U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER 0-25435
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SYMPOSIUM CORPORATION
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-4042921
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
410 PARK AVENUE, SUITE 830, NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices)
(212) 754-9901
(Issuer's Telephone Number, Including Area Code)
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 ( )?
Number of shares outstanding of each of the issuer's classes of common
equity as of November 9, 1999: 13,148,964 shares of common stock.
Transitional Small Business Disclosure Format Yes ( ) No (X)
<PAGE>
TABLE OF CONTENTS
PART I-FINANCIAL INFORMATION PAGE
Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)........1
Condensed Consolidated Balance Sheet-September 30, 1999...............1
Condensed Consolidated Statement of Operations
Three and Nine Months Ended September 30, 1999.....................2
Condensed Consolidated Statement of Stockholders' Equity
Nine Months Ended September 30, 1999................................3
Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1999................................4
Notes to Condensed Consolidated Financial Statements..................5
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.....................................................10
Item 2. Changes in Securities and Use of Proceeds.............................10
Item 3. Defaults Upon Senior Securities.......................................10
Item 4. Submission of Matters to a Vote of Security Holders...................10
Item 5. Other Information.....................................................10
Item 6. Exhibits and Reports on Form 8-K......................................11
(a) Exhibits..........................................................11
(b) Reports on Form 8-K...............................................11
Signatures....................................................................12
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
SYMPOSIUM CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
September 30, 1999
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<S> <C>
ASSETS (unaudited)
Current assets:
Cash and cash equivalents........................................................$ 318,686
Prepaid insurance................................................................ 30,827
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Total current assets................................................... 349,513
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Equipment (at cost, less accumulated depreciation)............................... 36,180
Deferred acquisition and financing costs......................................... 1,331,744
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Total assets....................................................................$ 1,717,437
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and other accrued expenses......................................$ 329,220
Due to stockholders.............................................................. 2,580
Net current liability in discontinued operations................................. 3,109
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Total current liabilities.............................................. 334,909
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Stockholders' Equity
Preferred stock, par value $.001 per share, authorized 10,000,000 shares;
no shares issued and outstanding.............................................. -
Common stock, par value $.001 per share, authorized 25,000,000 shares;
12,998,964 shares issued and outstanding at September 30, 1999................... 12,999
Additional paid-in capital....................................................... 9,435,553
Less: note receivable for 2,500,000 shares of common stock....................... (2,500,000)
Accumulated deficit.............................................................. (5,566,024)
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Total stockholders' equity............................................. 1,382,528
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Commitments and contingencies
Total liabilities and stockholders' equity.......................................$ 1,717,437
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</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
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<TABLE>
SYMPOSIUM CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
<CAPTION>
For the Three For the Nine
Months Ended Months Ended
September 30, 1999 September 30, 1999
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<S> <C> <C>
REVENUES:
Interest and dividend income........................................$ 66,313 $ 100,704
EXPENSES:
Salaries and benefits............................................... 250,404 416,429
Consulting expenses................................................. 3,374,034 3,861,385
Other operating expenses............................................ 457,932 865,789
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Total expenses.................................................... 4,082,370 5,143,603
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(Loss) from continuing operations before income tax provision....... (4,016,057) (5,042,899)
Provision for income taxes.......................................... - -
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(Loss) from continuing operations.................................. (4,016,057) (5,042,899)
DISCONTINUED OPERATIONS:
Loss from operations............................................... - (136,511)
Loss on disposal of discontinued operations........................ (42,000) (42,000)
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(Loss) before extraordinary items.................................. (4,058,057) (5,221,410)
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EXTRAORDINARY ITEM:
Cumulative effects of changes in accounting principles............. - (25,110)
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Net (loss)......................................................... $ (4,058,057) $(5,246,520)
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BASIC AND DILUTED EARNINGS PER SHARE:
(Loss) from continuing operations before discontinued
operations and extraordinary item................................ $ (0.31) $ (0.49)
Discontinued operations............................................ - (0.02)
Extraordinary items................................................ - -
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Net (loss)......................................................... $ (0.31) $ (0.51)
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Weighted average shares of common
stock outstanding basic and diluted.................................. 12,932,687 10,347,741
============= ============
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
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<TABLE>
SYMPOSIUM CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unuadited)
<CAPTION>
For the Nine
Months Ended
September 30, 1999
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<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) from continuing operations......................... $(5,042,899)
Adjustments to reconcile results of operations to
net cash effect of operating activities:
Value of 320,000 shares of common stock issued for services 1,010,000
Value of warrants to purchase 860,000 shares of common stock
issued for services 2,551,400
Depreciation 3,152
Net change in asset and liability accounts:
Prepaid insurance (30,827)
Accounts payable and other accrued expenses 263,149
Due to stockhoders (582)
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Net cash used in continuing operations (1,246,607)
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Net cash used in discontinued operations (136,086)
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Net cash used in operating activities (1,382,693)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (35,749)
Deferred acquisition and financing costs (927,595)
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Net cash used in investing activities (963,344)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of common stock 2,388,480
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NET INCREASE IN CASH AND CASH EQUIVALENTS 42,443
Cash and cash equivalents at beginning of period 276,243
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Cash and cash equivalents at end of period $ 318,686
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SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Common stock issued for note receivable $ 2,500,000
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Value of 195,000 shares of common stock issued as payment
for pending business acquisitions and deferred financing costs $ 195,000
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Value of warrants to purchase 815,000 shares of common stock
issued as payment for pending business acquisitions
and deferred financing costs $ 209,150
============
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
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<TABLE>
SYMPOSIUM CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(unaudited)
<CAPTION>
Common stock Note Receivable
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Additional
Number of Paid-in Number of Retained
Shares Amount Capital Shares Amount Deficit Total
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<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1999................7,370,464 $ 7,370 $ 587,152 - $ - $ (319,504) $ 275,018
Sales of common stock.....................5,085,000 5,085 4,854,915 2,500,000 (2,500,000) - 2,360,000
Issuances of common stock from
exercise of previously issued
warrants.....................................28,500 29 28,451 - - - 28,480
Stock warrants issued for consulting
services and pending business
acquisitions and financing................... - - 2,760,550 - - - 2,760,550
Common stock issued for consulting
services and pending business
acquisitions and financing...................515,000 515 1,204,485 - - - 1,205,000
Net (loss) for the nine months
ended September 30, 1999.................... - - - - - (5,246,520) (5,246,520)
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BALANCE AT SEPTEMBER 30, 1999............ 12,998,964 12,999 $ 9,435,553 2,500,000 $(2,500,000) $(5,566,024) $ 1,382,528
=========================================================================================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
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SYMPOSIUM CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION: The accompanying unaudited condensed consolidated
financial statements presented herein include the accounts of Symposium
Corporation and its wholly subsidiary Publishers Advantage Corporation ("PAC"
and collectively with Symposium Corporation, "Symposium" or the "Company"), have
been prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB and 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 of the results of operations for the interim
period have been included. Operating results for the three and nine months ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999. The accompanying unaudited
condensed consolidated financial statements and the information included under
the heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations" should be read in conjunction with the consolidated
financial statements and related notes of the Company for the year ended
December 31, 1998 as filed with its Form 10-SB. Financial information for the
three months and nine months ended September 30, 1998 have not been presented
because the Company had no operations during such period.
The operating results of PAC are presented as a discontinued operation as
discussed in Note 5. All significant inter-company balances and transactions
have been eliminated in consolidation.
Certain amounts in the statements have been reclassified to conform to the
1999 classifications.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS: The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. CHANGE IN ACCOUNTING PRINCIPLE
The Company has adopted the provisions of Statement of Position No. 98-5
("SOP 98-5") of the Accounting Standards Division of the American Institute of
Certified Public Accountants, which became effective on January 1, 1999. SOP
98-5 requires that the cost of start-up activities, which include organization
costs, be written off as incurred and that any costs previously deferred be
written off in the year of adoption of SOP 98-5 and reflected separately in the
statement of operations. Accordingly, the Company has written-off the $25,110
unamortized balance of its organization costs at January 1, 1999.
3. ACQUISITION AGREEMENTS
AMERINET, INC. PURCHASE OPTION: In June 1999, the Company entered into a
Stock Purchase Agreement to acquire for $5,000,000 50.1% of the common stock of
AmeriNet, Inc. ("AmeriNet"). AmeriNet offers a complete direct electronic debit
service both to merchants selling goods over the Internet as a method of payment
by the customer and as a service for business-to-business transactions. In
connection with the agreement, the Company has made a $500,000 loan to AmeriNet,
which bears interest at 8%. The loan plus accrued interest will be used to
reduce the cash payment made upon the acquisition of the AmeriNet stock and has
been included in deferred acquisition and financing costs at September 30, 1999.
The agreement provides for an additional loan of $500,000 which would further
reduce the cash payment made at closing. The agreement, which may be terminated
by either party, is contingent upon the Company's ability to obtain financing.
DIRECT SALES INTERNATIONAL PURCHASE OPTION: In June 1999, the Company
entered into an option agreement to acquire the assets of Direct Sales
International, L.P. ("DSI") and its subsidiaries. DSI is an Atlanta, Georgia
based subscription sales agent provider for consumer magazines in the United
States. The purchase price is (i) $22.9 million
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plus (ii) an amount equal to DSI's outstanding balance at the closing under its
loan facility divided by .555, plus (iii) the assumption of certain of DSI's
liabilities. In November 1999 the Company exercised this option, and the closing
of the purchase and sale is scheduled to occur on December 3, 1999, subject to
the conditions to be set forth in a definitive agreement which is in the process
of being finalized. To finance the acquisition, the Company is in the process of
finalizing a revolving credit line with an asset-based lender for up to $20
million, which will be secured by the DSI assets. In addition, the Company is
negotiating through its investment banker with several potential investment
groups for additional investment of up to $12 million, which will be required to
complete the purchase. This additional financing is likely to include debt and
equity financing. The Company's ability to obtain this financing is subject to
many factors beyond the control of the Company, including the willingness of
investors to provide funds and terms and conditions acceptable to the Company.
If the Company does not obtain the necessary financing, it will not be able to
complete the acquisition.
ISSUANCE OF SHARES TO RICHARD PROCHNOW: In connection with the option
agreement, the Company entered into a stock purchase agreement with Richard
Prochnow, the sole shareholder of DSI's general partner. Pursuant to the
agreement, the Company issued to Mr. Prochnow 2,500,000 shares of its common
stock at $1.00 per share. Mr. Prochnow paid for the shares with a promissory
note which bears interest at 7.75% and is payable at the earlier of December 31,
2000 or the closing date of the Company's purchase of the DSI assets if the
Company elects to exercise its option. The note is secured by the issued shares
and by a 25% limited partnership interest in DSI.
The stock purchase agreement provides that if the Company does not acquire
all or substantially all of the assets or equity interests of DSI on or before
November 30, 1999, Mr. Prochnow may elect to rescind his purchase by giving the
Company notice on or before December 10, 1999. If this occurs, Mr. Prochnow
would return the shares to the Company and the Company would cancel Mr.
Prochnow's promissory note. If Mr. Prochnow does not choose to rescind his
purchase of the shares, the Company would have the right to purchase a 25%
limited partnership interest in DSI from Mr. Prochnow in consideration of the
Company's return to Mr. Prochnow of his promissory note. If Mr. Prochnow does
not elect to rescind his purchase of the shares, the Company would have the
right to repurchase all or any portion of such shares for a purchase price of
$1.20 per share. The Company may exercise this right at any time from December
10, 1999 until June 2, 2000. The Company may pay the purchase price with a 25%
limited partnership interest in DSI (if the Company owns such interest), or with
cash, cancellation of Mr. Prochnow's promissory note or any combination of cash
or note cancellation that equals the aggregate purchase price.
If the Company acquires the DSI assets by exercising the option, the
Company will grant Mr. Prochnow registration rights acceptable to Mr. Prochnow
and the Company with respect to the Prochnow shares.
HAMILTON PURCHASE OPTION: In December 1998, the Company entered into an
agreement to acquire Hamilton Telecommunications Limited ("Hamilton"), an
international audiotext service operator. The purchase price for Hamilton is
$5.75 million plus 1,642,857 shares of the common stock plus contingent
consideration equal to the lesser of: (1) five times the amount, if any, by
which the relevant profits (as defined) of Hamilton for its fiscal year ending
June 30, 1999 exceeds $2.25 million (the relevant profits of Hamilton for the
fiscal year ended June 30, 1998), and (2) $6,000,000. The contingent
consideration is payable 50% in cash and 50% in shares of common stock valued at
$3.50 (accordingly, a maximum of 857,143 additional shares of common stock may
be issued). Completion of the acquisition is conditioned upon Symposium raising
sufficient funds to satisfy the initial cash consideration. In October, 1999,
the Company and the shareholders of Hamilton agreed to indefinitely extend the
date after which either could terminate the purchase agreement (if the closing
had not occurred) from October 15, 1999. The Company is continuing its
discussions with Hamilton.
There is no assurance that any of these acquisitions will be completed.
4. DEFERRED ACQUISITION AND FINANCING COSTS
As of September 30, 1999 the Company had recorded as an asset deferred
acquisition and financing costs, including among other things legal and
consulting services, of $1.3 million summarized as follows:
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AmeriNet $ 592,297
DSI 402,097
Hamilton 209,143
Deferred financing costs 127,937
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Total $ 1,331,744
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These deferred acquisition costs will be added to the purchase price in
determining the total cost to be allocated to the net assets acquired. If the
Company does not complete such acquisitions, then the deferred acquisition costs
will result in a charge to earnings in the period that the related contract is
terminated.
5. PUBLISHERS ADVANTAGE CORP. - DISCONTINUED OPERATION
As of June 30, 1999, the Company discontinued the operations of PAC.
Accordingly, the operating results of PAC have been segregated from continuing
operations and reported as a separate line item on the Company's condensed
consolidated financial statements. In addition, net liabilities as of September
30, 1999 and net assets as of December 31, 1998 have been reclassified on the
Company's financial statements as a net liability from discontinued operations
and investment in discontinued operations as of September 30, 1999 and December
31, 1998, respectively.
The table below lists the operating results of PAC through June 30, 1999:
Six Months
Ended
JUNE 30, 1999
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Sales $168,863
Net loss $(136,511)
6. NET LOSS PER SHARE
Net loss per share is presented under Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("FAS 128"). In accordance with FAS 128,
basic and diluted net loss per share has been computed using the weighted
average number of shares of common stock outstanding during the period.
Potentially dilutive securities have been excluded from the computation as their
effect is antidilutive.
If the Company had reported net income, diluted earnings per share would
have included the shares used in the computation of net loss per share plus
2,744,087 and 1,842,910 common equivalent shares related to the outstanding
options and warrants (determined using the treasury stock method) for the three
and nine months ended September 30, 1999.
7. CONSULTING EXPENSES
The Company recorded consulting expenses totaling $3.4 million and $3.9
million for the three and nine months ended September 30, 1999, respectively.
Included in these charges are $2.6 million of non-cash charges reflecting the
estimated fair value of five-year warrants to purchase 850,000 shares of common
stock for $5.00 per share and three-year warrants to purchase 10,000 shares of
common stock for $7.00 per share. The fair value of such warrants was estimated
using the Black-Scholes Option Pricing Formula. Additionally, $1.0 million of
the consulting costs incurred reflects the fair value of 320,000 shares of the
Company's common stock issued for professional services rendered during the nine
months ended September 30, 1999.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis should be read together with the
condensed consolidated financial statements of Symposium and the accompanying
"Notes to the Condensed Consolidated Financial Statements" included elsewhere in
this Form 10-QSB.
This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and liquidity and cash flows
of Symposium for the nine months ended September 30, 1999. Except for historical
information, the matters discussed in this "Management's Discussion and Analysis
of Financial Condition and Results of Operations" are forward-looking statements
that involve risks and uncertainties and are based upon judgments concerning
various factors that are beyond our control. Actual results could differ
materially from those projected in the forward-looking statements.
INTRODUCTION
The Company's principal business strategy is to identify, acquire and
consolidate companies in niche markets and direct marketing financial services.
Symposium targets companies in fragmented industries which management believes
have the following characteristics: (i) require low capital expenditures; (ii)
have prominent positions in niche markets; and (iii) have potential for high
growth rate and high rate of return on investment. In furtherance of this
strategy, Symposium has entered into the following agreements:
(a) In December 1998, the Company entered into an agreement to acquire all
the outstanding shares of Hamilton, which is engaged in the international
audiotext business. The international audiotext business allows customers to
access a variety of types of information by making international direct dial
telephone calls that are billed to their regular monthly telephone bills.
(b) In December 1998, the Company purchased an option to acquire all of the
outstanding capital stock of Automated Communications Limited ("ACL"), a
start-up business which intends to engage primarily in the provision of
international audiotext services to customers in the United States.
(c) In June 1999, the Company purchased all of the assets of DSI, which the
Company exercised in November 1999 (see Note 3 of Notes to Condensed
Consolidated Financial Statements included in this Form 10-Q); and
(d) In June 1999, the Company entered into an agreement to acquire shares
representing 50.1% of the outstanding capital stock of AmeriNet.
For a summary of the economic terms of these acquisition and option
agreements, see Note 3 of Notes to Condensed Consolidated Financial Statements
included in this Form 10-QSB.
The Company does not have the funds to complete the acquisition of any of
these companies. The Company has begun discussions to raise the necessary funds,
however, the Company has no commitment from, and no understandings with, any
party with regard to purchasing any of the securities offered in amounts
sufficient to complete the acquisitions (see "Financial Condition and Liquidity"
below). No assurance can be given that the Company will be able to raise the
funds on terms acceptable to it. If a significant part of these funds is raised
through the sale of equity securities, it is likely that the investors as a
group would acquire a significant equity interest in the Company.
In October, 1999, the Company and the shareholders of Hamilton agreed to
indefinitely extend the date after which either could terminate the purchase
agreement (if the closing had not occurred) from October 15, 1999. The Company
is continuing its discussions with Hamilton.
From December 1998 through June 30, 1999, the Company engaged principally
in telemarketing magazine and periodical subscriptions through PAC. The Company
discontinued these operations as of June 30, 1999 because: (i) the Company did
not want to divert management resources from completing its pending
acquisitions; (ii) the Company terminated its relationship with its provider of
"turnkey" telemarketing services, and did not want to incur the start-up costs
of its own telemarketing operations, particularly in light of the fact that
those operations could be conducted
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through DSI if the Company exercised its option to acquire DSI; and (iii) PAC
was generating less revenues than anticipated. Accordingly, the operating
results of PAC have been segregated from continuing operations and reported as a
separate line item on the Company's condensed consolidated financial statements.
In addition, net liabilities as of September 30, 1999 and net assets as of
December 31, 1998 have been reclassified on the Company's financial statements
as net liability from discontinued operations and investment in discontinued
operations as of September 30, 1999 and December 31, 1998, respectively.
Accordingly, as of the date of this Form 10-QSB, the Company has no
operating business, and its ability to stay in business depends on its ability
to acquire one or more businesses.
RESULTS OF OPERATIONS
REVENUES: During the three and nine months ended September 30, 1999, the
Company recorded revenues totaling $66,313 and $100,704, respectively. These
revenues were derived solely from the interest income received from the
investment of the Company's funds held in interest bearing accounts.
SALARIES AND BENEFITS: The Company incurred costs totaling $250,404 and
$416,429 for the three and nine months ended September 30, 1999, respectively,
reflecting the personnel costs.
CONSULTING EXPENSES: The Company recorded consulting expenses totaling
$3.4 million and $3.9 million for the three and nine months ended September 30,
1999, respectively. Included in these charges are $2.6 million of non-cash
charges reflecting the estimated fair value of five-year warrants to purchase
850,000 shares of common stock for $5.00 per share and three-year warrants to
purchase 10,000 shares of common stock for $7.00 per share. The fair value of
such warrants was estimated using the Black-Scholes Option Pricing Formula.
Additionally, $1.0 million of the consulting costs incurred reflected the fair
value of 320,000 shares of the Company's common stock issued for professional
services rendered during the nine months ended September 30, 1999.
OTHER OPERATING EXPENSES: Other operating expenses totaling $457,932 and
$866,257 for the three and nine months ended September 30, 1999, respectively,
include the costs associated with the Company's offices in New York and London,
as well as its accounting and legal costs. The Company has deferred costs,
incurred through September 30, 1999, related to the targeted acquisitions and
the associated financing arrangements.
DISCONTINUED OPERATIONS: Discontinued operations reflect the operating
loss totaling $136,511 from PAC for the six months ended June 30, 1999 which is
considered the measurement date for accounting purposes and a loss on the
disposal of the operation totaling $42,000 recorded in the third quarter of
1999. The loss on disposal recorded during the third quarter reflects a change
from the Company's second quarter estimate of the net liabilities associated
with the disposal of PAC.
EXTRAORDINARY ITEM: Effective January 1, 1999, the Company adopted SOP
98-5 requiring that the cost of start-up activities, which include organization
costs, be written off as incurred and that any costs previously deferred be
written off in the year of adopting SOP 98-5. Accordingly, the Company has
written off the $25,110 unamortized balance of its origin costs at January 1,
1999.
INCOME TAXES: No provision was recorded for federal and state income taxes
as the Company incurred net operating losses since inception. In accordance with
Statement of Accounting Standards No. 109 "Accounting for Income Taxes," the
Company has provided a full valuation allowance on its deferred tax assets
because of the uncertainty regarding their realization.
FINANCIAL CONDITION AND LIQUIDITY
For the nine months ended September 30, 1999, the Company used net cash of
$1.4 million in operations and $1.0 million in investing activities. The
Company's investing activities primarily consist of costs incurred in connection
with the proposed acquisitions. Accounts payable and other accrued expenses at
September 30, 1999 totaled $329,220 primarily due to costs incurred in
connection with the Hamilton, DSI and AmeriNet transactions. At September 30,
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1999, the Company recorded as an asset deferred business acquisition and
financing costs, including, among others, legal and consulting services, of $1.3
million in connection with the Hamilton, DSI and AmeriNet transactions.
At September 30, 1999, the Company had cash on hand of $316,994. The
Company believes that this is not sufficient to fund its operations through
year-end 1999 and will need to arrange for additional cash resources during the
fourth quarter of 1999. Subsequent to September 30, 1999, the Company raised an
additional $688,500 through the sale of 162,000 shares of its common stock.
Also, the Company does not have the funds to complete any of the potential
acquisitions described above. The Company is currently in the process of seeking
financing to continue its operations and complete one or more of its potential
acquisitions.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
On August 17, 1999, Symposium issued to AppleTree Investment Co., Ltd.
("AppleTree"), 120,000 shares of common stock for financial public relations
services and investment relations activities rendered to the Company. The
issuance and sale of these securities were made in reliance on Section 4(2) of
the Securities Act as a transaction not involving any public offering, based on:
(1) the fact that AppleTree represented that it was an accredited investor and
was acquiring the securities for investment purposes; and (2) the Company did
not engage in any general advertisement or general solicitation in connection
with the issuance of the securities.
On August 23, 1999, Symposium issued warrants to purchase 850,000 shares
of common stock for $5.00 per share, expiring on August 23, 2004, to Steven
Antebi for financial public relations services rendered to the Company. The
issuance and sale of these securities were also made in reliance on Section 4(2)
of the Securities Act as a transaction by the Company not involving any public
offering, based on: (1) the fact that Mr. Antebi represented that he was an
accredited investor and was acquiring the securities for investment purposes;
and (2) the Company did not engage in any general advertisement or general
solicitation in connection with the issuance of the securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On September 14, 1999, the Company held its annual meeting of
shareholders. There were 12,850,464 shares of common stock outstanding and
entitled to vote on the record date (August 19, 1999), and a total of 8,835,047
shares (69%) were represented at the meeting in person or by proxy.
At the Annual Meeting: (i) 8,835,047 votes were cast in favor of each of
the seven nominees of the Board of Directors (Ronald Altbach, Adam Bishop,
Richard Cohen, Rupert Galliers-Pratt, Richard Kaufman and Thomas McGlew), with
no votes against, no abstentions and no broker non-votes; and (ii) 8,655,827
shares were voted in favor of amendments to the Company's 1998 Stock Option
Plan, with no votes against, 179,220 shares abstaining an no broker non-votes.
ITEM 5. OTHER INFORMATION.
None.
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<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT NO. EXHIBIT NAME
----------- ------------
10.1 1998 Stock Option Plan of the Company, revised as of
July 12, 1999.
10.2 Employment Agreement dated as of September 20, 1999 with
Polly Bauer.
10.3 Employment Agreement dated as of September 21, 1999 with
Tim S. Ledwick.
10.4 Warrant Certificate dated August 23, 1999 issued to
Steven Antebi representing the right to purchase 850,000
shares of the Company's common stock.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
None.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SYMPOSIUM CORPORATION
Date: November 15, 1999 By: /S/ RONALD ALTBACH
-----------------------------------
Ronald Altbach
CO-CHAIRMAN AND CHIEF OPERATING
OFFICER
Date: November 15, 1999 By: /S/ TIM S. LEDWICK
-----------------------------------
Tim S. Ledwick
CHIEF FINANCIAL OFFICER
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<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT NAME
----------- ------------
10.1 1998 Stock Option Plan of the Company, revised as of
July 12, 1999.
10.2 Employment Agreement dated as of September 20, 1999 with
Polly Bauer.
10.3 Employment Agreement dated as of September 21, 1999 with
Tim S. Ledwick.
10.4 Warrant Certificate dated August 23, 1999 issued to
Steven Antebi representing the right to purchase 850,000
shares of the Company's common stock.
27.1 Financial Data Schedule.
Page 13
SYMPOSIUM CORPORTION
1998 STOCK OPTION PLAN
Revised as of July 12, 1999
1. THE PLAN.
The purpose of this 1998 Stock Option Plan (the "PLAN") is to provide
incentives and rewards to selected eligible directors, officers, employees and
consultants of Symposium Corporation (the "COMPANY") and its subsidiaries in
order to assist the Company and its subsidiaries in attracting, retaining and
motivating those persons by providing for or increasing the proprietary
interests of those persons in the Company, and by associating their interests in
the Company with those of the Company's shareholders.
2. ADMINISTRATION OF THE PLAN.
(a) ADMINISTRATOR. The Plan shall be administered by the Board of
Directors of the Company (the "BOARD"), or a committee of the Board (the
"COMMITTEE") which shall consist of two or more of its members who shall serve
at the pleasure of the Board. The administrator of the Plan shall be referred to
as the "ADMINISTRATOR." During such time that administration is delegated to the
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board.
(b) POWERS AND AUTHORITY. The Administrator shall have all the powers
vested in it by the terms of the Plan, including exclusive authority (i) to
select from among eligible directors, officers, employees and consultants, those
persons to be granted options ("OPTIONS") under the Plan; (ii) to determine the
type, size and terms of individual Options (which need not be identical) to be
made to each person selected, including whether an Option will be an Incentive
Stock Option or a Nonqualified Option (both as defined below); (iii) to
determine the time when Options will be granted and to establish objectives and
conditions (including, without limitation, vesting and performance conditions),
if any, for earning Options; (iv) to amend the terms or conditions of any
outstanding Options, subject to applicable legal restrictions and to the consent
of the other party to such Options; (v) to determine the duration and purpose of
leaves of absences which may be granted to holders of Options without
constituting termination of their employment for purposes of their Options; (vi)
to authorize any person to execute, on behalf of the Company, any instrument
required to carry out the purposes of the Plan; and (vii) to make any and all
other determinations which it determines to be necessary or advisable in the
administration of the Plan. The Administrator shall have full power and
authority to administer and interpret the Plan and to adopt, amend and revoke
such rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable. The Administrator's interpretation
of the Plan, and all actions taken and determinations made by the Administrator
pursuant to the powers vested in it hereunder, shall be conclusive and binding
on all parties concerned, including the Company, its shareholders, any optionee
and any other employee of the Company or any of its subsidiaries.
<PAGE>
3. PERSONS ELIGIBLE UNDER THE PLAN.
(a) INCENTIVE STOCK OPTIONS. Any person who is an employee of the
Company or any of its subsidiaries shall be eligible to be considered for the
grant of Options under the Plan which qualify as "incentive stock options"
("INCENTIVE STOCK OPTIONS") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "CODE").
(b) NONQUALIFIED STOCK OPTIONS. Any person who is a director, officer,
employee or consultant of the Company or any of its subsidiaries shall be
eligible to be considered for the grant of Options under the Plan which do not
qualify as Incentive Stock Options ("NONQUALIFIED OPTIONS").
4. OPTIONS.
Subject to the provisions of the Plan, the Administrator, in its sole
and absolute discretion, shall determine all of the types, terms and conditions
of each Option granted pursuant to the Plan. The provisions of separate Options
need not be identical, but each Incentive Stock Option shall be in compliance
with the substance of each of the following provisions:
(a) TERM. The exercise period may not be more than 10 years from the
date the Incentive Stock Option is granted. In the case of an Incentive Stock
Option granted to a person who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, the exercise
period may not be more than 5 years from the date such Incentive Stock Option is
granted.
(b) PRICE. The exercise price of an Incentive Stock Option may not be
less than 100% of the Fair Market Value of the Common Stock at the time the
Incentive Stock Option is granted (110% of the Fair Market Value in the case of
any person who owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company). In the absence of an established
market for the Common Stock, the Fair Market Value of the Common Stock shall be
determined in good faith by the Administrator;
(c) TRANSFERABILITY. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the Incentive
Stock Option is granted only by such person.
(d) EMPLOYMENT STATUS. In the event that the optionee's employment with
the Company terminates, the optionee must exercise the Incentive Stock Option,
to the extent it was exercisable at termination, within three months of such
termination.
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<PAGE>
(e) AGGREGATE FAIR MARKET VALUE OF INCENTIVE STOCK OPTIONS. To the
extent that the aggregate Fair Market Value (determined at the time of grant) of
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by any Optionee during any calendar year under all plans of the
Company and its affiliates exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in
which they were granted) shall be treated as Nonqualified Options
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
(a) MAXIMUM SHARES AVAILABLE. The aggregate number of shares of Common
Stock that may be issued or issuable pursuant to the Plan shall not exceed an
aggregate of 2,500,000 shares of Common Stock, subject to adjustment as provided
in Section 6 of the Plan. Any shares of Common Stock subject to an Option which
for any reason expires or is terminated unexercised as to such shares shall
again be available for issuance under the Plan. The aggregate number of shares
of Common Stock that may be issued at any time pursuant to Options granted under
the Plan shall be reduced by the number of shares of Common Stock which were
otherwise issuable pursuant to Options granted under this Plan but which were
withheld by the Company as payment of the purchase price of the Common Stock
issued pursuant to such Options or as payment of the recipient's tax withholding
obligation with respect to such issuance.
(b) PAYMENT FOR SHARES. The exercise price of Common Stock acquired
pursuant to the exercise of an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (1) in cash at the time the Option
is exercised, or (2) at the discretion of the Administrator, either at the time
of the grant or exercise of the Option, (A) by delivery to the Company of other
shares of Common Stock, the value of which shall be the Fair Market Value of
such Common Stock, (B) according to a deferred payment or other arrangement
(which may include, without limiting the generality of the foregoing, the use of
other shares of Common Stock) with the person to whom the Option is granted, (C)
by reducing the number of shares of Common Stock otherwise issuable pursuant to
the Option or (D) in any other form of legal consideration that may be
acceptable to the Administrator.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be payable at the minimum rate of interest
necessary to avoid the imputation of interest, under the applicable provisions
of the Code and Treasury Regulations.
(c) MAXIMUM NUMBER OF SHARES AVAILABLE FOR GRANT TO ANY PERSON. No
person shall receive Options representing more than 50% of the aggregate number
of shares of Common Stock that may be issued pursuant to all Options under the
Plan as set forth in Section 5(a) of this Agreement.
Page 3
<PAGE>
6. RECAPITALIZATIONS.
Unless otherwise provided in the option agreement:
(a) If outstanding shares of the Common Stock of the Company shall be
subdivided into a greater number of shares, or a dividend in Common Stock shall
be paid in respect of the Common Stock, the exercise price of any outstanding
Option in effect immediately prior to such subdivision or immediately after the
record date of such dividend, be proportionately reduced, and conversely, if
outstanding shares of the Common Stock of the Company shall be combined into a
smaller number of shares, the exercise price of any outstanding Option in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased.
(b) When any adjustment is required to be made in the exercise price,
the number of shares purchasable upon the exercise of any outstanding Option
shall be adjusted to that number of shares determined by dividing (1) an amount
equal to the number of shares purchasable upon the exercise of the Option
immediately prior to such adjustment, multiplied by the exercise price in effect
immediately prior to such adjustment, by (2) the exercise price in effect
immediately after such adjustment.
(c) In case of any capital reorganization, any reclassification of the
Common Stock of the Company (other than recapitalization described in Paragraph
6(a) of this Plan), or the consolidation or merger of the Company with another
person where the Company is the "surviving corporation," as defined in Paragraph
6 (h) below (collectively referred to hereinafter as "REORGANIZATIONS"), the
holder of any outstanding Option shall thereafter be entitled to purchase on
exercise of the Option the kind and number of shares of stock or other
securities or property of the Company receivable upon such Reorganization by a
holder of the number of shares of the Common Stock of the Company which such
Option entitles the holder to purchase from the Company immediately prior to
such Reorganization: and in any such case appropriate adjustments shall be made
in the application of the provisions set forth in the option agreements and in
this Plan with respect to the rights and interests thereafter of the optionee,
to the end that the provisions set forth in the option agreements and in this
Plan ( including the specified changes and other adjustments to the exercise
price) shall thereafter be applicable in relation to any shares or other
property thereafter purchasable upon exercise of such Option.
(d) Each outstanding Option shall terminate upon a dissolution or
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving corporation provided that (1) each optionee to whom no Option
has been tendered by the surviving corporation pursuant to the terms of item (2)
immediately below shall have the right exercisable during a ten-day period
ending on the fifth day prior to such dissolution or liquidation, or merger or
consolidation in which the Company is not the surviving corporation, to exercise
his or her Option in whole or in part, without regard to any installment
provisions under his or her Option agreement; and (2) in its sole and absolute
discretion, the surviving corporation may,
Page 4
<PAGE>
but shall not be so obligated, tender to any optionee an option or options to
purchase shares of the surviving corporation, and such new option or options
shall contain such terms and provisions as shall substantially preserve the
rights and benefits of any Option then outstanding under this Plan.
(e) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Board or
Administrator, whose determination in that respect shall be final, binding and
conclusive.
(f) Except as expressly provided in this Section 6, no optionee shall
have any rights by reason of any subdivision or consolidation of shares of stock
of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, and the dissolution,
liquidation, merger, consolidation or split-up or sale of assets or stock to
another corporation, or any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of or exercise price for the shares subject to such optionee's Option.
(g) The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve or liquidate, or to sell or transfer all or any
part of its business or assets.
(h) The determination as to which party to a Reorganization is the
"SURVIVING CORPORATION" shall be made on the basis of the relative equity
interest of the shareholders in the corporation existing after the
Reorganization, as follows: if following any reorganization the holders of
outstanding voting securities of the Company immediately prior to the
reorganization own equity securities possessing more than 50% of the voting
power of the corporation existing following the reorganization, then for
purposes of the Option, the Company shall be the surviving corporation. In all
other cases, the Company shall not be the surviving corporation. In making the
determination of ownership by the shareholders of a corporation immediately
after the reorganization of equity securities pursuant to this Section 6(h),
equity securities which the shareholders owned immediately before the
reorganization, as shareholders of another party to the transaction shall be
disregarded. Further, for purposes of this Section 6(h) only, outstanding voting
securities of a corporation shall be calculated by assuming the conversion of
all equity securities convertible (immediately or at some future time) into
shares entitled to vote.
7. MISCELLANEOUS PROVISIONS.
(a) DEFINITIONS.
(1) "SUBSIDIARY" means any future corporation which would be a
"SUBSIDIARY CORPORATION," as that term is defined in Section 424(f) of the Code,
of the Company.
Page 5
<PAGE>
(2) "OR" means "and/or."
(3) "FAIR MARKET VALUE" means, as of any date, the value
of the Common Stock as determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market, the Fair Market Value of a share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in the Common Stock) on the last
market trading day prior to the day of determination, as reported in the WALL
STREET JOURNAL or such other source as the deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq
System (but not on the Nasdaq National Market) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of Common Stock shall be the mean between the bid and
asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in the Wall Street Journal or such other
source as the deems reliable;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(b) CONDITIONS ON ISSUANCE. Securities shall not be issued pursuant to
Options unless the grant and issuance thereof shall comply with all relevant
provisions of law and the requirements of any securities exchange or quotation
system upon which any securities of the Company are listed, and shall be further
subject to approval of counsel for the Company with respect to such compliance.
Inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is determined by Company counsel to be necessary
to the lawful issuance and sale of any security or Options, shall relieve the
Company of any liability in respect of the nonissuance or sale of such
securities as to which requisite authority shall not have been obtained.
(c) RIGHTS AS A SHAREHOLDER. An optionee shall have no rights as a
holder of Common Stock with respect to Options hereunder, unless and until
certificates for shares of such stock are issued to the optionee.
(d) AGREEMENTS. All Options granted under the Plan shall be evidenced
by written agreements in such form and containing such terms and conditions (not
inconsistent with the Plan) as the Administrator shall from time to time adopt.
(e) WITHHOLDING TAXES. The Company shall have the right to require upon
exercise of an Option the payment (through withholding from the optionee's
salary or otherwise) of any federal, state, local or foreign taxes required by
law to be withheld. The obligation of the
Page 6
<PAGE>
Company to issue Common Stock shall be subject to the restrictions imposed by
any and all governmental authorities.
(f) NO RIGHTS TO OPTION. No person shall have any right to be granted
an Option under the Plan. Neither the Plan nor any action taken hereunder shall
be construed as giving any person any right to be retained in the employ of the
Company or any of its subsidiaries or shall interfere with or restrict in any
way the rights of the Company or any of its subsidiaries, which are hereby
reserved, to discharge an employee at any time for any reason whatsoever, with
or without good cause.
(g) ACCELERATION. The Administrator shall have the power to accelerate
the time at which an Option may first be exercised or the time during which an
Option or any part thereof will vest, notwithstanding the provisions in the
Option stating the time at which it may first be exercised or the time during
which it will vest.
(h) TRANSFERABILITY. Except as otherwise provided by the Administrator,
options granted under the Plan are not transferable other than as designated by
the optionee by will or by the laws of descent and distribution.
8. AMENDMENTS AND TERMINATION.
(a) AMENDMENTS. The Board may at any time and from time to time amend
the Plan in whole or in part, but no such action shall adversely affect any
rights or obligations with respect to any outstanding Options. However, with the
consent of the optionee affected, the Administrator may amend outstanding
agreements evidencing Options under the Plan in a manner not inconsistent with
the terms of the Plan.
(b) TERMINATION. The Plan shall terminate on the earlier to occur of
the date the Board terminates the Plan and December 31, 2007. The termination of
the Plan shall not terminate any outstanding Options.
9. EFFECTIVE DATE.
The Plan is effective on December 3, 1998.
10. GOVERNING LAW.
The Plan and any agreements entered into thereunder shall be construed
and governed by the laws of the State of New York applicable to contracts made
within, and to be performed wholly within, such state, without regard to the
application of conflict of laws rules thereof.
SYMPOSIUM CORPORATION
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made and entered into as
of August 20, 1999, by and between Symposium Corporation, a Delaware corporation
(the "COMPANY"), and Polly A. Bauer ("EMPLOYEE").
1. ENGAGEMENT AND RESPONSIBILITIES
1.1 Upon the terms and subject to the conditions set forth in this
Agreement, the Company hereby employs Employee and Employee hereby accepts such
employment. The Company may give Employee the position of an officer with the
Company or the position of president of SCC. The Company agrees that if the
Employee is assigned to work as president of SCC, the Company shall remain
obligated to fulfill all of the obligations owed to Employee, specifically
including, but not limited to, the obligations to pay the Compensation and
Benefits and the Severance Compensation provided for in Sections 3 and 5 of this
Agreement.
1.2 From and after the Full Time Effective Date, Employee agrees to devote
all of Employee's business time, energy and efforts to the business of the
Company and will use Employee's best efforts and abilities faithfully and
diligently to promote the Company's business interests. Employee's duties and
responsibilities shall be those incident to those which are normally and
customarily vested in the president of a division or subsidiary of a
corporation. In addition, Employee's duties shall include those duties and
services for the Company and its affiliates as the Board, the Chief Executive
Officer or the Chief Operating Officer of the Company shall from time to time
reasonably direct which are not inconsistent with Employee's position described
in Section 1.1. Prior to the Full Time Effective Date, Employee shall be
obligated to work on a part-time basis at mutually agreeable times.
1.3 The Company acknowledges that Employee resides in New Port Richey,
Florida, and that the Company presently intends that Employee will perform
services pursuant to this Agreement primarily from Clearwater, Florida except
for ordinary business travel. If Employee is requested to permanently relocate
as a condition to continuing employment with the Company, such requirement shall
be approved by the Board and, if Employee does so relocate, the Company shall
reimburse Employee for: (a) reasonable broker's commissions for the sale of her
home; (b) up to four months' rent in Employee's new location for temporary
housing; (c) the actual reasonable cost of moving personal possessions,
including household goods and automobiles; and (d) the cost of travel and
lodging for up to two house-hunting trips for Employee and her
spouse/significant other prior to the date of relocation; and (e) normal and
customary closing costs associated with the purchase of a new home at the new
location, including reasonable legal fees, stamp taxes, inspections, title
insurance, engineering survey, and loan application fees in connection with
obtaining a loan to finance the purchase of the new residence.
<PAGE>
1.4 Prior to this Agreement, Employee has committed to certain public
speaking engagements for dates after this Agreement, as identified in Exhibit A
to this Agreement. The Company agrees that Employee may complete those
engagements and retain the fees for those engagements. Thereafter, fees for
public speaking engagements relating to exception management or any business of
the Company Group, as it may from time to time be conducted, shall be paid to
the Company. Employee may, however, complete public speaking engagements on her
own time on matters not pertaining to the business of the Company Group and
retain the fees from such engagements provided that Employee handles such
activities in a professional manner so that they do not interfere with her
duties under this Agreement.
2. DEFINITIONS
"BENEFITS TERMINATION DATE" shall mean: (i) September 20, 2001, if Date of
Termination is on or prior to March 20, 2001; and (ii) six months after the Date
of Termination, if the Date of Termination is after March 20, 2001.
"BOARD" shall mean the Board of Directors of the Company.
"COMPANY GROUP" shall mean the Company and each Person that the Company
directly or indirectly Controls, is Controlled by, or is under common Control
with.
"CONTROL" shall mean, with respect to any Person, (a) the beneficial
ownership of more than 50% of the outstanding voting securities of such Person,
or (b) the power, directly or indirectly, by proxy, voting trust or otherwise,
to elect a majority of the outstanding directors, trustees or other managing
persons of such Person.
"DISABILITY," with respect to Employee, shall mean that, for physical or
mental reasons, Employee is unable to perform the essential functions of
Employee's duties under this Agreement for 60 consecutive days, or 90 days
during any one six month period. Employee agrees to submit to a reasonable
number of examinations by a medical doctor advising the Company as to whether
Employee shall have suffered a disability and Employee hereby authorizes the
disclosure and release to the Company and its agents and representatives all
supporting medical records. If Employee is not legally competent, Employee's
legal guardian or duly authorized attorney-in-fact will act in Employee's stead
for the purposes of submitting Employee to the examinations, and providing the
authorization of disclosure.
"DATE OF TERMINATION" shall have the meaning set forth in Section 4 of this
Agreement.
"FOR CAUSE" shall mean, in the context of a basis for termination of
Employee's employment with the Company, that:
(a) Employee breaches any obligation, duty or agreement under this
Agreement, which breach is not cured or corrected within 15 days of written
notice thereof from the Company (except for breaches of Section 6 or 7 of this
Agreement, which cannot be cured and for which the Company need not give any
opportunity to cure); or
(b) Employee commits any act of personal dishonesty, fraud,
embezzlement, breach of fiduciary duty or trust against the Company Group; or
2
<PAGE>
(c) Employee is indicted for, or convicted of, or pleads guilty or
nolo contendere with respect to, theft, fraud, a crime involving moral
turpitude, or a felony under federal or applicable state law; or
(d) Employee commits any act of personal conduct that, in the
reasonable opinion of the Board, gives rise to any member of the Company Group
of a material risk of liability under federal or applicable state law for
discrimination or sexual or other forms of harassment or other similar
liabilities to subordinate employees; or
(e) Employee commits continued and repeated substantive violations of
specific written directions of the Board, which directions are consistent with
this Agreement and Employee's position as a senior or executive officer, or
continued and repeated substantive failure to perform duties assigned by or
pursuant to this Agreement.
"FULL TIME EFFECTIVE DATE" shall mean September 20, 1999.
"PERSON" shall mean an individual or a partnership, corporation, trust,
association, limited liability company, governmental authority or other entity.
"SCC" shall mean the division or subsidiary established by the Company
under the name "Symposium Credit Corporation" or such other name selected by the
Company which will engage principally in the provision of consulting services in
the area of "exception management" for electronic transaction processing,
including chargeback analysis and fraud protection, and such other businesses as
may from time to time be approved by the Company.
3. COMPENSATION AND BENEFITS
Prior to the Full Time Effective Date, the Company shall pay to Employee a
weekly salary of $100, and Employee shall be entitled to no other benefits. From
the Full Time Effective Date until the Date of Termination, Employee shall
receive the compensation and benefits set forth in this Section 3.
3.1 SALARY. The Company shall pay to Employee salary at an annual rate of
$200,000, increased annually (as of each September 30, commencing September 30,
2000) by 5%. The salary shall be payable in installments in the same manner and
at the same times the Company pays salaries to other executive officers of the
Company, but in no event less frequently than equal monthly installments.
3.2 BONUS. Provided that Employee has not terminated her employment (or
given notice of termination of her employment) prior to December 1, 1999, the
Company shall pay to Employee a bonus of $38,000 on December 1, 1999. For each
year, commencing with the year ending December 31, 2000, Employee shall be
entitled to a bonus equal to 10% of the "Net Consulting Income" of SCC for the
year. The "NET CONSULTING INCOME" of SCC for any year shall mean: (i) the gross
revenues actually received by the Company during the year from consulting
services provided by SCC, excluding revenues from the Company or subsidiaries of
the Company; LESS (ii) the following payments or expenses of SCC during such
year: (A) the salary and benefits cost of Employee for such year: (ii) all
compensation, including benefits cost, paid to or on behalf of employees of SCC;
(iii) all other operating expenses of SCC, including without limitation
leasehold expenses for offices of SCC, supplies and travel and entertainment
costs; and (iv) at such time as
3
<PAGE>
SCC has more than three employees or engages in any business other than the
provision of consulting services, an annual amount determined in good faith by
the Company, after consultation with Employee, as SCC's reasonable and fair
share of general and administrative expenses of the Company.
The foregoing is not intended to prevent or limit the Company form paying
Employee a bonus in addition to that being paid under this Section 3.2. The
Company shall be entitled to pay Employee an additional bonus and the Employee
shall be entitled to accept such a bonus.
3.3 EXPENSE REIMBURSEMENT. Employee shall be entitled to reimbursement from
the Company for the reasonable out-of-pocket costs and expenses that Employee
incurs in connection with the performance of Employee's duties and obligations
under this Agreement in a manner consistent with the Company's practices and
policies therefor. Without limiting the foregoing, Employee shall be entitled to
reimbursement from the Company for the reasonable costs of registering,
traveling to and from, and attending continuing education courses required in
order for Employee to maintain her licenses.
3.4 EMPLOYEE BENEFIT PLANS. Employee shall be entitled to participate in
any pension, savings and group term life, medical, dental, disability and other
group benefit plans that the Company makes available to its employees generally.
3.5 VACATION. Employee shall be entitled to four weeks paid vacation, which
shall accrue in accordance with the Company's standard vacation accrual policy.
As of September 20, 1999, one week of the first year's vacation shall be deemed
accrued.
3.6 DISABILITY. If Employee shall suffer a Disability and shall receive
payments as a result of such Disability under any disability plan maintained by
the Company or from any government agency, the Company shall be entitled to
deduct the amount of such payments received from salary payable to Employee
during the period of such Disability.
3.7 WITHHOLDING. The Company may deduct from any compensation payable to
Employee (including payments made pursuant to Section 5 of this Agreement in
connection with or following termination of employment) amounts it believes are
required to be withheld under federal and state law, including applicable
federal, state and/or local income tax withholding, old-age and survivors' and
other social security payments, state disability and other insurance premiums
and payments.
4. TERM OF EMPLOYMENT
Employee's employment pursuant to this Agreement shall commence as of the
Effective Date and shall terminate on the earliest to occur of the following
(the "DATE OF TERMINATION"):
4.1 Upon 30 days written notice from Employee;
4.2 upon the death of Employee;
4.3 upon delivery to Employee of written notice of termination by the
Company if Employee shall suffer a Disability;
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4.4 upon delivery to Employee of written notice of termination by the
Company For Cause; or
4.5 upon delivery to Employee of written notice of termination by the
Company without cause.
5. SEVERANCE COMPENSATION
5.1 If Employee's employment is terminated pursuant to Section 4.5 (by the
Company without cause), the Company shall: (a) until the Benefits Termination
Date, continue to: (i) pay to Employee salary at the rate in effect on the Date
of Termination (ii) pay for Employee's (and her immediate family's)
participation in group medical, life, dental, disability and similar plans to
the extent permitted by the plan; and (b) pay to Employee any bonuses which
shall have accrued as of the Date of Termination.
5.2 If Employee's employment is terminated for any reason other than
pursuant to Section 4.5, the Company shall pay to Employee (or Employee's estate
or beneficiary, as the case may be) any unpaid base salary through the Date of
Termination and any bonus that shall have accrued as of the Date of Termination.
All rights and benefits which Employee or her estate may have under employee
benefit plans in which Employee shall be participating at the date of
termination of employment shall be determined in accordance with such plans.
5.3 If Employee's employment is terminated by the Company pursuant to
Section 4.4 (by the Company For Cause), and subject to applicable law and
regulations, the Company shall be entitled to offset against any payments due
Employee any loss or damage which the Company shall suffer as a result of the
acts or omissions of Employee giving rise to termination under Section 4.4.
5.4 Employee acknowledges that the Company has the right to terminate
Employee's employment without cause and that such termination shall not be a
breach of this Agreement or any other express or implied agreement between the
Company and Employee. Accordingly, in the event of such termination, Employee
shall be entitled only to those benefits specifically provided in this Section
5, and shall not have any other rights to any compensation or damages from the
Company for breach of contract.
5.5 Employee acknowledges that in the event of termination of Employee's
employment for any reason, Employee (and Employee's estate, heirs, beneficiaries
or others claiming through Employee) shall not be entitled to any severance or
other compensation from the Company except as specifically provided in this
Section 5. Without limitation on the generality of the foregoing, this Section
supersedes any plan or policy of the Company that provides for severance to its
officers or employees, and Employee shall not be entitled to any benefits under
any such plan or policy.
6. CERTAIN COVENANTS OF EMPLOYEE
6.1 From the date hereof until one year following the Date of Termination:
(a) Employee will not, directly or indirectly, influence or attempt to
influence any customer of the Company Group to reduce or discontinue its
purchases of any products or services from the Company Group or to divert such
purchases to any Person other than the Company Group.
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(b) Employee will not, directly or indirectly, interfere with, disrupt
or attempt to disrupt the relationship, contractual or otherwise, between the
Company Group and any of its respective suppliers, principals, distributors,
lessors or licensors;
(c) Employee will not, directly or indirectly, solicit any employee of
the Company Group to work for any Person.
(d) Unless Employee's employment was terminated without cause by the
Company pursuant to Section 4.5 (in which event this covenant shall not be
applicable), Employee will not, directly or indirectly, whether individually or
as a member, officer, director, investor, stockholder, employee or consultant of
any Person (other than the Company), or in any other capacity engage anywhere in
the world in a business which competes with the business of the Company;
PROVIDED, HOWEVER that ownership by Employee of four percent or less of the
outstanding capital stock of any Person engaged in any business which competes
with any line of business engaged in by the Company, which capital stock is
listed on a national securities exchange or actively quoted on the Nasdaq Stock
Market (assuming that Employee is not an officer, director or employee of, or a
consultant to, such Person or otherwise related in any way to such Person),
shall not be deemed a violation by Employee of this Section 6; and PROVIDED
FURTHER that Employee may (i) provide exception management consulting services
to Persons who are not engaged in any business which is competitive with any of
the businesses of the Company Group; and (ii) become an employee of, or provide
consulting services to, VISA, Mastercard or similar large credit card
association but may not, in such connection, take any action detrimental to the
Company Group.
6.2 REMEDIES. Employee acknowledges and agrees that, in the event of a
violation by Employee of the terms and provisions of this Section 6, the
remedies at law would not be adequate; and accordingly, in such event, the
Company may proceed to protect and enforce its rights under this Section 6 by a
suit in equity for specific performance and temporary, preliminary and permanent
injunctive relief from violation of any of the provisions of this Section 6 from
any court of competent jurisdiction without the necessity of proving the amount
of any actual damages to the resulting from the breach.
6.3 MODIFICATION. If for any reason there should be a determination by a
court of competent jurisdiction that the provisions of this Section 6 are too
broad or unreasonable (or otherwise objectionable) and therefore unenforceable,
the provisions of this Section 6 shall be deemed modified, and fully enforceable
as so modified, to the extent that the court would find them to be fair,
reasonable and enforceable under the circumstances.
7. CONFIDENTIALITY
Employee agrees not to disclose or use at any time (whether during or after
Employee's employment with the Company) for Employee's own benefit or purposes
or the benefit or purposes of any other Person any trade secrets, information,
data, or other confidential information relating to customers, development
programs, costs, marketing, trading, investment, sales activities, promotion,
credit and financial data, financial methods, plans, or the business and affairs
of the Company Group generally, PROVIDED that the foregoing shall not apply to
information which is not unique to the Company Group or which is generally known
to the industry or the public other than as a result of Employee's breach of
this covenant. Employee agrees that upon termination of his employment with the
Company for any reason, he will return to the Company immediately all memoranda,
6
<PAGE>
books, papers, plans, information, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company Group
except that he may retain personal notes, notebooks, diaries, rolodexes and
addresses and phone numbers. Employee further agrees that he will not retain or
use for his account at any time any trade names, trademark or other proprietary
business designation used or owned in connection with the business of any member
of the Company Group.
8. MISCELLANEOUS
8.1 NOTICES. All notices, requests, demands and other communications
(collectively, "NOTICES") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service, courier, facsimile transmission or
by United States first class, registered or certified mail, addressed to the
following addresses:
If to the Company, to:
Symposium Corporation
410 Park Avenue
18th Floor
New York, NY 1022
Attn: Chairman of the Board
If to Employee, to:
Employee's address as set forth on the books
and records of the Company
Any Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails. Any
party may from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this Section.
8.2 ENTIRE AGREEMENT. This Agreement contains the sole and entire agreement
and understanding of the parties with respect to the entire subject matter of
this Agreement, and any and all prior discussions, negotiations, commitments and
understandings, whether oral or otherwise, related to the subject matter of this
Agreement are hereby merged herein. No party to this Agreement has relied on any
representations, oral or otherwise, express or implied, other than those
contained in this Agreement.
8.3 SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
8.4 GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Florida. The parties agree that for so long as Employee
resides in Florida, the exclusive
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<PAGE>
venue and jurisdiction for any dispute arising out of this Agreement shall be
the United States District Court for the Middle District of Florida or the
circuit court of Hillsborough County, Florida. Each party hereto waives the
right to a trial by jury in any dispute in connection with or relating to this
Agreement or employee's employment, and agree to take any and all action
necessary or appropriate to effect such waiver. In the event of litigation,
this Agreement may be filed as written consent to a trial by the Court.
8.5 CAPTIONS. The various captions of this Agreement are for reference only
and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
8.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
8.7 ATTORNEYS' FEES. If any action or proceeding is brought to enforce or
interpret any provision of this Agreement, the prevailing party shall be
entitled to recover as an element of its costs, and not its damages, its
reasonable attorneys' fees, costs and expenses. The prevailing party is the
party who is entitled to recover its costs in the action or proceeding. A party
not entitled to recover its costs may not recover attorneys' fees. No sum for
attorneys' fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover its costs or
attorneys' fees.
In Witness Whereof, the parties have executed this Agreement as of the date
first above written.
Symposium Corporation
By: /S/ RONALD ALTBACH
-----------------------------------
Ronald Altbach
Chief Operating Officer
By: /S/ POLLY A. BAUER
-----------------------------------
Polly A. Bauer
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EXHIBIT A
TO
EMPLOYMENT AGREEMENT
COMMITTED SPEAKING ENGAGEMENTS
American Express -- November 1999 and February 2000
Mastercard International -- May 2000
VISA USA - July 2000
Electronic Retail Association - August 2000
National Retail Association - October 2000
SYMPOSIUM CORPORATION
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made and entered into
as of September 21, 1999, by and between Symposium Corporation, a Delaware
corporation (the "COMPANY"), and Tim S. Ledwick ("EMPLOYEE").
1. ENGAGEMENT AND RESPONSIBILITIES
(a) Upon the terms and subject to the conditions set forth in this
Agreement, the Company hereby employs Employee as an officer of the Company.
Employee hereby accepts such employment. Employee shall have the title of Chief
Financial Officer, but may have any executive officer title determined by the
Board of Directors provided that Employee always has a title which is no less
senior than Chief Financial Officer.
(b) Employee agrees to devote all of Employee's business time, energy
and efforts to the business of the Company and will use Employee's best efforts
and abilities faithfully and diligently to promote the Company's business
interests. Employee's duties and responsibilities shall be those incident to
those which are normally and customarily vested in such office(s) of a
corporation. In addition, Employee's duties shall include those duties and
services for the Company and its affiliates as the Board shall, in its sole and
absolute discretion, from time to time reasonably direct which are not
inconsistent with Employee's position described in Section 1(a).
(c) For so long as Employee is employed by the Company, Employee shall
not, directly or indirectly, either as an employee, employer, consultant, agent,
investor, principal, partner, stockholder (except as the holder of less than 5%
of the issued and outstanding stock of a publicly held corporation), corporate
officer or director, or in any other individual or representative capacity,
engage or participate in any business that is in competition in any manner
whatsoever with the business of the Company Group, as such businesses are now or
hereafter conducted.
2. DEFINITIONS
"BENEFITS TERMINATION DATE" shall mean: (i) two months following the
Date of Termination if Employee's employment with the Company terminates on or
prior to March 31, 2000; and (ii) six months following the Date of Termination
if Employee's employment with the Company terminates after March 31, 2000;
provided, however, that if any Person acquires more than fifty percent of the
outstanding voting securities of the Company, from and after the date of such
acquisition the Benefits Termination Date shall mean one year from the Date of
Termination.
"BOARD" shall mean the Board of Directors of the Company.
<PAGE>
"COMPANY GROUP" shall mean the Company and each Person that the Company
directly or indirectly Controls.
"CONTROL" shall mean, with respect to any Person, (i) the beneficial
ownership of more than 50% of the outstanding voting securities of such Person,
or (ii) the power, directly or indirectly, by proxy, voting trust or otherwise,
to elect a majority of the outstanding directors, trustees or other managing
persons of such Person.
"DISABILITY," with respect to Employee, shall mean that, for physical
or mental reasons, Employee is unable to perform the essential functions of
Employee's duties under this Agreement for 60 consecutive days, or 90 days
during any one six month period. Employee agrees to submit to a reasonable
number of examinations by a medical doctor advising the Company as to whether
Employee shall have suffered a disability and Employee hereby authorizes the
disclosure and release to the Company and its agents and representatives all
supporting medical records. If Employee is not legally competent, Employee's
legal guardian or duly authorized attorney-in-fact will act in Employee's stead
for the purposes of submitting Employee to the examinations, and providing the
authorization of disclosure.
"FOR CAUSE" shall mean, in the context of a basis for termination of
Employee's employment with the Company, that:
(a) Employee breaches any obligation, duty or agreement under this
Agreement, which breach is not cured or corrected within 15 days of written
notice thereof from the Company (except for breaches of Sections 1(c), 6 or 7 of
this Agreement, which cannot be cured and for which the Company need not give
any opportunity to cure); or
(b) Employee commits any act of fraud, embezzlement, breach of
fiduciary duty or trust against the Company Group; or
(c) Employee is indicted for, or convicted of, or pleads guilty or nolo
contendere with respect to, theft, fraud, a crime involving moral turpitude, or
a felony under federal or applicable state law; or
(d) Employee commits any act of personal conduct that, in the
reasonable opinion of the Board, gives rise to any member of the Company Group
of a material risk of liability under federal or applicable state law for
discrimination or sexual or other forms of harassment or other similar
liabilities to subordinate employees; or
(e) Employee commits continued and repeated substantive violations of
specific written directions of the Board, which directions are consistent with
this Agreement and Employee's position as a senior or executive officer, or
continued and repeated substantive failure to perform duties assigned by or
pursuant to this Agreement.
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"FULL START DATE" shall mean earlier of: (i) the date specified by the
Company as the "Full Start Date", and (ii) the date the Company has raised not
less than $10 million in one or a series of equity financings after the date
hereof.
"PERSON" shall mean an individual or a partnership, corporation, trust,
association, limited liability company, governmental authority or other entity.
3. COMPENSATION AND BENEFITS
For so long as Employee shall be employed by the Company, Employee
shall receive the compensation and benefits set forth in this Section 3.
(a) SALARY. The Company shall pay Employee a salary at an annual rate
of $210,000. The Board may, but shall not be obligated to, increase Employee's
salary from time to time. The salary shall be payable in installments in the
same manner and at the same times the Company pays salaries to other executive
officers of the Company, but in no event less frequently than equal monthly
installments.
(b) BONUS. On or before January 31 of each calendar year, commencing
with the year 2000, the Board of Directors or the Chief Executive Officer of the
Company, following consultation with Employee, shall establish a bonus plan for
Employee for such year which will permit Employee to earn a bonus for such year
in an amount ranging from $20,000 to $40,000. The terms and conditions of the
bonus plan shall be within the sole and absolute discretion of the Board of
Directors and/or the Chief Executive Officer. The bonus plan may provide
objective and/or subjective criteria for earning a bonus.
(c) EXPENSE REIMBURSEMENT. Employee shall be entitled to reimbursement
from the Company for the reasonable out-of-pocket costs and expenses which
Employee incurs in connection with the performance of Employee's duties and
obligations under this Agreement in a manner consistent with the Company's
practices and policies therefor.
(d) EMPLOYEE BENEFIT PLANS. Employee shall be entitled to participate
in any pension, savings and group term life, medical, dental, disability, and
other group benefit plans that the Company makes available to its employees
generally.
(e) VACATION. Employee shall be entitled to paid vacation which accrues
at a rate of two weeks per year through September 30, 2000 and three weeks per
year thereafter. Vacation shall accrue in accordance with the Company's standard
vacation accrual policy.
(f) DISABILITY. In the event of any Disability, if Employee shall
receive payments as a result of such Disability under any disability plan
maintained by the Company or from any government agency, the Company shall be
entitled to deduct the amount of such payments received from base salary payable
to Employee during the period of such Disability.
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<PAGE>
(g) WITHHOLDING. The Company may deduct from any compensation payable
to Employee (including payments made pursuant to Section 5 of this Agreement in
connection with or following termination of employment) amounts it believes are
required to be withheld under federal and state law, including applicable
federal, state and/or local income tax withholding, old-age and survivors' and
other social security payments, state disability and other insurance premiums
and payments.
4. TERM OF EMPLOYMENT
Employee's term of employment pursuant to this Agreement shall commence
as of the date hereof and shall terminate on the earliest to occur of the
following (the "DATE OF TERMINATION"):
(a) upon the date set forth in a written notice of termination from
Employee to the Company (which date shall at least 30 days after the delivery of
that notice if the notice is delivered after the Full Start Date); provided,
however, that in the event Employee delivers such notice to the Company, the
Company shall have the right to accelerate such termination by written notice
thereof to Employee (and such termination by the Company shall be deemed to be a
termination of employment pursuant to this Section 4(a), and not a termination
pursuant to Section 4(d) or 4(e) hereof);
(b) upon the death of Employee;
(c) upon delivery to Employee of written notice of termination by the
Company if Employee shall suffer a Disability;
(d) upon delivery to Employee of written notice of termination by the
Company For Cause; or
(e) upon delivery to Employee of written notice of termination by the
Company without cause.
5. SEVERANCE COMPENSATION
(a) If Employee's employment is terminated pursuant to Section 4(e) (by
the Company without cause) after the Full Start Date, the Company shall: (i)
until the Benefits Termination Date, continue to pay (A) pay to Employee salary
at the rate in effect on the Date of Termination; and (B) pay for Employee's
(and his immediate family's) participation in group medical, life, dental,
disability and similar plans to the extent permitted by the plan; and (ii) pay
to Employee a pro-rated share of any bonus which would have been earned by
Employee had Employee been employed the entire year, which bonus is directly
tied to, and calculated by reference to, the financial performance of the
Company for the year, all as set forth in the bonus plan adopted pursuant to
Section 3(b) of this Agreement..
(b) If Employee's employment is terminated for any reason other than by
the Company without cause after the Full Start Date, the Company shall pay to
Employee (or Employee's estate
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<PAGE>
or beneficiary, as the case may be) any unpaid base salary through the Date of
Termination and any bonus for the year prior to the year in which the Date of
Termination occurs which has not been paid. Employee shall not be entitled to
any bonus for the year in which the Date of Termination occurs. All rights and
benefits which Employee or his estate may have under employee benefit plans in
which Employee shall be participating at the date of termination of employment
shall be determined in accordance with such plans.
(c) If Employee's employment is terminated by the Company pursuant to
Section 4(d) (by the Company For Cause), and subject to applicable law and
regulations, the Company shall be entitled to offset against any payments due
Employee any loss or damage which the Company shall suffer as a result of the
acts or omissions of Employee giving rise to termination under Section 4(d).
(d) Employee acknowledges that the Company has the right to terminate
Employee's employment without cause and that such termination shall not be a
breach of this Agreement or any other express or implied agreement between the
Company and Employee. Accordingly, in the event of such termination, Employee
shall be entitled only to those benefits specifically provided in this Section
5, and shall not have any other rights to any compensation or damages from the
Company for breach of contract.
(e) Employee acknowledges that in the event of termination of
Employee's employment for any reason, Employee (nor Employee's estate, heirs,
beneficiaries or others claiming through Employee) shall not be entitled to any
severance or other compensation from the Company except as specifically provided
in this Section 5. Without limitation on the generality of the foregoing, this
Section supersedes any plan or policy of the Company which provides for
severance to its officers or employees, and Employee shall not be entitled to
any benefits under any such plan or policy.
6. COVENANT NOT TO SOLICIT
From the date hereof until two years from the Date of Termination:
(a) Employee will not, directly or indirectly, influence or attempt to
influence any customer of the Company Group to reduce or discontinue its
purchases of any products or services from the Company Group or to divert such
purchases to any Person other than the Company Group.
(b) Employee will not, directly or indirectly, interfere with, disrupt
or attempt to disrupt the relationship, contractual or otherwise, between the
Company Group and any of its respective suppliers, principals, distributors,
lessors or licensors; and
(c) Employee will not, directly or indirectly, solicit any employee of
the Company Group to work for any Person.
7. CONFIDENTIALITY
Employee agrees not to disclose or use at any time (whether during or
after Employee's employment with the Company) for Employee's own benefit or
purposes
Page 5
<PAGE>
or the benefit or purposes of any other Person any trade secrets, information,
data, or other confidential information relating to customers, development
programs, costs, marketing, trading, investment, sales activities, promotion,
credit and financial data, financial methods, plans, or the business and affairs
of the Company Group generally, PROVIDED that the foregoing shall not apply to
information which is not unique to the Company Group or which is generally known
to the industry or the public other than as a result of Employee's breach of
this covenant. Employee agrees that upon termination of his employment with the
Company for any reason, he will return to the Company immediately all memoranda,
books, papers, plans, information, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company Group
except that he may retain personal notes, notebooks, diaries, rolodexes and
addresses and phone numbers. Employee further agrees that he will not retain or
use for his account at any time any trade names, trademark or other proprietary
business designation used or owned in connection with the business of any member
of the Company Group.
8. MISCELLANEOUS
(a) NOTICES. All notices, requests, demands and other communications
(collectively, "NOTICES") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service, courier, facsimile transmission or
by United States first class, registered or certified mail, addressed to the
following addresses:
If to the Company, to:
Symposium Corporation
410 Park Avenue
18th Floor
New York, New York 10022
Attn: Chief Executive Officer and Board of Directors
If to Employee, to:
Employee's address as set forth on the books
and records of the Company
Any Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails. Any
party may from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this Section.
(b) ENTIRE AGREEMENT. This Agreement contains the sole and entire
agreement and understanding of the parties with respect to the entire subject
matter of this Agreement, and any and all prior discussions, negotiations,
commitments and understandings, whether oral or otherwise, related to the
subject matter of this Agreement are hereby merged herein. No representations,
oral
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<PAGE>
or otherwise, express or implied, other than those contained in this Agreement
have been relied upon by any party to this Agreement.
(c) SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
(d) GOVERNING LAW. This Agreement has been made and entered into in the
State of New York and shall be construed in accordance with the laws of the
State of New York.
(e) CAPTIONS. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(g) ATTORNEYS' FEES. If any action or proceeding is brought to enforce
or interpret any provision of this Agreement, the prevailing party shall be
entitled to recover as an element of its costs, and not its damages, its
reasonable attorneys' fees, costs and expenses. The prevailing party is the
party who is entitled to recover its costs in the action or proceeding. A party
not entitled to recover its costs may not recover attorneys' fees. No sum for
attorneys' fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover its costs or
attorneys' fees.
In Witness Whereof, the parties have executed this Agreement as of the
date first above written.
Symposium Corporation
By: /S/ RONALD ALTBACH
-----------------------------------
Its Co-Chairman
By: /S/ TIM S. LEDWICK
-----------------------------------
Tim S. Ledwick
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, ASSIGNED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN
EXEMPTION FROM REGISTRATION
August 23, 1999 850,000 Warrants
SYMPOSIUM CORPORATION
410 Park Avenue, 18th Floor
New York, NY 10022
COMMON STOCK WARRANT CERTIFICATE
1. THE WARRANTS.
This certifies that Steve Antebi ("ANTEBI"), or registered assigns
("HOLDER"), is the holder of the number of warrants ("WARRANTS") of Symposium
Corporation (the "COMPANY") set forth above. Each Warrant entitles Holder to
purchase one share, subject to adjustment pursuant to Section 4 hereof (each a
"WARRANT SHARE") of common stock, par value $0.001 per share (the "COMMON
STOCK"), of the Company for $5.00 per share (as adjusted from time to time
pursuant to Section 4 hereof) (the "EXERCISE PRICE").
2. EXPIRATION OF WARRANTS.
The Warrants shall terminate and expire at 5:00 EST on August 23, 2004,
unless sooner terminated pursuant to Section 4(b) hereof.
3. EXERCISE OF WARRANTS.
(a) Any Warrants that have become exercisable may be exercised by Holder
only by delivery to the Company of:
(i) written notice of exercise (the "EXERCISE NOTICE") in form and
substance identical to Exhibit "A" attached hereto; and
(ii) payment of the Exercise Price of the Warrant Shares in cash or by
check.
(b) Upon receipt of Exercise Notice and the Exercise Price, the Company
shall promptly issue in the name of and deliver to Holder a stock certificate or
certificates evidencing the Warrant Shares.
(c) Notwithstanding anything to the contrary contained herein, the Warrants
may not be exercised unless and until any then-applicable requirements of all
state and federal laws and regulatory agencies shall have been fully complied
with to the reasonable good faith satisfaction of
<PAGE>
the Company and its counsel and the representations and warranties of Holder
made in the Exercise Notice shall be true and correct.
4. ADJUSTMENTS UPON RECAPITALIZATION.
(a) Subject to the provisions of Section 4(b), if any change is made in the
Common Stock, without receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company) the Warrants will be appropriately adjusted in the class(es) and number
of shares and exercise price per share of stock subject to the Warrants. The
conversion of any convertible securities of the Company shall not be treated as
a "transaction not involving the receipt of consideration by the Company."
(b) The Warrants shall terminate upon a dissolution, liquidation or sale of
substantially all of the assets of the Company, or a merger or consolidation in
which the Company is not the surviving corporation; provided that the Warrants
shall be exercisable notwithstanding the limitations in Section 3(a) for a
period of at least 20 days from the date specified in a notice from the Company
to Holder advising Holder of such dissolution, liquidation, sale of assets,
merger or consolidation (and any exercise by Holder shall be contingent upon the
consummation of such dissolution, liquidation, sale, merger or consolidation).
The determination as to which party to a merger or consolidation is the
"surviving corporation" shall be made on the basis of the relative equity
interests of the consolidation, as follows: if following any merger or
consolidation the holders of outstanding voting securities of the Company
immediately prior to the merger or consolidation own equity securities
possessing more than 50% of the voting power of the corporation existing
following the merger or consolidation, then for purposes of the Warrants, the
Company shall be the surviving corporation. In all other cases, the Company
shall not be the surviving corporation. In making the determination of ownership
by the shareholders of a corporation immediately after the merger or
consolidation of equity securities pursuant to this Section 4(b), equity
securities which the shareholders owned immediately before the merger or
consolidation, as shareholders of another party to the transaction shall be
disregarded. Further, for purposes of this Section 4(b) only, outstanding voting
securities of a corporation shall be calculated by assuming the conversion of
all equity securities convertible (immediately or at some future time) into
shares entitled to vote.
(c) The provisions of this Section 4 are intended to be exclusive, and
Holder shall have no other rights upon the occurrence of any of the events
described in this Section 4.
(d) The grant of the Warrants shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes in its capital or business structure, or to merge, consolidate, dissolve
or liquidate, or to sell or transfer all or any part of its business or assets.
(e) If the Warrants terminate prior to August 23, 2004 pursuant to Section
4(b) above, in lieu of paying the Exercise Price in cash or by check, Holder
shall have the right to exercise the Warrants in full or in part by surrendering
the Warrant Certificate in exchange for a number of shares of Common Stock equal
to: (i) the aggregate Market Price of the Warrant Shares underlying the Warrants
being exercised minus the aggregate Exercise Price of the Warrants being
exercised,
Page 2
<PAGE>
divided by (ii) the Market Price per share, each Market Price being determined
as of the date of exercise. The "MARKET PRICE" on any date shall be: (i) if the
reason for the termination is a transaction in which the common shareholders of
the Company receive cash for their shares of Common Stock (for example, a
"cash-out merger"), the Market Price shall be the cash per received by the
common shareholders; and (ii) in any other circumstance, the Market Price shall
be the average of the Daily Market Prices for each of the 10 trading days
immediately preceding such date. The "DAILY MARKET PRICE" on any date shall be
deemed to be the last reported sale price of the Common Stock on such date, or,
in the case no such reported sales take place on such date, the last reported
sale price on the preceding date on which there was a last reported sales price,
as officially reported by the principal securities exchange in which the shares
of Common Stock are listed or admitted to trading or by the Nasdaq Stock Market,
or if the Common Stock is not listed or admitted to training on any national
securities exchange or the Nasdaq Stock Market, the closing bid price as
furnished by the National Association of Securities Dealers, Inc. through Nasdaq
or a similar organization or if Nasdaq is no longer reporting such information.
If the Daily Market Price cannot be determined pursuant to the sentence above,
the Daily Market Price shall be determined in good faith (using customary
valuation methods) by resolution of the members of the board of directors of the
Company based on the information best available to it.
5. RIGHTS AS STOCKHOLDER.
Holder shall have no rights, privileges, duties, or obligations whatsoever
as shareholder of the Company, including the right to vote, receive dividends,
consent, or receive notices as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or any other matter
until such time as Holder duly exercises the Warrants pursuant to Section 3
hereof. The Company will provide to the Holder any notices and other documents
which it provides to its shareholders generally at the time and in the manner in
which it notifies its shareholders.
6. TRANSFER OF WARRANT.
Holder agrees not to sell, assign, transfer, pledge, grant a security
interest in, or otherwise dispose of, with or without consideration ("TRANSFER")
the Warrants except pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), or an exemption from
registration. As a further condition to any such Transfer, except in the event
that such Transfer is made pursuant to an effective registration statement under
the Securities Act, if in the reasonable opinion of counsel to the Company any
Transfer of the Securities by the contemplated transferee thereof would not be
exempt from the registration and prospectus delivery requirements of the
Securities Act, the Company may require the contemplated transferee to furnish
the Company with an investment letter setting forth such information and
agreements as may be reasonable requested by the Company to ensure compliance by
such transferee with the Securities Act.
7. REPRESENTATIONS OF ANTEBI.
Antebi hereby represents and warrants to the Company as follows:
(a) He is acquiring the Warrants for his own account, for investment
purposes only.
Page 3
<PAGE>
(b) He understands that an investment in the Warrants involves a high
degree of risk, and he has the financial ability to bear the economic risk of
this investment in the Warrants, including a complete loss of such investment.
He has adequate means for providing for its current financial needs and has no
need for liquidity with respect to this investment.
(c) He is an "accredited investor" as that term is defined in Rule 501(a)
under Regulation D promulgated pursuant to the Securities Act.
(d) He has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of an investment in the
Warrants.
(e) He understands that the Warrants have not been registered under the
Securities Act or under any state securities laws. He is familiar with the
provisions of the Securities Act and Rule 144 thereunder and understands that
the restrictions on transfer placed on the Warrants may result in him being
required to hold the Warrants for an indefinite period of time.
(f) He believes that he has received all the information he considers
necessary or appropriate for deciding whether to invest in the Warrants, and he
has had an opportunity to ask questions and receive answers from the Company and
its officers and directors regarding the business, prospects and financial
condition of the Company.
8. REPRESENTATIONS OF THE COMPANY.
The Company by represents and warrants to, and agrees with, the Holder as
follows:
(a) The Warrants have been duly authorized and are validly issued, fully
paid and non-assessable;
(b) The Warrant Shares have been duly authorized and upon issuance in
accordance with the Warrants will be validly issued, fully paid and
non-assessable; and
(c) The Company has reserved and will continue to reserve from its
authorized but unissued shares of Common Stock a sufficient number of shares for
issuance upon exercise the Warrants.
9. REGISTRATION OF WARRANT SHARES.
(a) In the event that on or after January 1, 2000, the Company files a
registration statement under the Securities Act, registering the sale by the
Company of shares of Common Stock of the Company for cash (other than in
connection with an employee benefit plan), the Company shall offer to include
the Warrant Shares in the registration statement, and shall include the number
of Warrant Shares which Antebi requests in writing be included within 15 days
after receipt of the Company's notice; provided that if the if the offering is
to be firmly underwritten:
(i) Antebi may include Warrant Shares in the registration statement only if
he agrees to sell the Shares to the underwriters in the public offering;
Page 4
<PAGE>
(ii) If the managing underwriter advises the Company that it will not
include shares of shareholders of the Company in the offering, then the Company
shall have no obligation to include Warrant Shares in the registration
statement;
(iii) If the managing underwriter advises the Company that the number
of shares which may be included is limited, the shares to be included shall
first be allocated to the Company and then to all shareholders of the Company
having the right to include shares, pro rata based on the number of shares held.
The Company shall have the right, in its sole discretion, to determine not
to proceed with any registration commenced or proposed to be commenced.
(b) In connection with the registration, the Company will:
(i) furnish to Antebi a copy of the registration statement and each
amendment to the registration statement and such number of copies of the final
prospectus included under such registration statement as Antebi may reasonably
request in order to facilitate the distribution of the Warrant Shares owned by
Antebi; and
(ii) will notify Antebi of the issuance of any stop order by the
Securities and Exchange Commission in connection with the registration
statement.
(c) As a condition to including any Warrant Shares in the registration
statement, Antebi must complete and provide to the Company all questionnaires,
powers of attorney, indemnities and other documents which reasonably be required
by the Company in connection with the registration statement and execute any
agreement approved by the Company and required by the underwriters (if any).
(d) Following the effectiveness of the registration statement, upon receipt
from the Company of a notice that the registration statement contains an untrue
statement of material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, Antebi will immediately
discontinue disposition of Warrant Shares pursuant to the registration statement
until the Company notifies Antebi that he may resume sales of Warrant Shares
and, if necessary, provides to Antebi copies of the supplemental or amended
prospectus. In such event, Antebi will deliver to the Company all copies, other
than permanent file copies then in Antebi's possession, of the most recent
prospectus covering the Warrant Shares.
(e) The Company agrees to indemnify and hold harmless Antebi from and
against any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Warrant Shares (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished in writing
to the Company
Page 5
<PAGE>
by Antebi or on Antebi's behalf expressly for use therein; provided that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply to
the extent that any such loss, claim, damage, liability or expense results from
the fact that a current copy of the prospectus (or, in the case of a prospectus,
the prospectus as amended or supplemented) was not sent or given to the person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Warrant Shares concerned to such person.
(f) Antebi agrees to indemnify and hold harmless the Company, its officers,
directors and agents and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934 to the same extent as the foregoing indemnity
from the Company to Antebi, but only (i) with respect to information furnished
in writing by Antebi or on Antebi's behalf expressly for use in any registration
statement or prospectus relating to theWarrant Shares, or any amendment or
supplement thereto, or any preliminary prospectus or (ii) to the extent that any
loss, claim, damage, liability or expense described in Section 9(e) results from
the fact that a current copy of the prospectus (or, in the case of a prospectus,
the prospectus as amended or supplemented) was not sent or given to the person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Warrant Shares concerned to such person.
(g) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 4, such person (an "INDEMNIFIED PARTY") shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Party, and shall assume the payment of all fees and expenses; provided that the
failure of any Indemnified Party so to notify the Indemnifying Party shall not
relieve the Indemnifying Party of its obligations hereunder except to the extent
that the Indemnifying Party is materially prejudiced by such failure to notify.
In any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement
Page 6
<PAGE>
includes an unconditional release of such Indemnified Party from all liability
arising out of such proceeding.
(h) The obligations of the Company to include Warrant Shares in a
registration statement shall terminate one year after the issuance of the
Warrant Shares upon exercise of the Warrants.
(i) In the event of an underwritten public offering of capital stock by the
Company, Antebi agrees not to sell any capital stock of the Company (other than
Warrant Shares included in the offering) during such period as may be reasonably
requested by the managing underwriter of the offering (which period shall not be
longer than the period during which the directors of the Company may not sell
capital stock).
10. GENERAL PROVISIONS.
(a) NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be given to the parties hereto as
follows:
If to the Company, to:
Symposium Corporation
410 Park Avenue, 18th Floor
New York, NY 10022
Attention: Ronald Altbach
If to Holder, to the address set
forth in the records of the Company,
or at such other address or addresses as may have been furnished by either party
in writing to the other party hereto. Any such notice, request, demand or other
communication shall be effective (A) if given by mail, five days after such
communication is deposited in the mail by first-class certified mail, return
receipt requested, postage prepaid, addressed as aforesaid, or (B) if given by
any other means, when delivered at the address specified in this Section 10(a).
(b) GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of New York without giving effect to the principles of
conflicts of law thereof.
(c) LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of the Warrants, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of the Warrants, if mutilated, the
Company will make and deliver a new warrant of like tenor and dated as of such
cancellation, in lieu of the Warrants.
(d) MISCELLANEOUS. Titles and captions contained herein are inserted for
convenience of reference only and do not constitute a part hereof for any other
purpose. Except as specifically provided herein, neither the Warrants nor any
right pursuant hereto or interest herein shall be assignable by any of the
parties hereto without the prior written consent of the other party hereto.
Page 7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Common Stock
Warrant Certificate to be executed as of the date first above written.
SYMPOSIUM CORPORATION
By: /S/ RONALD ALTBACH
-----------------------------------
Ronald Altbach, Co-Chairman of the Board
ACCEPTED AND AGREED:
/S/ STEVE ANTEBI
- -----------------------------------
Steve Antebi
<PAGE>
EXHIBIT "A"
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF THE WARRANTS)
To: SYMPOSIUM CORPORATION
The undersigned hereby elects to purchase shares of Common Stock (the
"WARRANT SHARES") of Symposium Corporation, a Delaware corporation (the
"COMPANY"), pursuant to the terms of the enclosed common stock warrant
certificate (the "CERTIFICATE"). The undersigned tenders herewith payment of the
exercise price pursuant to the terms of the Certificate.
The undersigned hereby represents and warrants to, and agrees with, the
Company as follows:
(i) The undersigned is acquiring the Warrant Shares for its own account,
for investment purposes only.
(ii) The undersigned understands that an investment in the Warrant Shares
involves a high degree of risk, and the undersigned has the financial ability to
bear the economic risk of this investment in the Warrant Shares, including a
complete loss of such investment. The undersigned has adequate means for
providing for its current financial needs and has no need for liquidity with
respect to this investment.
(iii) The undersigned is an "accredited investor" as that term is defined
in Rule 501(a) under Regulation D promulgated pursuant to the Securities Act of
1933, as amended (the "ACT").
(iv) The undersigned has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of0 an
investment in the Warrant Shares.
(v) The undersigned understands that the Warrant Shares have not been
registered under the Act or under any state securities laws. The undersigned is
familiar with the provisions of the Act and Rule 144 thereunder and understands
that the restrictions on transfer placed on the Warrant Shares may result in the
undersigned being required to hold the Warrant Shares for an indefinite period
of time.
(vi) The undersigned believes that it has received all the information it
considers necessary or appropriate for deciding whether to invest in the Warrant
Shares, and the undersigned has had an opportunity to ask questions and receive
answers from the Company and its officers and directors regarding the business,
prospects and financial condition of the Company.
(vii) The undersigned agrees not to sell, assign, transfer, pledge, grant a
security interest in, or otherwise dispose of, with or without consideration
("TRANSFER") any of the Warrant Shares except pursuant to an effective
registration statement under the Act or an exemption from registration. As a
further condition to any such Transfer, except in the event that such Transfer
is made pursuant to an effective registration statement under the Act, if in the
reasonable opinion of counsel to the Company any Transfer of the Warrant Shares
by the contemplated transferee thereof would not be exempt from the registration
and prospectus delivery requirements of the Act, the Company may require the
contemplated transferee to furnish the Company with an investment
A-1
<PAGE>
letter setting forth such information and agreements as may be reasonable
requested by the Company to ensure compliance by such transferee with the Act.
Each certificate evidencing the Warrant Shares will bear the following
legend:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN EXEMPTION FROM REGISTRATION
Number of Warrants Exercised: ______________
Cashless Exercise ___ Yes ___ No (permitted only in certain circumstances)
Dated:
----------------------------------- -----------------------------------
[Name]
A-2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27.1 FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the interim
condensed consolidated financial statements of Symposium Corporation as of and
for the nine months ended September 30, 1999 included in this report on Form
10-QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0001069201
<NAME> Symposium Corporation
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> SEP-30-1999
<CASH> 318,686
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 349,513
<PP&E> 39,456
<DEPRECIATION> 3,276
<TOTAL-ASSETS> 1,717,437
<CURRENT-LIABILITIES> 334,909
<BONDS> 0
<COMMON> 12,999
0
0
<OTHER-SE> 1,369,529
<TOTAL-LIABILITY-AND-EQUITY> 1,717,437
<SALES> 0
<TOTAL-REVENUES> 100,704
<CGS> 0
<TOTAL-COSTS> (5,143,603)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,246,520)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,042,899)
<DISCONTINUED> (178,511)
<EXTRAORDINARY> 0
<CHANGES> (25,110)
<NET-INCOME> (5,246,520)
<EPS-BASIC> (.51)
<EPS-DILUTED> (.51)
</TABLE>
