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)   September 15, 2008


ADDVANTAGE TECHNOLOGIES GROUP, INC.
( Exact name of Registrant as specified in its Charter)

Oklahoma
(State or other Jurisdiction of Incorporation)

1-10799
73-1351610
(Commission file Number)
(IRS Employer Identification No.)
   
1221 E. Houston, Broken Arrow Oklahoma
74012
(Address of Principal Executive Offices)
(Zip Code)

(918) 251-9121
(Registrant's Telephone Number, Including Area Code)


(Former Name or Former Address, if Changed Since Last Report)

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 (see General InstructionA.2. below):

□
Written Communication 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© under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 1.01   Entry into a Material Definitive Agreement.
 
On September 15, 2008, ADDvantage Technologies Group, Inc. (the “Company”) appointed Scott Francis, as Vice President, Chief Financial Officer and Chief Accounting Officer.  Pursuant to a letter agreement dated September 15, 2008, between the Company and Mr. Francis, his compensation will include an annual salary of $120,000 and a stock option grant to purchase 10,000 shares of the Company’s common stock.  Mr. Francis will also participate in the Senior Management Incentive Compensation Plan.
 
Item 5.02   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
On September 15, 2008, ADDvantage Technologies Group, Inc. (the "Company") appointed Dan O’Keefe, age 40, as Vice President, Chief Operating Officer and Secretary.  Mr. O’Keefe previously served as Vice President, Chief Financial Officer, Chief Accounting Officer and Secretary of the Company since March 2006.  Prior to joining the Company, O’Keefe served as the Corporate Controller for LinkAmerica Corporation from 1997 through 2001 and as President of Interstate Express, Inc., a LinkAmerica Company, from 2001 through 2005. 
 
On September 15, 2008, the Company appointed Scott A. Francis, age 41, as Vice President, Chief Financial Officer and Chief Accounting Officer.  Prior to his employment by the Company, Mr. Francis served for four years as a controller of accounting for Vanguard Car Rental USA, Inc., a car rental company located in Tulsa, Oklahoma.  From 1997 to 2004, he served as manager of financial reporting for WilTel Communications, Inc., a public telecommunications company located in Tulsa, Oklahoma, for which he managed all financial reporting and general accounting functions.  The material terms of Mr. Francis’ employment agreement are discussed in Item 1.01 above.
 
Item 7.01  Regulation FD Disclosure 
 
ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced that it has named Scott A. Francis as vice president, chief financial officer and chief accounting officer. In conjunction with the hiring of Mr. Francis, the Company announced that Daniel E. O’Keefe, who previously held these positions, will serve as vice president, chief operating officer and secretary.  In O’Keefe’s new position, he will pursue corporate objectives and serve as a liaison between the operating business units of the Company.  A copy of the press release is furnished as Exhibit 99.1 to this Current Report filed on Form 8-K and is incorporated herein by reference.
 
  Item 9.01   Financial Statements and Exhibits
 
(d) Exhibits
 
The following exhibits are furnished herewith:
 
Exhibit 10.1
Exhibit 99.1
Employment contract for Mr. Francis.
Press release dated September 16, 2008, issued by the Company.
 

 
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.

 
ADDVANTAGE TECHNOLOGIES GROUP, INC.
 
     
 
Date: September 18, 2008
 
     
     
     
 
By: /s/ Daniel E. O’Keefe
 
 
Daniel E. O’Keefe
 
 
Vice-President, Chief Operating Officer & Secretary
 
     



Exhibit Index

Exhibit Number
Description
10.1
99.1
Employment contract for Mr. Francis.
Press release dated September 16, 2008, issued by the Company.
 
9/18/2008
 
Mr. Scott A. Francis
6531 E. 84th Street
Tulsa, Oklahoma  74133

Dear Scott:

We are writing this letter to formally offer you the position of ADDvantage Technologies Group as Chief Financial Officer “CFO”.

As you know, we have conducted an extensive search and, after careful consideration of your qualifications in relation to our requirements, and as compared to the qualifications of other candidates considered, we are pleased to offer you this key position in our organization.

Outlined below are (1) your role and responsibilities as CFO and (2) the compensation package we are offering.


Role and Responsibilities


As CFO, you will report directly to me as Vice President & COO and be responsible for managing and participating in the accounting, financial and administrative functions of the Company, including accounting and financial reporting, SEC reporting, SOX compliance, tax planning/reporting, investor relations, credit administration, banking relations, human resources, information technology, and risk management.  More specifically, your primary responsibilities will include:

1.
Accounting/Financial Reporting – Managing the preparation of financial statements and reports and providing associated reviews, interpretations and analyses to senior management.
 
·  
Prepare periodic analyses and evaluations of the profitability of company operations and its business units.

2.
External Reporting – Supervising and participating in the  preparation of reports to the SEC, including 10-Qs, 10-Ks, proxies, and related reports.

3.
Tax Planning/Compliance – Planning and coordinating company tax planning and reporting functions, including state and federal tax reporting, working with the independent CPA firm.
 
4.
Cash Flow Management – Managing the preparation of cash flow projections and the management of the company's cash position, and initiating/implementing procedures and actions aimed at improving the company's cash flow.

5.
Policies/Procedures/Controls – Developing, and supervising the implementation of, policies, procedures and controls governing assigned functions, including accounting and financial reporting, credit, and information technology.

6.
Human Resources – Directing the company's human resource functions and participating actively in the recruitment and selection of key personnel, administration of compensation and benefit programs, preparation and distribution of employee handbooks and related HR communication materials, and the design and implementation of employee training and development programs.

7.
Financial Audit – Managing the company's relationship with the independent CPA firm, negotiating and controlling audit fees, and reviewing audit findings with the Audit Committee of the Board of Directors.

8.
Banking Relations – Participating in the maintenance of relationships with banks and financial institutions, administering loans and credit agreements, and ensuring compliance with associated reporting requirements.

9.
Investor Relations – Participating in investor relations activities, including presentations to investor groups, responses to questions and inquiries from investors, and the preparation of the company's annual report.

10.
Credit Administration – Supervising and participating in the company's credit function, including the establishment of credit policies and procedures, approval of customer credit, and collection of outstanding balances.

11.
Risk Management – Playing a lead role in the identification and management of the company's business risks and in the determination of associated insurance requirements.

Once you are on board, I will work with you in defining your responsibilities more specifically and in determining your initial priorities in the job.

 
Compensation Package

 
The compensation package we are offering includes the following basic elements:

1.
Base Salary – As discussed, your starting base salary will be $10,000 paid monthly ($120,000 on an annualized basis) to be paid according to our normal payroll procedures and subject to normal withholdings.

2.
Incentive Compensation – Beginning with our 2009 fiscal year, starting 10/1/2008, you will be eligible to participate in the company’s management incentive compensation plan.  Under this plan, you will be able to earn incentive awards, in addition to base salary, up to 27.5% of your annual salary based on performance in relation to the metrics of the plan.  I will provide you with a copy of the incentive plan once you are on board.

3.
Equity Incentive Plan – As discussed, you will be eligible to participate in the company’s incentive stock option plan through which you will be granted options on 10,000 shares of common stock in ADDvantage Technologies Group, Inc.  You will vest in these options as they become exercisable in four installments of 2,500 shares annually over a four-year period.

4.
Automobile Allowance – You will be provided with an automobile allowance of $300 per month ($3,600 annually).

5.
Employee Benefits – You will be eligible to participate in the company’s group insurance and employee benefit plans, according to the terms and conditions of each plan:
 
·  
Group Medical and Dental Insurance – Eligible the first day of the month following 90 days of service.  Under both our group health and group dental plans, you can select from HMO or PPO coverage options.
 
·  
Life Insurance – Eligible the first day of the month following 90 days of service.  The company will pay for $25,000 of life insurance coverage for you, $5,000 of coverage for your spouse, and $3,000 of coverage for each of your children.
 
·  
Accidental Death and Disability (AD&D) – Eligible the first day of the month following 90 days of service.  This insurance protection is paid by the company.
 
·  
Long-Term Disability (LTD) – Eligible the first day of the month following 90 days of service.  This insurance protection is paid for by the company.
 
·  
Section 125 Flexible Spending Account – Eligible the first day of the month following 90 days of service.  Under this program, you will be able to use pre-tax dollars to pay for childcare expenses and healthcare expenses not covered by group insurance.
 
·  
401-k Profit Sharing Plan – Eligible the first day of the quarter following one year of service.  The company will match your contributions on a dollar-for-dollar basis up to 5% of your annual compensation.
 
·  
Vacation – Ten days of paid vacation time, beginning with your first year of employment earned on a pro-rata basis over the first year.
 

*     *     *     *     *     *     *
 
Please note that the offer contained in this letter will be effective for seven days.  This letter, in conjunction with the human resources policies of ADDvantage Technologies Group, Inc., contains the complete understanding regarding your employment and supersedes any and all other agreements, whether oral or written.  No amendment, modification, waiver or addition to it will be valid and binding unless it is in writing and signed by both you and myself.

At your earliest convenience, please sign and return one copy of this letter to confirm that you accept our employment offer and that you are not bound by any agreements, contracts or commitments which would, in any way, limit your performance and contributions in the position we are offering.  In addition, your signing this letter will indicate that you understand that our offer does not in any way represent an employment contract or any other commitment to your employment with the company for a specific term.

*     *     *     *     *     *     *

We look forward to your joining our management team at ADDvantage Technologies.  We understand that you will begin your employment with the company no later than Monday, September 15, 2008.

Sincerely,



Dan O’Keefe
Vice President/COO

Agreed to:


____________________________________
Scott A. Francis                                                   Date




ADDvantage Technologies Group, Inc.
1221 E. Houston
Broken Arrow, Oklahoma 74012

For further information
KCSA Strategic Communications
Company Contact:
David Burke
Ken Chymiak        (9l8) 25l-2887
(212) 896-1258
Dan O’Keefe         (9l8) 25l-2887
dburke@kcsa.com

ADDvantage Technologies Group, Inc. Appoints Scott Francis
Chief Financial Officer
Daniel O’Keefe appointed to chief operating officer


BROKEN ARROW, Oklahoma September 17, 2008 – ADDvantage Technologies Group, Inc. (NASDAQ: AEY), today announced that it has named Scott A. Francis as vice president, chief financial officer and chief accounting officer. In conjunction with the hiring of Mr. Francis, the Company announced that Daniel E. O’Keefe, who previously held these positions, will serve as vice president, chief operating officer and secretary.  In O’Keefe’s new position, he will pursue corporate objectives and serve as a liaison between the operating business units of the Company.

As chief financial officer and chief accounting officer, Francis will be responsible for all areas of financial reporting, general accounting, information technology and risk management of the Company.

Francis comes to ADDvantage Technologies from Vanguard Car Rental USA, Inc. where he served as a controller of accounting since 2004 and directed various accounting functions including risk management, commissions, general accounting, employee benefits and financial systems. Prior to that, he served as manager of financial reporting for WilTel Communications, Inc., for which he managed all financial reporting and general accounting functions.  Francis also worked for The Williams Companies, Inc. in their SEC financial reporting and consolidations accounting area as well as Ernst & Young.  Francis graduated with a B.S. in accounting from Oklahoma State University in 1989.

Commenting on the hire, Ken Chymiak, chief executive officer of ADDvantage Technologies, stated, “We are pleased to be adding someone of Scott’s financial background, which will help to strengthen our executive management team. His experience and knowledge will be of great value to our company as we position ourselves for the future and begin to put in place our succession plans for the management of ADDvantage Technologies. He will no doubt be an asset as we continue to expand our business both domestically and internationally.”

“Joining the management team of ADDvantage Technologies is an exciting opportunity for me,” Francis said. “As an industry leader in providing equipment to a vast array of CATV operators, ADDvantage Technologies has great potential for future growth, given the current and expected future demand for increased bandwidth and system upgrades required to keep operators competitive. I look forward to the endeavor and the opportunities that lie ahead.”


About ADDvantage Technologies Group, Inc.

ADDvantage Technologies Group, Inc. supplies the cable television (CATV) industry with a comprehensive line of new and used system-critical network equipment and hardware from leading manufacturers, including Scientific-Atlanta and Motorola, as well as operating a national network of technical repair centers.  The equipment and hardware ADDvantage distributes are used to acquire, distribute, and protect the broad range of communications signals carried on fiber optic, coaxial cable and wireless distribution systems, including television programming, high-speed data (Internet) and telephony.

ADDvantage operates through its subsidiaries, Tulsat Corporation, ADDvantage Technologies Group of Nebraska, Inc., NCS Industries, Inc., ADDvantage Technologies Group of Missouri, Inc., ADDvantage Technologies Group of Texas, Tulsat-Atlanta, LLC, Jones Broadband International, Inc. and Tulsat-Pennsylvania LLC. For more information, please visit the corporate web site at www.addvantagetech.com .


The information in this announcement may include forward-looking statements.  All statements, other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements.  These statements are subject to risks and uncertainties, which could cause actual results and developments to differ materially from these statements.  A complete discussion of these risks and uncertainties is contained in the Company’s reports and documents filed from time to time with the Securities and Exchange Commission.