SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SYNERGISTIC HOLDINGS CORP.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
_________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
_________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_________________________________________________________________
(5) Total fee paid:
_________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
_________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_________________________________________________________________
(3) Filing Party:
_________________________________________________________________
(4) Date Filed:
_________________________________________________________________
SYNERGISTIC HOLDINGS CORP.
50 Laser Court
Hauppauge, New York 11788
(516) 436-5000
December 11, 1997
Dear Shareholders:
On behalf of the Board of Directors and management of
Synergistic Holdings Corp. (the "Company"), I cordially invite you to attend the
Annual Meeting of Shareholders to be held on December 29, 1997, at 10:00 a.m.,
at the Company's offices located at 50 Laser Court, Hauppauge, New York 11788.
The matters to be acted upon at the meeting are fully
described in the attached Notice of Annual Meeting of Shareholders and Proxy
Statement. In addition, the directors and executive officers of the Company will
be present to respond to any questions that you may have. Accompanying the
attached Proxy Statement is the Company's Annual Report for the fiscal year
ended April 30, 1997. This report describes the financial and operational
activities of the Company.
Whether or not you plan to attend the annual meeting, please
complete, sign and date the enclosed proxy card and return it in the
accompanying envelope as promptly as possible. If you attend the Annual Meeting,
and I hope you will, you may vote your shares in person even if you have
previously mailed in a proxy card.
We look forward to greeting you at the meeting.
Sincerely,
Salvatore Crimi
Chairman of the Board, President and
Chief Executive Officer
SYNERGISTIC HOLDINGS CORP.
50 Laser Court
Hauppauge, New York 11788
--------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 29, 1997
--------------
TO THE SHAREHOLDERS OF
SYNERGISTIC HOLDINGS CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
(the "Annual Meeting") of Synergistic Holdings Corp., a Delaware corporation
(hereinafter "Company"), will be held at the Company's offices located at 50
Laser Court, Hauppauge, New York 11788, on December 29, 1997, at 10:00 a.m. for
the following purposes:
1. To elect directors of the Company to hold office until the
next Annual Meeting or until their respective successors are duly elected and
qualified;
2. To consider and act upon a proposal to amend the Company's
certificate of incorporation ("Certificate of Incorporation") in order to
increase the number of shares of Common Stock authorized for issuance
thereunder;
3. To consider and act upon a proposal to amend the Company's
Certificate of Incorporation in order to change the name of the Company to Salex
Holding Corporation;
4. To consider and act upon a proposal to adopt a stock option
plan and to authorize the maximum number of shares of common stock reserved for
issuance upon exercise of options granted under such plan;
5. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
December 8, 1997 as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Annual Meeting or any adjournments
thereof. Representation of at least a majority of all outstanding shares of
Common Stock is required to constitute a quorum. Accordingly, it is important
that your stock be represented at the meeting. The list of shareholders entitled
to vote at the Annual Meeting will be available for examination by any
shareholder at the Company's offices at 50 Laser Court, Hauppauge, New York
11788, for eleven (11) days prior to December 29, 1997.
Whether or not you plan to attend the Annual Meeting, please
complete, date and sign the enclosed proxy card and mail it promptly in the
self-addressed envelope enclosed for your convenience. You may revoke your proxy
at anytime before it is voted.
By Order of the Board of Directors,
Angelo Crimi
Secretary
Hauppauge, New York
December ___, 1997
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YOUR VOTE IS IMPORTANT, ACCORDINGLY, WE URGE YOU TO DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING.
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SYNERGISTIC HOLDINGS CORP.
TABLE OF CONTENTS
Page
----
PROXY STATEMENT................................................................................................. 1
INFORMATION CONCERNING VOTE..................................................................................... 1
ELECTION OF THE BOARD OF DIRECTORS.............................................................................. 2
EXECUTIVE COMPENSATION AND OTHER INFORMATION.................................................................... 4
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION................................................................................ 7
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS................................................................. 9
STOCK PERFORMANCE CHART......................................................................................... 9
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION AND TO INCREASE THE AMOUNT
OF SHARES AUTHORIZED TO BE ISSUED............................................................................... 10
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE
COMPANY TO SALEX HOLDING CORPORATION............................................................................ 10
PROPOSAL TO ADOPT A STOCK OPTION PLAN........................................................................... 11
OTHER MATTERS ARISING AT THE ANNUAL MEETING..................................................................... 13
LEGAL PROCEEDINGS............................................................................................... 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................................. 15
INDEMNIFICATION OF DIRECTORS AND OFFICERS....................................................................... 16
INDEPENDENT PUBLIC ACCOUNTANTS.................................................................................. 16
SECTION 16(a) REPORTING DELINQUENCIES........................................................................... 16
ANNUAL REPORT ON FORM 10-K...................................................................................... 18
EXHIBIT A....................................................................................................... 1
i
SYNERGISTIC HOLDINGS CORP.
50 Laser Court
Hauppauge, New York 11788
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PROXY STATEMENT
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For Annual Meeting of Shareholders
to be Held on December 29, 1997
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Approximate Mailing Date of Proxy Statement and Form of Proxy:December 11, 1997.
INFORMATION CONCERNING VOTE
General
This Proxy Statement and the enclosed form of proxy is
furnished in connection with the solicitation of proxies by the Board of
Directors of Synergistic Holdings Corp., a Delaware corporation (hereinafter,
the "Company"), for use at the annual meeting of shareholders to be held on
Monday, December 29, 1997, at 10:00 a.m., and at any and all adjournments
thereof (the "Annual Meeting"), with respect to the matters referred to in the
accompanying notice. The Annual Meeting will be held at the Company's offices
located at 50 Laser Court, Hauppauge, New York 11788.
A change in control of the Company, more particularly
described herein under the heading "Proposal to Amend the Certificate of
Incorporation to Change the Name of the Company to Salex Holding Corporation,"
occurred on September 19, 1996.
Voting Rights and Outstanding Shares
Only shareholders of record at the close of business on
December 8, 1997 are entitled to notice of and to vote at the Annual Meeting.
As of the close of business on December 8, 1997, __________ shares of common
stock, par value $.01 per share (the "Common Stock"), 1,000 shares of Series B
Convertible Preferred Stock, par value $.01 per share (the "Series B Preferred
Stock") and 25,000 shares of Series C Preferred Stock, par value $.01 per share
(the "Series C Preferred Stock") were issued and outstanding. Each share of
Common Stock entitles the record holder thereof to 1 vote on all matters
properly brought before the Annual Meeting. Each share of Series B Preferred
Stock entitles the record holder thereof to 2,059.106 votes on all matters
properly brought before the Annual Meeting. Each share of Series C Preferred
Stock entitles the record holder to 100 votes on all matters properly brought
before the Annual Meeting.
Revocability of Proxies
A shareholder who executes and mails a proxy in the enclosed
return envelope may revoke such proxy at any time prior to its use by notice in
writing to the Secretary of the Company, at the above address, or by revocation
in person at the Annual Meeting. Unless so revoked, the shares represented by
duly executed proxies received by the Company prior to the Annual Meeting will
be presented at the Annual Meeting and voted in accordance with the
shareholder's instructions marked thereon. If no instructions are marked
thereon, proxies will be voted (1) FOR the election as directors, the nominees
named below under the caption "ELECTION OF DIRECTORS;" (2) FOR the increase in
authorized amount of shares to be issued as discussed below under the caption
"PROPOSAL TO AMEND CERTIFICATE OF INCORPORATION TO INCREASE AMOUNT OF AUTHORIZED
SHARES TO BE ISSUED;" (3) FOR the change in name of the Company as discussed
below
under the caption "PROPOSAL TO AMEND CERTIFICATE OF INCORPORATION TO CHANGE THE
NAME OF THE COMPANY;" and, (4) FOR the adoption of the stock option plan as
discussed below under the caption "PROPOSAL TO ADOPT THE STOCK OPTION PLAN." In
their discretion, the proxies are authorized to consider and vote upon such
matters incident to the conduct of the meeting and upon such other business
matters or proposals as may properly come before the meeting that the Board of
Directors of the Company does not know at a reasonable time prior to this
solicitation will be presented at the meeting.
Shareholder Proposals
If any shareholder of the Company intends to present a
proposal for consideration at the next Annual Meeting of Shareholders and
desires to have such proposal included in the Proxy Statement and form of Proxy
distributed by the Board of Directors with respect to such meeting, such
proposal must be received at the Company's principal executive offices, 50 Laser
Court, Hauppauge, New York 11788, Attention: Salvatore Crimi, not later than
September 29, 1998.
Voting Procedures
All votes shall be tabulated by the inspector of elections
appointed for the meeting, who shall separately tabulate affirmative and
negative votes, abstentions and broker non-votes. The presence of a quorum for
the Annual Meeting, defined here as a majority of the holders of the stock
issued and outstanding and entitled to vote at the meeting, being present in
person or represented by proxy, is required. Votes withheld from director
nominees and abstentions will be counted in determining whether a quorum has
been reached. Broker-dealer non-votes are not counted for quorum purposes.
Assuming a quorum has been reached, a determination must be
made as to the results of the vote on each matter submitted for shareholder
approval. Director nominees must receive a plurality of the votes cast at the
meeting, which means that a vote withheld from a particular nominee or nominees
will not affect the outcome of the meeting. The amendment to increase the amount
of authorized shares to be issued must be approved by a majority of the
outstanding stock entitled to vote. The amendment to change the name of the
Company must be approved by a majority of the outstanding stock entitled to
vote. The adoption of the Company's stock option plan must be approved by a
majority of the votes cast at the meeting.
Cost of Solicitation of Proxies
The solicitation of proxies pursuant to this Proxy
Statement is made by and on behalf of the Company's Board of Directors. The cost
of such solicitation will be paid by the Company. Such cost includes the
preparation, printing and mailing of the Notice of Annual Meeting, Proxy
Statement, Annual Report and form of proxy. The solicitation will be conducted
principally by mail, although directors, officers and employees of the Company
(at no additional compensation) may solicit proxies personally or by telephone
or telegram. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of proxy material to the
beneficial owners of shares held of record by such fiduciaries, and the Company
may reimburse such persons for their reasonable expenses in so doing.
Each holder of the Company's Common Stock who does not expect
to be present at the Annual Meeting or who plans to attend, but who does not
wish to vote in person, is urged to fill in, date and sign the enclosed Proxy
and return it promptly in the enclosed return envelope.
Item 1 ELECTION OF THE BOARD OF DIRECTORS
The Board of Directors has nominated seven (7) persons,
Salvatore Crimi, Angelo Crimi, Franklin Pinter, Andrew Lunetta, Francis
Fitzpatrick, Pershing Sun, and Syd Mandelbaum to be elected as Directors at the
Annual Meeting and to hold office until the next Annual Meeting or until their
successors have been duly elected and qualified. It is intended that each proxy
received by the Company will be voted For the election, as directors of the
Company, of the nominees listed below, unless authority is withheld by the
shareholder executing such proxy.
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Shares may not be voted cumulatively. Each of such nominees has consented to
being nominated and to serve as a director of the Company if elected. If any
nominee should become unavailable for election or unable to serve, it is
intended that the proxies will be voted for a substitute nominee designated by
the Board of Directors. At the present time, the Board of Directors knows of no
reason why any nominee might be unavailable for election or unable to serve. The
proxies cannot be voted for a greater number of persons than the number of
nominees named herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
Directors and Executive Officers
Set forth below is certain information with respect to each of
the nominees for the office of Director, each Director and each executive
officer of the Company.
Name Age Company Position and Offices Held
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Salvatore Crimi 72 Chief Executive Officer and Chairman of the
Board of Directors
Angelo Crimi 45 Secretary, Vice President Sales and
Vice-Chairman of the Board of Directors
Pershing Sun 54 Senior Vice President, Chief Information
Officer and Director
Franklin Pinter 47 Director
Syd Mandelbaum 47 Nominee for Director
Francis Fitzpatrick 56 Director
Andrew Lunetta 47 Nominee for Director
Salvatore Crimi has served as the Chairman of the Board of
Directors, Chief Executive Officer and President of the Company since September
18, 1996. From 1974 to 1996 Mr. Crimi served as Chairman of the Board and Chief
Executive Officer of Salex Holding Corporation. He is the father of Angelo
Crimi, the Vice Chairman of the Board of Directors, Vice President of Sales and
Secretary of the Company.
Angelo Crimi has served as the Vice Chairman of the Board of
Directors, Vice President of Sales, and Secretary of the Company since September
18, 1996. From 1995 to 1996 Mr. Crimi served as President of Salex Holding
Corporation. He is the son of Salvatore Crimi, the Chief Executive Officer,
Chairman of the Board of Directors and President of the Company.
Pershing Sun has served as a Director of the Company and
Senior Vice President and Chief Information Officer of the Company since
September 18, 1996. Form 1991 to 1996 Mr. Sun served as Chief Information
Officer of Salex Holding Corporation.
Franklin Pinter has served as a Director since January 7,
1997. From 1984 to the present Mr. Pinter has served as an investment and estate
planner with the firm of Arnonc, Lowth, Fanning.
Syd Mandelbaum has served as an account executive for Toshiba
American Medical Systems since 1997. From 1993 to 1997 Mr. Mandelbaum served as
a laser flow cytometry specialist with the Coulter Corporation. From 1990 to
1993 Mr. Mandelbaum was a Vice President of Cell Measurement Systems for Imager
Instrumentation.
-3-
Francis Fitzpatrick has served as Director since September 18,
1996. Mr. Fitzpatrick has served as a Vice President of Fitzpatrick Brothers
Corporation, an auto collision repair facility, since 1982.
Andrew Lunetta has served as a consultant to the Company since
July 1997. From 1995 to 1997, Mr. Lunetta served as Chief Financial Officer of
Tostal Corp., a publicly traded company. From 1982 to 1995, Mr. Lunetta was the
Vice President-Controller of Coyne Electrical Contractors, Inc.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors held five (5) meetings during fiscal
year May 1, 1996 to April 30, 1997. The Board of Directors appointed a
Compensation Committee and an Audit Committee on October 26, 1996.
The Compensation Committee is authorized to review all forms
of compensation paid to middle and senior management, make recommendations in
terms of employment contracts, issuing or awarding bonus type compensation, and
oversee and make recommendations for approval to the Board. The members of the
Compensation Committee for the fiscal year ended April 30, 1997 are Messrs. S.
Crimi, Sun, Swartwood, Fitzpatrick and Pinter. The Committee held no meetings
from October 26, 1996 to April 30, 1997.
The Audit Committee is responsible for making recommendations
to the Board of Directors as to all financial information of the Company. The
members of the Audit Committee for the fiscal year ended April 30, 1997 are
Messrs. Swartwood, A. Crimi and Dickson. The Committee held no meetings from
October 26, 1996 to April 30, 1997.
During the fiscal year ended April 30, 1997, all directors,
other than Franklin Pinter, who are nominated for election attended at least 75%
of the aggregate number of meetings of the Board held during the period for
which they have been a director.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary Compensation Table
The following table sets forth the cash and noncash
compensation awarded to or earned by the Chief Executive Officers who served in
that position during fiscal year ended April 30, 1997, and the most highly
compensated executive officer of the Company earning at least $100,000 per year.
-4-
Summary Compensation Table
Annual Compensation Long-Term Compensation
----------------------------- ----------------------
Awards
----------------------
Securities
Other Annual Underlying
Name and Principal Position Salary Compensation Options/SARs
--------------------------- ------ ------------ ----------------------
($) ($) (#)
Salvatore Crimi, $95,866 $12,214(2) 79,610
Chairman of the Board, Chief
Executive Officer and President(1)
Jeffrey Dickson, $103,365 $4,800(4) 300,000
President and Chief Operating Officer(3)
- ---------------------
(1) Mr. Salvatore Crimi was appointed Chief Executive Officer of the Company on
September 19, 1996.
(2) Includes $5,173 representing car and commuting allowances and $7,041
representing the value of certain health insurance benefits provided by the
Company.
(3) Mr. Dickson is no longer an employee of the Company.
(4) Represents car and commuting allowance.
Stock Option Grants
Set forth below is information on grants of stock options for
the named executive officers for the period May 1, 1996 to April 30,1997.
Option Grant in Last Fiscal Year
Individual Grants
-------------------------------------------------
Percent of Potential Realizable
Number of Total Value At Assumed Rates
Securities Options/SARs Exercise of Stock Price
Underlying Granted to of Base Appreciation for
Option/SARs Employees in Price Expiration Option Term
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- --------------------------- ----------------- ------------------ ------------- ------------- ------------- ----------
Salvatore Crimi 79,610 7% 2.125 11/21/02 $2.85 $3.76
500,000 44% 1.50 4/30/97 $1.22 $1.46
Jeffrey Dickson 300,000 27% 1.0 8/31/00
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Aggregated Options Exercised in Last Fiscal Year
and Fiscal Year-End Option Values*
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Fiscal Year-End (#) Options at Fiscal Year-End ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------------- ------------------------------- -------------------------------------
Salvatore Crimi 31,844 / 47,766 -- /--
Jeffrey Dickson 300,000 / -- -- / --
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(1) Calculated based on the average closing bid and asked prices as quoted by
the OTC Bulletin Board for the last business day of the fiscal year
($0.34) less the exercise price payable for such shares.
Directors' Compensation
Directors of the Company do not receive compensation for
serving on the Board of Directors or any of its committees. Upon adoption of the
Stock Option Plan each non-employee director will receive options, as a formula
grant, to purchase 5,000 shares of Common Stock at an exercise price equal to
their market value on the first trading day of each May.
Employment Contracts and Termination of Employment
and Change-In-Control Arrangements
In August 1995, the Salex Holding Corporation ("Salex")
entered into an employment agreement with Mr. Salvatore Crimi which provides for
his appointment as Chief Executive Officer for a term ending on August 4, 1998.
Mr. Crimi's agreement was assumed by the Company upon completion of the
acquisition of Salex. The term is automatically extended for additional one-year
periods unless either party gives written notice to the other of its desire not
to renew such term which notice must be given no later than ninety (90) days
prior to the end of each term on any such renewal. The agreement provides that
during each fiscal year of the Company until the expiration or termination of
the agreement, Mr. Crimi's annual base salary shall be the greater of (i) his
base salary for the immediate prior year plus the product obtainable by
multiplying Mr. Crimi's base salary for the immediate prior year by a
percentage, if any, by which, the Consumer Price Index for all Urban Consumers
- -- New York --Northeast New Jersey Region (the "CPI") for the month of December
of the immediate prior year exceeds the CPI for the month of December of the
year prior to the immediate prior year, or (ii) an amount at the annual rate as
determined by the Board of Directors of the Company. To demonstrate his
commitment to the Company during the fiscal year ended April 30, 1997, Mr. Crimi
reduced his base salary approximately 31.52% from $140,000 to $95,866. For the
fiscal year ending April 30, 1998, Mr. Crimi's base salary is $140,000.
In the event that the Company terminates Mr. Crimi's
employment, other than for cause, or Mr. Crimi terminates his employment as a
result of a breach by the Company of the agreement, Mr. Crimi will be paid
severance compensation equal to his annual base salary (at the rate payable at
the time of such termination) and accrued benefits plus an amount equal to the
lesser of one year's full base salary (as in effect at the time of such
termination and any other amounts owed to him under the agreement or the full
base salary (as in effect at the time of such termination) and any other amounts
that would have been payable to Mr. Crimi from the date of termination through
the original stated expiration date of the employment agreement. In the event
that the Company terminates Mr. Crimi's employment for cause or Mr. Crimi shall
terminate his employment for reasons other than a breach of the agreement by the
Company, the Company shall pay Mr. Crimi his full base salary and accrued
benefits
-6-
through the date of termination at the rate in effect at the time notice of
termination is given. For a period of two years following termination of Mr.
Crimi's employment for any reason (other than a termination by the Company
without cause) Mr. Crimi cannot perform services for or have an equity interest
in (except for an interest of 2% of less in an entity which is engaged in a
competitive business and which is publicly traded) any competitive business. In
addition, the Agreement provides that for the two year period following
termination of Mr. Crimi's employment for any reason, with or without cause, Mr.
Crimi cannot, directly or indirectly (including without limitation, as owner
employee, agent, consultant or independent contractor) provide or solicit
services of the type provided by the Company to any of its existing customers or
potential customers with which or with whom the Company has negotiated within
the twelve months preceding the date of termination of Mr. Crimi's employment.
BOARD OF DIRECTORS
REPORT ON EXECUTIVE COMPENSATION
It is the duty of the Compensation Committee to develop, administer, and review
the Company's compensation plans, programs, and policies, to monitor the
performance and compensation of executive officers and other key employees and
to make appropriate recommendations and reports to the Board of Directors
relating to executive compensation. The Company's compensation program is
intended to motivate, retain and attract management, linking incentives to
financial performance and enhanced shareholder value. The program's fundamental
philosophy is to tie the amount of compensation "at risk" for an executive to
his or her contribution to the Company's success in achieving superior
performance objectives. For the fiscal year ended April 30, 1997, the
Compensation Committee held no meetings. All matters relating to Executive
Compensation were acted upon by the Board of Directors. During the fiscal year
ended April 30, 1997 there were no salary increases or bonuses granted by the
Board of Directors to executive officers. To demonstrate their committment to
the success of the Company, Salvatore Crimi, Angelo Crimi and Pershing Sun each
agreed to reduce their respective annual salaries for the fiscal year ended
April 30, 1997.
Compensation Structure
The annual cash compensation of most of the executive officers, including the
Chief Executive Officer, consists primarily of annual salary. Non-cash
compensation of executive officers consists of options granted. The compensation
of each executive officer is based on an annual review of such officer's
performance by the Chief Executive Officer and his recommendations to the
Compensation Committee. In establishing and administering the variable elements
in the compensation of the Company's executive officers, the Compensation
Committee tries to recognize individual contributions, as well as overall
business results. Compensation levels are also determined based upon the
executive's responsibilities, the efficiency and effectiveness with which he
marshals resources and oversees the matter under his supervision, and the degree
to which he has contributed to the accomplishments of major tasks that advance
the Company's goals. In determining the size of option awards for a particular
executive officer, the Compensation Committee considers the amount of stock
options awarded to other executive officers in a like position, in addition to
the other compensation considerations discussed above.
-7-
Chief Executive Officer Compensation for Fiscal Year Ended April 30, 1997
Mr. Crimi, the Chief Executive officer of the Company, was
employed under an employment agreement which became effective on August 4, 1995,
and has a three year term that is renewable, automatically, for additional one
years periods unless either party gives written notice not to renew such term
which notice must be given not less than ninety (90) days prior to the end of
such term. In order to demonstrate his commitment to the Company, Mr. Crimi
reduced his annual base salary by 31.52% from $140,000 to $95,866 for the fiscal
year ended April 30, 1997. For the fiscal year ending April 30, 1998, Mr. Crimi
will be paid a base salary of $140,000.
December __, 1997
Respectfully submitted,
Salvatore Crimi
Pershing Sun
Francis Fitzpatrick
Franklin Pinter
Board of Directors
___________________________________________
-8-
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Mr. Salvatore Crimi, the Chief Executive Officer and President
of the Company, served as a Member of the Compensation Committee for the fiscal
year ended April 30, 1997.
STOCK PERFORMANCE CHART
The following graph sets forth the average of the high and low
closing sale price for the Common Stock (based on transaction data as reported
by the NASDAQ Small Cap Market) for the fiscal years ended 1995, 1996 and for
all quarters of fiscal year 1997 [OTC Bulletin Board] and for a peer group
selected by the Company consisting of companies which provide commercial
services. The businesses included in the Company-selected peer group are: Bettis
Corporation, CRW Financial Inc. and Cypress Financial Services Inc. Bettis
Corporation and CRW Financial Inc. are listed on the Nasdaq Small Cap Market and
Cypress Financial Services Inc. is quoted on the OTC Bulletin Board. The
Company's Stock began trading on the Nasdaq Small Cap Market on June 3, 1994 at
a price of $___ per share. On April 16, 1997 the Company was delisted. As of
such date the OTC Bulletin Board began quoting the Company's Common Stock.
COMPARISON of THREE-YEAR SHARE PRICES
Synergistic Holdings Corp. and Peer Group
The Company's Common Stock began trading on the Nasdaq Stock
Market on June 3, 1994 at a price of $__ per share.
SALX BETT(2) CRWF(3) CYFS(4)
4/30/95 2.25 3.03
4/30/96 3.00 5.25 3.69
7/31/96 2.88 6.00 11.13
10/31/96 2.88 7.13 9.50
1/31/97 1.28 8.63 3.13
4/30/97 0.34(1) 6.13 1.50
- ----------
(1) On April 16, 1997, the Company's Common Stock was delisted by the Nasdaq
Small Cap Market from April 16, 1997 through April 30, 1997, the
Company's Common Stock was quoted on the OTC Bulletin Board.
(2) In December 1996 Bettis Corporation merged with Daniel Industries, Inc.
(3) CRW Financial Inc. began trading on the Nasdaq Small Cap Market on May
15, 1995.
(4) The OTC Bulletin Board began quoting Cypress Financial Services, Inc. on
October 1, 1996.
-9-
Item 2 PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
AND TO INCREASE THE AMOUNT OF SHARES
AUTHORIZED TO BE ISSUED
The Board of Directors is hereby submitting to the
shareholders of the Company for their approval a proposed amendment of the
Certificate of Incorporation to increase the amount of shares authorized to be
issued. Pursuant to the Company's Certificate of Incorporation, an aggregate of
11,000,000 shares of capital stock, of which 10,000,000 shares shall be Common
Stock and 1,000,000 shall be preferred stock par value $.01 per share (the
"Preferred Stock") are authorized for issuance. The Board of Directors believes
that an increase in the authorized shares under the Certificate of Incorporation
is necessary to accommodate, among other things, the conversion rights of the
holders of the Series A Preferred Convertible Stock, the Series B Preferred
Stock and the Series C Preferred Stock. Pursuant to the terms of the
subscription agreement between the Company and the holders of the Series C
Preferred Stock, the Company has agreed that in the event that an amendment to
the Certificate of Incorporation to increase the number of shares of Common
Stock which the Company is authorized to issue by December 31, 1997 has not been
approved by the Board of Directors and shareholders, the Company will pay the
holders of the Series C Preferred Stock $1,000,000. Accordingly, on June 2,
1997, the Board of Directors adopted, subject to shareholder approval, an
amendment to the Certificate of Incorporation that increases the number of
shares of capital stock authorized for issuance under the Certificate of
Incorporation to 40,000,000 shares of which 39,000,000 shares shall be Common
Stock, 1,000,000 shares shall be Preferred Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
Item 3 PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
TO SALEX HOLDING CORPORATION
The Board of Directors proposes and recommends to the
shareholders for their approval an amendment to the Company's Certificate of
Incorporation to change the name of the Company to Salex Holding Corporation.
Prior to the Company's acquisition of the Salex Holding
Corporation ("Salex"), the Company was primarily engaged in securities trading,
securities brokerage, investment banking, and related financial activities.
Salex, a Delaware corporation, provided automobile asset management services and
managed on a nationwide basis, the maintenance and repair of fleets of
automobiles and trucks owned, leased and operated by corporate customers. In
August of 1995, the Company purchased from Salex 1,580,000 shares of Salex
common stock (the "Salex Common Stock") (which represented a 20% common equity
interest) for a purchase price of $1,500,000. In January of 1996, the Company
purchased an additional 363,400 shares of Salex Common Stock (representing a
4.6% common equity) directly from one of the principal shareholders of Salex,
Salvatore Crimi, for a purchase price of $500,000. Subsequently, on September
18, 1996 (the "Closing"), the Company's wholly-owned subsidiary, Salex
Industries, Inc., a Delaware corporation ("Subsidiary"), consummated a merger
contemplated by a Merger Agreement, dated June 27, 1996, as amended and restated
on September 18, 1996 (the "Merger Agreement"), by and among the Company,
Subsidiary, Salex, Salex Fleet Specialist Corp., a New York corporation, Salex
Fleet Management Corp., a New York corporation, Salex National Account Corp., a
New York corporation, Salex Salvage Disposal Corp., a New York corporation,
Salex Financial Services Corp., a New York corporation (collectively, the "Salex
Subsidiaries"), the Salvatore Crimi Family Limited Partnership, Pershing Sun,
Michael Sun, Jennifer Sun, Susan Tauss-Giovinco, Francis Fitzpatrick and
Harrison Fitzpatrick (collectively, the "Salex Shareholders") and T. Marshall
Swartwood and Thomas M. Swartwood. Pursuant to the Merger Agreement, the
Subsidiary was merged with and into Salex and (i) all of the shares of Salex
Common Stock held by the Company were cancelled and extinguished and (ii) all of
the 4,503,000 issued and outstanding shares of Salex Common Stock owned by the
Salex Shareholders were converted into (a) 4,003,165 shares of Common Stock and
(b) 1,000 shares of Series B Preferred Stock. Upon the filing by the Company of
a Certificate of Amendment to its Certificate of Incorporation increasing the
authorized capital stock of the Company, each share of Series B Preferred Stock
shall
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be converted into 2,059.106 shares of Common Stock. At the time of the closing
the shares of Common Stock delivered, together with the shares of Common Stock
into which the shares of Series B Preferred Stock are convertible, represented,
in the aggregate, 51% of the fully-diluted, issued and outstanding shares of the
Common Stock. This merger enabled the Salex Shareholders to acquire control of
the Company from T. Marshall Swartwood and Thomas M. Swartwood.
Immediately after the Closing, the Company divested itself of
substantially all its assets other than its investment in Salex. As a result,
the Company's primary business now is automobile asset management. The current
management of the Company and its board of directors have elected to concentrate
on expansion in the automobile asset management industry. Salex had achieved
significant good will in this sector and it is management's wish to leverage the
core competency of Salex and adopt it as the primary mission of this company.
Therefore it is management's intention to change the name of "Synergistic
Holdings Corp." to "Salex Holding Corporation".
The shareholders' approval of the proposal to change the name of the Company
includes granting the officers of the Company and each of them acting alone the
authority to take all such further actions as may be required to effectuate such
change, including, but not limited to, the filing of a formal Certificate of
Amendment to the Certificate of Incorporation on behalf of the Company with the
Secretary of State of the State of Delaware.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
Item 4 PROPOSAL TO ADOPT A STOCK OPTION PLAN
On June 2, 1997, the Board of Directors approved, subject to
shareholders' approval, the 1997 Incentive and Non-qualified Stock Option Plan
(the "Plan") and the maximum number of shares of Common Stock reversed for
issuance upon exercise of options granted under such Plan shall be an aggregate
of 4,000,000 shares subject to adjustments as specified under such Plan.
The Board of Directors believes that it is in the best
interests of the Company and its shareholders to adopt this Plan which will
allow the Company to grant options to help the Company secure and retain the
services of key employees and consultants.
A full copy of the proposed Plan is attached as Exhibit A to
the Proxy Statement. A brief description of the Plan is provided below. The
description below is qualified in its entirety by reference to the complete
Plan.
Description of the Stock Option Plan
SYNERGISTIC HOLDINGS CORP.
1997 INCENTIVE AND NON-QUALIFIED
STOCK OPTION PLAN
1. Purpose
The purpose of the 1997 Incentive and Non-qualified Stock Option Plan
(the "Plan") is to encourage and enable key employees (which term, as used
herein, shall include officers), directors, consultants and advisors to the
Company or subsidiary, and other persons or entities providing goods or services
to the Company to acquire a proprietary interest in the Company through the
ownership of common stock of the Company. Such directors, consultants, advisors
and other persons or entities providing goods or services to the Company and
entitled to receive options hereunder are hereinafter collectively referred to
as the "Associates." An employee or Associate to whom an option has been granted
will provide such employee and Associate with a more direct stake in the future
welfare of the Company and encourage them to remain employed by or associated
with the Company. It is also
-11-
expected that the Plan will encourage qualified persons to seek and accept
employment or association with the Company.
The Plan provides for the grant of "incentive stock options" to employees
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and non-qualified stock options
("Non-qualified Options") to Associates. The Plan will be administered by the
Board of Directors.
The Plan will authorize the issuance of options to purchase a maximum of
4,000,000 shares of Common Stock. The Plan contains customary provisions with
respect to adjustments for stock splits and similar transactions. If any stock
option granted under the Plan terminates, expires unexercised, or is cancelled,
the shares of Common Stock that would otherwise have been issuable pursuant
thereto will be available for issuance pursuant to the grant of new stock
option.
The Board of Directors has exclusive discretion (except as may be
designated or permitted in the Plan or by the By-Laws of the Company) to select
to whom stock options will be granted and to determine the type, size, terms and
conditions under which each stock option may be exercisable, and the expiration
date of each option. The Board of Directors also has exclusive discretion to
make all other determinations which its members deem necessary or desirable in
the interpretation and administration of the Plan.
Stock options granted under the Plan generally expire not later than ten
years after the date on which they are granted. The exercise price may not be
less than 100% of the fair market value of the Common Stock on the date any such
stock option is granted (110% in the case of any optionee with, at the time of
grant, owns, directly or by attribution, more than 10% of the combined voting
power of all classes of capital stock of the Company a "ten percent owner
optionee"). In addition, the term of an Incentive Stock Option for a ten percent
owner optionee cannot exceed five years from the date of grant. The aggregate
fair market value (determined at the time the option is granted) of the Common
Stock granted as Incentive Stock Options to an optionee that may become
exercisable for the first time during any calendar year cannot exceed $100,000
(or such other limit as may be imposed by the Code).
The Board of Directors may amend the Plan at any time and from time to
time, but any such amendment is subject to shareholder approval where the
absence of such shareholder approval would adversely affect the compliance of
the Plan with Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended, or other applicable laws or regulations. Accordingly, no action of
the Board may, without shareholder approval, increase the maximum number of
shares which may be issued upon exercise of an option, modify the eligibility
requirements of the Plan, reduce the minimum option exercise price requirement,
or extend the limits imposed on the period during which options may be granted
or issued.
Federal Income Tax Consequences
The following is a brief description of the federal income tax treatment
which will generally apply to benefits or awards (hereinafter, "awards") made
under the Plan, based on federal income tax laws in effect on the date hereof.
The exact federal income tax treatment of awards will depend on the specific
nature of any such award. BECAUSE THE FOLLOWING PROVIDES ONLY A BRIEF SUMMARY OF
THE GENERAL FEDERAL INCOME TAX RULES, INDIVIDUALS SHOULD NOT RELY THEREON FOR
INDIVIDUAL TAX ADVICE, AS EACH TAXPAYER SITUATION AND THE CONSEQUENCES OF ANY
PARTICULAR TRANSACTION WILL VARY DEPENDING UPON THE SPECIFIC FACTS AND
CIRCUMSTANCES INVOLVED. RATHER, EACH TAXPAYER IS ADVISED TO CONSULT WITH HIS OR
HER OWN TAX ADVISOR FOR PARTICULAR FEDERAL AS WELL AS STATE AND LOCAL INCOME AND
ANY OTHER TAX ADVICE.
The grant of an Incentive Stock Option or a Non-qualified Option under the
Plan would not result in income for the grantee or a deduction for the Company.
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The exercise of a Non-qualified Option would result in ordinary income for
the optionee and a deduction for the Company measured by the difference between
the option price and the fair market value of the shares received at the time of
exercise.
The exercise of an Incentive Stock Option would not result in income for
the grantee if the grantee (i) does not dispose of the shares within two years
after the date of grant or one year after the transfer of shares upon exercise,
and (ii) is an employee of the Company or a subsidiary of the Company from the
date of grant until three months before the exercise date. If these requirements
are met, the basis of the shares upon later disposition would be the option
exercise price. Any gain will be taxed to the employee as long-term capital gain
and the Company would not be entitled to a deduction. The excess of the market
value on the exercise date over the option exercise price is an item of tax
preference, potentially subject to the alternative minimum tax.
New Plan Benefits(1)
- --------------------------------------------------------------------------------------------------------------------------
1997 Incentive and Non-qualified Stock Option Plan
- --------------------------------------------------------------------------------------------------------------------------
Dollar(2)
Name and Position Value ($) Number of Units
- --------------------------------------------------------------------------------------------------------------------------
Non-Executive Director Group...................................... $1875.50 Options to purchase 5,000
shares of common stock
- --------------------------------------------------------------------------------------------------------------------------
Each nominee for election as a director........................... $937.75 Options to purchase 5,000
shares of common stock
- --------------------------------------------------------------------------------------------------------------------------
(1) The information set forth relates to benefits or amounts to which would
have been received or allocated for the fiscal year ended April 30, 1997
if the Plan had been in effect.
(2) Board on the average of the closing bid and asked prices of the Common
Stock as quoted on the OTC Bulletin Board on November 19, 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
Item 5 OTHER MATTERS ARISING AT THE ANNUAL MEETING
The matters referred to in the Notice of Annual Meeting and
described in this Proxy Statement are, to the knowledge of the Board of
Directors, the only matters that will be presented for consideration at the
Annual Meeting. If any other matters should properly come before the Annual
Meeting, the persons appointed by the accompanying proxy will vote on such
matters in accordance with their best judgment pursuant to the discretionary
authority granted to them in the proxy.
Security Ownership of Management and Certain Beneficial Owners(1)
The following table sets forth certain information, as of
August 26, 1997, regarding the beneficial ownership of the Company's Common
Stock by: (i) each shareholder known by the Company to be the beneficial owner
of more than five percent of the outstanding shares of the Company's Common
Stock; (ii) each Director of the Company and nominee for; (iii) each Named
Executive Officer (as hereinafter defined) of the Company; and (iv) all
Directors, nominees for Directors, and executive officers of the Company as a
group.
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Amount and Nature of
Name and Address of Beneficial Owner Beneficial Owner(2)(3) Percent of Class(2)(3)
- ------------------------------------------------------ ---------------------- -----------------------------
Salvatore Crimi Family Limited Partnership............ 1,631,696(4) 16.75
Meadows Management, LLC............................... 1,250,000(5)(6) 11.97
1500 Hempstead Turnpike
East Meadow, New York 11554
Dr. Robert Cohen...................................... 1,250,000(5)(6)(7) 11.97
1500 Hempstead Turnpike
East Meadow, New York 11554
Dr. Alan Cohen........................................ 1,250,000(5)(6)(8)(9) 11.97
1500 Hempstead Turnpike
East Meadow, New York 11554
Guardian Angel Management, Ltd........................ 1,250,000(5)(6)(9) 11.97
147 Redpoll Circle
North Hills, New York 11577
Jonathan Pratt........................................ 1,250,000(5)(6)(10) 11.97
147 Redpoll Circle
North Hills, New York 11577
Pershing Sun.......................................... 1,299,449(11) 13.48
Salvatore Crimi....................................... 1,091,483(12) 11.39
Franklin Pinter....................................... 75,000(13) *
Francis Fitzpatrick................................... 54,516(14) *
Angelo Crimi.......................................... -- --
Syd Mandelbaum........................................ -- --
Andrew Lunetta ....................................... -- --
All directors, nominees and executive officers as
a group (5 persons)................................... 2,520,448 25.06
- --------------------
* Less than one percent (1%).
(1) These tables are based upon information supplied by Schedules 13D and 13G,
if any, filed with the Securities and Exchange Commission (the "SEC").
Unless otherwise indicated in the footnotes to the table and subject to the
community property laws where applicable, each of the shareholders named in
this table has sole voting and investment power with respect to the shares
shown as beneficially owned by him. Applicable percentage of ownership is
based on 9,187,260 shares of Common Stock, which were outstanding on
November 19, 1997.
(2) Beneficial ownership is determined in accordance with the rules of the SEC.
In computing the number of shares beneficially owned by a person and the
percentage of ownership of that person, shares of Common Stock subject to
options or preferred stock held by that person that are currently
exercisable or convertible within 60 days of November 19, 1997 are deemed
outstanding. To the Company's knowledge, except as set forth in the
footnotes to this table and subject to applicable community property laws,
each person named in the table has sole voting and investment power with
respect to the shares set forth opposite such person's name.
-14-
(3) In calculating the percent of the outstanding shares of Common Stock, all
shares issuable on exercise of stock options or conversion of preferred
stock held by the particular beneficial owner that are included in the
column to the left of this column are deemed to be outstanding.
(4) Includes 553,900 shares which may be acquired upon the conversion of 269
shares of Series B Preferred Stock.
(5) Represents shares of Common Stock to be acquired upon the conversion of
12,500 shares of Series C Preferred Stock.
(6) At the annual meeting of shareholders Meadows Management, LLC ("Meadows"),
of which Dr. Robert Cohen and Dr. Alan Cohen are managing members, and
Guardian Angel Management, LTD ("Guardian Angel"), of which Jonathan Pratt
is the sole shareholder, intend to vote together on all matters presented
at such meeting. In the aggregate this group beneficially owns 2,500,000
shares.
(7) This amount includes all of the shares beneficially owned by Meadows. Dr.
Robert Cohen, a managing member of Meadows, has shared voting power and
shared investment power. Dr. Robert Cohen disclaims beneficial ownership of
such shares.
(8) This amount includes all of the shares beneficially owned by Meadows. Dr.
Alan Cohen, a managing member of Meadows has shared voting power and shared
investment power. Dr. Alan Cohen disclaims beneficial ownership of such
shares.
(9) The Company intends to challenge the validity of the transfer of 12,500
shares of Series C Preferred from Meadows to Guardian Angel of which
Jonathan Pratt is the sole shareholder.
(10) This amount includes all of the shares beneficially owned by Guardian
Angel. Jonathan Pratt disclaims beneficial ownership of such shares.
(11) Includes 436,530 shares which may be acquired upon the conversion of 212
shares of Series B Preferred Stock and 15,190 shares which may be acquired
upon the exercise of options which will be exercisable within 60 days. Does
not include 22,186 shares underlying options which are not exercisable
within 60 days.
(12) Includes 360,314 shares which may be acquired upon the conversion of 175
shares of Series B Preferred Stock and 31,844 shares which may be acquired
upon exercise of options which will be exercisable within 60 days. Does not
include 47,766 shares underlying option which are not exercisable within 60
days.
(13) Includes warrants to purchase 25,000 shares of Common Stock.
(14) Includes 956 shares which may be acquired upon the exercise of options
which will be exercisable within 60 days. Does not include 1,435 shares
underlying option which are not exercisable within 60 days.
LEGAL PROCEEDINGS
There are no material legal proceedings now pending or
threatened against the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 19, 1996, the Company retired 1,453,600 shares of
Common Stock purchased by the Company from Mr. Crimi for a purchase price of
$2,000,000. As payment for this obligation, the Company and Mr. Crimi agreed to
offset the amount owed Mr. Crimi against certain loans made by the Company to
Mr.
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Crimi totaling $1,004,212. In addition, the Company assumed a note payable by
Mr. Crimi to a former shareholder of the Company in the amount of $995,788.
Andrew Lunetta, a nominee for election as a director, is
currently serving as a consultant to the Company. Mr. Lunetta is paid $8,650 per
month and his employment may be terminated by either party at any time.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has entered into indemnity agreements with each of
its directors and executive officers. The indemnity agreements provide that
directors and executive officers (the "Indemnities") will be indemnified and
held harmless to the fullest possible extent permitted by law, including against
all expenses (including attorney's fees), judgments, fines, penalties and
settlement amounts paid or incurred by them in any action, suit or proceeding on
account of their services as director, officer, employee, agent or fiduciary of
the Company or as directors, officers, employees or agents of any other company
or entity at the request of the Company. The Company will not, however, be
obligated pursuant to the agreements to indemnify or advance expenses to an
indemnified party with respect to any action: (1) in which a judgment adverse to
the Indemnitee establishes (a) that the Indemnitee's acts were committed in bad
faith or were the result of active and deliberate dishonesty and, in either
case, were material, or (b) that the Indemnitee personally gained in fact a
financial profit or other advantage to which he or she was not legally entitled,
or (2) which the Indemnitee initiated, prior to a change in control of the
Company, against the Company or any director or officer of the Company unless
the Company consented to the initiation of such claim. The indemnity agreements
require an Indemnitee to reimburse the Company for expenses advanced only to the
extent that it is ultimately determined that the director or executive officer
is not entitled, under Section 145 of the General Corporation Law of the State
of Delaware and the indemnity agreement, to indemnification for such expenses.
INDEPENDENT PUBLIC ACCOUNTANTS
On May 23, 1997 the Board of Directors, dismissed BDO Seidman
LLP ("BDO") as the Company's auditors and replaced them with Feldman Radin &
Co., P.C. The reports of BDO did not contain an adverse opinion or a disclaimer
of opinion, and were not qualified or modified as to uncertainty, audit scope,
or accounting principles. There were no disagreements with the former auditors
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure related to the financial statements
which BDO reported on at the time of their dismissal which, if not resolved to
the former auditors' satisfaction, would have caused them to make reference to
the subject matter of the disagreement in connection with their report.
Representatives of Feldman Radin & Co., P.C., which audited the Company's fiscal
year ended April 30, 1997 financial statements, are expected to be present at
the Annual Meeting. They will have the opportunity to make a statement if they
so desire, and they are expected to be available to respond to appropriate
questions.
SECTION 16(a) REPORTING DELINQUENCIES
Section 16(a) of the Securities and Exchange Act of 1934
requires the Company's directors and executive officers, and persons who
beneficially own more than ten percent (10%) of a registered class of the
Company's equity securities, to file with the SEC reports of ownership and
changes in ownership of Common Stock and other equity securities of the Company.
Executive officers, directors and greater than ten percent (10%) beneficial
owners are required by SEC regulation to furnish the Company with copies of all
Section 16(a) reports that they file. Based solely upon a review of the copies
of such reports furnished to the Company or written representations that no
other reports were required, the Company believes that, during fiscal year ended
April 30, 1997, all filing requirements, other than those disclosed herein,
applicable to its executive officers, directors, and greater than ten percent
(10%) beneficial owners were met. Guardian Angel Management, LTD, Meadows
-16-
Management, LLC, Dr. Robert Cohen, Dr. Alan Cohen and Jonathan Pratt were
required to file Forms 3 by June 12, 1997. Such forms were filed on June 26,
1997.
-17-
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge to each person whose
proxy is solicited, upon the written request of any such person, a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1997,
filed with the SEC, including the financial statements and the schedules
thereto. The Company does not undertake to furnish without charge copies of all
exhibits to its Form 10-K, but will furnish any exhibit upon the payment of
Twenty Cents ($0.20) per page or a minimum charge of Five Dollars ($5.00). Such
written requests should be directed to Mr. Salvatore Crimi, 50 Laser Court,
Hauppauge, New York 11788. Each such request must set forth a good faith
representation that, as of December 10, 1997, the person making the request was
a beneficial owner of securities entitled to vote at the Annual Meeting. The
Company incorporates herein the Annual Report by reference.
By Order of the Board of Directors,
Angelo Crimi
Secretary
Hauppauge, New York
December __, 1997
-18-
EXHIBIT A
SYNERGISTIC HOLDINGS CORPORATION
1997 INCENTIVE AND NONQUALIFIED
STOCK OPTION PLAN
---------------------------------------
1. Purpose
The purpose of this Stock Option Plan (the "Plan") is to encourage and
enable key employees (which term, as used herein, shall include officers), and
directors, of Salex Holdings Corporation or a parent (if any) or subsidiary
thereof (collectively, unless the context otherwise requires, the
"Corporation"), consultants, and advisors to the Corporation, and other persons
or entities providing goods or services to the Corporation to acquire a
proprietary interest in the Corporation through the ownership of common stock of
the Corporation. As used herein, the term "parent" or "subsidiary" shall mean
any present or future corporation which is or would be a "parent corporation" or
"subsidiary corporation" of the Corporation as the term is defined in section
424 of the Internal Revenue Code of 1986, as amended (the "Code") (determined as
if the Corporation were the employer corporation). Such directors, consultants,
advisors, and other persons or entities providing goods or services to the
Corporation and entitled to receive options hereunder are hereinafter
collectively referred to as the "Associates," and the relationship of the
Associates to the Corporation is hereinafter referred to as "association with"
the Corporation. An employee or Associate to whom an option has been granted is
referred to as a "Grantee". Such ownership will provide such Grantees with a
more direct stake in the future welfare of the Corporation and encourage them to
remain employed by or associated with the Corporation. It is also expected that
the Plan will encourage qualified persons to seek and accept employment or
association with the Corporation.
2. Administration
(a) The Plan shall be administered by the Board of Directors
(the "Board").
(b) As it applies to the administration of the Plan, a majority
of the members of the Board shall constitute a quorum, and the action of a
majority of the members of the Board present at a meeting at which a quorum is
present, as well as actions taken pursuant to the unanimous written consent of
all of the members of the Board without holding a meeting, shall be deemed to be
actions of the Board. All actions of the Board and all interpretations and
decisions made by the Board with respect to any question arising under the Plan
shall be final and conclusive and shall be binding upon the Corporation and all
other interested parties.
(c) Subject to the terms and conditions of the Plan, the Board
shall be responsible for the overall management and administration of the Plan
and shall have such authority as shall be necessary or appropriate in order to
carry out its responsibilities, including, without limitation, the authority to
(i) interpret and construe the Plan and to determine the terms of all options
granted pursuant to the Plan, including, but not limited to, the persons to
whom, and the time or times at which grants shall be made, the number of options
to be included in the grants, the number of options which shall be treated as
incentive stock options (in the case of options granted to employees) as
described in section 422 of the Code, the number of options which do not qualify
as incentive stock options ("nonqualified options"), and the terms and
conditions thereof; (ii) to adopt rules and regulations and to prescribe forms
for the operation and administration of the Plan; and (iii) to take any other
action not inconsistent with the provisions of the Plan that it may deem
necessary or appropriate.
3. Eligibility and Participation
EXH. A-1
(a) Key employees and Associates are eligible to receive
options. Each option shall be granted, and the number of shares subject thereto
shall be determined by the Committee.
(b) Directors who are not officers of the Corporation shall
receive as formula grants, on an annual basis on the first trading day of each
May starting May 1, 1998, stock options for 5,000 shares of the Corporation's
common stock, at an exercise price equal to the fair market value of the stock
on the date of grant. The fair market value shall be determined in accordance
with Section 8 hereof.
4. Shares Subject to the Plan
(a) Options shall be evidenced by written agreements which
shall, among other things (i) designate the option as either an incentive stock
option or a nonqualified stock option, (ii) specify the number of shares covered
by the option; (iii) specify the exercise price, determined in accordance with
paragraph 7 hereof, for the shares subject to the option; (iv) specify the
option period determined in accordance with paragraph 6 hereof; (v) set forth
specifically or incorporate by reference the applicable provisions of the Plan;
and (vi) contain such other terms and conditions consistent with the Plan as the
Board may, in its discretion, prescribe.
(b) The stock to be offered and delivered under the Plan,
pursuant to the exercise of an option, shall be shares of the Corporation's
authorized common stock and may be unissued shares or reacquired shares, as the
Board may from time to time determine. Subject to adjustment as provided in
paragraph 13 hereof, the aggregate number of shares to be delivered under the
Plan shall not exceed Four Million (4,000,000) shares. If an option expires or
terminates for any reason during the term of the Plan prior to the exercise
thereof in full, the shares subject to but not delivered under such option shall
be available for options thereafter granted.
5. Incentive Stock options
(a) An option designated by the Board as an "incentive stock
option" is intended to qualify as an "incentive stock option" within the meaning
of section 422 of the Code. An incentive stock option shall be granted only to
an employee of the Corporation.
(b) No incentive stock option shall provide any person with a
right to purchase shares to the extent that such right first becomes exercisable
during a prescribed calendar year and the sum of (i) the fair market value
(determined as of the date of grant) of the shares subject to such incentive
stock option which first become available for purchase during such calendar
year, plus (ii) the fair market value (determined as of the date of grant) of
all shares subject to incentive stock options previously granted to such person
under all plans of the Corporation first become available for purchase during
such calendar year exceeds $100,000.
(c) Without prior written notice to the Board, a Grantee may
not dispose of shares acquired pursuant to the exercise of an incentive stock
option until after the later of (i) the second anniversary of the date on which
the incentive stock option was granted, or (ii) the first anniversary of the
date on which the shares were acquired; provided, however, that a transfer to a
trustee, receiver, or other fiduciary in any insolvency proceeding, as described
in section 422(c)(3) of the Code, shall not be deemed to be such a disposition.
The optionee shall make appropriate arrangements with the Corporation for any
taxes which the Corporation is obligated to collect in connection with any
disposition of shares acquired pursuant to the exercise of an incentive stock
option, including any Federal, state or local withholding taxes.
(d) Should Section 422 of the Code be amended during the term
of the Plan, the Board may modify the Plan consistently with such amendment.
EXH. A-2
6. Term of Option Period
The term during which options may be granted under the Plan shall
expire in ten years from the date approved by the Board and the option period
during which each option may be exercised shall, subject to the provisions of
paragraph 12 hereof, be during such period, expiring not later than the tenth
anniversary (the fifth anniversary in the case of incentive stock options
granted to a person who owns (within the meaning of section 424(d) of the Code)
more than 10 percent of the total combined voting power of all classes of stock
of the Corporation at the time such option is granted) of the date the option is
granted, as may be determined by the Board.
7. Option Price
The price at which shares may be purchased upon exercise of a
particular option shall be such price as may be fixed by the Board but in no
event less than the minimum required in order to comply with any applicable law,
rule or regulation and, in the case of incentive stock options, shall not be
less than 100 percent, or in the case of incentive stock options granted to an
optionee who is a 10 percent stockholder (within the meaning of paragraph 6
hereof), shall not be less than 110 percent, of the fair market value (as
defined in paragraph 8) of such shares on the date such option is granted.
8. Stock as Form of Exercise Payment
At the discretion of the Board, a Grantee who owns shares of the
Corporation's common stock may elect to use such shares, with the value thereof
to be determined as the fair market value of such shares on the day prior to the
date of exercise of the option, to pay all or part of the option price required
under the Plan. As used herein, fair market value shall be deemed to be the
closing price on such day of the Corporation's common stock if the Corporation's
common stock is then traded on a national securities exchange or the closing bid
price on such day of the Corporation's common stock, if such stock is traded on
the Nasdaq National Market System or Small-Cap Market System or, if not so
traded, the average of the closing bid and asked prices thereof on such day.
9. Exercise of Options
(a) Each option granted shall be exercisable in whole or in
part at any time, or from time to time, during the option period as the Board
may provide in the terms of such option; provided that the election to exercise
an option shall be made in accordance with applicable federal and state laws and
regulations.
(b) No option may at any time be exercised with respect to a
fractional share.
(c) No shares shall be delivered pursuant to the exercise of
any option, in whole or in part, until qualified for delivery under such
securities laws and regulations as may be deemed by the Board to be applicable
thereto, until such shares are listed on each securities exchange on which the
Corporation's common stock may then be listed, until, in the case of the
exercise of an option, payment in full of the option price is received by the
Corporation in cash or stock as provided in paragraph 8 and until payment in
cash of any applicable withholding taxes is received by the Corporation. Unless
prior to the exercise of the option the shares of the Corporation's common stock
issuable upon such exercise have been registered with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the notice of
exercise shall be accompanied by a representation or agreement of the individual
exercising the option to the Corporation to the effect that such shares are
being acquired for investment and not with a view to the resale or distribution
thereof or such other documentation as may be required by the Corporation unless
in the opinion of counsel to the Corporation such representation, agreement, or
documentation is not necessary to comply with said Act. No holder of an option,
or such holder's legal representative, legatee, or distributee shall be or be
deemed to be a holder of any shares subject to such option unless and until a
certificate or certificates therefor is issued in his name.
10. Acceleration of Vesting
EXH. A-3
(a) An option shall automatically be vested and immediately
exercisable in full upon the occurrence of any of the following events:
(i) Any person within the meaning of
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, other than the Corporation, has become the beneficial
owner, within the meaning of Rule 13d-3 under such Act, of 51
percent or more of the combined voting power of the
Corporation's then outstanding voting securities, unless such
ownership by such person has been approved by the Board
immediately prior to the acquisition of such securities by
such person;
(ii) The first day on which shares of the
Corporation's common stock are purchased pursuant to a tender
offer or exchange offer, unless such offer is made by the
corporation or unless such officer has been approved or not
opposed by the Board;
(iii) The stockholders of the Corporation
have approved an agreement to merge or consolidate with or
into another corporation (and the Corporation is not the
survivor of such merger or consolidation) or an agreement to
sell or otherwise dispose of all or substantially all of the
Corporation's assets (including a plan of liquidation), unless
the Board has resolved that options shall not automatically
vest; or
(iv) During any period of two consecutive
years, individuals who at the beginning of such period
constitute the Board of the Corporation cease for any reason
to constitute at least a majority thereof, unless the election
or the nomination for the election by the Corporation's
stockholders of each new director was approved by a vote of at
least a majority of the directors then still in office who
were directors at the beginning of the period.
(b) Other than upon the occurrence of any of the events
described in paragraph 10(a), the Board shall have the authority at any time or
from time to time to accelerate the vesting of any individual option and to
permit any stock option not theretofore exercisable to become immediately
exercisable.
11. Transfer of Options
Options granted under the Plan may not be transferred except
by will or the laws of descent and distribution and, during the lifetime of the
Grantee to whom granted, may be exercised only by such or by such Grantee's
guardian or legal representative.
12. Termination of Employment
(a) Except as specifically provided in this paragraph 12, an
incentive stock option shall be exercisable only if the Grantee has maintained
continuous status as an employee of the Corporation since the date of grant of
such option and no incentive stock option shall be exercisable three (3) months
after termination of a Grantee's employment with the Corporation unless such
termination occurs by death or disability (within the meaning of section
22(e)(3) of the Code). In the event of the death or disability of a Grantee, the
options held by such Grantee which were otherwise exercisable on the date of his
termination of employment shall expire unless exercised by such Grantee, or, in
the case of the death of a Grantee, by his heirs, legatees, or personal
representatives, within a period of twelve (12) months after the date of
termination of employment. In no event, however, shall any option be exercisable
after ten years from the date it was granted. The Board shall advise the holder
of one or more incentive stock options whose employment with the Corporation is
terminated for any reason, that in order for such options to be treated as
incentive stock options under the Code, he must exercise them within three (3)
months from the date of termination. Nothing in the Plan or in any option shall
confer upon any Grantee the right to continue in the employ of or association
with the Corporation or interfere in any way with the right of the Corporation
to terminate the employment or association of a Grantee at any time. The Board's
determination that a Grantee's employment or association has terminated and the
date thereof shall be final and conclusive on all persons affected thereby.
EXH. A-4
(b) The Board may, if it determines that to do so would be in
the Corporation's best interests, provide in a specific case or cases for the
exercise of options which would otherwise terminate upon termination of
employment with the Corporation for any reason, upon such terms and conditions
as the Board determines to be appropriate.
(c) In the case of a Grantee on an approved leave of absence,
the Board may, if it determines that to do so would be in the best interests of
the Corporation, provide in a specific case for continuation of options during
such leave of absence, such continuation to be on such terms and conditions as
the Board determines to be appropriate. Leaves of absence for such period and
purposes conforming to the personnel policy of the Corporation as may be
approved by the Board shall not be deemed terminations or interruptions of
employment.
13. Adjustments Upon Changes in Capitalization
(a) If the Corporation's outstanding common stock is hereafter
changed by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination, or exchange of shares or the
like, or dividends payable in shares of the Corporation's common stock, an
appropriate adjustment shall be made by the Board in the aggregate number of
shares available under the Plan and in the number of shares and price per share
subject to outstanding options. If the Corporation shall be reorganized,
consolidated, or merged with another corporation, or if all or substantially all
of the assets of the Corporation shall be sold or exchanged, the holder of an
option shall, after the occurrence of such a corporate event, be entitled to
receive upon the exercise of his option the same number and kind of shares of
stock or the same amount of property, cash, or securities as he would have been
entitled to receive upon the happening of any such corporate event as if he had
exercised such option and had been, immediately prior to such event, the holder
of the number of shares covered by such option. All adjustments made pursuant to
this paragraph to the terms or conditions of an incentive stock option shall be
subject to the requirements of section 424 of the Code.
(b) Any adjustment in the number of shares shall apply
proportionately to only the unexercised portion of any option granted hereunder.
If fractions of a share would result from any such adjustment, the adjustment
shall be revised to the next higher whole number of shares.
14. Termination, Modification, and Amendment
(a) The Plan shall terminate 10 years from the earlier of the
date of its adoption by the Board or the date on which the Plan is approved by
the stockholders of the Corporation and no option shall be granted after
termination of the Plan.
(b) The Plan may from time to time be terminated, modified, or
amended by the affirmative vote of the holders of a majority of the outstanding
shares of the Corporation entitled to vote thereon.
(c) The Board may at any time terminate the Plan or from time
to time make such modifications or amendments of the Plan as it may deem
advisable including, without limitation, modifications to reflect changes in
applicable law; provided, however, that the Board of Directors shall not (i)
modify or amend the Plan in any way that would disqualify any incentive stock
option issued pursuant to the Plan as an incentive stock option as defined in
section 422 of the Code or (ii) without approval by the affirmative vote of the
holders of a majority of the outstanding shares of the Corporation entitled to
vote thereon, increase (except as provided by paragraph 14) the maximum number
of shares as to which options may be granted under the Plan.
(d) No termination, modification, or amendment of the Plan,
may, without the consent of the Grantee, adversely affect the rights conferred
by such option.
EXH. A-5
15. Effective Date
The Plan shall become effective upon the adoption by the Board
subject to the approval by the affirmative vote of the holders of a majority of
the outstanding shares of the Corporation. All options granted prior to the date
of such stockholder approval shall be subject to such approval.
EXH. A-6
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SYNERGISTIC
HOLDINGS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS: December 29, 1997
The undersigned shareholder of Synergistic Holdings
Corporation, a Delaware corporation (the "Company"), hereby appoints
________________________________________, or any of them, voting singly in the
absence of the others, as his/her/its attorney(s) and proxy(ies), with full
power of substitution and revocation, to vote, as designated on the reverse
side, all of the shares of Common Stock of the Company, that the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
at 50 Laser Court, Hauppauge, New York 11788 at 10:00 a.m. (local time), on
December 29, 1997, or any adjournment or adjournments thereof, in accordance
with the instructions on the reverse side hereof.
This proxy, when properly executed, will be voted in the
manner directed herein by the undersigned shareholder. If no direction is made,
this proxy will be voted "FOR" each of the nominees listed in Proposal No. 1,
"FOR" Proposal No. 2, "FOR" Proposal No. 3 and "FOR" Proposal No. 4. The proxies
are authorized to vote as they may determine, in their discretion, upon such
other business as may properly come before the Meeting.
Please mark |X|
your votes as
indicated in
this example
The Board of Directors recommends a vote for Items 1 though 4.
FOR AGAINST ABSTAIN
ITEM 1 - ELECTION OF DIRECTORS ITEM 2-APPROVAL [ ] [ ] [ ]
OF PROPOSAL TO
FOR all nominees listed below [ ] AMEND THE
CERTIFICATE OF
INCORPORATION TO
INCREASE NUMBER OF
SHARES OF COMPANY
WITHHOLD AUTHORITY [ ] STOCK AUTHORIZED
to vote for all nominees listed below. FOR ISSUANCE
NOMINEES: ITEM 3-APPROVAL [ ] [ ] [ ]
Salvatore Crimi OF PROPOSAL TO
Angelo Crimi AMEND THE
Franklin Pinter CERTIFICATE OF
Francis Fitzpatrick INCORPORATION TO
Pershing Sun CHANGE THE
Andrew Lunetta COMPANY'S NAME TO
Syd Mandelbaum SALEX HOLDING
CORPORATION
WITHHELD FOR: (Write that nominee's name in the space provided below) ITEM 4-APPROVAL [ ] [ ] [ ]
OF THE COMPANY'S
____________________________________________________ STOCK OPTION PLAN
This Proxy, when properly executed, will be voted in accordance with the The proxies are authorized to vote as they may
directions given y the undersigned stockholder. If no directions are made, determine, in their discretion, upon such other
Item 2, Item 3, Item 4, and in the accompanying Proxy it will be voted business as may properly come before the meeting.
"FOR" Item 1, Statement, and as the proxies deem advisable on any other
matters as may properly come before the meeting.
Signature: _________________________________ Signature: ____________________________________ Date: ______________________________
NOTE: This Proxy should be marked, dated and signed by the shareholders exactly as his or her name appears hereon and returned
promptly in the enclosed envelope. Joint owners should each sign. Persons signing in a fiduciary capacity should so indicate.
If shares are held by joint tenants or as community property, both should sign.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS CARD PROMPTLY