As filed with the Securities and Exchange Commission on January
15, 1998
Registration No. 333-
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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Computer Horizons Corp.
(Exact name of registrant as specified in its charter)
New York 49 Old Bloomfield Avenue 13-2638902
(State or other Mountain Lakes, New Jersey 07046 (I.R.S.
jurisdiction of (973) 299-4000 Employer
incorporation or Identification
organization) Number)
John J. Cassese
Chairman, Chief Executive
Officer and President
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046
(973) 299-4000
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
Copies to:
Robert A. Cantone, Esq. Dennis M. DiVenuta
Proskauer Rose LLP General Counsel
1585 Broadway Computer Horizons Corp.
New York, New York 10036 49 Old Bloomfield Avenue
(212) 969-3000 Mountain Lakes, New Jersey 07046
973) 299-4000
Approximate date of commencement of proposed sale of the
securities to the public: As soon as practicable after the
effective date of this Registration Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box: [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered in connection with dividend or interest reinvestment
plans, check the following box: [X]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering:
[ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
________________________________________________________________
________________________________________________________________
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Per Offering Registration
Registered Registered Share Price (a) Fee
________________________________________________________________
Common 566,666 $39.22 $22,224,640.52 $6,556.27
Stock, $.10 shares
par value
________________________________________________________________
(a) Estimated solely for the purposes of calculating the
registration fee pursuant to Rule 457(c) of the Securities Act of
1933 based on the average of the high and low prices of the
registrant's Common Stock on the Nasdaq National Market on
January 12, 1998.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
COMPUTER HORIZONS CORP.
---------------
566,666 SHARES OF COMMON STOCK
($0.10 Par Value)
---------------
This Prospectus has been prepared for use in connection with
proposed sales of up to 566,666 shares (the "Offered Shares") of
the common stock, par value $0.10 (the "Common Stock"), of
Computer Horizons Corp. (the "Company"), which may be made from
time to time by or for the account of certain stockholders of the
Company (the "Selling Stockholders"). See "The Selling
Stockholders". The Company will receive no part of the proceeds
of this offering. The Offered Shares were acquired by the Selling
Stockholders in connection with the acquisition by the Company of
a business that was owned by the Selling Stockholders.
The Common Stock is traded on the Nasdaq National Market
under the symbol "CHRZ". On January 14, 1998, the closing sale
price of the Common Stock was $43. Sales of Offered Shares may
be made through brokers, dealers or agents or directly to
purchasers, and may be effected in the over-the-counter market or
otherwise, and at market prices prevailing at the time of sale,
fixed prices or negotiated prices. See "Manner of Sale".
The Selling Stockholders will bear all commissions, and
other compensation paid to brokers in connection with the sale of
the Offered Shares. The Company will bear the expense of
registering the Offered Shares issued and the shares issuable
upon exercise of the options referred to above.
Computer Horizons is a diversified information technology
services company that provides IT staffing and solutions
services, including Year 2000 services, to major corporations.
Founded in 1969 as a provider of IT staffing resources, the
Company has expanded through internal growth and acquisitions to
become a leading national provider of IT staffing services. The
Company also offers its clients various IT solutions services,
including application development, conversions/migrations, legacy
maintenance outsourcing, enterprise network management and
knowledge transfer and training. The Company's Year 2000
solution addresses all phases of Year 2000 projects from
assessment through full compliance and is based on its
proprietary Signature 2000 Toolset. The Company's Year 2000
services business, which represented approximately 3% of the
Company's revenues in the first nine months of 1996, accounted
for approximately 21% of its revenues in the first nine months of
1997.
See "Risk Factors" beginning on page 3 for a discussion of
certain factors that should be considered by prospective
purchasers of the Offered Shares.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The date of this Prospectus is _______ __, 1998
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act"). In
accordance with the Exchange Act, the Company files reports,
proxy statements and other information with the Securities and
Exchange Commission (the "SEC").
The Company has filed, through the Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR"), a
Registration Statement on Form S-3 (the "Registration Statement")
with the SEC under the Securities Act of 1933 (the "Securities
Act") with respect to the Offered Shares. This Prospectus does
not contain all the information set forth in the Registration
Statement and the exhibits thereto, certain portions of which
have been omitted as permitted by the rules and regulations of
the SEC. Copies of the Registration Statement (including such
omitted portions) are available from the SEC upon payment of
prescribed rates. For further information, reference is made to
the Registration Statement and the exhibits filed therewith.
Statements contained in this Prospectus relating to the contents
of any contract or other document referred to herein or therein
are not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or such other document,
each such statement being qualified in all respects by such
reference.
This filed material can be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the SEC: Chicago Regional Office
(Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661) and New York Regional Office (Seven World Trade
Center, New York, New York 10048). Copies of such material may
be obtained by mail from the Public Reference Section of the SEC,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, such material can be inspected at the
offices of the National Association of Securities Dealers, Inc.
(the "NASD"), 1735 K Street, N.W., Washington, DC 20006.
Material filed electronically through EDGAR may also be accessed
through the SEC's home page on the World Wide Web at
http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the
Company with the SEC, are incorporated by reference in this
Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (File No. 0-7282);
(b) Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997;
(c) Quarterly Report on Form 10-Q for the fiscal quarter
ended June 27, 1997;
(d) Quarterly Report on Form 10-Q for the fiscal quarter
ended September 27, 1997;
(e) the description of the Company's Common Stock contained
in the Company's Registration Statement on Form 8-A;
(f) Current Report on Form 8-K dated December 19, 1997.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the
offering of the Offered Shares shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from
the respective dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that
is incorporated or deemed incorporated by reference herein
modifies, supersedes or replaces such statement. Any statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information
that has been incorporated by reference in this Prospectus
(excluding exhibits unless such exhibits are specifically
incorporated by reference into such documents). Requests should
be directed to the Corporate Secretary, Computer Horizons Corp.
at 49 Old Bloomfield Avenue, Mountain Lakes, New Jersey 07046,
telephone number (973) 299-4000.
RISK FACTORS
This Prospectus contains forward-looking statements that
involve risks and uncertainties. The statements contained in
this Prospectus that are not purely historical are
forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including without
limitation statements regarding the Company's expectations,
beliefs, intentions or strategies regarding the future. All
forward-looking statements included in this document are based on
information available to the Company on the date hereof, and the
Company assumes no obligation to update any such forward-looking
statements. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth in the
following risk factors and elsewhere in this Prospectus. In
evaluating the Company's business, prospective investors should
consider carefully the following factors in addition to the other
information set forth in this Prospectus.
Fluctuations in Quarterly Operating Results
The Company's revenues and operating results are subject to
significant variation from quarter to quarter. Revenues are
subject to fluctuation based upon a number of factors, including
the timing and number of client projects commenced and completed
during the quarter, delays incurred in connection with projects,
the Company's ability to retain key personnel, the ability of
the Company to develop, introduce and market new and enhanced
services, announcements by the Company or its competitors, the
growth rate of the market for IT staffing and solution services,
including Year 2000 services, and general economic conditions.
Unanticipated termination of a project or the decision by a
client not to proceed to the stage of a project anticipated by
the Company could result in decreased revenues and lower employee
utilization rates which could have a material adverse effect on
the Company's business, operating results and financial
condition. For example, in the second quarter of 1996, the
Company lost a contract with a major client which resulted in a
decline in solutions revenues and net income. There can be no
assurance that the Company will not experience a similar loss in
the future. The principal factors affecting the Company's gross
margin are the level of salary and other compensation related
expenses necessary to attract and retain qualified technical
personnel and the mix of staffing versus solutions business
during the quarter. Compensation levels can be impacted by a
variety of factors including competition for highly-skilled
employees and inflation. The Company's operating results are
also subject to fluctuation as a result of other factors
including the accuracy of estimates of fixed-price projects,
employee utilization rates and extraordinary events such as
acquisitions or litigation. The Company's operating results may
also be affected in the future by the licensing of its Signature
2000 Toolset which it has recently begun to offer to third
parties. To date, the Company has only licensed the software to
one client and there can be no assurance that it will be
successful in its future licensing activities. However, to the
extent the Company does license its software, the revenues from
such licensing activities may result in significant fluctuations
in the Company's revenues and operating results.
The Company has from time to time disclosed bookings for its
Year 2000 services business. These bookings include projects
which the Company has been advised that it has been awarded the
business but which are not yet subject to contractual
arrangements as well as projects which are subject to fully
executed contracts. In addition, to the extent that the project
is not being undertaken on a fixed-price basis, bookings are
based on the Company's estimate of billings expected to result
from such project. There can be no assurance that the amounts
included in bookings at any given time will result in revenues
being recognized in the time frame anticipated by the Company or
at all. As a result, bookings should not be relied upon as an
indication of revenues in any future period.
Due to all of the foregoing factors, in some future quarter
or quarters the Company's operating results may be below the
expectations of securities analysts and investors. For example,
in the second quarter of 1996, the Company failed to meet the
expectations of securities analysts as a result of the loss of a
contract with a major client. Failure of the Company to meet
such expectations would have a material adverse effect on the
price of the Company's Common Stock. See "--Potential Volatility
of Stock Price".
Recruitment and Retention of IT Professionals
The Company's business is labor intensive and depends to a
large extent on its ability to attract, train, motivate and
retain highly-skilled IT professionals and project managers. The
Company must continually identify and recruit technical personnel
for both its staffing and solutions businesses to fill new
positions and to replace employees who have left the Company.
Qualified IT professionals are in great demand worldwide and are
likely to remain a limited resource for the foreseeable future.
In addition, the IT service industry has experienced high
employee turnover rates which have increased in recent periods
and the Company's experience has been consistent with such
trends. There can be no assurance that the Company will be
successful in attracting a sufficient number of highly-skilled
employees in the future, or that it will be successful in
retaining existing and future employees and the failure to do so
could have a material adverse effect on the Company's business,
operating results and financial condition. In addition, to the
extent that the number of companies in the IT services industry
increases and such companies seek to expand their employee bases,
the competition for skilled employees and the compensation being
offered to such employees is likely to increase. As a result of
the foregoing, the Company may in the future be required to incur
higher recruiting expenses and increase its compensation levels,
either of which could have a material adverse effect on its
business, operating results and financial condition.
Risk Associated with Year 2000 Business; Risks Associated with
New Services
The Company expects to derive a significant percentage of
its solutions revenues from Year 2000 services through at least
1999. There can be no assurance that the Company will be
successful in increasing its Year 2000 business or, to the extent
that such business increases, that the Company will be able to
meet the demand for such services on a timely basis. Any failure
of the Company to increase such business or meet such demand
could have a material adverse effect on the Company's business,
operating results and financial condition. While a substantial
majority of the Company's current solutions bookings are for Year
2000 projects, the Company expects this demand to begin to
decrease as the implementation and testing of many Year 2000
conversion projects is completed. Any such decrease, to the
extent it is not offset by an increase in the Company's other
businesses, could have a material adverse effect on the Company's
business, operating results and financial condition. In
addition, by devoting significant resources during the next
several years to its Year 2000 services business, the Company's
ability to develop, introduce and market new services could be
adversely affected.
The Company is seeking to leverage its knowledge of clients'
IT systems and applications obtained during Year 2000 projects
into additional engagements involving other solutions services
including services not previously provided by the Company. The
Company's ability to successfully develop new services depends on
a number of factors, including its ability to identify and
effectively integrate new services into the Company's existing
operating structure. The identification and offering of new
services in which the Company has little or no experience or
expertise could result in a significant diversion of management's
attention and place disproportionate demands on the Company's
operational, administrative and financial resources. There can be
no assurance that the Company will be successful in generating
additional business from its Year 2000 clients for other services
or that the performance of any new service offerings will meet
management's expectations or provide the same gross margins as
the Company's existing operations.
Dependence on Staffing Business
In the year ended December 31, 1996 and the first nine
months of 1997, the Company's staffing business accounted for
approximately 73% and 67% of revenues, respectively. As a
result, the Company's future operating results depend in large
part on the continued growth and profitability of the Company's
staffing business. Any decline in, or failure of the Company's
staffing business to grow at anticipated rates, as a result of
competition or otherwise, would have a material adverse effect on
the Company's business, operating results and financial
condition.
Concentration of Revenues; Dependence on Large Projects
The Company has derived, and believes that it will continue
to derive, a significant portion of its revenues from a limited
number of large clients. In the year ended December 31, 1996 and
the first nine months of 1997, the Company's ten largest clients
accounted for approximately 40% and 46% of its revenues,
respectively. One customer, AT&T, accounted for approximately
10% and 13% of revenues in the year ended December 31, 1996 and
the first nine months of 1997, respectively. The volume of work
performed for specific clients is likely to vary from year to
year, and a major client in one year may not use the Company's
services in a subsequent year. For example, in the second
quarter of 1996, the Company lost a contract with a major client
which resulted in a decline in solutions revenues and net income.
The loss of any large client could have a material adverse effect
on the Company's business, operating results and financial
condition.
Most of the Company's contracts are terminable by the client
following limited notice and without significant penalty. In
addition, each stage of a project represents a separate
contractual commitment at the end of which the client may elect
not to proceed to the next stage of the project. There can be no
assurance that in the future one or more of the Company's major
clients will not terminate a contract, reduce the scope of a
large project or elect not to proceed to the stage of a project
anticipated by the Company. The cancellation or significant
reduction in the scope of a large project could have a material
adverse effect on the Company's business, operating results and
financial condition.
Competition
The markets for the Company's services are highly
competitive. The Company believes that the market for IT
staffing services is highly fragmented and regionalized. As a
result, in addition to competing with larger providers of IT
staffing services such as Cap Gemini SA, Computer Task Group,
Inc., Keane, Inc. and Mastech Corporation, the Company also
competes with a large number of regional providers of staffing
services. In addition, the Company competes for staffing
projects with the information systems groups of its prospective
clients. In its solutions business, including its Year 2000
services business, the Company competes with consulting and
system integration firms, including Analysts International
Corporation, Andersen Consulting, CIBER, Inc., Computer Sciences
Corporation, Electronic Data Systems Corp., Information
Management Resources, Inc., International Business Machines
Corporation, Keane, Inc. and the "Big Six" accounting firms. The
Company also competes in the IT solutions market with vendors of
application software. In addition, there are relatively low
barriers to entry into the Company's markets and the Company has
faced, and expects to continue to face, additional competition
from other established and emerging companies. Increased
competition may result in greater pricing pressure which could
have a material adverse effect on the Company's operating
results.
The Company believes competition will continue to intensify
as the market for IT services continues to develop and
competitors focus on additional service offerings such as Year
2000 services and European Monetary Union ("EMU") conversion
services. There can be no assurance that other companies will
not develop services, products and marketing approaches that will
be more successful than those of the Company. Many of the
Company's current and potential competitors have significantly
greater financial, technical, marketing and other resources than
the Company. As a result, they may be able to respond more
quickly to new or emerging technologies and changes in clients'
requirements, or to devote greater resources to the development,
promotion, sale and support of their services and products than
the Company. In addition, current and potential competitors may
establish cooperative relationships among themselves or with
third parties to increase the ability of their services or
products to address the staffing and solutions needs of the
Company's prospective clients. Accordingly, it is possible that
new competitors, alliances among competitors or alliances between
competitors and third parties may emerge and acquire significant
market share. If this were to occur, it could have a material
adverse effect on the Company's business, operating results and
financial condition.
The Company believes that the principal competitive factors
in its market include quality of services and deliverables, speed
of development and implementation, price, project management
capability and technical and business expertise. The Company
believes that its ability to compete also depends in part on a
number of competitive factors outside its control, including the
ability of its competitors to hire, retain and motivate project
managers and other IT professional staff, the development by
others of software that is competitive with the Company's
services and products and the extent of its competitors'
responsiveness to client needs. There can be no assurance that
the Company can maintain its competitive position against current
and potential competitors or that competitive pressures faced by
the Company will not have a material adverse effect on the
Company's business, operating results and financial condition.
Risks of Technological Change and Evolving Industry Standards
The IT services industry is characterized by rapid
technological change, changing client requirements and new
service and product introductions. The introduction of
competitive IT solutions embodying new technologies and the
emergence of new industry standards may render the Company's
existing IT solutions or underlying technologies obsolete or
unmarketable. As a result, the Company will be dependent in
large part upon its ability to develop new IT solutions that
address the increasingly sophisticated needs of its clients, keep
pace with new competitive service and product offerings and
emerging industry standards and achieve broad market
acceptance. There can be no assurance that the Company will be
successful in developing and marketing new IT solutions that
respond to technological change, changing client requirements or
evolving industry standards, that the Company will not experience
difficulties that could delay or prevent the successful
development, introduction and marketing of these new IT solutions
or that its IT solutions will adequately meet the requirements of
the marketplace and achieve market acceptance.
Fixed-Price Contracts
The Company offers certain of its services on a fixed-price
rather than on a time and materials or best efforts basis.
Although the Company draws upon the past experience of its
project managers and senior technical personnel to estimate the
cost of performing fixed-price projects, the Company has a
limited history upon which to base such estimates. Since under
the terms of such contracts the Company bears the risk of cost
overruns and inflation in connection with these projects, the
Company's failure to estimate accurately the resources and time
required for a project or its failure to complete its contractual
obligations within the time frame committed could have a material
adverse effect on the Company's operating results and financial
condition. In the past, the Company has been required to commit
unanticipated additional resources to complete certain projects,
which negatively affected the Company's profitability on such
projects and there can be no assurance that the Company will not
experience similar situations in the future.
Risks Associated with Failure to Manage Growth and a Changing
Business
The Company has recently experienced a period of significant
growth that has placed, and could continue to place, a
significant strain on its management and operations. From
September 1996 to September 1997, the number of the Company's
billable consultants has increased from approximately 2,350 to
2,800 full-time employees and independent contractors, and
further increases are expected. The Company has also expanded
geographically by opening new offices and it intends to open
additional offices which will require that the Company
successfully replicate its current business model in remote
locations. In addition, the Company is seeking to further expand
its solutions business, including its Year 2000 services
business. The Company's ability to manage future growth, if any,
will require the Company to continually enhance its operational
and financial control systems, implement new systems as
necessary, and will depend on its ability to attract, train,
assimilate and retain qualified personnel. The
Company is in the process of implementing a new accounting system
in order to provide it with the flexibility to address the
variations in billing arrangements required for its solutions
business. Although the Company intends to run its existing and
new systems in parallel for some period of time, there can be no
assurance that the Company will not experience difficulties in
the operation of its new accounting system which could result in
delays or disruptions in billing its clients. Any significant
delays or disruptions in the Company's billing cycle could have a
material adverse effect on the Company's operating results in the
affected period. The failure of the Company's management to
respond effectively to future growth, if any, and the changing
nature of its business could have a material adverse effect on
the Company's business, operating results and financial
condition.
Risks Associated with Potential Acquisitions
As part of the Company's strategy, it intends to pursue
strategic acquisitions. Such acquisitions could present
significant challenges to the Company's management. There is
significant competition for acquisition opportunities in the IT
services industry which may make the completion of acquisitions
more difficult and expensive. In addition, some competitors for
these acquisition candidates have greater resources than the
Company. If the Company is successful in completing
acquisitions, it will face numerous risks, including difficulties
assimilating new operations and personnel, the need to manage
geographically remote businesses and the diversion of management
attention from other business concerns. Any acquisition,
depending on its size, could result in the use of a significant
portion of the Company's cash, or if such acquisition is made
utilizing the Company's securities, could result in significant
dilution to the Company's shareholders. Furthermore, there can
be no assurance that any acquired service capacity or technology
will gain acceptance in the Company's markets. Should the
Company's management fail to respond effectively to these
challenges, future acquisitions could have a material adverse
effect on the Company's business, operating results and financial
condition.
Dependence on Key Personnel
The Company is dependent to a significant extent on the
efforts, direction and guidance of its senior management,
including John J. Cassese, the Company's Chairman of the Board,
President and Chief Executive Officer, and other key personnel.
The Company has entered into employment agreements with its
executive officers, each of which contains provisions limiting
these employees' rights to compete with the Company and hire its
employees. The Company maintains and is the beneficiary under a
key person life insurance policy in the amount of $3.8 million
with respect to Mr. Cassese. The loss of any of the Company's
senior management or key personnel and, in particular, Mr.
Cassese, or the inability to attract and retain key management
personnel in the future, could have a material adverse effect on
the Company's business, operating results and financial
condition.
Risks Associated with India Joint Venture
The Company is seeking to leverage its relationship with
Birla Horizons International, an India-based joint venture
between National Engineering Industries Limited ("NEI"), an
affiliate of The Birla Group, and the Company (the "Joint
Venture") to provide lower-cost, offshore solutions services to
its clients. The Board of Directors of the Joint Venture,
consisting of an equal number of representatives of the Company
and NEI, controls and manages the business of the Joint Venture.
In the event of a deadlock among the Board of Directors of the
Joint Venture which is not resolved within 15 days, the Company
or NEI may terminate the Joint Venture by giving 30 days notice
to the other party. If the Joint Venture is terminated as a
result of such a deadlock, the non-terminating party will have
the right to purchase the terminating party's shares in the Joint
Venture at fair market value for a period of 30 days. If the
non-terminating party does not purchase such shares during the 30
day period, the terminating party will be entitled to sell its
shares in the Joint Venture to a third party. There can be no
assurance that the Board of Directors of the Joint Venture will
not become deadlocked or that, as a result of such deadlock, the
Company or NEI will not have a right to terminate the Joint
Venture. Any termination of the Joint Venture, whether arising
from a deadlock of the Board of Directors or otherwise, could
result in the loss of the Company's offshore outsourcing
capabilities. Such a loss could have a material adverse effect
on the Company's business, operating results and financial
condition.
Since the Company does not directly oversee the services
provided by the Joint Venture, there can be no assurance that
such services will be of the same quality as the services
provided by the Company. To the extent that there are delays or
problems with deliverables provided by the Joint Venture, the
Company's relationships with its clients may be adversely
affected and the Company may be required to incur expenses to
remedy any problems that arise as a consequence, either of which
could have a material adverse effect on the Company's business,
operating results and financial condition. The Company
encountered problems of this nature in connection with an early
project involving the Joint Venture's resources. Furthermore,
the Company must maintain active satellite communications between
its offices and the Joint Venture's offices in order to
effectively leverage its relationship with the Joint Venture.
Any disruption of the Company's ability to transmit voice and
data through satellite communications to India over a prolonged
period of time could have a material adverse effect on the
Company's business, operating results and financial condition.
In addition, the Joint Venture is subject to the risks
associated with doing business in India. India's central and
state governments are significantly involved in the Indian
economy as regulators. In the recent past, the government of
India has provided significant tax incentives and relaxed certain
regulatory restrictions in order to encourage foreign investment
in certain sectors of the economy. Certain of these benefits
that directly affect the Joint Venture include, among others, tax
holidays, liberalized import and export duties and preferential
rules on foreign investment and repatriation. Changes in the
business or regulatory climate of India could have a material
adverse effect on the Joint Venture's business, operating results
and financial condition. In addition, India has experienced
significant inflation, shortages of foreign exchange and has been
subject to civil unrest. Changes in inflation, interest rates,
taxation or other social, political, economic or diplomatic
developments affecting India in the future could have a material
adverse effect on the Company's business, operating results and
financial condition.
Increasing Significance of Non-U.S. Operations and Risks
Associated with International Operations
The Company anticipates that over the next several years it
will increase its investment in international operations and that
an increasing percentage of its revenues may be generated outside
of the U.S. The Company's international operations depend
greatly upon business, immigration and technology transfer laws
in those countries, and upon the continued development of
technology infrastructure. As a result, the Company's business
is subject to the risks generally associated with non-U.S.
operations including, unexpected changes in regulatory
environments, difficulties in managing international operations,
dependence on foreign partners, fluctuations in currency exchange
rates, longer accounts receivable payment cycles and greater
difficulties in collecting accounts receivable, potential foreign
tax consequences, including the impact of repatriation of
earnings, tariffs and other trade barriers, political unrest and
changing conditions in countries in which the Company's services
are provided or facilities are located. If any such factors were
to render the conduct of business in a particular country
undesirable or impracticable, there could be a material adverse
effect on the Company's business, operating results and financial
condition.
Risks Associated with IT Industry Trend Toward Preferred Vendor
Relationships
To reduce their need to manage a large number of IT service
providers and to obtain more favorable pricing, certain
businesses are seeking to use a limited number of "preferred
vendors." The Company believes that this trend toward preferred
vendors will become increasingly common in the marketplace, may
result in pricing pressure and will decrease the number of
available business opportunities. The Company is aggressively
pursuing preferred vendor contracts in order to obtain new or
additional business from large clients. However, there can be no
assurance that the Company will be awarded preferred vendor
contracts, and the Company's inability to win such contracts
could have a material adverse effect on the Company's business,
operating results and financial condition. In addition, while
preferred vendor contracts often generate higher volumes, they
may result in lower gross margins. As a result, there can be no
assurance that the Company will be able to maintain its gross
margin if it is awarded preferred vendor contracts. The
Company's inability to sustain its gross margins on such
contracts could have a material adverse effect on the Company's
business, operating results and financial condition.
Risk of Increased Government Regulation of Immigration
The Company and the Joint Venture in the past have relied
and in the future expect to rely increasingly upon attracting and
retaining individuals with technical and project management
skills from other countries. There is a limit to the number of
new H-1B petitions that the Immigration and Naturalization
Service may approve in any government fiscal year, and in years,
such as this year, in which the limit is reached, the Company may
be unable to obtain H-1B visas necessary to bring critical
foreign employees to the U.S. Compliance with existing U.S.
immigration laws, or changes in such laws making it more
difficult to hire foreign nationals or limiting the ability of
the Company to retain H-1B employees in the U.S., could increase
competition for technical personnel and increase the Company's
cost of recruiting and retaining the requisite number of IT
professionals which could have a material adverse effect on the
Company's business, operating results and financial condition.
Risks Related to Intellectual Property Protection
The Company relies primarily upon a combination of copyright
and trademark laws, trade secrets, confidentiality procedures and
contractual arrangements to protect its proprietary rights. In
addition, the Company has applied for one patent in the U.S.
related to Time Engineer, a tool which automates certain aspects
of the 28 year windowing approach to Year 2000 remediation. There
can be no assurance that a patent will be issued pursuant to this
application or that, if granted, such patent would survive a
legal challenge to its validity or provide significant protection
to the Company. Despite the Company's efforts to protect its
proprietary rights, there can be no assurance that the steps
taken by the Company will be adequate to deter misappropriation
of its proprietary information, that the Company will be able to
detect unauthorized use and take appropriate steps to enforce its
intellectual property rights or that the Company's competitors
will not independently develop similar technology.
While the Company to date has not received any claims that
its intellectual property rights infringe on the intellectual
property rights of others, there can be no assurance that such a
claim will not be asserted against the Company in the future,
that the assertion of such a claim will not result in litigation
or that the Company would prevail in such litigation or be able
to obtain a license for the use of any infringed intellectual
property from a third party on commercially reasonable terms.
The risk of infringement claims against the Company will increase
if other parties are able to successfully obtain patents for
software products and processes related to the Company's
business. In particular, the Company is aware of one issued
patent related to a particular method for addressing the Year
2000 problem. If that patent were asserted against the Company
and found to be valid, enforceable and infringed by the use of
Time Engineer, the Company could be subject to a claim for
damages and could be prevented from offering any service or
product which uses or incorporates Time Engineer unless it is
able to obtain a license on commercially reasonable terms. The
Company's revenues to date from the use of Time Engineer have not
been material and the Company does not expect such revenues to be
material in the future. Any such claims, regardless of their
outcome, could result in substantial cost to the Company, require
the Company to modify the manner in which it provides services
and divert management's attention from the Company's operations,
any of which could have a material adverse effect on the
Company's business, operating results and financial condition.
Potential Liability to Clients
Much of the Company's business involves projects that are
critical to the operations of its clients' businesses and provide
benefits that may be difficult to quantify. Any failure in a
client's system could result in a claim for substantial damages
against the Company, regardless of the Company's responsibility
for such failure. While the Company attempts to contractually
limit its liability for damages arising from its IT services,
there can be no assurance the limitations of liability set forth
in its service contracts will be enforceable in all instances or
would otherwise protect the Company from liability for damages.
While the Company currently maintains general liability
insurance, including coverage for errors and omissions, there can
be no assurance that the Company will avoid significant claims
and attendant publicity. Furthermore, there can be no assurance
that the Company's insurance coverage will be adequate or that
such coverage will remain available at acceptable costs.
Successful claims brought against the Company in excess of its
insurance coverage could have a material adverse effect on the
Company's business, operating results and financial condition.
Employment Liability Risks
As a provider of staffing services, the Company places
employees (and independent contractors) at its clients'
businesses. Risks associated with this activity include possible
claims of discrimination and harassment, liabilities for errors
and omissions by the Company's employees (and independent
contractors), misuse of client proprietary information or
intellectual property, injury to Company or client employees,
misappropriation of client property, other criminal activity,
torts and other similar claims. In certain circumstances, the
Company may be held responsible for the actions of persons not
under the Company's direct control. While the Company has not
had significant problems with respect to such employment
liability, there can be no assurance that the Company will not
experience such problems in the future.
Potential Volatility of Stock Price
The trading price of the Company's Common Stock has been
subject to significant fluctuations in the past. In addition,
the stock market has from time to time experienced extreme price
and volume fluctuations, particularly among technology companies,
which often have been unrelated to the operating performance of
particular companies. Any announcement with respect to any
unfavorable variance in revenues or net income from levels
generally expected by securities analysts or investors for a
given period would have an immediate and significant effect on
the trading price of the Common Stock. In addition, factors such
as announcements of technological innovations or new services or
products by the Company, its competitors or other third parties,
rumors of such innovations or new services or products, changing
market conditions in the IT services industry, changes in
estimates by securities analysts, announcements of extraordinary
events, such as acquisitions or litigation, or general economic
conditions may have a significant impact on the market price of
the Common Stock. In the past, following periods of volatility
in the market price of a particular company's securities,
securities class action litigation has often been brought against
such companies. There can be no assurance that such litigation
will not occur in the future with respect to the Company. Such
litigation could result in substantial costs and a significant
diversion of management's attention and resources, which could
have a material adverse effect upon the Company's business,
operating results and financial condition.
Anti-Takeover Provisions
The Company's Board of Directors has the authority to issue
up to 150,000 shares of Preferred Stock and to determine the
rights, preferences, privileges and restrictions, including
voting and conversion rights of such shares, without any further
vote or action by the shareholders. The issuance of Preferred
Stock could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock
of the Company. The Company has no present plan to issue
Preferred Stock. The Company is also subject to the
anti-takeover provisions of Section 912 of the New York Business
Corporation Law, which will prohibit the Company from engaging in
a "business combination" with an "interested shareholder" for a
period of five years after the date of the transaction in which
the person became an interested shareholder, unless the business
combination is approved in a prescribed manner. The application
of Section 912 could have the effect of delaying or preventing a
change in control of the Company. In addition, the Company has
adopted a shareholder rights plan or "poison pill" which would
have certain anti-takeover effects. The distribution of the
Preferred Stock Purchase Rights, under the terms of the Rights
Agreement dated July 9, 1989, as amended, would cause substantial
dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors of the
Company. Furthermore, the Company's option plans also provide
for acceleration upon certain events resulting in changes of
control. Each of the foregoing provisions could delay or make
more difficult a merger, tender offer or proxy contest involving
the Company. There can be no assurance that such provisions will
not have an adverse effect on the value received by the holders
of the Company's Common Stock.
THE COMPANY
General
Increasingly, organizations are addressing issues such as
the need to improve quality, shorten time to market and reduce
costs by utilizing IT solutions that facilitate rapid and
flexible collection, analysis and dissemination of information.
As a result, an organization's ability to effectively utilize new
IT solutions in a cost-effective manner has become critical in
today's increasingly competitive business environment. During
this time of increasing reliance on IT, rapid technological
change and other challenges, such as the need for Year 2000
conversions, have strained the capabilities of the internal IT
departments within these organizations. As a result of these
factors and the need to focus their resources on core
competencies, large corporations are increasingly outsourcing
these functions to third party vendors of IT services.
International Data Corporation ("IDC") estimates that worldwide
outsourcing spending was approximately $86 billion in 1996, and
projects that such spending will grow to $140 billion in 2001.
Furthermore, the Gartner Group estimates the worldwide cost of
fixing the Year 2000 problem to be between $300 and $600 billion.
The Company markets its services primarily to Fortune 500
companies with significant information technology budgets and
recurring staffing or software development needs. In 1996, the
Company provided services to over 450 clients, including AT&T,
Chase Manhattan Corporation, Citicorp, Dow Chemical Company,
Florida Power & Light Company, Ford Motor Company, International
Business Machines Corporation, MCI Communications Corporation,
NYNEX Corporation and Prudential Insurance Company of America.
The Company has been successful in generating repeat business
from existing clients, with more than 90% of billings (excluding
billings of certain subsidiaries) in each of 1994, 1995 and 1996
having been generated from clients that were also clients during
the prior year. The Company believes that its ability to offer a
broad range of staffing and solutions services and its
established relationships with many Fortune 500 companies provide
it with significant advantages in the IT services market.
As of September 30, 1997, the Company had approximately
2,800 billable consultants (including independent contractors).
The Company provides staffing and solutions services through a
network of 45 branch offices located in 21 states, the District
of Columbia, Canada, England and India (including the offices of
the Company's India-based joint venture). The Company maintains
an internal staff of over 100 recruiters and believes that its
ability to attract, motivate and retain highly skilled IT
professionals on a large scale is a core competency.
The Company's objective is to be the leading provider of
comprehensive IT staffing and solutions services to major
corporations. To achieve this objective, the Company is seeking
to: (i) maintain the Company's leadership position in its core
staffing business; (ii) increase its higher margin Year 2000
services business; (iii) develop new strategic solutions
offerings; (iv) expand its base of staffing and solutions
clients; and (v) expand its geographic presence through opening
new offices, acquisitions and strategic partnerships or
alliances.
The Company's principal executive offices are located at 49
Old Bloomfield Avenue, Mountain Lakes, New Jersey 07046-1495,
(973) 299-4000.
Recent Developments
On December 19, 1997, the Company acquired CG Computer
Services Corporation ("CG"), a regional provider of IT
provisioning and staffing solutions primarily on the West Coast
of the United States. Pursuant to the acquisition, CG was merged
into a wholly-owned subsidiary of the Company and each share of
CG common stock was converted into .79033 shares of Company
Common Stock.
SELLING STOCKHOLDERS
The following table lists the names and business addresses
of each Selling Stockholder, the number of shares of Common Stock
beneficially owned by each Selling Stockholder as of January 15,
1998, the percentage that such shares represented of the total
number of outstanding shares of Common Stock as of that date, and
the number of Offered Shares being offered by each Selling
Stockholder pursuant to this Prospectus. Each Selling
Stockholder acquired the Offered Shares in connection with the
Company's acquisition of a business owned, in part, by such
Selling Stockholder. Following the sale of the Offered Shares,
none of the Selling Stockholders will hold greater than one
percent of the outstanding shares of Common Stock. Unless
otherwise indicated, each Selling Stockholder in the table has
sole voting and investment power as to the Offered Shares shown
as being owned by such person.
Offered
Name and Address Number Percent Shares
- ---------------- ------- ------- -------
Alan R. Grushcow 276,615 1.00 276,615
341 South Almont Drive
Beverly Hills, California 90211
Sabina Ephraim 290,051 1.05 290,051
16556 County Line Road
Capron, Illinois 61012
MANNER OF SALE
This Prospectus, as appropriately amended or supplemented,
may be used from time to time by the Selling Stockholders to
offer and sell the Offered Shares in transactions in which they
and any broker-dealer through whom such shares are sold may be
deemed to be underwriters within the meaning of the Securities
Act. The Company will receive none of the proceeds from any such
sales. There presently are no arrangements or understandings,
formal or informal, pertaining to the distribution of the shares
of Common Stock described herein. Upon the Company being
notified by a Selling Stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of shares
of Common Stock bought through a block trade, special offering,
exchange distribution or secondary distribution, a supplemented
Prospectus will be filed, pursuant to Rule 424(b) under the
Securities Act, setting forth (i) the name of each Selling
Stockholder and the participating broker-dealer(s), (ii) the
number of shares involved, (iii) the price at which the shares
were sold, (iv) the commissions paid or the discounts allowed to
such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the
information set out in this Prospectus and (vi) other facts
material to the transaction.
Selling Stockholders may sell the shares being offered
hereby from time to time in transactions (which may involve
crosses and block transactions) on the Nasdaq National Market
(the "NMS"), in negotiated transactions or otherwise, at market
prices prevailing at the time of the sale or at negotiated
prices. Selling Stockholders may sell some or all of the shares
in transactions involving broker-dealers, who may act solely as
agent and/or may acquire shares as principal. Broker-dealers
participating in such transactions as agent may receive
commissions from Selling Stockholders (and, if they act as agent
for the purchaser of such shares, from such purchaser), such
commissions computed in appropriate cases in accordance with the
applicable rules of the NMS, which commissions may be at
negotiated rates where permissible under such rules.
Participating broker-dealers may agree with Selling Stockholders
to sell a specified number of shares at a stipulated price per
share and, to the extent such broker-dealer is unable to do so
acting as an agent for the Selling Stockholder, to purchase as
principal any unsold shares at the price required to fulfill the
broker-dealer's commitment to Selling Stockholders.
Broker-dealers who acquire shares as principal may thereafter
resell such shares from time to time in transactions (which may
involve crosses and block transactions and which may involve
sales to or through other broker-dealers, including transactions
of the nature described in the preceding two sentences) on the
NMS, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive commissions
from the purchaser of such shares.
The Company has agreed to indemnify each Selling Stockholder
under the Securities Act against certain liabilities, including
liabilities arising under the Securities Act. Each Selling
Stockholder may indemnify any broker-dealer that participates in
transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities
Act.
EXPERTS
The consolidated financial statements and schedule included
in the Company's Annual Report on Form 10-K, for the year ended
December 31, 1996, which are incorporated by reference in this
Prospectus, have been audited by Grant Thornton LLP, independent
certified public accountants, to the extent and for the period
indicated in their report with respect thereto and are
incorporated herein in reliance upon such report given the
authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of Offered Shares of Common Stock has been
passed upon for the Company by Proskauer Rose LLP, counsel to the
Company.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses in connection with the distribution of the
securities being registered hereunder (all of which are already
outstanding) are:
Securities and Exchange Commission registration fee . .$ 6,556.27
Accounting fees and expenses . . . . . . . . . . . . . .5,000.00
Legal fees and expenses (other than Blue Sky
fees and expenses) . . . . . . . . . . . . . . . . . .15,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . 2,000.00
-----------
Total . . . . . . . . . . . . . . . . . . . . . $28,556.27
==========
All amounts except the Securities and Exchange Commission
registration fee are estimated.
Item 15. Indemnification of Directors and Officers
The Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation") provides, as permitted by Section
402(b) of the New York Business Corporation Law (the "BCL") that
no director shall be personally liable to the Company or any
shareholder for damages for any breach of duty as a director,
provided that the Certificate of Incorporation does not eliminate
or limit the liability of any director if a judgment or other
final adjudication adverse to him establishes that (i) his acts
or omissions were in bad faith or involved intentional misconduct
or a knowing violation of law, (ii) he personally gained in fact
a financial profit or other advantage to which he was not legally
entitled or (iii) his acts violated Section 719 of the BCL.
The Certificate of Incorporation also provides, in
accordance with Section 722 of the BCL, that each person who was
or is made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, (1) is or was a director or
officer of the Company or (2) is or was serving at the request of
the Company as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans (whether the basis of such proceeding is alleged action in
an official capacity as a director, officer, employee or agent or
in any other capacity while serving as a director, officer,
employee or agent), shall be indemnified and held harmless by the
Company to the fullest extent authorized or permitted by
applicable law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that
such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to
provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in
settlement) actually and reasonably incurred or suffered by such
person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of his heirs,
executors and administrators, provided, however, that, except for
actions brought to enforce such indemnification rights, the
Company shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Company. The right
to indemnification conferred in the Certificate of Incorporation
is a contract right and includes the rights to be paid by the
Company the expenses incurred in defending any such proceeding in
advance of its final disposition, provided, however, that, if the
BCL requires, the payment of such expenses incurred by a director
or officer in his capacity as such (and not in any other capacity
in which service was or is rendered by such person while a
director or officer, including, without limitation, service with
respect to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to
the Company of an undertaking by or on behalf of such director or
officer to repay all amounts so advanced as to which it shall
ultimately be determined that such director or officer is not
entitled to be indemnified.
The Certificate of Incorporation further provides, in
accordance with the BCL, that the indemnification rights provided
therein are not exclusive of any other rights that any person may
have, and that the Company may, subject to certain restrictions
imposed by the BCL, maintain insurance to protect itself and its
officers and directors against expenses, liabilities and losses,
whether or not the Company would be permitted to indemnify such
person against such expenses, liabilities and losses under the
BCL.
The Company currently has a $15,000,000 directors' and
officers' liability insurance policy.
Item 16. Exhibits and Financial Statements
Exhibit 5.1 Opinion of Proskauer Rose LLP regarding
legality (filed herewith).
Exhibit 23.1 Consent of Grant Thornton, LLP
Exhibit 23.3 Consent of Proskauer Rose LLP (included in
Exhibit 5.1).
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8
or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Mountain Lakes, State of New Jersey on January 15,
1998.
Computer Horizons Corp.
By: /s/ John J. Cassese
--------------------------------
John J. Cassese
President, Chief Executive
Officer and Chairman
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ John J. Cassese Chairman of the January 15, 1998
- ---------------------- Board, Chief Executive
John J. Cassese Officer, President and
(principal executive
officer)
/s/ William J. Murphy Executive Vice January 15, 1998
- ----------------------- President, Chief
William J. Murphy Financial Officer
principal financial and
accounting officer)
/s/ Thomas J. Berry Director January 15, 1998
- -----------------------
Thomas J. Berry
/s/ Rocco J. Marano Director January 15, 1998
- -----------------------
Rocco J. Marano
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
5.1 Opinion of Proskauer Rose LLP
regarding legality (filed herewith).
23.1 Consent of Grant Thornton, LLP.
23.3 Consent of Proskauer Rose LLP
(included in Exhibit 5.1).
Exhibit 5.1
January 15, 1998
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046
Ladies and Gentlemen:
We are acting as counsel to Computer Horizons Corp., a New
York corporation (the "Company"), in connection with the
Registration Statement on Form S-3, as amended (the "Registration
Statement"), filed by the Company under the Securities Act of
1933, relating to the registration of 566,666 shares (the
"Shares") of the common stock, par value $.10 (the "Common
Stock"), of the Company. The Registration Statement relates to
the offer and sale of up to 566,666 of the Shares by certain
selling stockholders.
We have examined and relied upon originals or copies,
certified or otherwise authenticated to our satisfaction, of all
such corporate records, documents, agreements and instruments
relating to the Company, and certificates of public officials and
of representatives of the Company, and have made such
investigations of law, and have discussed with representatives of
the Company and such other persons such questions of fact, as we
have deemed proper or necessary as a basis for rendering this
opinion.
Based upon and subject to the foregoing, we are of the
opinion that the Shares are legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as Exhibit
5.1 to the Registration Statement. In giving the foregoing
consent, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act
of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
PROSKAUER ROSE LLP
By: /s/ ROBERT A. CANTONE
- -----------------------
A member of the firm
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED ACCOUNTANTS
We have issued our report dated January 27, 1997, accompanying
the consolidated financial statements of Computer Horizons Corp.
appearing in the 1996 Annual report of the Company to its
shareholders incorporated by reference in the Annual Report on
Form 10-K for the year ended December 31, 1996, and our report
dated January 27, 1997, accompanying the financial statement
schedule included in that Form 10-K, which are incorporated by
reference in this Registration Statement. We consent to the
incorporation by reference in the Registration Statement of the
aforementioned reports and to the use of our name as it appears
under the caption "Experts."
GRANT THORNTON LLP
/s/Grant Thornton LLP
Parsippany, New Jersey
January 15, 1997
[Letterhead of Proskauer Rose LLP]
January 15, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
Re: Computer Horizons Corp.
Registration No. 333-
-----------------------
On behalf of our client, Computer Horizons Corp. (the "Company"),
we herewith transmit for filing pursuant to the Securities Act of
1933 the Company's Registration Statement on Form S-3.
If the Staff has any questions or requires additional
information, please do not hesitate to call the undersigned at
212.969.3652.
Respectfully,
/s/ RHONDA M. EDWARDS
Rhonda M. Edwards
cc: Dennis DiVenuta
General Counsel
Computer Horizons Corp.
