint which arises from the
exchange in September 1997 of the individual plaintiffs' stock in PNS for stock
of U.S. Office Products. PNS was a subsidiary of Aztec when Aztec's Common Stock
was distributed by U.S. Office Products on June 9, 1998 to U.S. Office Products'
stockholders. Prior to the distribution, PNS was a subsidiary of U.S. Office
Products. The plaintiffs allege that in February and May 1998 promises were made
to them by or on behalf of one or more of the defendants that they would be
compensated for the decline in the value of their U.S. Office Products stock
following the exchange. The suit is pending in the United States District Court
for the District of Connecticut.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During the interim fiscal year from April 26, 1998 to December 31, 1998, the
Board of Directors met nine times (including by telephone conference). Mr.
Ledecky attended 66% of the meetings of the Board of Directors and all other
Directors attended at least 75% of the meetings of the Board of Directors and of
the committees on which they served.
8
<PAGE>
The Board of Directors has a standing Audit Committee which is charged with
reviewing Aztec's annual audit, meeting with Aztec's independent accountants to
review Aztec's internal control and financial management practices, and
providing the opportunity for direct contact between the Company's independent
accountants and the Board of Directors. The Audit Committee held six meetings
during the interim fiscal year from April 26, 1998 to December 31, 1998. Messrs.
Howell and Mitman are members of the Audit Committee. Mr. Howell is the Chairman
of the Audit Committee.
The Board of Directors has a standing Compensation Committee, which is
charged with making recommendations to the Board of Directors regarding
compensation of Aztec's executive officers, and administering the Company's
stock option plans and its stock purchase plan. The Compensation Committee held
five meetings during fiscal 1998. Messrs. Howell, Tandowski and Mitman were
members of the Compensation Committee during fiscal 1998. Dr. Tandowski resigned
from the Compensation Committee, effective January 1, 1999. Mr. Mitman is the
Chairman of the Compensation Committee.
DIRECTOR COMPENSATION
Aztec compensates non-employee directors $1,500 for attendance at quarterly
Board of Directors meetings, $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 (other than a quarterly meeting) or committee
meeting. The Company also reimburses directors' travel expenses incurred in
attending meetings of the Board of Directors or meetings of committees of the
Board of Directors.
Non-employee directors of the Company receive stock options under the
Company's Amended and Restated 1998 Non-Employee Director Stock Option Plan (the
"Director Plan"). The Director Plan provides for the grant of options to
purchase a maximum of 300,000 shares of Common Stock, 195,000 of which are
currently available for future grant. The Director Plan is administered by the
Board of Directors. On April 20, 1999, the Board of Directors voted to amend the
Director Plan (i) to decrease the number of shares authorized for issuance upon
initial election to the Board of Directors from 25,000 shares to 15,000 shares;
and (ii) to provide that all options granted on or after April 20, 1999 under
such plan shall be fully exercisable and vested on the date of grant. The
Director Plan previously provided that options granted upon initial election
vested upon the date of grant and were exercisable on the first anniversary of
the date of grant and all other options vested 1/3 immediately and 1/3 on each
successive anniversary of the date of grant. This change in the vesting schedule
is in response to a proposed change in accounting treatment of options granted
to directors which would impact charges to earnings of Aztec. Previously,
non-employee directors were treated as employees for the purpose of determining
the charge to earnings recorded upon the grant of options to non-employee
directors. The Financial Accounting Standards Board has proposed that
non-employee directors will no longer be treated as employees for this purpose.
Accordingly, if the proposal is finalized, under Statement of Financial
Accounting Standards 123, Aztec would need to value all non-employee director
options and record a charge to earnings at their fair value. Thus, in order to
minimize the consequences of the likely charge relating to these option grants,
the Board of Directors approved the amendment modifying the vesting terms of the
options granted pursuant to the Director Plan.
As amended, the Director Plan provides that each non-employee director will
receive an automatic grant of an option to purchase 15,000 shares of Common
Stock upon initial election (for initial elections prior to the spin-off from
U.S. Office Products, the date of grant was June 10, 1998) to the Board of
Directors. In addition, an option to purchase 10,000 shares of Common Stock will
be granted to each incumbent non-employee director on the date of each annual
meeting of stockholders, if the director is
9
<PAGE>
serving in that capacity immediately following such annual meeting. An option to
purchase 5,000 shares of Common Stock will also be granted to each non-employee
director who is the chairperson of a committee of the Board of Directors upon
initial appointment to such position (for appointments made prior to the
spin-off from U.S. Office Products, the date of grant was June 10, 1998). An
additional option to purchase 5,000 shares of Common Stock will be granted to
each non-employee director who is the chairperson of a committee of the Board of
Directors on the date of each annual meeting of stockholders, provided such
director is serving as chairperson of that committee immediately following such
annual meeting.
Options granted under the Director Plan expire, with certain limitations, on
the earlier of 90 days after such non-employee director ceases to serve as a
director or 10 years from the date of grant. The option price for options
granted under the Director Plan is equal to the fair market value of a share of
Common Stock on the date of grant.
Pursuant to the foregoing provisions, (i) on June 10, 1998, the Company
granted 30,000 options each to Mr. Howell and Mr. Mitman, at an exercise price
of $9.875; (ii) on September 25, 1998, the Company granted 15,000 options each
to Mr. Howell and Mr. Mitman, at an exercise price of $5.50; (iii) on November
19, 1998, the Company granted 5,000 options to Mr. Mitman at an exercise price
of $3.625; and (iv) on December 17, 1998, the Company granted 10,000 options to
Mr. Howell at an exercise price of $3.90625. On June 2, 1999, the Company at its
Annual Meeting will grant to Mr. Howell and Mr. Mitman options to purchase
25,000 and 20,000 shares, respectively. Grants on June 2, 1999 will include
annual option grants and grants for committee chairmanships for Mr. Howell as
chairman of the Strategic, Litigation and Audit Committees and for Mr. Mitman as
chairman of the Search and Compensation Committees.
10
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
paid by Aztec for services rendered during the interim fiscal year from April
26, 1998 to December 31, 1998 to the Chief Executive Officer and the two other
most highly compensated executive officers of Aztec who earned in excess of
$100,000 (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL ---------------------------
COMPENSATION (1) SECURITIES
-------------------- OTHER UNDERLYING
NAME AND PRINCIPAL FISCAL SALARY ANNUAL STOCK ALL OTHER
POSITION YEAR ($) BONUS($) COMPENSATION OPTIONS(#) COMPENSATION($)
- ----------------------------------------------------- ------ --------- -------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
James E. Claypoole................................... 1998 $243,308(2) $ 60,000 $125,834(3) 572,185(4) $ 8,000(5)
Chairman, Chief Executive
Officer and President
Douglas R. Johnson................................... 1998 $124,712(6) $ 30,000 78,150(7)
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
Ira Cohen............................................ 1998 $138,462(8) $ 10,000 78,150(7)
Chief Operating Officer
</TABLE>
- ------------------------
(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 Officer for such year.
(2) Mr. Claypoole's annual salary is $375,000. Mr. Claypoole's salary was
increased from $315,000 to $375,000 in June 1998.
(3) Consists of payments from U.S Office Products in a tender offer for shares
of U.S. Office Products Common Stock at $27.00 per share in June 1998.
(4) Includes options to purchase 560,070 shares granted as part of the December
14, 1998 option exchange program. See "Option Exchange."
(5) Consists of payment of automobile expenses.
(6) Mr. Johnson's annual salary is $193,500. Mr. Johnson's salary was increased
from $175,000 to $193,500 in October 1998.
(7) Represents options granted as part of the December 14, 1998 option exchange
program. See "Option Exchange."
(8) Mr. Cohen's annual salary is $200,000.
11
<PAGE>
STOCK OPTION GRANTS
The following table sets forth certain information regarding options granted
to the Named Officers during the interim fiscal year from April 26, 1998 to
December 31, 1998.
OPTION GRANTS IN INTERIM FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------------- VALUE AT
PERCENT OF ASSUMED ANNUAL RATES
NUMBER OF TOTAL OF
SECURITIES OPTIONS EXERCISE STOCK PRICE
UNDERLYING GRANTED TO OR APPRECIATION
OPTIONS EMPLOYEES BASE FOR OPTION TERM (3)
GRANTED IN FISCAL PRICE EXPIRATION ----------------------
NAME DATE (#)(1) YEAR(2) ($/SH) DATE 5%($) 10%($)
- --------------------------------------------- -------- ---------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
James E. Claypoole........................... 9/18/98 12,115 * $ 5.00 9/18/08 $ 41,795 $ 102,433
12/14/98 538,570(4) 11.74% $3.96875 6/10/08 $1,260,322 $3,148,541
12/14/98 21,500(5) * $3.96875 4/28/07 $ 42,787 $ 103,425
Douglas R. Johnson........................... 12/14/98 78,150(6) 1.70% $3.96875 6/10/08 $ 182,881 $ 456,874
Ira Cohen.................................... 12/14/98 78,150(7) 1.70% $3.96875 6/10/08 $ 182,881 $ 456,874
</TABLE>
- ------------------------
* Less than 1%
(1) Represents options granted pursuant to the Company's 1998 Stock Incentive
Plan.
(2) Calculated based on the total number of options, 4,588,051, granted during
the interim fiscal year from April 26, 1998 to December 31, 1998, including
those options granted under the option exchange program and excluding
previously granted options cancelled under the option exchange program. See
"Option Exchange."
(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) Represents options granted as part of the December 14, 1998 option exchange
program. These options were granted in exchange for stock options granted on
June 10, 1998 to purchase 1,033,723 shares of Aztec Common Stock at an
exercise price of $9.875. See "Option Exchange."
(5) Represents options granted as part of the December 14, 1998 option exchange
program. These options were granted in exchange for stock options granted on
June 10, 1998 to purchase 48,974 shares of Aztec Common Stock at an exercise
price of $10.70. See "Option Exchange."
(6) Represents options granted as part of the December 14, 1998 option exchange
program. These options were granted in exchange for stock options granted on
June 10, 1998 to purchase 150,000 shares of Aztec Common Stock at an
exercise price of $9.875. See "Option Exchange."
12
<PAGE>
(7) Represents options granted as part of the December 14, 1998 option exchange
program. These options were granted in exchange for stock options granted on
June 10, 1998 to purchase 150,000 shares of Aztec Common Stock at an
exercise price of $9.875. See "Option Exchange."
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR IN-THE-MONEY OPTIONS
SHARES END(#) AT FISCAL YEAR END($)(2)
ACQUIRED ON VALUE --------------------------- -----------------------------
NAME EXERCISE(#)(1) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- --------------- ------------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
James E. Claypoole....... None 0 4,532 567,653 0 0
Douglas R. Johnson....... None 0 0 78,150 0 0
Ira Cohen................ None 0 0 78,150 0 0
</TABLE>
- ------------------------
(1) The Named Officers did not exercise any options in the fiscal year ended
December 31, 1998.
(2) None of the unexercised options held by the Named Officers were in-the-money
at fiscal year end December 31, 1998.
EMPLOYMENT CONTRACTS
In June 1998, Aztec entered into an employment agreement with James E.
Claypoole, as the Company's Chief Executive Officer. The employment agreement
provides for an initial three-year term, which term may be extended by mutual
agreement of the parties. Pursuant to the agreement, Mr. Claypoole is entitled
to receive a base annual salary of $375,000, with an annual bonus of up to that
amount at the discretion of the Compensation Committee. See "Report of the
Compensation Committee on Executive Compensation." Aztec may terminate Mr.
Claypoole's employment for "cause" (as "cause" is defined in the agreement). If
Mr. Claypoole is terminated by the Company without "cause," the Company must pay
a pro rata portion (based on (i) the number of days between the first day of the
then current fiscal year and the date termination is effective; and (ii) his
annual base salary) of Mr. Claypoole's "Severance Bonus Amount" plus an amount
equal to his annual base salary through June 10, 2002. Under the employment
agreement, "Severance Bonus Amount" for a fiscal year equals the average bonuses
paid to Mr. Claypoole for the fiscal years preceding such fiscal year or
$187,500, whichever is greater. Under the employment agreement, Mr. Claypoole
was also granted a stock option to purchase 1,033,723 shares of Aztec's Common
Stock at the exercise price of $9.875. On December 14, 1998, Mr. Claypoole, as
part of the Company's option exchange program, exchanged the options granted to
him under his employment agreement. Mr. Claypoole exchanged 10,126 incentive
stock options for 5,276 incentive stock options and 1,023,597 nonstatutory stock
options for 533,294 nonstatutory stock options each at an exercise price per
share of $3.96875 and each is fully vested as of June 10, 1998 and 100%
exercisable on June 10, 1999. See "Option Exchange."
Aztec entered into an employment agreement with Mr. Ledecky, effective as of
June 10, 1998. Under the employment agreement, Mr. Ledecky reports to the Board
of Directors and senior management of Aztec. In such capacity, Mr. Ledecky
provides high-level acquisition negotiation services and strategic business
advice. Aztec can require Mr. Ledecky's performance of such services, consistent
with his other contractual obligations to Building One Services Corp., U.S.
Office Products and other companies. Under
13
<PAGE>
the employment agreement Mr. Ledecky's base annual salary was set at $48,000 and
he was granted a stock option to purchase 1,660,500 shares of Aztec Common Stock
at an exercise price of $9.875. On December 14, 1998, Mr. Ledecky, as part of
the Company's option exchange program, exchanged the options granted to him
under his employment agreement. Mr. Ledecky exchanged his option to purchase
1,660,500 shares of Aztec Common Stock for an option to purchase 865,121 shares
of Aztec Common Stock at an exercise price per share of $3.96875. Mr. Ledecky's
options are fully vested as of June 10, 1998 and 100% exercisable on June 10,
1999. See "Compensation Committee Report on Option Exchange." Under the terms of
his employment agreement, Mr. Ledecky's option is exercisable immediately if
Aztec accelerates the exercise schedule of options for substantially all
management option holders. Mr. Ledecky also entered into an agreement with U.S.
Office Products, effective June 10, 1998, which governs his continuing
obligations to U.S. Office Products and portions of which were incorporated in
his employment agreement with Aztec (the "Services Agreement"). Specifically,
under his employment agreement, Aztec may terminate Mr. Ledecky's employment
only for "cause" as "cause" is defined in the Services Agreement to consist of
(i) his conviction of or guilty or nolo contendere plea to a felony demonstrably
and materially injurious to Aztec and resulting in a sentence of imprisonment or
(ii) his violation of any noncompetition provisions. In addition, under Mr.
Ledecky's employment agreement with Aztec he is subject to the noncompetition
and nonsolicitation provisions of the Services Agreement. Thus, until the later
of one year after Mr. Ledecky leaves Aztec's employ or June 10, 2000, he may
not, among other things, invest in or work for or on behalf of any business
selling any products or services in direct competition with Aztec, within 100
miles of any Aztec office. However, Mr. Ledecky may serve in a policy making
role at certain enumerated businesses.
OPTION EXCHANGE
The following table sets forth certain information concerning the exchange
of stock options held by the Named Officers since April 26, 1998. See
"Compensation Committee Report Option Exchange."
TEN-YEAR OPTION REPRICING
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES NUMBER OF MARKET PRICE EXERCISE ORIGINAL OPTION
UNDERLYING SECURITIES OF STOCK AT PRICE AT TERM REMAINING
OPTIONS UNDERLYING TIME OF TIME OF NEW AT DATE OF
REPRICED OR NEW REPRICING OR REPRICING OR EXERCISE REPRICING OR
AMENDED OPTIONS AMENDMENT AMENDMENT PRICE AMENDMENT
NAME AND POSITION DATE (#) (#) ($) ($) ($) (IN MONTHS)
- ----------------------------- --------- ------------ ----------- ------------- --------------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
James E. Claypoole........... 12/14/98 1,033,723 538,570 $ 3.96875 $ 9.875 $ 3.96875 114 months
Chairman, Chief Executive 12/14/98 48,974 21,500 $ 3.96875 $ 10.70 $ 3.96875 110 months
Officer and President
Douglas R. Johnson........... 12/14/98 150,000 78,150 $ 3.96875 $ 9.875 $ 3.96875 114 months
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
Ira Cohen.................... 12/14/98 150,000 78,150 $ 3.96875 $ 9.875 $ 3.96875 114 months
Chief Operating Officer
</TABLE>
14
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee was established by the Board of Directors to
administer and establish policies governing the Company's executive compensation
and its stock option programs. The Company was an integral part of U.S. Office
Products prior to the distribution by U.S. Office Products of the Company's
Common Stock in June 1998. Prior to June 1998 the Company's compensation
policies were established by U.S. Office Products. As a result, the Company's
compensation polices are still evolving. In addition, under the terms under
which its stock was distributed by U.S. Office Products the Company was
committed to issue options to purchase approximately 3,601,364 shares of its
Common Stock to Aztec employees formerly employed by U.S. Office Products, and
to enter into employment agreements with Messrs. Claypoole and Ledecky. While
these arrangements have benefited the Company by providing it with experienced
employees and management, they have also limited the Compensation Committee's
ability to effect its own polices regarding the Company's compensation plans.
The Company's compensation polices are also significantly impacted by the
fact that the Company operates in the area of information technology, one of the
fastest growing business sectors and as a result one in which the competition
for qualified employees is the most intense. Compensation in the information
technology industry is heavily weighted in favor of stock options and the
Compensation Committee's focus during this early period of the Company's
existence has been to ensure that the Company's stock option programs are set to
attract and retain outstanding employees.
The Company has two stock option programs for its employees: the 1998 Stock
Incentive Plan, which is intended primarily for key employees, and the 1998
Employee Stock Purchase Plan, which is available to all employees. The
competitiveness of the 1998 Stock Incentive Plan has been adversely affected by
the decline in the price of the Company's Common Stock over the last nine months
from over $9.00 to under $2.00. The Company has effected an option exchange
program in an effort to re-establish the competitiveness of this program. See
"Compensation Committee Report on Option Exchange."
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS OTHER THAN THE CHIEF EXECUTIVE
OFFICER
Base salaries for executive officers are set at competitive market levels
for their respective positions, levels of responsibility and experience. In
February 1999, the Compensation Committee decided not to increase the 1999 base
salaries for Mr. Cohen or for Mr. Johnson. Mr. Cohen and Mr. Johnson were,
however, awarded bonuses for their services in 1998 of $10,000 and $30,000,
respectively.
EXECUTIVE BONUS PLAN
An executive cash bonus plan was established in February 1999. Prior to that
date the Company had no formal bonus program. Under the terms of this plan
Messrs. Cohen and Johnson could receive payments in addition to their base
salaries. The target amount of these bonus payments is 40% of base salaries. The
amount of the bonuses will depend on two factors: the degree to which the
Company achieves its budgeted results for 1999 and the extent to which each of
them has discharged assignments and achieved individual goals assigned to them
during the year by the Chief Executive Officer. No bonuses will be paid if 1999
pre-tax income is less than the 1998 level. In addition to their base salaries
and bonuses, both Mr. Cohen and Mr. Johnson have been granted stock options in
1998 and participated in the option exchange program. See "Compensation
Committee Report on Option Exchange."
15
<PAGE>
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
As described in detail under the heading "Employment Contracts," Mr.
Claypoole's compensation as Chief Executive Officer is substantially governed by
the terms of an Employment Agreement entered into on June 10, 1998 in connection
with the distribution of the Company's Common Stock by U.S. Office Products.
Under the terms of this agreement, Mr. Claypoole's base salary for 1998 was
$375,000. As required by the terms of that agreement, in February 1999 the
Compensation Committee reviewed but decided not to change Mr. Claypoole's base
salary.
In February 1999 the Compensation Committee reviewed Mr. Claypoole's
performance during 1998. The Compensation Committee noted that stockholder value
had decreased significantly since the spin-off in June 1998 and that Mr.
Claypoole was a participant in the option exchange program. See "Compensation
Committee Report on Option Exchange." In determining Mr. Claypoole's bonus for
1998 the Compensation Committee took into account that he had been active as the
Company's Chief Executive Officer for only seven months (the period from the
spin-off from U.S. Office Products in June 1998 to the end of 1998). During this
period, the Company met expected revenue targets, concluded a lending
arrangement with BankBoston, N.A., made three acquisitions, and successfully
recouped substantially all money paid in one acquisition involving charges of
fraud by the seller.
The Compensation Committee determined that Mr. Claypoole's bonus should be
substantially below a competitive level, and set this amount at $60,000. The
amount of any bonus for 1999 will depend upon achievements of financial
objectives for the year, the Chief Executive Officer's success in implementing
Aztec strategy for increased service revenue, and his ability to fully integrate
and coordinate Aztec's operations; however, no bonus will be paid if 1999
pre-tax income is less than the 1998 level.
COMPENSATION COMMITTEE REPORT ON OPTION EXCHANGE
In November 1998, the Compensation Committee became concerned that the
Company's outstanding stock options might not continue to provide the incentive
and retention function for which those options had originally been issued
because of the decline in the price of the Company's stock from over $9.00 in
June of 1998 to $4.00 in November 1998. In response to this concern, a
recognized executive compensation consulting firm analyzed the Company's
existing stock options and reviewed stock option repricing strategies. This
firm's report noted that, given the November 1998 stock price of $4.00, the
option exercise price of all of Aztec's outstanding options were in excess of
the current market price; the exercise price of 13% of the outstanding options
was 125% of the then current market price; the exercise price of 68% of the
outstanding options was 247% of the then current market price; the exercise
price of 11% of the outstanding options was 268% of the then current market
price, and the exercise price of 8% of the outstanding options was 385% of the
then current market price. The report noted that any repricing of options could
provide the Company with an opportunity to reduce the number of outstanding
options. Prior to the option exchange, the number of outstanding options as a
percentage of the Company's outstanding stock was 28.9%. This amount was in
excess of the amount generally used in comparable companies.
Inquiries conducted by the Compensation Committee indicated that other
companies in the high technology industry had been confronted with this problem
and had made adjustments to stock options in order to continue to motivate their
employees. The Compensation Committee also concluded that the loss of key
employees could have a significant adverse impact on the Company's performance.
16
<PAGE>
Based on these considerations, on December 9, 1998, the Compensation
Committee determined that it was in the best interests of the Company and its
stockholders to reduce the number of outstanding options while at the same time
restoring the incentive nature of outstanding options held by employees
(including executive officers) by offering holders of those options the
opportunity to exchange their options for new options with an exercise price
equal to the December 14, 1998 closing market price of $3.96875 per share. In
determining the number of shares that would be subject to the terms of the new
options, the Committee followed calculations of value under the Black-Scholes
formula as calculated in the report of the executive compensation consulting
firm. These calculations provided the option holder with the same present value
before and after the exchange by reducing both the option exercise price and the
number of shares subject to the options. All other terms and conditions
applicable to the outstanding options remained the same.
A majority of the Company's employee option holders elected to participate
in the option exchange. The exchange was not offered to Non-Employee Directors.
As a result, the number of shares of the Company's stock subject to outstanding
options was reduced from approximately 6,368,345 shares or 28.9% of the
Company's outstanding stock to 4,558,051 shares or approximately 20.7% of the
Company's outstanding stock.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a federal income tax deduction to public companies for certain
compensation in excess of $1 million paid to a corporation's chief executive
officer or any of its four other most highly compensated executive officers.
Qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. Currently, options granted under the 1998
Stock Incentive Plan with an exercise price equal to the fair market value of
the Common Stock as of the date of grant qualify as performance based
compensation. Such options are qualified as performance based because the 1998
Stock Incentive Plan is subject to a transition rule under Section 162(m) which
expires at the Company's next annual meeting. The Compensation Committee intends
to review the potential effects of Section 162(m) periodically and in the future
may decide to amend the 1998 Stock Incentive Plan once the transition rule
expires and structure additional portions of the Company's compensation program
in a manner designed to permit deductibility for federal income tax purposes,
except in those limited cases where the stockholder value is maximized by an
alternative approach.
Compensation Committee
Clifford Mitman, Jr., Chairman
Lawrence M. Howell
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Company's Compensation Committee are Messrs.
Mitman and Howell. Dr. Tandowski, an employee of the Company, served on the
Compensation Committee until his resignation effective January 1, 1999. 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.
17
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company from June 11, 1998(1) (the first full day of trading
of the Common Stock of the Company) through December 31, 1998 with the
cumulative total return on (i) the Russell 3000 Index and (ii) a Line-of
Business Index consisting of companies in Aztec's Standard Industrial
Classification (SIC) code number 7373-Computer Integrated System Design. The
comparison assumes the investment of $100 on June 11, 1998 in the Company's
Common Stock and in each of the indices and, in each case, assumes reinvestment
of all dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AZTEC TECHNOLOGY PARTNERS,
INC. SIC CODE INDEX RUSSELL 3000 INDEX
<S> <C> <C> <C>
6/11/98 $100.00 $100.00 $100.00
6/30/98 $77.27 $115.92 $103.38
7/31/98 $87.39 $114.81 $101.50
8/31/98 $53.16 $91.56 $85.95
9/30/98 $54.48 $113.43 $91.82
10/31/98 $55.09 $122.62 $98.79
11/30/98 $38.58 $147.75 $104.69
12/31/98 $36.76 $191.15 $111.21
DOLLARS
</TABLE>
<TABLE>
<CAPTION>
6/11/98 6/30/98 7/31/98 8/31/98 9/30/98 10/31/98 11/30/98
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Aztec Technology Partners, Inc.......... 100.00 77.27 87.39 53.16 54.48 55.09 38.58
SIC Code Index.......................... 100.00 115.92 114.81 91.56 113.43 122.62 147.75
Russell 3000 Index...................... 100.00 103.38 101.50 85.95 91.82 98.79 104.69
<CAPTION>
12/31/98
-----------
<S> <C>
Aztec Technology Partners, Inc.......... 36.76
SIC Code Index.......................... 191.15
Russell 3000 Index...................... 111.21
</TABLE>
(1) The Company's Common Stock began trading on the Nasdaq National Market on
June 10, 1998 at a price of $11.00 per share.
18
<PAGE>
PROPOSAL 2--RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as the Company's independent accountants for the current fiscal year.
PricewaterhouseCoopers LLP is the Company's current independent accountants.
Although stockholder ratification of the Board of Directors' selection of
PricewaterhouseCoopers LLP is not required by law, the Board of Directors
believes that it is advisable to give stockholders the opportunity to ratify
this selection. If this proposal is not approved at the Annual Meeting, the
Board of Directors will reconsider its selection of PricewaterhouseCoopers LLP.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.
THE BOARD OF DIRECTORS BELIEVES THAT THE SELECTION OF THE FIRM OF
PRICEWATERHOUSECOOPERS LLP AS ITS INDEPENDENT ACCOUNTANTS IS IN THE BEST
INTEREST OF AZTEC AND ITS STOCKHOLDERS, AND RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THIS PROPOSAL.
OTHER MATTERS
Management does not know of any other matters which may come before the
Annual Meeting. However, if any other matters are properly presented to the
Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote, or otherwise act, in accordance with their judgment on such
matters.
ADDITIONAL INFORMATION
SOLICITATION COSTS
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews. Brokers, custodians and fiduciaries will be
requested to forward proxy soliciting material to the owners of shares held in
their names and the Company will also reimburse them for out-of-pocket expenses
incurred on behalf of the Company.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders submitted pursuant to Rule 14a-8 under the
Exchange Act intended to be presented at the 2000 Annual Meeting of Stockholders
must be received by the Secretary of the Company at the Company's principal
office in Braintree, Massachusetts not later than December 28, 1999 for
inclusion in the proxy statement for that meeting.
In addition, the Company's Amended and Restated By-laws require that the
Company be given advance notice of stockholder nominations for election to the
Company's Board of Directors and of other business which stockholders wish to
present for action at an annual meeting of stockholders (other than matters
included in the Company's proxy statement in accordance with Rule 14a-8). The
required notice must be made in writing delivered or mailed by first class
United States mail, postage prepaid, to the Secretary and received not less than
60 days nor more than 90 days prior to such meeting; provided, however, that if
less than 70 days' notice or prior public disclosure of the date of the 2000
Annual Meeting is given to stockholders, such nomination or notice of other
business shall have been mailed or delivered to the Secretary of the Company not
later than the close of business on the 10th day following the date on
19
<PAGE>
which the notice of meeting was mailed or such public disclosure was made,
whichever occurs first. The Company has not yet determined the date of its 2000
Annual Meeting.
Persons named as proxies in this Proxy Statement will have discretionary
authority to vote on any matter proposed by a stockholder for consideration at
the Annual Meeting. Persons named as proxies in the proxy statement for the 2000
Annual Meeting will have discretionary authority to vote on any matter proposed
by a stockholder for consideration at the 2000 Annual Meeting that is not
included in the Company's proxy statement relating to such meeting if the
Company has not received notice of such proposal prior to March 12, 2000.
By Order of the Board of Directors,
/s/ Douglas R. Johnson
--------------------------------------
Douglas R. Johnson
SECRETARY
April 23, 1999
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE ANNUAL
MEETING. WHETHER OR NOT STOCKHOLDERS PLAN TO ATTEND, STOCKHOLDERS ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE.
STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY VOTE THEIR SHARES PERSONALLY EVEN
THOUGH THEY HAVE SENT IN THEIR PROXIES.
20
<PAGE>
PROXY CARD
AZTEC TECHNOLOGY PARTNERS, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints James E. Claypoole, Ross J. Weintraub,
Alexander A. Bernhard, or any of them with full power of substitution,
proxies to vote at the Annual Meeting of Stockholders of Aztec Technology
Partners, Inc. (the "Company") to be held on June 2, 1999 at 10:00 a.m.,
local time, at the offices of Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts 02109, and at any adjournment or adjournments thereof, hereby
revoking any proxies heretofore given, to vote all shares of Common Stock of
the Company held or owned by the undersigned as directed on the reverse, and
in their discretion upon such other matters as may come before the meeting.
(To be Signed on Reverse Side)
SEE REVERSE
SIDE
<PAGE>
Please Detach and Mail in the Envelope Provided
A / X Please mark your
votes as in this
example
<TABLE>
<CAPTION>
WITHHOLD
AUTHORITY
TO VOTE FOR
ALL
FOR NOMINEES NOMINEES
<S> <C> <C> <C>
1. To elect the / / / / Clifford Mitman, Jr.
nominees at right as Benjamin Tandowski
Class II Director until
the 2002 Annual
Meeting. (Except as
marked below)
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
[ ] FOR ALL NOMINEES
EXCEPT FOR THE FOLLOWING:
(TO WITHHOLD AUTHORITY 2. To ratify the selection // // //
TO VOTE FOR ONE OR MORE of PricewaterhouseCoopers
NOMINEES, WRITE THE LLP as the Company's
NOMINEE'S NAME BELOW): independent accountant
for the current fiscal year.
- --------------------------
- --------------------------
This proxy, when properly executed, will be voted in the
manner directed by the undersigned. If no direction is
given with respect to any election to office or
proposal specified above, this proxy will be voted for
such election to office or proposal.
Please mark this box if you will be attending the //
meeting and return the proxy card promptly using
the enclosed envelope.
Please mark this box if address change and note //
at left.
SIGNATURE(S) DATE , 1999
------------------------- ---------------------------- ------------------
</TABLE>
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign personally. When signing as attorney, executor, administrator,
trustee or guardian, indicate full title as such.
