<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
- ----- Exchange Act of 1934 for the quarterly period ended June 30, 1999
- ----- Transition Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the transition period from to .
Commission Fle Number 000-24789
SYNERGY 2000, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its Charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 64-0872630
- ------------------------------------------------------------- ---------------------------------
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
2815 Cox Neck Road, Chester, Maryland, 21614
--------------------------------------------
(Address of principal executive offices)
(410) 643-8320
--------------
(Telephone)
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
--- ---
As of July 1, 1999, Registrant had outstanding 10,651,500 shares of Common
Stock, $.001 par value.
<PAGE>
SYNERGY 2000, INC.
Table of Contents
PART I FINANCIAL INFORMATION
ITEM 1 - Financial Statements
Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998
Consolidated Statements of Operations for the three and six months
ended June 30, 1999 and 1998
Consolidated Statements of Retained Earnings as of June 30, 1999.
Consolidated Statements of Cash Flows for the six months ended June
30, 1999 and June 30, 1998
Consolidated Notes to Financial Statements
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
SIGNATURES
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
1. EXHIBITS
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
SYNERGY 2000, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Current Assets
Cash $198,999 $90,212
Accounts Receivable 307,926 214,718
Common Stock Subscriptions Receivable 112,500 112,500
Other Current Assets -- 11,261
---------- ----------
Total Current Assets $619,425 $428,691
Equipment, Net 14,816 9,388
Other Assets:
Intangible Assets, Net 864,706 912,745
Organization Costs, Net 72 93
---------- ----------
Total Other Assets 864,778 912,838
---------- ----------
Total Assets $1,499,019 $1,350,917
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts Payable $66,316 $15,841
Accrued Payroll Taxes 2,309 --
---------- ----------
Total Current Liabilities $68,625 $15,841
Deferred Income Taxes 32,865 8,281
Minority Interest in Consolidated Subsidiary 426,495 450,768
Stockholder's Equity:
Common Stock, Par Value $.001:
Authorized 25,000,000 Shares
Issued and Outstanding 10,851,500 Shares 10,651 10,651
Common Stock Subscribed, 112,500 Shares 112,500 112,500
Capital in Excess of Par Value of Common Stock 761,649 761,649
Retained Earnings 86,234 (8,773)
---------- ----------
Total Stockholders' Equity 971,034 876,027
---------- ----------
Total Liabilities and Stockholders' Equity $1,499,019 $1,350,917
---------- ----------
</TABLE>
See accompanying Consolidated Notes to Financial Statements
<PAGE>
SYNERGY 2000, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- --------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Fees Billed $517,450 $926,447 $1,380,134 $999,669
Operating Expenses:
Salaries 83,261 60,760 149,791 121,520
Contract Services 238,828 438,058 889,407 447,928
Taxes and Licenses 7,751 5,892 14,371 10,590
Auto and Truck 3,004 -- 3,004 1,395
Travel and Business 20,502 15,227 39,207 26,784
Meals and Entertainment 3,444 442 4,184 1,277
Advertising 1,050 9,935 26,050 58,260
Professional Fees 27,720 4,500 29,544 14,248
Rent 2,776 2,985 5,815 5,914
Telephone 6,497 5,140 11,674 10,575
Supplies 8,862 3,029 10,940 9,291
Insurance 40,751 16,435 45,557 20,118
Postage and Shipping 978 697 1,493 1,802
Dues and Publications 616 120 616 652
Investor Relations 191 326 3,350 4,416
Amortization 24,031 11 48,061 22
Depreciation 951 226 1,478 444
Miscellaneous 124 322 274 398
------- -------- ------- --------
Total Operating Exoenses 471,337 564,105 1,284,816 735,634
------- -------- ------- --------
Net Income (Loss) Before Income Taxes 46,113 362,342 95,318 264,035
Income Tax (Expense) Benefit -15,041 -95,171 -24,584 -94,164
------- -------- ------- --------
Net Income (Loss) Before Minority Interest 31,072 267,171 70,734 169,871
Minority Interest in Net loss 11,438 -661 24,273 -661
------- -------- ------- --------
Consolidated Net Income (Loss) $42,510 $266,510 $95,007 $169,210
------- -------- ------- --------
</TABLE>
See accompanying Consolidated Notes to Financial Statements
<PAGE>
SYNERGY 2000, INC.
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
<TABLE>
<CAPTION>
Capital Total
Common In Excess Retained Stock-
Common Stock of Par Earnings Holders'
Stock Subscribed Value (Deficity) Equity
------- ---------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Balance- September 30, 1998 $10,637 $112,500 $726,663 $49,544 $899,344
Shares sold 14 -- 34,986 -- 35,000
Net Income -- -- -- (58,317) -58,317
------- -------- -------- ------- --------
Balance- December 31, 1998 10,651 112,500 761,649 (8,773) 876,027
Net Income -- -- -- 52,497 52,497
------- -------- -------- ------- --------
Balance- March 31, 1999 $10,651 $112,500 $761,649 $43,724 $928,524
Shares sold -- -- -- -- 0
Net Income -- -- -- 42,510 42,510
------- -------- -------- ------- --------
Balance- June 30, 1999 $10,651 $112,500 $761,649 $86,234 $971,034
------- -------- -------- ------- --------
</TABLE>
See accompanying Consolidated Notes to Financial Statements
<PAGE>
SYNERGY 2000, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
------------------------
June 30, June 30,
1999 1998
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $70,734 $169,871
Adjustments to Reconcile Net Income (Loss) to Net Cash
Cash Provided by (Used) in Operating Activities:
Depreciation 1,478 444
Amortization 48,061 21
Dec (Inc) in Accounts receivable (93,208) (459,059)
Inc. (Dec.) in Other Assets 11,261 --
Inc. (Dec.) in Accounts Payable 50,475 175,200
Inc. (Dec.) in Payroll Taxes 2,309 1,331
Inc. (Dec.) in Deferred Income Taxes 24,584 94,164
-------- --------
Net Cash Provided by (Used) in Operating Activities $115,694 ($18,028)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Equipment -6,907 -863
-------- --------
Net Cash Used in Investing Activities -6,907 -863
-------- --------
NET INCREASE (DECREASE) IN CASH $108,787 ($18,891)
CASH - BEGINNING 90,212 137,612
-------- --------
CASH - ENDING $198,999 $118,721
-------- --------
</TABLE>
See accompanying Consolidated Notes to Financial Statements
<PAGE>
SYNERGY 2000, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
The accompanying unaudited consolidated financial statements of Synergy 2000,
Inc. and subsidiary (the Company) have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the regulations of the Securities and Exchange Commission. Accordingly,
they do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six month period ended June 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999. These interim consolidated financial statements should be read in
conjunction with the financial statements and notes for the year ended December
31, 1998.
Organization and Business - The Company is an information systems integrator and
management consulting firm providing value added technology and management
solutions for companies to prepared them tactically and strategically for the
Year 2000 and beyond. The Company offers a variety of products and services for
solving systems' problems related to the Year 2000 and the inability to process
computer application code with date-related fields.
On June 25, 1998, the Company and Argos Technologies, Inc. (an unrelated
company) agreed to form Argos 2000, Inc. for the purpose of marketing Year 2000
compatible policy administration software to the auto insurance industry. The
Company received 51% of the newly issued common stock of Argos 2000, Inc. in
exchange for 200,000 shares of its $.001 par value common stock. This common
stock is not reflected as issed and outstanding in the accompanying unaudited
financial statements since it is eliminated in consolidation. Argos
Technologies, Inc. received 49% of the newly issued common stock of Argos
2000, Inc., plus certain contingent commissions based on sales, in exchange
for Argos 2000, Inc., receiving an exclusive non-transferable, license,
throughout the world, to market certain proprietary software. This
transaction was valued at $980,785 which was the estimated fair value of the
common stock issued by Argos 2000, Inc. as of June 25, 1998.
Since the Company's clients include all industries, its ability to collect
amounts due from them as a result of extending them credit, is not affected by
economic fluctuations in any particular industry.
Principles of Consolidation - The consolidated financial statements include the
accounts of the Company and its 51% owned subsidiary, Argos 2000, Inc. All
significant intercompany transactions and balances have been eliminated.
Revenue Recognition - Revenue from contract consulting services are recognized
on the percentage-to-completion method. Revenue frm sales of software and
software documentation products is generally recognized upon product shipment
provided that no significant vendor obligations remian and collection of the
resulting receivable is deemed probable.
Depreciation - The company's equipment is depreciated using the straight-line
method. Depreciation expense totalled $1,478 for the six months ended June 30,
1999 and $444 for the six months ended June 30, 1998.
Intangible Assets - In June 1998, Argos 2000, Inc, acquired an exclusive,
non-transferable, license, throughout the world, to market a fully automated
year 2000 compatible, policy administration sysatem designed for the auto
insurance industry. This intangible asset is amortized using the straight-line
method over 10 years. Amortization expense totalled $48,039 for the six months
ended June 30, 1999.
<PAGE>
SYNERGY 2000, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
June 30, 1999
Organization Costs - Organization cost ($215) are being amortized using the
straight-line method over 60 months. Amortization expense charged to operations
amounted to $22 for the six months ended June 30, 1999 and 1998. Accumulated
amortization was $143 at June 30, 1999.
Deferred Income Taxes - For income tax reporting, the Company uses accounting
methods that recognize depreciation sooner than for financial statement
reporting and does nt recognize income and certain expenses until received or
paid. As a result, the basis of equipment, accounts receivable, and certain
accrued expenses for financial reporting exceeds its tax basis. Deferred
income taxes have been recorded for the excess, which will be taxable in
future periods through reduced depreciation deductions, and increased income for
tax purposes.
Use f Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain amounts and disclosures. Accordingly,
actual results could differ from those estimates.
NOTE 2 - EQUIPMENT
- ------------------
Equipment consists of the following:
Computer Equipment $18,235
Accumulated Depreciation (3,419)
-------
$14,816
-------
NOTE 3 - INCOME TAXES
- ---------------------
The income tax provision consists of the following:
1999 1998
------- -------
Current $ -- $ --
Deferred 24,584 94,164
------- -------
$24,584 $94,164
------- -------
The income tax provision differes from the expense that would result from
applying statutory rates to income befre income taxes because of nondeductible
meals and entertainment of $2,092 in 1999 and $639 in 1998.
NOTE 4 - STOCKHOLDERS' EQUITY
- -----------------------------
Common Stock Subscribed - On December 31, 1998, 250,000 shares of the Company's
$.001 par value common stock was subscribed to for a total price of $250,000.
For the year ended December 31, 1997, $137,500 of the subscriptions were
received. The remaining $112,500 was outstanding at June 30, 1999.
Net Income Per Share - Net income per common share has not been computed since
it is not significant.
<PAGE>
SYNERGY 2000, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
The Company's revenues are derived from the performance of consulting and
management arrangements. These arrangements generally last several months and
generally are not with the same client. The Company's future revenues are always
dependent upon obtaining additonal contracts. The company's results may vary
from quarter to quarter based upon the number of contracts performed and the
stage of completion of during those quarters.
Statement of Operations June 30, 1999 to June 30, 1998 (unaudited)
The Company's revenues or fees billed was approximately $517,000 for the quarter
ended June 30, 1999 compared to approximately $926,000 for the comparable period
in 1998. The decrease was due to a combinations of factors. For the quarter
ended June 30, 1998, the Company earned and was paid an extraordinary bonus of
$150,000 from one of its customers as a result of achieving difficult
contractual milestones. For the quarter ended June 30, 1999, The Company was
involved in negotiations for two large contracts which consumed considerable
time and money with very little generation of revenue. These two contracts were
ultimately signed, which should generate significant revenue during the next two
to three quarters.
The Company's operating expenses during the quarter ended June 30, 1999 were
approximately $421,000 compared to $564,000 during the comparable period in
1998. The decreased expenses were primarily attributable to the decreased
volume. The decrease, however, was not proportional due primarily to increased
amoritization, professional fees and salaries.
As a result of the foregoing, the Company had net income of $42,500 for the
quarter ended June 30, 1999 as compared to a $266,500 in the net income of
approximately comparable quarter in 1998.
The Company's revenues or fees billed was approximately $1,380,100 for the six
month ended June 30, 1999 compared to approximately $999,700 for the comparable
period in 1998. The increase was due to an increase in the value of contracts
during this period.
The Company's operating expenses during thesix month period ended June 30, 1999
were approximately $1,284,800 compared to $735,600 during the comparable period
in 1998. The increased expenses were primarily attributable to the increased
volume, plus an increase in amoritization, professional fees and salaries. The
Company had net income of $95,700 for the six month period ended June 30, 1999
as compared to a net income of approximately $169,200 in the comparable quarter
in 1998. The decrease in net income is primarily the result of an increase in
expenses relative to revenues.
The Company is not aware of any trend that will adversely affect its revenues in
1999. The Company relies on programmers and consultants to peform its contracts
and from time to time there have been shortages of such programmers. The Company
has not in the past nor does it anticipate any difficulty in the immediate
future in obtaining programmers. Any change could result in increased fees paid
for outside technical help.
The Company's revenues beyond 1999 are dependent upon its ability to diversify
beyond offering Year 2000 services, which it is currently doing.
Liquidity
The Company's working capital was approximately $550,800 as of June 30, 1999 as
compared to approximately $466,900 at June 30, 1998. The increase was primarly
attributable to cash and accounts receivable rising from the accumulation of
increased revenues and profits over the last twelve months.
<PAGE>
SYNERGY 2000, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
The Company has derved its cash from operation and the sale of shares. The
Company has no commitments for capital expenditures and believes its available
cash is adequate to cover its financial commitments for the next 12 months.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 10Q.
10.1 (b) Employment Agreement of Eli Dabich, Jr. dated as of June 30, 1999
10.1 (c) Employment Agreement of Jeanette T. Smith dated June 30, 1999
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
(Registrant) Synergy 2000, Inc.
Date 13-Aug-99
By /s/ Eli Dabich, Jr.
----------------------------
Eli Dabich, Jr. as President
<PAGE>
STATE OF DELAWARE )
) EMPLOYMENT AGREEMENT
COUNTY OF KENT )
AGREEMENT made as of this June 30 1999, between SYNERGY 2000, Inc., a
Delaware corporation, hereinafter called the Company and ELI DABICH, JR., a
resident of the state of Maryland, hereinafter called the Employee.
W I T N E S S E T H :
Whereas, the Company wishes to employ the Employee on the terms and
conditions hereinafter set forth;
Whereas, the Employee is willing to accept such employment, and
NOW, THEREFORE, the parties hereto, in consideration of the premises
and the mutual covenants and promises hereinafter contained, do hereby agree as
follows:
1. Employment. The Company agrees to employ Employee and Employee
agrees to be employed by the Company subject to the terms and provisions of this
Agreement.
2. Terms. The employment of Employee by the Company as provided by
Section 1 hereof will be for a period of one (1) year commencing on the date
hereof.
3. Duties. Employee shall serve as the President of the Company and
shall have such powers and duties as may be from time to time prescribed by the
Company's Board of Directors, provided that the nature of Employee's powers and
duties shall at all times be those of a person serving as the President of a
corporation of a size and conducting operations comparable to the Company.
During his employment hereunder Employee shall devote time to the business and
affairs of the Company and shall use his best efforts to advance the best
interests of the Company at all times.
4. Place of Performance. Employee shall perform his duties hereunder at
the principal executive offices of the Company, provided, however, that he may
be reasonably required to travel and render services in different locations from
time to time incident to the performance of duties.
5. Compensation. The Employee shall receive remuneration from the
Company for his services hereunder at such rate and in such manner as may from
time to time be mutually agreed between the Company and the Employee; provided,
however, that:
(a) the aggregate remuneration to the Employee from the
Company for any fiscal year of the Company shall not be less than One
humdred twenty-one Thousand ($121,000) Dollars, payable in Twelve (12)
monthly installments at the end of each month during the term of this
Agreement. If the Company does not have adequate funds from operations
to pay the full salary, any monthly salary payment may be deferred for
up to six months until funds are available to make such payment. Any
deferred salary payments shall not accrue interest; however, such
payments may at the employee's election be used to exercise stock
options and may be converted to common stock.
(b) the Company shall also pay such additional salaries and
other compensation as may, from time to time, be approved by the Board
of Directors.
6. Expenses. During the term of Employee's employment hereunder, the
Company shall pay the reasonable expenses incurred by Employee (within limits
that may be established by the Board of Directors of the Company) in the
performance of his duties hereunder (or shall reimburse Employee on account of
such expenses paid directly by Employee) promptly upon the submission to the
Company by Employee of appropriate vouchers prepared in accordance with
applicable regulations of the Internal Revenue Service. Should any travel and
entertainment expenses as drawn by Employee be held nondeductible as travel and
entertainment expenses to Company by the Internal Revenue Service, then such
nondeductible travel and entertainment expenses shall be considered additional
compensation to Employee.
<PAGE>
7. Termination. Either party hereto may terminate this agreement upon
thirty days prior written notice to the other.
8. Vacation. Employee shall be entitled to a certain number of paid
vacation days in each calendar year in accordance with the vacation policies and
practices of the Company as determined by the Board of Directors of the Company,
but not less than twenty-one (21) business days in any calendar year, prorated
appropriately on account of any calendar year during which Employee renders
services hereunder for less than the entire such year. In the event this
Agreement is terminated for any reason Employee shall be entitled to be paid for
vacation accrued but not taken. Such payment shall be made in a lump sum upon
the date of termination.
9. Meetings. The Company may require the Employee to attend such
business meetings and seminars each year, as shall in the Company's opinion
serve to improve and maintain Employee's competence, to the Company's advantage
and benefit; provided, however, that the Company shall bear the expense of
attending such meetings.
10. Insurance. The Company may in its discretion at any time after the
execution of this Agreement apply for and procure, as owner and for its own
benefit, life and/or disability insurance on the Employee in such amounts and in
such form or forms as the Company may choose. The Employee, at the request of
the Company, shall submit to such medical examinations, supply such information,
and execute such documents as may be required by the insurance company or
companies to whom the Company has applied for such insurance.
11. Notices. All notices hereunder shall be in writing and shall be
deemed to have been given at the time when mailed in any general or branch
United States Post Office enclosed in a registered postpaid envelope addressed
to the last known address of the respective parties.
12. Non-Waiver. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
13. Validity. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
14. Default. Employee and the Company recognize that Employee's
services to be performed hereunder are of a unique, special, and extraordinary
character, and that in the event of any conduct by Employee violating any
provision of this Agreement, the Company shall be entitled, if it so elects, to
institute and prosecute proceedings in any court of competent jurisdiction,
either at law or in equity, to obtain damages for such conduct, to enforce
specific performance of such provision, to enjoin Employee from such conduct, or
to obtain any other relief, or any combination of the foregoing that the Company
may elect to pursue.
15. Attorney' Fees. If any suit or action shall be instituted to
enforce or interpret this Agreement, the prevailing party shall be entitled to
recover from the losing party, in addition to statutory costs, such sums as all
courts may adjudge as reasonable for the prevailing party's attorneys' fees in
such suit, action or any appeal thereof.
16. Counterparts. This Agreement is executed in two counterparts, each
of which shall be deemed an original and together shall constitute one and the
same agreement, with one counterpart being delivered to each party hereto.
<PAGE>
17. Succession. Except as otherwise herein expressly provided, this
Agreement shall inure to the benefit of and be binding upon the Company, its
successors and assigns, (including but not limited to any corporation, which may
acquire all or substantially all of the Company's assets and business or with or
into which the Company may be consolidated or merged), and Employee, his heirs,
executors, administrator, and legal representatives, provided that the
obligations of Employee hereunder may not be delegated.
18. Gender. The use of masculine pronouns in this agreement shall not
construed in such a manner as to alter the intent of this agreement when applied
to female employees.
19. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware.
The parties hereto have executed this Agreement the day and year first
above written.
SYNERGY 2000 INC.
By:
--------------------------------
Title: President
-------------------------------
ELI DABICH, JR.
<PAGE>
STATE OF DELAWARE )
) EMPLOYMENT AGREEMENT
COUNTY OF KENT )
AGREEMENT made as of this June 30 1999, between SYNERGY 2000, Inc., a
Delaware corporation, hereinafter called the Company and Jeanette Tebrich Smith,
a resident of the state of California, hereinafter called the Employee.
W I T N E S S E T H :
STATE OF DELAWARE )
) EMPLOYMENT AGREEMENT
COUNTY OF KENT )
AGREEMENT made as of this June 30 1999, between SYNERGY 2000, Inc., a
Delaware corporation, hereinafter called the Company and Jeanette Tebrich Smith,
a resident of the state of California, hereinafter called the Employee.
W I T N E S S E T H :
Whereas, the Company wishes to employ the Employee on the terms and
conditions hereinafter set forth;
Whereas, the Employee is willing to accept such employment, and
NOW, THEREFORE, the parties hereto, in consideration of the premises
and the mutual covenants and promises hereinafter contained, do hereby agree as
follows:
1. Employment. The Company agrees to employ Employee and Employee
agrees to be employed by the Company subject to the terms and provisions of this
Agreement.
2. Terms. The employment of Employee by the Company as provided by
Section 1 hereof will be for a period of one (1) year commencing on the date
hereof.
3. Duties. Employee shall serve as the Executive Vice Predident of the
Company and shall have such powers and duties as may be from time to time
prescribed by the Company's Board of Directors, provided that the nature of
Employee's powers and duties shall at all times be those of a person serving as
the President of a corporation of a size and conducting operations comparable to
the Company. During his employment hereunder Employee shall devote time to the
business and affairs of the Company and shall use his best efforts to advance
the best interests of the Company at all times.
4. Place of Performance. Employee shall perform his duties hereunder at
the principal executive offices of the Company, provided, however, that he may
be reasonably required to travel and render services in different locations from
time to time incident to the performance of duties.
5. Compensation. The Employee shall receive remuneration from the
Company for his services hereunder at such rate and in such manner as may from
time to time be mutually agreed between the Company and the Employee; provided,
however, that:
<PAGE>
(a) the aggregate remuneration to the Employee from the
Company for any fiscal year of the Company shall not be less than One
humdred sixteen Thousand ($116,000) Dollars, payable in Twelve (12)
monthly installments at the end of each month during the term of this
Agreement. If the Company does not have adequate funds from operations
to pay the full salary, any monthly salary payment may be deferred for
up to six months until funds are available to make such payment. Any
deferred salary payments shall not accrue interest; however, such
payments may at the employee's election be used to exercise stock
options and may be converted to common stock.
(b) the Company shall also pay such additional salaries and
other compensation as may, from time to time, be approved by the Board
of Directors.
6. Expenses. During the term of Employee's employment hereunder, the
Company shall pay the reasonable expenses incurred by Employee (within limits
that may be established by the Board of Directors of the Company) in the
performance of his duties hereunder (or shall reimburse Employee on account of
such expenses paid directly by Employee) promptly upon the submission to the
Company by Employee of appropriate vouchers prepared in accordance with
applicable regulations of the Internal Revenue Service. Should any travel and
entertainment expenses as drawn by Employee be held nondeductible as travel and
entertainment expenses to Company by the Internal Revenue Service, then such
nondeductible travel and entertainment expenses shall be considered additional
compensation to Employee.
7. Termination. Either party hereto may terminate this agreement upon
thirty days prior written notice to the other.
8. Vacation. Employee shall be entitled to a certain number of paid
vacation days in each calendar year in accordance with the vacation policies and
practices of the Company as determined by the Board of Directors of the Company,
but not less than twenty-one (21) business days in any calendar year, prorated
appropriately on account of any calendar year during which Employee renders
services hereunder for less than the entire such year. In the event this
Agreement is terminated for any reason Employee shall be entitled to be paid for
vacation accrued but not taken. Such payment shall be made in a lump sum upon
the date of termination.
9. Meetings. The Company may require the Employee to attend such
business meetings and seminars each year, as shall in the Company's opinion
serve to improve and maintain Employee's competence, to the Company's advantage
and benefit; provided, however, that the Company shall bear the expense of
attending such meetings.
10. Insurance. The Company may in its discretion at any time after the
execution of this Agreement apply for and procure, as owner and for its own
benefit, life and/or disability insurance on the Employee in such amounts and in
such form or forms as the Company may choose. The Employee, at the request of
the Company, shall submit to such medical examinations, supply such information,
and execute such documents as may be required by the insurance company or
companies to whom the Company has applied for such insurance.
11. Notices. All notices hereunder shall be in writing and shall be
deemed to have been given at the time when mailed in any general or branch
United States Post Office enclosed in a registered postpaid envelope addressed
to the last known address of the respective parties.
12. Non-Waiver. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
13. Validity. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
14. Default. Employee and the Company recognize that Employee's
services to be performed hereunder are of a unique, special, and extraordinary
character, and that in the event of any conduct by Employee violating any
provision of this Agreement, the Company shall be entitled, if it so elects, to
institute and prosecute proceedings in any court of competent jurisdiction,
either at law or in equity, to obtain damages for such conduct, to enforce
specific performance of such provision, to enjoin Employee from such conduct, or
to obtain any other relief, or any combination of the foregoing that the Company
may elect to pursue.
15. Attorney' Fees. If any suit or action shall be instituted to
enforce or interpret this Agreement, the prevailing party shall be entitled to
recover from the losing party, in addition to statutory costs, such sums as all
courts may adjudge as reasonable for the prevailing party's attorneys' fees in
such suit, action or any appeal thereof.
16. Counterparts. This Agreement is executed in two counterparts, each
of which shall be deemed an original and together shall constitute one and the
same agreement, with one counterpart being delivered to each party hereto.
<PAGE>
17. Succession. Except as otherwise herein expressly provided, this
Agreement shall inure to the benefit of and be binding upon the Company, its
successors and assigns, (including but not limited to any corporation, which may
acquire all or substantially all of the Company's assets and business or with or
into which the Company may be consolidated or merged), and Employee, his heirs,
executors, administrator, and legal representatives, provided that the
obligations of Employee hereunder may not be delegated.
18. Gender. The use of masculine pronouns in this agreement shall not
construed in such a manner as to alter the intent of this agreement when applied
to female employees.
19. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware.
The parties hereto have executed this Agreement the day and year first
above written.
SYNERGY 2000 INC.
By:
---------------------------------
Title: Executive Vice President
---------------------------------
JEANETTE TEBRICH SMITH
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Audited
and Unaudited Consolidated Balance Sheet and Statement of Operations as of
December 31, 1998 and for the three month and six months period ended March
31 and June 30, 1999 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C> <C> <C>
<PERIOD-TYPE> Year 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 MAR-31-1999 JUN-30-1999
<PERIOD-END> DEC-31-1998 MAR-31-1999 JUN-30-1999
<CASH> 90,212 326,983 198,999
<SECURITIES> 0 0 0
<RECEIVABLES> 214,718 290,137 420,426
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 428,691 740,956 619,425
<PP&E> 11,329 11,329 14,816
<DEPRECIATION> 1,941 2,468 3,419
<TOTAL-ASSETS> 1,350,917 1,638,625 1,499,019
<CURRENT-LIABILITIES> 474,890 710,101 527,985
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 10,651 10,651 10,651
<OTHER-SE> 865,376 928,524 960,383
<TOTAL-LIABILITY-AND-EQUITY> 1,350,917 1,638,625 1,499,019
<SALES> 0 0 0
<TOTAL-REVENUES> 1,920,885 862,684 1,380,134
<CGS> 0 0 0
<TOTAL-COSTS> 1,883,832 813,479 1,284,816
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 37,053 49,205 95,318
<INCOME-TAX> 7,274 9,543 24,581
<INCOME-CONTINUING> 29,779 39,662 70,734
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 49,795 52,497 95,007
<EPS-BASIC> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
