================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM - 11K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES ACT OF 1934
[ ] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED: ________________________
[X] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM: April 1, 1998 to December
31, 1998; for the fiscal year ended March 31, 1998 and 1997
and from inception (December 26, 1995) to March 31, 1996
COMMISSION FILE NUMBER:
1-10210
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
EGLOBE, INC.
2000 PENNSYLVANIA AVENUE, NW, SUITE 4800, WASHINGTON, DC, 20006
================================================================================
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
CONTENTS
Report of Independent Certified Public Accountants F-2
Financial Statements
Statements of Net Assets Available for Benefits F-3 - F-6
Statements of Changes in Net Assets Available
for Benefits F-7 - F-10
Notes to Financial Statements F-11 - F-15
Supplemental Schedules
Line 27a - Assets Held for Investment
Purposes - December 31, 1998 F-16
Line 27d - Reportable Transactions -
Nine Months Ended December 31, 1998 F-17
Signature Page 18
Exhibit 23.1
Consent of BDO Seidman, LLP 19
Report of Independent Certified Public Accountants
Plan Administrator of eGlobe, Inc.
401(k) Profit Sharing Plan
Denver, Colorado
We have audited the accompanying statements of net assets available for benefits
of the eGlobe, Inc. 401(k) Profit Sharing Plan (formerly the Executive Telecard,
Ltd. 401(k) Profit Sharing Plan) (the "Plan") as of December 31, 1998, March 31,
1998 and 1997, and the related statements of changes in net assets available for
benefits for the nine months ended December 31, 1998 and for the year ended
March 31, 1998. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the eGlobe, Inc.
401(k) Profit Sharing Plan at December 31, 1998, March 31, 1998 and 1997, and
the changes in its net assets available for benefits for the nine months ended
December 31, 1998 and for the year ended March 31, 1998, in conformity with
generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying table of contents are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rule and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ BDO Seidman, LLP
Denver, Colorado
June 25, 1999
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
LARGE
MONEY INVESTMENT CAP
MARKET GRADE BOND BLEND APPRECIATION
DECEMBER 31, 1998 FUND FUND FUND FUND
- ----------------- ---- ---- ---- ----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ 46,247 $ - $ - $ -
Mutual Funds:
Smith Barney Investment
Grade Bond Fund - 28,139 - -
Smith Barney Large Cap
Blend Fund - - 101,308 -
Smith Barney Appreciation Fund - - - 114,505
Smith Barney International Equity Fund - - - -
eGlobe, Inc. Common Stock - - - -
------ ------ ------- -------
Total investments 46,247 28,139 101,308 114,505
Contributions receivable -
Employee 2,846 2,591 6,067 5,302
Contribution payable (273) - - -
Interfund receivable/payable (14,706) 1,531 5,308 7,736
------ ------ ------- -------
Net assets available for benefits $ 34,114 $ 32,261 $ 112,683 $ 127,543
------ ------ ------- -------
INTERNATIONAL
EQUITY EGLOBE, INC.
DECEMBER 31, 1998 FUND COMMON STOCK TOTAL
- ----------------- ---- ------------ -----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ - $ - $ 46,247*
Mutual Funds:
Smith Barney Investment
Grade Bond Fund - - 28,139*
Smith Barney Large Cap
Blend Fund - - 101,308*
Smith Barney Appreciation Fund - - 114,505*
Smith Barney International Equity Fund 39,671 - 39,671*
eGlobe, Inc. Common Stock - 46,114 46,114*
--------------- -------------- -----------
Total investments 39,671 46,114 375,984
Contributions receivable -
Employee 1,758 3,297 21,861
Contribution payable - - (273)
Interfund receivable/payable 175 (44) -
--------------- -------------- -----------
Net assets available for benefits $ 41,604 $ 49,367 $ 397,572
--------------- -------------- -----------
- -------------
* Represents 5% or more of net assets available for benefits.
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
LARGE
MONEY INVESTMENT CAP
MARKET GRADE BOND BLEND
MARCH 31, 1998 FUND FUND FUND
- -------------- ---- ---- ----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ 39,156 $ - $ -
Mutual Funds:
Smith Barney Investment
Grade Bond Fund - 23,208 -
Smith Barney Growth
and Income Fund - - 88,625
Smith Barney Appreciation Fund - - -
Smith Barney International Equity Fund - - -
eGlobe, Inc. Common Stock - - -
-------- ----- -----
Total investments 39,156 23,208 88,625
Contributions receivable -
Employee 1,572 1,271 4,234
Interest receivable 71 - -
Interfund receivable/payable (15,036) 1,079 4,039
-------- ----- -----
Net assets available for benefits $ 25,763 $ 25,558 $ 96,898
-------- ----- -----
INTERNATIONAL
APPRECIATION EQUITY EGLOBE, INC.
MARCH 31, 1998 FUND FUND COMMON STOCK TOTAL
- -------------- ---- ---- ------------ -----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ - $ - $ - $ 39,156 *
Mutual Funds:
Smith Barney Investment
Grade Bond Fund - - - 23,208*
Smith Barney Growth
and Income Fund - - - 88,625*
Smith Barney Appreciation Fund 74,545 - - 74,545*
Smith Barney International Equity Fund - 31,729 - 31,729*
eGlobe, Inc. Common Stock - - 48,284 48,284*
--------------- ------------- -------------- ------------
Total investments 74,545 31,729 48,284 305,547
Contributions receivable -
Employee 4,323 1,346 2,499 15,245
Interest receivable - - - 71
Interfund receivable/payable 8,955 688 275 -
--------------- ------------- -------------- ------------
Net assets available for benefits $ 87,823 $ 33,763 $ 51,058 $ 320,863
--------------- ------------- -------------- ------------
- -------------
* Represents 5% or more of net assets available for benefits.
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
LARGE
MONEY INVESTMENT CAP
MARKET GRADE BOND BLEND APPRECIATION
MARCH 31, 1997 FUND FUND FUND FUND
- -------------- ---- ---- ---- ----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ 11,302 $ - $ - $ -
Mutual Funds:
Smith Barney Investment
Grade Bond Fund - 22,969 - -
Smith Barney Growth
and Income Fund - - 43,418 -
Smith Barney Appreciation Fund - - - 33,599
Smith Barney International Equity Fund - - - -
eGlobe, Inc. Common Stock - - - -
Participant loans - - - -
---------- ------------- --------- -------------
Total investments 11,302 22,969 43,418 33,599
Contributions receivable -
Employee 731 1,543 4,831 3,464
Interfund receivable/payable 2,290 (272) (730) (493)
---------- ------------- --------- -------------
Net assets available for benefits $ 14,323 $ 24,240 $ 47,519 $ 36,570
---------- ------------- --------- -------------
INTERNATIONAL
EQUITY EGLOBE, INC. PARTICIPANT
MARCH 31, 1997 FUND COMMON STOCK LOANS TOTAL
- -------------- ---- ------------ ----- -----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ - $ - $ $ 11,302*
Mutual Funds:
Smith Barney Investment
Grade Bond Fund - - - 22,969*
Smith Barney Growth
and Income Fund - - - 43,418*
Smith Barney Appreciation Fund - - - 33,599*
Smith Barney International Equity Fund 21,151 - - 21,151*
eGlobe, Inc. Common Stock - 14,248 - 14,248*
Participant loans - - 3,181 3,181
------------- ------------- ---------- ---------
Total investments 21,151 14,248 3,181 149,868
Contributions receivable -
Employee 1,900 1,601 - 14,070
Interfund receivable/payable (282) (513) - -
------------- ------------- ---------- ---------
Net assets available for benefits $ 22,769 $ 15,336 $ 3,181 $ 163,938
------------- ------------- ---------- ---------
- ----------
* Represents 5% or more of net assets available for benefits.
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(UNAUDITED)
LARGE
MONEY INVESTMENT CAP
MARKET GRADE BOND BLEND
MARCH 31, 1996 FUND FUND FUND
- -------------- ---- ---- ----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ 7,631 $ - $ -
Mutual Funds:
Smith Barney Investment Grade Bond Fund - 4,155 -
Smith Barney Growth and Income Fund - - 8,583
Smith Barney Appreciation Fund - - -
Smith Barney International Equity Fund - - -
eGlobe, Inc. Common Stock - - -
---------- ---------------- -----------
Total investments 7,631 4,155 8,583
Contributions receivable - Employee 189 365 677
Employee rollovers - - 6,261
---------- ---------------- -----------
Net assets available for benefits $ 7,820 $ 4,520 $ 15,521
---------- ---------------- -----------
INTERNATIONAL
APPRECIATION EQUITY EGLOBE, INC.
MARCH 31, 1996 FUND FUND COMMON STOCK TOTAL
- -------------- ---- ---- ------------ -----
Assets
Investments, at fair value (Note 2):
Money Market Funds $ - $ - $ - $ 7,631*
Mutual Funds:
Smith Barney Investment Grade Bond Fund - - - 4,155*
Smith Barney Growth and Income Fund - - - 8,583*
Smith Barney Appreciation Fund 8,442 - - 8,442*
Smith Barney International Equity Fund - 5,099 - 5,099*
eGlobe, Inc. Common Stock - - 5,886 5,886*
-------------- -------------- -------------- --------
Total investments 8,442 5,099 5,886 39,796
Contributions receivable - Employee 592 384 362 2,569
Employee rollovers 4,696 3,130 1,565 15,652
-------------- -------------- -------------- --------
Net assets available for benefits $ 13,730 $ 8,613 $ 7,813 $ 58,017
-------------- -------------- -------------- --------
- ---------
* Represents 5% or more of net assets available for benefits.
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
LARGE
MONEY INVESTMENT CAP
MARKET GRADE BOND BLEND
NINE MONTHS ENDED DECEMBER 31, 1998 FUND FUND FUND
- ----------------------------------- ---- ---- ----
Additions:
Employee contributions $ 17,425 $ 16,622 $ 43,252
Employee rollovers 1,863 503 1,138
Dividend and interest income 1,077 - -
Net appreciation (depreciation) in
fair value of investments - 1,295 4,001
----------- -------------- --------------
Total additions 20,365 18,420 48,391
----------- -------------- --------------
Deductions - Benefits paid
to participants 11,561 14,735 32,823
----------- -------------- --------------
Net increase (decrease) prior
to interfund transfers 8,804 3,685 15,568
Interfund transfers (453) 3,018 217
----------- -------------- --------------
Net increase (decrease) 8,351 6,703 15,785
Net assets available for benefits,
beginning of period 25,763 25,558 96,898
----------- -------------- --------------
Net assets available for benefits,
end of period $ 34,114 $ 32,261 $ 112,683
----------- -------------- --------------
INTERNATIONAL
APPRECIATION EQUITY EGLOBE, INC.
NINE MONTHS ENDED DECEMBER 31, 1998 FUND FUND COMMON STOCK TOTAL
- ----------------------------------- ---- ---- ------------ -----
Additions:
Employee contributions $ 43,027 $ 14,548 $ 35,527 $ 170,401
Employee rollovers 1,138 1,641 635 6,918
Dividend and interest income - - - 1,077
Net appreciation (depreciation) in
fair value of investments 10,018 (1,785) (36,373) (22,844)
-------------- -------------- -------------- ---------
Total additions 54,183 14,404 (211) 155,552
-------------- -------------- -------------- ---------
Deductions - Benefits paid
to participants 12,104 6,824 796 78,843
-------------- -------------- -------------- ---------
Net increase (decrease) prior
to interfund transfers 42,079 7,580 (1,007) 76,709
Interfund transfers (2,359) 261 (684) -
-------------- -------------- -------------- ---------
Net increase (decrease) 39,720 7,841 (1,691) 76,709
Net assets available for benefits,
beginning of period 87,823 33,763 51,058 320,863
-------------- -------------- -------------- ---------
Net assets available for benefits,
end of period $ 127,543 $ 41,604 $ 49,367 $ 397,572
-------------- -------------- -------------- ---------
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
LARGE
MONEY INVESTMENT CAP
MARKET GRADE BOND BLEND APPRECIATION
YEAR ENDED MARCH 31, 1998 FUND FUND FUND FUND
- ------------------------- ---- ---- ---- ----
Additions:
Employee contributions $ 14,046 $ 17,427 $ 63,147 $ 51,828
Employee rollovers - - 159 -
Dividend and interest income 1,211 1,691 696 285
Net appreciation (depreciation)
in fair value of investments - 3,695 14,965 14,161
------ ----- ------ ------
Total additions 15,257 22,813 78,967 66,274
------ ----- ------ ------
Deductions -
Benefits paid to participants 3,337 15,101 24,992 8,875
------ ----- ------ ------
Net increase (decrease) prior to
interfund transfers 11,920 7,712 53,975 57,399
------ ----- ------ ------
Interfund transfers (480) (6,394) (4,596) (6,146)
------ ----- ------ ------
Net increase (decrease) 11,440 1,318 49,379 51,253
Net assets available for benefits,
beginning of year 14,323 24,240 47,519 36,570
------ ----- ------ ------
Net assets available for benefits,
end of year $ 25,763 $ 25,558 $ 96,898 $ 87,823
------ ----- ------ ------
INTERNATIONAL
EQUITY EGLOBE, INC. PARTICIPANT
YEAR ENDED MARCH 31, 1998 FUND COMMON STOCK LOANS TOTAL
- ------------------------- ---- ------------ ----- -----
Additions:
Employee contributions $ 22,276 $ 25,294 $ - $ 194,018
Employee rollovers 159 - - 318
Dividend and interest income - - - 3,883
Net appreciation (depreciation)
in fair value of investments 3,685 (6,738) - 29,768
------ ------ ------ -------
Total additions 26,120 18,556 - 227,987
------ ------ ------ -------
Deductions -
Benefits paid to participants 10,337 5,239 3,181 71,062
------ ------ ------ -------
Net increase (decrease) prior to
interfund transfers 15,783 13,317 (3,181) 156,925
------ ------ ------ -------
Interfund transfers (4,789) 22,405 - -
------ ------ ------ -------
Net increase (decrease) 10,994 35,722 (3,181) 156,925
Net assets available for benefits,
beginning of year 22,769 15,336 3,181 163,938
------ ------ ------ -------
Net assets available for benefits,
end of year $ 33,763 $ 51,058 $ - $ 320,863
------ ------ ------ -------
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(UNAUDITED)
LARGE
MONEY INVESTMENT CAP
MARKET GRADE BOND BLEND APPRECIATION
YEAR ENDED MARCH 31, 1997 FUND FUND FUND FUND
- ------------------------- ---- ---- ---- ----
Additions:
Employee contributions $ 4,154 $ 17,108 $ 38,952 $ 30,602
Employee rollovers 3,659 1,463 1,097 833
Dividend and interest income 5,053 - - -
Net appreciation (depreciation)
in fair value of investments - (588) 3,613 1,629
---------- ----------- ----------- -------------
Total additions 12,866 17,983 43,662 33,064
---------- ----------- ----------- -------------
Deductions -
Benefits paid to participants 826 938 8,521 9,871
---------- ----------- ----------- -------------
Net increase (decrease) prior to
interfund transfers 12,040 17,045 35,141 23,193
Interfund transfers (5,537) 2,675 (3,143) (353)
---------- ----------- ----------- -------------
Net increase 6,503 19,720 31,998 22,840
Net assets available for benefits,
beginning of year 7,820 4,520 15,521 13,730
---------- ----------- ----------- -------------
Net assets available for benefits,
end of year $ 14,323 $ 24,240 $ 47,519 $ 36,570
---------- ----------- ----------- -------------
INTERNATIONAL
EQUITY EGLOBE, INC. PARTICIPANT
YEAR ENDED MARCH 31, 1997 FUND COMMON STOCK LOANS TOTAL
- ------------------------- ---- ------------ ----- -----
Additions:
Employee contributions $ 18,817 $ 17,488 $ - $ 127,121
Employee rollovers 1,514 139 - 8,705
Dividend and interest income - - 473 5,526
Net appreciation (depreciation)
in fair value of investments 668 (6,482) - (1,160)
------------- ------------- ---------- ---------
Total additions 20,999 11,145 473 140,192
------------- ------------- ---------- ---------
Deductions -
Benefits paid to participants 4,000 2,909 7,206 34,271
------------- ------------- ---------- ---------
Net increase (decrease) prior to
interfund transfers 16,999 8,236 (6,733) 105,921
Interfund transfers (2,843) (713) 9,914 -
------------- ------------- ---------- ---------
Net increase 14,156 7,523 3,181 105,921
Net assets available for benefits,
beginning of year 8,613 7,813 - 58,017
------------- ------------- ---------- ---------
Net assets available for benefits,
end of year $ 22,769 $ 15,336 $ 3,181 $ 163,938
------------- ------------- ---------- ---------
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(UNAUDITED)
LARGE
PERIOD FROM INCEPTION MONEY INVESTMENT CAP
(DECEMBER 26, 1995) MARKET GRADE BOND BLEND APPRECIATION
TO MARCH 31, 1996 FUND FUND FUND FUND
- ----------------- ---- ---- ---- ----
Additions:
Employee contributions $ 7,764 $ 4,622 $ 8,795 $ 7,431
Employee rollovers - - 6,744 6,297
Dividend and interest income 56 - - -
Net appreciation (depreciation)
in fair value of investments - (102) (18) 2
----------- -------------- -------------- --------------
Total additions 7,820 4,520 15,521 13,730
----------- -------------- -------------- --------------
Net increase 7,820 4,520 15,521 13,730
Net assets available for benefits,
beginning of period - - - -
----------- -------------- -------------- --------------
Net assets available for benefits,
end of period $ 7,820 $ 4,520 $ 15,521 $ 13,730
----------- -------------- -------------- --------------
PERIOD FROM INCEPTION INTERNATIONAL
(DECEMBER 26, 1995) EQUITY EGLOBE, INC.
TO MARCH 31, 1996 FUND COMMON STOCK TOTAL
- ----------------- ---- ------------ -----
Additions:
Employee contributions $ 4,837 $ 4,981 $ 38,430
Employee rollovers 3,604 1,565 18,210
Dividend and interest income - - 56
Net appreciation (depreciation)
in fair value of investments 172 1,267 1,321
-------------- -------------- --------
Total additions 8,613 7,813 58,017
-------------- -------------- --------
Net increase 8,613 7,813 58,017
Net assets available for benefits,
beginning of period - - -
-------------- -------------- --------
Net assets available for benefits,
end of period $ 8,613 $ 7,813 $ 58,017
-------------- -------------- --------
See accompanying notes to financial statements.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. PLAN DESCRIPTION
The following description of the eGlobe, Inc. 401(k) Profit Sharing Plan
(formerly the Executive TeleCard, Ltd. 401(k) Profit Sharing Plan) (the "Plan"),
provides only general information. Participants should refer to the plan
agreement for a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution profit-sharing plan which covers
substantially all employees of eGlobe, Inc. (the "Company"). Effective April 1,
1998, the Plan changed its year end from March 31 to December 31. The Plan is
maintained for the exclusive benefit of eligible employees of the Company and
their beneficiaries to provide a means to accumulate retirement savings, to
provide retirement funds and to provide benefits in the event of the death or
disability. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
ELIGIBILITY
All employees of the Company who have obtained the age of 21 and completed three
months of service (as defined) are eligible to participate in the elective
contributions. An employee must complete one year of service (as defined) to
participate in any employer matching or profit-sharing contributions in the
Plan.
CONTRIBUTIONS
Each participant may elect to make salary reduction contributions from 1% of
his/her annual compensation to a maximum of the highest deferral allowed by the
nondiscrimination rules of the Internal Revenue Code. Participant salary
deferrals cannot exceed a maximum dollar amount determined by the Federal
Government each year. The pre-tax contribution limit is indexed annually for
inflation. The amount was $10,000 for 1998. The Company may also make, on an
annual basis, a matching contribution equal to a percentage of each
participant's discretionary contribution. Additionally, the Company may make, on
an annual basis, a discretionary profit sharing contribution to the Plan. The
Company has not made any employer contributions since the inception of the Plan.
PARTICIPANT ACCOUNTS
Earnings, net gains and losses are allocated among those participating in the
fund based on the ratio of each participant's average account balance to the
total of all participants' average account balances related to that fund.
INVESTMENT OPTIONS
Participants may direct the investment of their account balance among one or
more of the following investment options:
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Money Market Funds
- ------------------
This fund consists of units in the Smith Barney Exchange Reserve Money Market
Portfolio and the Smith Barney Money Fund Cash Portfolio, portfolios whose
primary investment objective is to maximize current income to the extent
consistent with the preservation of capital and the maintenance of liquidity by
investing in high quality short-term money market instruments.
Investment Grade Bond Fund
- --------------------------
This fund consists of units in the Smith Barney Investment Grade Bond Fund, a
mutual fund whose primary investment objective is to achieve high current income
by investing primarily in a diversified portfolio of high-yielding corporate
bonds, debentures and notes denominated in U.S. dollars and foreign currencies.
Large Cap Blend Fund
- --------------------
This fund consists of units in the Smith Barney Large Cap Blend Fund (formerly
known as Growth and Income Fund), a mutual fund whose primary investment
objective is to invest in income producing equity securities, including
dividend-paying common stocks, securities that are convertible into common
stocks and warrants.
Appreciation Fund
- -----------------
This fund consists of units in the Smith Barney Appreciation Fund, a mutual fund
whose primary investment objective is to seek long-term appreciation of
shareholders' capital through investments primarily in equity securities.
International Equity Fund
- -------------------------
This fund consists of units in the Smith Barney International Equity Fund, a
mutual fund whose primary investment objective is to seek a total return on its
assets from growth of capital and income by investing in a diversified portfolio
of equities and securities of established non-United States issuers.
eGlobe, Inc. Common Stock
- --------------------------
Funds are invested in shares of the Company's common stock.
FORFEITURES AND PLAN EXPENSES
The amount of any nonvested forfeitures attributed to a participant's break in
service, as specified by the plan agreement, is generally used to offset plan
expenses and/or reduce future employer contributions for the next plan year.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
VESTING
All participants' contributions are fully vested. A participant has a
nonforfeitable right to a percentage of the balance in his/her Company
contribution account commencing after one year of service (as defined) of 20%
and increasing to 100% after five years of service. Upon death, total
disability, reaching retirement age, or termination of the Plan a participant's
account becomes fully vested.
PARTICIPANT LOANS
An employee may, with the consent of the plan administrator, borrow up to 50% of
their account balance, however, not less than $500 and not to exceed $50,000.
The loans bear interest at the prevailing rate charged by lenders for a loan of
similar type and must be repaid within five years, unless such loans are for a
participant's primary residence, in which case, the loan must be repaid within
thirty years. Loan repayments are made in equal installments through payroll
deductions.
PAYMENT OF BENEFITS
Upon termination of service due to death, disability, retirement, or upon
reaching age 59-1/2, a participant may elect to receive either a lump-sum amount
equal to the value of the participant's vested interest in his or her account or
installment payments as defined by the plan agreement.
ADMINISTRATIVE EXPENSES
The Company pays certain administrative expenses of the Plan without
reimbursement.
PLAN AMENDMENT AND TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
discontinue contributions at any time and terminate the Plan, subject to the
provisions of ERISA. In the event the Plan is terminated, the accounts of all
participants would become fully vested, and the assets would be distributed
among the participants in accordance with the terms set forth in the Plan.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Plan's financial statements have been prepared in accordance with the
financial reporting requirements of ERISA. In the opinion of the Plan's
management, the unaudited financial statements for the year ended March 31, 1997
and for the period from inception (December 26, 1995) to March 31, 1996 are
presented on a basis consistent with the audited financial statements and
reflect all adjustments, consisting only of normal recurring accruals, necessary
for fair presentation of the results of such periods.
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual basis of
accounting.
USE OF ESTIMATES
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 disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of additions and deductions during the reporting period.
Actual results could differ from those estimates.
VALUATION OF INVESTMENTS
Investments are stated at fair value based upon current quoted market prices.
Participant loans are stated at cost, which approximates fair value. Purchases
and sales of securities are recorded as of the trade date. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. INCOME TAX STATUS
The Plan has obtained its latest determination letter on September 30, 1998, in
which the Internal Revenue Service has stated that the Plan is qualified and the
related trust is tax exempt.
SUPPLEMENTAL SCHEDULES
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
- --------------------------------------------------------------------------------
EIN: 84-1346369
Plan Number 001
DECEMBER 31, 1998
- ------------------
(a) (b) (c) (d) (e)
--- --- --- --- ---
NUMBER OF CURRENT
* IDENTITY OF ISSUE SHARES COST VALUE
- ----------------- ------ ---- -----
Smith Barney Exchange Reserve Money Market Portfolio 2,047 $ 2,047 $ 2,047
Smith Barney Money Funds Cash Portfolio 44,200 44,200 44,200
Smith Barney Investment Grade Bond Fund 2,149 28,401 28,139
Smith Barney Large Cap Blend Fund 5,956 100,171 101,308
Smith Barney Appreciation Fund 7,503 110,654 114,505
Smith Barney International Equity Fund 1,826 38,076 39,671
eGlobe, Inc. Common Stock 28,378 79,718 46,114
------ -------- ----------
$403,267 $ 375,984
======== ==========
- ---------
* There were no non-exempt party-in-interest transactions.
See accompanying report of independent certified public accountants.
EGLOBE, INC.
401(K) PROFIT SHARING PLAN
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
- --------------------------------------------------------------------------------
EIN: 84-1346369
Plan Number 001
NINE MONTHS ENDED DECEMBER 31, 1998
-----------------------------------
(a) (b) (c) (d) (g) (i)
--- --- --- --- --- ---
IDENTITY OF DESCRIPTION PURCHASE SELLING SALES NET
PARTY INVOLVED OF ASSET PRICE (A) PRICE (A) COST GAIN (LOSS)
-------------- -------- --------- --------- ---- -----------
Smith Barney Large Cap
Blend Fund $ 19,572 $ 22,683 $ 19,572 $ 3,111
----------- ----------- ----------- -----------
- ---------
(a) Equivalent to current value at date of transaction.
See accompanying report of independent certified public accountants.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
eGlobe, Inc.
Date: July 12, 1999 By: /s/ Graeme S.R. Brown
---------------------------
Graeme S.R. Brown
Associate General Counsel and
Assistant Secretary
eGlobe, Inc.