SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
(Mark One)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission file number 1-13381
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HOSPITALITY WORLDWIDE SERVICES, INC.
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(Exact name of Registrant as specified in its charter)
New York 11-3096379
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
450 Park Avenue, Suite 2603, New York, New York 10022
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 223-0699
----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
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Common Stock, $.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /x/ No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]
The aggregate market value of the Common Stock, $.01 par value per share
(the "Common Stock"), held by non- affiliates of the Registrant as of April 26,
1999 (based upon the last sale price for the Common Stock on the American Stock
Exchange) was approximately $33,297,402.
The number of shares of Common Stock outstanding as of April 26, 1999 was
13,354,164.
<PAGE>
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors and Executive Officers
The directors and executive officers of the Company and their positions with the
Company are set forth below.
Name Age Position
- ---------- ----- --------
Robert A. Berman 39 Chairman of the Board, Chief
Executive Officer and Director
Leonard F. Parker 69 Chairman Emeritus
Douglas A. Parker 41 President & Director
Howard G. Anders 55 Executive Vice President,
Chief Financial Officer
& Secretary
Scott A. Kaniewski 35 Director
Louis K. Adler 63 Director
George Asch 61 Director
Richard A. Bartlett 41 Director
ROBERT A. BERMAN joined the Company in March 1997 as the President, Chief
Executive Officer and Director. In November 1997, he became the Chairman of the
Board, Chief Executive Officer and a Director. Prior to joining the Company, Mr.
Berman served as the Managing Director of Watermark LLC from September 1992 to
March 1997 and is currently the sole Manager of Watermark LLC. Mr. Berman is
also Vice Chairman and a director of Unistar Gaming Corporation, a wholly-owned
subsidiary of Executone Information Systems, and a director of Catskill
Development, LLC, the owner of an operating harness track.
LEONARD F. PARKER joined the Company in March 1997 as Chairman of the
Board and Director. In November 1997, he became Chairman Emeritus of the Board
of Directors. Leonard Parker founded The Leonard Parker Company ("LPC") in 1969.
Mr. Parker is a graduate of Tulane University and served in the United States
Air Force. Prior to founding LPC, Mr. Parker was employed from 1950 by Maxwell
Company, an interior design and furnishing company. Mr. Parker serves on various
committees for the Special Olympics. Leonard Parker is the father of Douglas
Parker.
DOUGLAS A. PARKER joined the Company in March 1997 as
President-Purchasing Division and a Director. In November 1997, he became the
President and a Director. Mr. Parker is also President of LPC. Mr. Parker, a
graduate of Tulane University in International Business, has been with LPC for
17 years. Mr. Parker is responsible for the development of the overseas offices
in Sandton, Singapore and Dubai, coordinating the international operations and
sales, as well as vendor and client relationships. Mr. Parker is also a director
of Shelby Williams Industries, Inc. Douglas Parker is the son of Leonard Parker.
HOWARD G. ANDERS joined the Company in October 1994 as Executive Vice
President, Chief Operating Officer and Director. In February 1996, he resigned
as a Director of the Company and became the Chief Financial Officer, Executive
Vice President and Secretary. From December 1995 to February 1996, Mr. Anders
was an independent consultant. Mr. Anders served as Vice President and Chief
Financial Officer of Alpine Lace Brands, Inc. in Maplewood, New Jersey from
April 1992 to October 1994. From April 1983 to April 1992, Mr. Anders was
President and Chief Operating Officer of North Hills Electronic, Inc. in Glen
Cove, New York. Mr. Anders is a graduate of Rutgers University and attended the
Harvard Business School PMD Program.
SCOTT A. KANIEWSKI has been a director of the Company since March 1996.
Mr. Kaniewski has been a Member of Watermark LLC since February 1995 and the
President of Watermark LLC since May 1997. Prior to his involvement with
Watermark LLC, Mr. Kaniewski held several positions with VMS Realty Partners,
including Vice President of Hotel Investments from December 1988 to March 1995.
He is a Certified Public Accountant and a member of the Illinois CPA Society.
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<PAGE>
LOUIS K. ADLER has been a director of the Company since September 1996.
Mr. Adler has been a private investor for over five years in Houston, Texas. He
has been Chairman of the Board and President of Bancshares, Inc. (Houston, TX)
since 1973; Vice Chairman of the Board since 1992 and a director since 1988 of
Luther's Bar-B-Q, Inc., a group of twenty restaurants in Texas, Louisiana and
Colorado; a director, Secretary and Treasurer of Warwick Communications, Inc.
since 1993; and a director and officer of several other private companies. Mr.
Adler is also a trustee and the President of the Adler Foundation and member of
the Dean's Advisory Counsel of Goizueta Business School of Emory University.
GEORGE ASCH has been a director of the Company since September 1996.
Since September 1994, Mr. Asch has been a Vice President of Gray, Seifert and
Co., Inc. an investment management company which became a wholly-owned
independent subsidiary of Legg Mason, Inc. in April 1994. For 25 years prior to
joining Gray Seifert and Co., Inc. in August 1990, Mr. Asch served as President
of a manufacturing company. He currently serves on the boards of various
philanthropic organizations, including the Montefiore Medical Center and the
Price Foundation. He is a graduate of Columbia College and served as an officer
in the United States Navy.
RICHARD A. BARTLETT has been a director of the Company since September
1996. Mr. Bartlett is a Managing Director of Resource Holdings Limited, a
private merchant banking firm in New York City ("Resource Limited"). He
specializes in legal aspects of mergers, acquisitions and other corporate
restructurings. In that capacity, he sits and has sat on the board of various
companies in which Resource Limited and its principals have made investments.
From 1987 to 1993, he was a member of the Council of Foreign Relations and is a
member of the New York State Bar. Mr. Bartlett received a law degree from Yale
Law School and received his B.A. from Princeton University.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers, directors and greater than ten percent
shareholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file. During the year ended December
31, 1998, to the Company's knowledge, all of such forms were filed in a timely
manner.
Board Meetings and Committees
The Board of Directors met five times during the fiscal year ended
December 31, 1998. From time to time, the members of the Board of Directors may
act by unanimous written consent. The Board of Directors has established
standing Audit and Compensation Committees.
Audit Committee. The Audit Committee exercises the power which the Board
of Directors would otherwise hold with respect to financial functions of the
Company, including matters pertaining to the audit of the financial statements
of the Company and related financial matters, as well as the appointment and
activities of the Company's independent certified public accountants. The Audit
Committee consists of Messrs. Adler and Asch. The Audit Committee met one time
during the fiscal year ended December 31, 1998.
Compensation Committee. The Compensation Committee exercises the power
which the Board of Directors would otherwise hold with respect to (i) the grant
of options under the 1996 Stock Option Plan (the "Employee Plan"); and (ii) the
compensation and benefits of all officers of the Company. The Compensation
Committee consists of Messrs. Adler, Asch and Bartlett. The Compensation
Committee met one time during the fiscal year ended December 31, 1998.
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<PAGE>
Item 11. EXECUTIVE COMPENSATION
Summary Compensation Table(1)
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to Robert A. Berman, the Company's
Chief Executive Officer, Leonard F. Parker, Douglas A. Parker and Howard G.
Anders, the Company's four other most highly compensated executives (the "Named
Executive Officers"). There is no other executive officer of the Company whose
salary and bonus exceeded $100,000 with respect to the fiscal years ended
December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------- ---------------------------
Awards Payouts
----------- -----------
Securities
Other Annual Restricted Underlying LTIP
Name and Principal Salary Bonus Compensation Stock Options/ Payouts All Other
Position Year ($) ($) ($) Awards ($) SARs(#) ($) Compensation
- ------------------ ----- -------- ------ ------------ ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert A. Berman (2) 1998 $300,000 -- -- -- -- -- --
1997 $161,000 -- -- -- 160,000 -- --
1996 -- -- -- -- -- -- --
Leonard F. Parker (3) 1998 $250,000 -- -- -- -- -- --
1997 $250,000 -- -- -- -- -- --
1996 -- -- -- -- -- -- --
Douglas A. Parker (4) 1998 $250,000 -- -- -- -- -- --
1997 $175,000 -- -- -- 100,000 -- --
1996 -- -- -- -- -- -- --
Howard G. Anders (5) 1998 $225,000 -- -- -- -- -- --
1997 $215,000 -- -- -- 15,000 -- --
1996 $150,000 -- -- -- 100,000 -- --
</TABLE>
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(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive's salary and bonus
(2) Mr. Berman joined the Company in March 1997 as the President, Chief
Executive Officer and Director. In November 1997, he became the
Chairman of the Board, Chief Executive Officer and a Director.
(3) Mr. Leonard Parker joined the Company in March 1997 as Chairman of the
Board and Director. In November 1997, he became Chairman Emeritus of
the Board of Directors.
(4) Mr. Douglas Parker joined the Company in March 1997 as
President--Purchasing Division and a Director. In November 1997, he
became the President and a Director.
(5) Mr. Montero joined the Company in August 1995 as Vice
President-Operations and Chief Operating Officer of HRB. Currently, Mr.
Montero is President of HRB.
(6) Mr. Anders joined the Company in October 1994 as Executive Vice
President, Chief Operating Officer and Director. In February 1996, he
resigned as a Director of the Company and became the Chief Financial
Officer, Executive Vice President and Secretary.
Option/SAR Grants in Last Fiscal Year
There were no option/SAR grants to any of the Named Executive Officers
during the fiscal year ended December 31, 1998.
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<PAGE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
The following table sets forth certain information regarding
unexercised stock options held by the Named Executive Officers as of December
31, 1998.
<TABLE>
Number of
Securities Value of Unexercised
Shares Underlying In-the-Money
Acquired Unexercised Options/SARs Options/SARs At
On Value At Fiscal Year-End Fiscal Year-End
Name Exercise Realized($) Exercisable/Unexercisable(1) Exercisable/Unexercisable
- ----------------------------- ---------------- ----------- -------------------------------- --------------------------
<S> <C> <C> <C> <C>
Robert A. Berman............. -- -- 32,000 / 128,000 0 / 0
Leonard F. Parker............ -- -- -- --
Douglas A. Parker............ -- -- 28,667 / 71,333 0 / 0
Howard G. Anders............. 10,000 $27,250 193,000 / 12,000 $560,250 / 0
</TABLE>
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(1) On December 31, 1998, the last reported sales price of the Common Stock
on the American Stock Exchange was $5.00 per share. ---------------
Long-Term Incentive and Pension Plans
The Company does not have any long-term incentive or defined benefit
pension plans.
Defined Benefit or Actuarial Plans
The Company does not have any defined benefit or actuarial plans.
Director Compensation
The Company does not currently compensate directors who are also
executive officers of the Company for service on the Board of Directors. Outside
directors are paid a fee of $750 and reimbursed for their expenses incurred in
attending each meeting of the Board of Directors and its Committees.
On September 26, 1996, the Company's Board of Directors adopted, and
the Company's shareholders approved, the 1996 Outside Directors Stock Option
Plan (the "Outside Directors' Plan") for purposes of securing for the Company
and its shareholders the benefits arising from stock ownership by its outside
directors.
1996 Stock Option Plan. In September 1996, the Company's Board of
Directors adopted, and the Company's shareholders approved, the 1996 Stock
Option Plan (the "Employee Plan"). The purpose of the Employee Plan is to
promote the success of the Company by providing additional incentive to the
officers and employees of the Company who are primarily responsible for the
management and growth of the Company, or otherwise materially contribute to the
conduct and direction of its business, operations and affairs, in order to
strengthen their desire to remain in the employ of the Company and to stimulate
their efforts on behalf of the Company, and to retain and attract to the employ
of the Company persons of competence.
Originally, the Employee Plan provided that the maximum number of
shares of Common Stock reserved for awards thereunder shall be 1,700,000. At the
Company's 1998 Annual Meeting of Shareholders, the Company's shareholders
approved an increase in the number of shares reserved for issuance under the
Employee Plan to 2,700,000. As of April 27, 1999, (i) options to purchase
1,511,750 shares of Common Stock are outstanding under the Employee Plan at
exercise prices ranging from $2.75 to $12.00 per share, 816,269 of which are
currently exercisable, (ii) 309,250 options granted under the Employee Plan have
been exercised, and (iii) 879,000 options remain available to the Company for
grant under the Employee Plan. The Employee Plan provides for the grant of (i)
options that are intended to qualify as incentive stock options ("Incentive
Stock Options") within the meaning of Section 422A of the Internal Revenue Code
of 1986, as amended, and (ii) options not intended to so qualify. The exercise
price of options granted under the Employee Plan may be less than, more than or
equal to the fair market value of such shares on the date of grant; provided,
however, that the exercise price of an Incentive Stock Option at the time of
grant thereof shall (i), if such Incentive Stock Option is being granted to a
10% shareholder, be at least 110% of the fair market value on the date of grant
and (ii), if such Incentive Stock Option is being granted to any other person,
be at least 100% of the fair market value on the date of grant. Any options
granted under the
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<PAGE>
Employee Plan that shall expire, terminate or otherwise be annulled for any
reason without having been exercised shall again be available for purposes of
the Employee Plan.
The Employee Plan is administered by the Compensation Committee, which
is comprised of not less than two members of the Company's Board of Directors
who are "disinterested persons" for purposes of Rule 16b-3 under the Exchange
Act. The Committee has the power and authority to grant to eligible persons
options to purchase shares of Common Stock under the Employee Plan and to
determine the restrictions, terms and conditions of all such options granted as
well as to interpret the provisions of the Employee Plan, any agreements
relating to awards granted under the Employee Plan, and to supervise the
administration of the Employee Plan.
No Incentive Stock Options may be granted to any person for which the
"fair market value," as defined within the Employee Plan, determined as of the
time an Incentive Stock Option is granted to such person, of the Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by such person during any calendar year under all plans of the Company and its
subsidiaries, shall exceed $100,000.
Subject to the provisions of the Employee Plan with respect to death,
retirement and termination of employment, the term of each option shall be for
such period as the Committee shall determine as set forth in the applicable
option agreement, but not more than (i) five years from the date of grant in the
case of Incentive Stock Options held by 10% or greater shareholders and (ii) ten
years from the date of grant in the case of all other Incentive Stock Options.
The Employee Plan is intended to comply in all respects with Rule 16b-3
under the Exchange Act.
1996 Outside Directors' Stock Option Plan. On September 26, 1996, the
Company's Board of Directors adopted, and the Company's shareholders approved,
the 1996 Outside Directors' Stock Option Plan (the "Directors' Plan") for
purposes of securing for the Company and its shareholders the benefits arising
from stock ownership by outside directors. Each outside director who becomes a
director after March 1, 1996 receives an initial grant of an option to purchase
15,000 shares of Common Stock. To the extent that shares of Common Stock remain
available for the grant of options under the Directors' Plan, on April 1 of each
year, commencing on April 1, 1997, each outside director shall automatically be
granted an option to purchase 10,000 shares of Common Stock. Options granted
under the Directors' Plan shall be exercisable in three equal installments,
commencing on the first anniversary of the grant date. The exercise price of
such options is the closing price of the Company's Common Stock on the American
Stock Exchange on the day of their grant. As of April 27, 1999, (i) 250,000
shares of Common Stock have been reserved for issuance under the Directors'
Plan, (ii) the Company has granted 160,000 options to purchase shares of Common
Stock under the Directors' Plan at a weighted average exercise price of $4.86
per share, 8,334 of which have been exercised and 151,666 of which remain
outstanding, (iii) 68,336 of the 151,666 remaining outstanding options are
currently exercisable, and (iv) there are 90,000 options available for grant
under the Directors' Plan. The Directors' Plan is intended to comply in all
respects with Rule 16b-3 under the Exchange Act.
1994 Non-Statutory Stock Option Plan. In 1994, the Company adopted 1994
Non-Statutory Stock Option Plan, which was subsequently terminated. As of April
27, 1999, options to purchase 40,000 shares of Common Stock remain outstanding
and exercisable under such plan with an exercise price of $1.275 per share.
Employment Agreements
The Company entered into a three-year employment agreement with Mr.
Berman as of January 1, 1998. The term of the employment agreement may be
renewed for one year periods by mutual agreement of Mr. Berman and the Company.
The employment agreement provides for base compensation at the rate of $300,000
per annum plus an annual bonus determined by the Company's Board of Directors in
its sole discretion. In the event of a change of control (as defined in the
employment agreement) which results in either (i) the termination of Mr.
Berman's services for any reason other than voluntary withdrawal or cause, (ii)
the placement of Mr. Berman in a position of lesser stature than that of a
senior executive officer of the Company; (iii) a breach of certain provisions of
Mr. Berman's employment agreement; or (iv) a requirement that Mr. Berman's
principal duties be performed outside of Manhattan, or if Mr. Berman decides to
leave the Company one year after such a change of control, the Company must pay
to Mr. Berman, as liquidated damages, a lump sum cash payment equal to 2.99
times his base salary and last bonus paid (up to certain limitations). The
employment agreement also contains confidentiality and non-compete provisions
during the term of the agreement and for a period of two years thereafter.
The Company entered into a four-year employment agreement with Mr.
Leonard Parker on January 9, 1997 with a base compensation of $250,000 per
annum. Pursuant to such agreement, the salary for the final year of the
agreement was
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<PAGE>
paid in full at signing. Further, Mr. Leonard Parker has agreed not to compete
with the Company during the term of the agreement and for a period of one year
thereafter.
The Company entered into a two-year employment agreement with Mr.
Douglas Parker as of January 1, 1998. The term of the employment agreement may
be renewed for one year periods by mutual agreement of Mr. Douglas Parker and
the Company. The employment agreement provides for base compensation at the rate
of $250,000 per annum plus an annual bonus determined by the Company's Board of
Directors in its sole discretion. In the event of a change of control (as
defined in the employment agreement) which results in either (i) the termination
of Mr. Douglas Parker's services for any reason other than voluntary withdrawal
or cause, (ii) the placement of Mr. Douglas Parker in a position of lesser
stature than that of a senior executive officer of the Company; (iii) a breach
of certain provisions of Mr. Douglas Parker's employment agreement; or (iv) a
requirement that Mr. Douglas Parker's principal duties be performed outside a 30
mile radius from the location at which Mr. Douglas Parker had performed his
duties immediately prior to the change of control, the Company must pay to Mr.
Douglas Parker, as liquidated damages, a lump sum cash payment equal to 2.99
times his base salary (subject to certain limitations). The employment agreement
also contains confidentiality and non-compete provisions during the term of the
agreement and for a period of two years thereafter.
The Company entered into a three-year employment agreement with Mr.
Montero on March 1, 1998. The term of the employment agreement may be renewed
for one year periods by mutual agreement of Mr. Montero and the Company. The
employment agreement provides for base compensation at the rate of $250,000 per
annum plus an annual bonus determined by the Company's Board of Directors in its
sole discretion. In the event of a change of control (as defined in the
employment agreement) which results in either (i) the termination of Mr.
Montero's services for any reason other than voluntary withdrawal or cause, (ii)
the placement of Mr. Montero in a position of lesser stature than that of a
senior executive officer of the Company; (iii) a breach of certain provisions of
Mr. Montero's employment agreement; or (iv) a requirement that Mr. Montero's
principal duties be performed outside a 30 mile radius from the location at
which Mr. Montero had performed his duties immediately prior to the change of
control, the Company must pay to Mr. Montero, as liquidated damages, a lump sum
cash payment equal to 2.99 times his base salary (subject to certain
limitations). The employment agreement also contains confidentiality and
non-compete provisions during the term of the agreement and for a period of two
years thereafter.
The Company entered into a three-year employment agreement with Mr.
Anders as of January 1, 1998. The term of the employment agreement may be
renewed for one year periods by mutual agreement of Mr. Anders and the Company.
The employment agreement provides for base compensation at the rate of $225,000
per annum plus an annual bonus determined by the Company's Board of Directors in
its sole discretion. In the event of a change of control (as defined in the
employment agreement) which results in either (i) the termination of Mr. Anders'
services for any reason other than voluntary withdrawal or cause, (ii) the
placement of Mr. Anders in a position of lesser stature than that of a senior
executive officer of the Company; (iii) a breach of certain provisions of Mr.
Anders' employment agreement; or (iv) a requirement that Mr. Anders' principal
duties be performed outside a 30 mile radius from the location at which Mr.
Anders had performed his duties immediately prior to the change of control, the
Company must pay to Mr. Anders, as liquidated damages, a lump sum cash payment
equal to 2.99 times his base salary (subject to certain limitations). The
employment agreement also contains confidentiality and non-compete provisions
during the term of the agreement and for a period of two years thereafter.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee, which exercises the power which
the Board of Directors would otherwise hold with respect to the grant of options
under the Employee Plan as well as the compensation and benefits of all officers
of the Company, consists of Louis K. Adler, George Asch and Richard A. Bartlett.
Mr. Bartlett is a Managing Director of Resource Holdings. The Company has
renewed its engagement with Resource Holdings as a financial advisor. As
compensation for such engagement, the Company has agreed to pay Resource
Holdings a retainer of $10,000 per month for at least one year. The Company,
pursuant to the terms of its previous agreement, granted Resource Holdings a
five-year option to purchase 500,000 shares of Common Stock at an exercise price
of $2.00 per share, 300,000 of which remain outstanding and exercisable as of
April 27, 1999.
Other
No director, executive officer or record or beneficial owner of more
than five percent of the Company's Common Stock is involved in any material
legal proceeding in which he is a party adverse to the Company or has a material
interest adverse to the Company.
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<PAGE>
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The voting securities of the Company outstanding on April 27, 1999
consisted of 13,354,164 shares of Common Stock and 120,000 shares of Convertible
Preferred Stock. The following table sets forth information concerning ownership
of the Common Stock and the Convertible Preferred Stock, as at April 27, 1999,
by (i) each director and nominee for director, (ii) each executive officer,
(iii) all directors, director nominees and executive officers as a group, and
(iv) each person who, to the knowledge of management, owned beneficially more
than 5% of the Common Stock or the Convertible Preferred Stock. Unless otherwise
indicated, the address of each person listed below is 450 Park Avenue, New York,
New York 10022.
<TABLE>
Convertible
Common Stock Percent of Preferred Stock Percent of
Beneficial Owner(1) Beneficially Owned Class(2) Beneficially Owned Class
- ------------------------------------- ------------------ ---------- ------------------ ----------
<S> <C> <C> <C> <C>
Robert A. Berman..................... 767,598(3) 5.7%
Leonard F. Parker 271,435 2.0%
550 Biltmore Way
Coral Gables, Florida 33134
Douglas A. Parker 444,534(4) 3.3%
550 Biltmore Way
Coral Gables, Florida 33134
Howard G. Anders 197,600(5) 1.5%
Richard A. Bartlett................... 428,167(6) 3.1%
c/o Resource Holdings Associates, L.P.
520 Madison Avenue, 40th Floor
New York, New York 10022
Scott A. Kaniewski.................... 98,757(7) 0
Louis K. Adler........................ 95,001(8) *
910 Travis Street, Suite 2030
Houston, Texas 77002-5810
George Asch........................... 95,001(9) *
c/o Gray Seifert & Company, Inc.
380 Madison Avenue
New York, New York 10022
Mitchell Parker 1,039,532(10) 7.3% 40,000(12) 33.3%
550 Biltmore Way
Coral Gables, Florida 33134
Gregg Parker 991,198(11) 7.0% 40,000(13) 33.3%
550 Biltmore Way
Coral Gables, Florida 33134
Bradley Parker 829,300(12) 5.9% 40,000(14) 33.3%
550 Biltmore Way
Coral Gables, Florida 33134
All Executive Officers and Directors
as a group (8 persons)................. 2,398,093(13) 17.1%
</TABLE>
- --------------------
* Less than 1%
(1) Except as outlined herein, the persons named in the table, to the
Company's knowledge, have sole voting and dispositive power with
respect to all shares shown as beneficially owned by them, subject to
community property laws where applicable and the information contained
in the footnotes hereunder.
(2) Calculations assume that (i) all options and warrants which are
presently exercisable or exercisable within 60 days have been
exercised; and (ii) all Convertible Preferred Stock which is presently
convertible has been converted.
(3) Consists of (i) 735,598 shares of Common Stock held individually by Mr.
Berman; and (ii) 32,000 shares of Common Stock issuable upon exercise
of presently exercisable options currently held by Mr. Berman.
(4) Consists of (i) 401,200 shares of Common Stock held individually by Mr.
D. Parker; and (ii) 43,334 shares of Common Stock issuable upon
exercise of presently exercisable options currently held by Mr. D.
Parker.
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<PAGE>
(5) Consists of (i) 4,600 shares of Common Stock held individually by Mr.
Anders; and (ii) 193,000 shares of Common Stock issuable upon exercise
of presently exercisable options currently held by Mr. Anders.
(6) Consists of (i) 108,166 shares of Common Stock owned individually by
Mr. Bartlett: (ii) 300,000 shares of Common Stock underlying an option
granted to Resource Holdings Associates, L.P. ("Resource Holdings") as
to which Mr. Bartlett is attributed beneficial ownership pursuant to
Rule 13d-3; and (iii) 20,001 shares of Common Stock issuable upon
exercise of presently exercisable options currently held by Mr.
Bartlett. Mr. Bartlett, as a Managing Director of Resource Holdings,
has shared power to vote and dispose of the 300,000 shares of Common
Stock underlying Resource Holdings' option.
(7) Consists of (i) 90,424 shares of Common Stock held individually by Mr.
Kaniewski; and (ii) 8,333 shares of Common Stock issuable upon exercise
of presently exercisable options currently held by Mr. Kaniewski.
(8) Consists of (i) 75,000 shares of Common Stock held individually by Mr.
Adler; and (ii) 20,001 shares of Common Stock issuable upon exercise of
presently exercisable options currently held by Mr. Adler.
(9) Consists of (i) 75,000 shares of Common Stock held individually by Mr.
Asch; and (ii) 20,001 shares of Common Stock issuable upon exercise of
presently exercisable options currently held by Mr. Asch.
(10) Consists of (i) 196,198 shares of Common Stock held individually by Mr.
M. Parker; (ii) 43,334 shares of Common Stock issuable upon exercise of
presently exercisable options currently held by Mr. M. Parker; and
(iii) a maximum of 800,000 shares of Common Stock issuable upon
conversion of the 40,000 shares of Convertible Preferred Stock
currently held by Mr. M. Parker which are presently convertible. The
shares of Convertible Preferred Stock convert into Common Stock on a
formula basis. This number of shares of Common Stock represents the
absolute maximum number of shares issuable upon conversion of the
Convertible Preferred Stock. Should Mr. M. Parker convert any or all of
his shares of Convertible Preferred Stock, his ownership interest in
the Convertible Preferred Stock will decrease or disappear accordingly.
(11) Consists of (i) 191,198 shares of Common Stock held individually by Mr.
G. Parker; and (ii) a maximum of 800,000 shares of Common Stock
issuable upon conversion of the 40,000 shares of Convertible Preferred
Stock currently held by Mr. G. Parker which are presently convertible.
The shares of Convertible Preferred Stock convert into Common Stock on
a formula basis. This number of shares of Common Stock represents the
absolute maximum number of shares issuable upon conversion of the
Convertible Preferred Stock. Should Mr. G. Parker convert any or all of
his shares of Convertible Preferred Stock, his ownership interest in
the Convertible Preferred Stock will decrease or disappear accordingly.
(12) Consists of (i) 29,300 shares of Common Stock held individually by Mr.
B. Parker; and (ii) a maximum of 800,000 shares of Common Stock
issuable upon conversion of the 40,000 shares of Convertible Preferred
Stock currently held by Mr. B. Parker which are presently convertible.
The shares of Convertible Preferred Stock convert into Common Stock on
a formula basis. This number of shares of Common Stock represents the
absolute maximum number of shares issuable upon conversion of the
Convertible Preferred Stock. Should Mr. B. Parker convert any or all of
his shares of Convertible Preferred Stock, his ownership interest in
the Convertible Preferred Stock will decrease or disappear accordingly.
(13) Includes presently exercisable options to purchase 636,670 shares of
Common Stock at exercise prices ranging from $1.275 to $12.00 per
share.
-9-
<PAGE>
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 1, 1998, the Company renewed its engagement of Resource
Holdings as a financial advisor. As compensation for such engagement, the
Company has agreed to pay Resource Holdings a retainer of $10,000 per month for
at least one year. The Company, pursuant to the terms of its previous agreement,
granted Resource Holdings a five-year option to purchase 500,000 shares of
Common Stock at an exercise price of $2.00 per share, 300,000 of which are still
outstanding and exercisable as of the date of this Proxy Statement.
In May 1997, the Company entered into an Agreement to Joint Venture
(the "Joint Venture Agreement") with Apollo Real Estate Advisors II, L.P., a
Delaware limited partnership ("Apollo") and Watermark LLC. Pursuant to the Joint
Venture Agreement, Watermark LLC receives a management fee of 1 1/2% of all
costs (other than soft costs) incurred in acquiring and rehabilitating a
particular project. On February 9, 1998, the Company purchased the assets of the
real estate advisory business from Watermark LLC, including all of Watermark
LLC's right, title and interest to the aforementioned management fees payable
under the Joint Venture Agreement. The Company paid Watermark LLC $1,500,000 as
consideration.
Watermark LLC has entered into an agreement with Leonard Parker,
Douglas Parker, Philip Parker, Mitchell Parker, Gregg Parker and Bradley Parker
to purchase 1,413,833 shares of Common Stock for $4.75 per share. Additionally,
Watermark LLC has agreed to purchase all of the outstanding Convertible
Preferred Stock at par value. The consummation of the transaction contemplated
under the agreement is contingent upon, among other things, financing. The
agreement has recently been amended to provide for a closing to occur not later
than June 18, 1999. Upon completion of the transaction, both Leonard and Doug
Parker will resign from the Board of Directors, but will remain as senior
executives of the Company.
-10-
<PAGE>
PART IV
Item 14. EXHIBITS AND REPORTS ON FORM 8-K.
**(a)(1) and (2) Financial Statements:
--------------------
o Hospitality Worldwide Services, Inc. and Subsidiaries
o Report of Independent Public Accountants
o Consolidated Financial Statements
(a)(3) Exhibits
Exhibit
Number Exhibits
- ------- --------
3.1 Certificate of Incorporation, as amended, of the Company (Incorporated
by reference to Exhibit 3.1 to the Company's Form 10-Q for the quarter
ended June 30, 1998).
3.2 Amended and Restated By-laws of the Company (Incorporated by reference
to Exhibit 3.2 to the Company's Form 10-Q for the quarter ended June
30, 1998).
4.1 Specimen Common Shares Certificate (Incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form SB-2, No.
33-7094-NY).
4.2 Rights Agreement dated as of November 24, 1997, by and between the
Company and Continental Stock Transfer & Trust Company, as rights
agent (the "Rights Agreement") (Incorporated by reference to the
Company's Registration Statement on Form 8-A filed with the Commission
on December 2, 1997).
4.3 Amendment to Rights Agreement dated January 7, 1998 (Incorporated by
reference to Exhibit 4.3 of the Company's Form 10-K for the year ended
December 31, 1997).
10.1 Asset Purchase Agreement dated as of April 1, 1995, by and among AGF
Interior Services Co., Watermark Investments Limited (Bahamas),
Watermark Investments Limited (Delaware), HRB, the Company and Tova
Schwartz (Incorporated by reference to the Company's Current Report on
Form 8-K dated August 22, 1995).
10.2 Divestiture, Settlement and Reorganization Agreement dated as of
February 26, 1996, by and among the Company, HRB, Watermark
Investments Limited (Bahamas), Watermark Investments Limited
(Delaware), AGF Interior Services Co., Tova Schwartz, Alan G.
Friedberg and Guillermo Montero (Incorporated by reference to Exhibit
10.2 to the Company's Form 10-KSB for the year ended December 31,
1995).
10.3 Memorandum Agreement dated April 12, 1996, by and between the Company
and Watermark (Incorporated by reference to Exhibit 10.3 to the
Company's Form 10-KSB for the year ended December 31, 1995).
10.4 Bill of Sale and Assumption Agreement dated February 26, 1996, by and
between the Company and Tova Schwartz (Incorporated by reference to
Exhibit 10.4 to the Company's Form 10-KSB for the year ended December
31, 1995).
10.5 Consulting Agreement dated February 28, 1996, by and between to
Company and Resource Holdings Associates (Incorporated by reference to
Exhibit 10.6 to the Company's Form 10-KSB for the year ended December
31, 1995).
10.6 Employment Agreement, dated as of January 1, 1998, by and between the
Company and Robert A. Berman (Incorporated by reference to Exhibit
10.6 to the Amendment No. 1 to the Company's Form 10-K, filed on April
29, 1998, for the year ended December 31, 1997).
10.7 Employment Agreement, dated as of January 1, 1998, by and between the
Company and Howard G. Anders (Incorporated by reference to Exhibit
10.7 to the Amendment No. 1 to the Company's Form 10-K, filed on April
29, 1998, for the year ended December 31, 1997).
*** 10.8 Amended 1996 Stock Option Plan.
10.9 Form of Option Agreement for the 1996 Plan (Incorporated by reference
to Exhibit 4(b) to the Company's Registration Statement on Form S-8
filed on February 12, 1997, File No. 333-21689).
10.10 Form of Stock Agreement for the Outside Directors' Plan (Incorporated
by reference to Exhibit 4(c) to the Company's Registration Statement
on Form S-8 filed on February 12, 1997, File No. 333-21689).
10.11 Form of Option Granted to Officers (Incorporated by reference to
Exhibit 4(d) to the Company's Registration Statement on Form S-8 filed
on February 12, 1997, File No. 333-21689).
10.12 Agreement and plan of Merger dated as of January 9, 1997, by and among
Leonard Parker Company, LPC Acquisition Corp., and the Company
(incorporated by reference to Exhibit 2.1 of the Company's Current
Report on Form 8-K filed on January 24, 1997).
-11-
<PAGE>
10.13 Employment Agreement, dated as of January 9, 1997, by and among The
Leonard Parker Company, the Company and Leonard Parker (Incorporated
by reference to Exhibit 10.13 to the Company's Registration Statement
on Form SB-2, No. 333-31765).
10.14 Employment Agreement, dated as of January 1, 1998, by and between the
Company and Douglas Parker (Incorporated by reference to Exhibit 10.14
to the Amendment No. 1 to the Company's Form 10-K, filed on April 29,
1998, for the year ended December 31, 1997).
10.15 Registration Rights Agreement, dated as of January 9, 1997, by and
among the Company, Leonard Parker, Douglas Parker, Bradley Parker,
Philip Parker, Gregg Parker and Mitchell Parker (Incorporated by
reference to Exhibit 10.18 to the Company's Registration Statement on
Form SB-2, No. 333-31765).
10.16 Agreement to Joint Venture, dated as of May 12, 1997, by and among
Apollo Real Estate Advisors II, L.P., the Registrant and Watermark
Investments Limited, LLC. (Incorporated by reference to Exhibit 10.19
to the Company's Registration Statement on Form SB-2, No. 333-31765).
10.17 Warrant dated May 12, 1997 issued to Apollo Real Estate Advisors II,
L.P. (Incorporated by reference to Exhibit 10.20 to the Company's
Registration Statement on Form SB-2, No. 333-31765).
10.18 Agreement and Plan of Merger, dated as of January 1, 1998, by and
among the Company, HWS Acquisition Corp., a Delaware corporation,
Bekins Distribution Services Co., Inc. and the Sellers named therein
(Incorporated by reference to the Company's Current Report on Form 8-K
dated January 9, 1998).
10.19 Registration Rights Agreement dated as of January 1, 1998, by and
among the Company and the Shareholders named therein (Incorporated by
reference to Exhibit 10.1 to the Company's Amended Current Report on
Form 8-K, dated September 16, 1998).
10.20 Financial Advisory Agreement dated April 10, 1997, by and between the
Company and Resource Holdings Associates (Incorporated by reference to
Exhibit 10.21 to the Company's Registration Statement on Form SB- 2,
No. 333-31765).
10.21 Master Development Agreement, dated June 5, 1998, by and between the
Company and Prime Hospitality Corp. (Incorporated by reference to
Exhibit 10 to the Company's Form 10-Q for the quarter ended June 30,
1998).
* 10.22 Stock Purchase Agreement, dated as of March 30, 1999, by and among the
Company, Watermark Investments Limited LLC, Leonard Parker, Douglas
Parker, Philip Parker, Mitchell Parker, Gregg Parker and Bradley
Parker.
*** 10.23 Amendment to Stock Purchase Agreement, dated as of April 27, 1999, by
and among the Company, Watermark Investments Limited LLC, Leonard
Parker, Douglas Parker, Philip Parker, Mitchell Parker, Gregg Parker
and Bradley Parker.
** 11 Computation of earnings per share (Incorporated herein by reference to
Note 15 to the Company's Consolidated Financial Statements).
16.1 Letter from Arthur Andersen LLP dated March 19, 1996 (Incorporated by
reference to the Company's Current Report on Form 8-K/A filed March
25, 1996).
16.2 Letter from BDO Seidman, LLP dated November 19, 1997 (Incorporated by
reference to the Company's Current Report on Form 8-K dated November
12, 1997).
* 21 Subsidiaries of the Company.
** 23.1 Consent of Arthur Andersen LLP dated March 31, 1998.
* 23.2 Consent of BDO Seidman, LLP dated March 31, 1998.
** 27 Financial Data Schedule.
- ---------------------------
* Previously filed with the Company's Form 10-K for the year ended December
31, 1998, filed on April 1, 1999.
** Previously filed with Amendment No. 1 to the Company's Form 10-K for the
year ended December 31, 1998, filed on April 16, 1999.
*** Filed herewith.
(c) Reports on Form 8-K
Form 8-K, dated January 9, 1998, filed with the Commission on January 23,
1998, as amended on March 24, 1998, April 16, 1998 and September 16, 1998,
reporting Item 2, Acquisition on Distribution of Assets.
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<PAGE>
POWER OF ATTORNEY
Hospitality Worldwide Services, Inc. and each of the undersigned do
hereby appoint Robert A. Berman and Howard G. Anders, and each of them
severally, its or his true and lawful attorneys to execute on behalf of
Hospitality Worldwide Services, Inc. and the undersigned any and all amendments
to this Report and to file same with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. Each of such
attorneys shall have the power to act hereunder with or without the other.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized on the 27th day of
April, 1999.
HOSPITALITY WORLDWIDE SERVICES, INC.
(Registrant)
By:/s/ Robert A. Berman
-------------------------------------
Robert A. Berman, Chairman of the Board,
Chief Executive Officer (principal executive
officer) and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- -----
/s/ Robert A. Berman Chairman of the Board, April 28, 1999
- -------------------- Chief Executive Officer
Robert A. Berman (principal executive officer)
and Director
/s/ Leonard F. Parker Chairman Emeritus of the Board April 28, 1999
- --------------------- and Director
Leonard F. Parker
/s/ Douglas A. Parker President, Chief Operating April 28, 1999
- --------------------- Officer and Director
Douglas A. Parker
/s/ Howard G. Anders Executive Vice President, Chief April 28, 1999
- -------------------- Financial Officer and Secretary
Howard G. Anders
/s/ Scott A. Kaniewski Director April 28, 1999
- ----------------------
Scott A. Kaniewski
Director
- -------------------
Louis K. Adler
/s/ George Asch Director April 28, 1999
- ---------------
George Asch
Director
- -----------------------
Richard A. Bartlett
-13-
HOSPITALITY WORLDWIDE SERVICES, INC.
AMENDED 1996 STOCK OPTION PLAN
1. Purposes
The purpose of the Plan is to provide additional incentive to the
officers and employees of the Company who are primarily responsible for the
management and growth of the Company, or otherwise materially contribute to the
conduct and direction of its business, operations and affairs, in order to
strengthen their desire to remain in the employ of the Company and to stimulate
their efforts on behalf of the Company, and to retain and attract to the employ
of the Company persons of competence. Each option granted pursuant to the Plan
shall be designated at the time of grant as either an "incentive stock option"
or as a "non-qualified stock option." The terms and conditions of the Plan shall
be set forth or incorporated by reference in the option agreements evidencing
the options.
2. Definitions
For the purposes of the Plan, unless the context otherwise requires,
the following definitions shall be applicable:
(a) "Board" or "Board of Directors" means the Company's Board of
Directors.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee composed of two or
more members of the Board of Directors, and who shall be responsible for
administering the Plan. Each of the members of the Committee shall be a
Disinterested Person.
(d) "Company" means Hospitality Worldwide Services, Inc.
(e) "Disinterested Person" means a disinterested person, as defined
in Rule 16b-3 under the Exchange Act.
(f) "Employee" means an employee of the Company or of a Subsidiary
(including a director or officer of the Company or a Subsidiary who is also an
employee).
(g) "ERISA" means the Employment Retirement Income Security Act of
1974.
<PAGE>
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(i) "Fair Market Value" of the Shares means the closing price of
publicly traded Shares on the national securities exchange on which the Shares
are listed (if the Shares are so listed) or on the Nasdaq National Market (if
the Shares are regularly quoted on the Nasdaq National Market), or, if not so
listed or regularly quoted, the mean between the closing bid and asked prices of
publicly traded Shares in the over-the-counter market, or, if such bid and asked
prices shall not be available, as reported by any nationally recognized
quotation service selected by the Company, or as determined by the Committee in
a manner consistent with the provisions of the Code.
(j) "ISO" means an option intended to qualify as an incentive stock
option under Section 422 of the Code.
(k) "NQO" means an option that does not qualify as an ISO.
(l) "Plan" means the 1996 Stock Option Plan of the Company.
(m) "Securities Act" means the Securities Act of 1933, as amended.
(n) "Shares" means shares of the Company's Common Stock, $.01 par
value, including authorized but unissued shares and shares that have been
previously issued and reacquired by the Company.
(o) "Subsidiary" of the Company means and includes a "Subsidiary
Corporation," as that term is defined in Section 425(f) of the Code.
3. Administration
Subject to the express provisions of the Plan, the Committee shall have
authority to interpret and construe the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and conditions of
the respective option agreements (which need not be identical) and to make all
other determinations necessary or advisable for the administration of the Plan.
Subject to the express provisions of the Plan, the Committee, in its sole
discretion, shall from time to time determine the persons from among those
eligible under the Plan to whom, and the time or times at which, options shall
be granted, the number of Shares to be subject to each option, whether an option
shall be designated an ISO or an NQO and the manner in and price at which such
option may be exercised. In making such determination, the Committee may take
into account the nature and period of
-2-
<PAGE>
service of eligible employees, their level of compensation, their past, present
and potential contributions to the Company and such other factors as the
Committee shall in its discretion deem relevant. The determination of the
Committee with respect to any matter referred to in this Section 3 shall be
conclusive.
4. Eligibility for Participation
Any Employee shall be eligible to receive ISOs or NQOs granted under
the Plan.
5. Limitation on Shares Subject to the Plan
Subject to adjustment as hereinafter provided, no more than 2,700,000
Shares may be issued pursuant to the exercise of options granted under the Plan.
If any option shall expire or terminate for any reason, without having been
exercised in full, the unpurchased Shares subject thereto shall again be
available for the purposes of the Plan.
6. Terms and Conditions of Options
Each option granted under the Plan shall be subject to the following
terms and conditions:
(a) Except as provided in Subsection 6(j), the option price per Share
shall be determined by the Committee, but (i) as to an ISO shall not be less
than 100% of the Fair Market Value of a Share on the date such ISO option is
granted; and (ii) as to an NQO, shall not be less than 75% of the Fair Market
Value of a Share on the date such NQO is granted.
(b) The Committee shall, in its discretion, fix the term of each
option, provided that the maximum length of the term of each option granted
hereunder shall be 10 years and provided further than the provisions of
Subsection 6(j) hereof shall be applicable to the grant of ISOs to Employees
therein identified.
(c) If a holder of an option dies while he is employed by the Company
or a Subsidiary, such option may, to the extent that the holder of the option
was entitled to exercise such option on the date of his death, be exercised
during a period after his death fixed by the Committee, in its discretion, at
the time such option is granted, but in no event to exceed one year, by his
personal representative or representatives or by the person or persons to whom
the holder's rights under the option shall pass by will or by the applicable
laws of descent and distribution or by a qualified domestic relations order;
provided, however, that no option granted under the Plan may be exercised to any
extent by anyone after its expiration.
-3-
<PAGE>
(d) In the event that a holder of an option shall voluntarily retire
or quit his employment without the written consent of the Company or a
Subsidiary or if the Company shall terminate the employment of a holder of an
option for cause, the options held by such holder shall forthwith terminate. If
a holder of an option shall voluntarily retire or quit his employment with the
written consent of the Company or a Subsidiary, or if the employment of such
holder shall have been terminated by the Company or a Subsidiary for reasons
other than cause, such holder may (unless his option shall have previously
expired pursuant to the provisions hereof) exercise his option at any time prior
to the first to occur of the expiration of the original option period or the
expiration of a period after termination of employment fixed by the Committee,
in its discretion, at the time the option is granted, but in no event to exceed
three months, to the extent of the number of Shares subject to such option which
were purchasable by him on the date of termination of his employment. Options
granted under the Plan shall not be affected by any change of employment so long
as the holder thereof continues to be an Employee.
(e) Anything to the contrary contained herein or in any option
agreement executed and delivered hereunder, no option shall be exercisable
unless and until the Plan has been approved by stockholders of the Company in
accordance with Section 13 hereof.
(f) Each option shall be nonassignable and nontransferable by the
option holder otherwise than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of ERISA, or the rules promulgated thereunder and shall be exercisable
during the lifetime of the option holder solely by him.
(g) An option holder desiring to exercise an option shall exercise
such option by delivering to the Company written notice of such exercise,
specifying the number of Shares to be purchased, together with payment of the
purchase price therefor; provided, however that no option may be exercised in
part with respect to fewer than 100 Shares, except to purchase the remaining
Shares purchasable under such option. Payment shall be made as follows: (i) in
United States dollars by cash or by check, certified check, bank draft or money
order payable to the order of the Company; (ii) at the discretion of the
Committee, by delivering to the Company Shares already owned by the option
holder and having a Fair Market Value on the date of exercise equal to the
exercise price, or a combination of such Shares and cash; or (iii) by any other
proper method specifically approved by the Committee.
(h) In order to assist an option holder with the acquisition of
Shares pursuant to the exercise of an option granted under the Plan, the
Committee may, in its discretion and subject to the requirements of applicable
statutes, rules and regulations,
-4-
<PAGE>
whenever, in its judgment, such assistance may reasonably be expected to benefit
the Company, authorize, either at the time of the grant of the option or
thereafter (i) the extension of a loan to the option holder by the Company, (ii)
the payment by the option holder of the purchase price of the Shares in
installments, or (iii) the guaranty by the Company of a loan obtained by the
option holder from a third party. The Committee shall determine the terms of any
such loan, installment payment arrangement or guaranty, including the interest
rate and other terms of repayment thereof. Loans, installment payment
arrangements and guaranties may be authorized with or without security and the
maximum amount thereof shall be the option price for the Shares being acquired
plus related interest payments.
(i) The aggregate Fair Market Value (determined at the time an ISO is
granted) of the Shares as to which an Employee may first exercise ISOs in any
one calendar year under all incentive stock option plans of the Company and its
Subsidiaries may not exceed $100,000.
(j) An ISO may be granted to an Employee owning, or who is considered
as owning by applying the rules of ownership set forth in Section 425(d) of the
Code, over 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary if the option price of such ISO equals or exceeds 110%
of the Fair Market Value of a Share on the date the option is granted and such
ISO shall expire not more than five years after the date of grant.
7. Adjustments Upon Changes in Capitalization
(a) Subject to any required regulatory approval, new option rights
may be substituted for the option rights granted under the Plan, or the
Company's duties as to options outstanding under the Plan may be assumed, by a
corporation other than the Company, or by a parent or subsidiary of the Company
or such corporation, in connection with any merger, consolidation, acquisition,
separation, reorganization, liquidation or like occurrence in which the Company
is involved. Notwithstanding the foregoing or the provisions of Subsection 7(b)
hereof, in the event such corporation, or parent or subsidiary of the Company or
such corporation, does not substitute new option rights for, and substantially
equivalent to, the option rights granted hereunder, or assume the option rights
granted hereunder, the option rights granted hereunder shall terminate and
thereupon become null and void (i) upon dissolution or liquidation of the
Company, or similar occurrence, (ii) upon any merger, consolidation,
acquisition, separation, reorganization, or similar occurrence, in which the
Company will not be a surviving entity or (iii) upon a transfer of substantially
all of the assets of the Company or more than 80% of the outstanding Shares;
provided, however, that each option holder
-5-
<PAGE>
shall have the right immediately prior to or concurrently with such dissolution,
liquidation, merger, consolidation, acquisition, separation, reorganization or
similar occurrence, to exercise any unexpired option rights granted hereunder
whether or not then exercisable. If the exercise of the foregoing right by the
holder of an ISO would be deemed to result in a violation of the provisions of
Subsection 6(i) of the Plan, then, without further act on the part of the
Committee or the option holder, such ISO shall be deemed an NQO to the extent
necessary to avoid any such violation.
(b) The existence of outstanding options shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issuance of Common Stock or subscription rights or any
merger or consolidation of the Company, or any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Shares or the
rights thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise; provided,
however, that if the outstanding Shares shall at any time be changed or
exchanged by declaration of a stock dividend, stock split, combination of shares
or recapitalization, the number and kind of Shares subject to the Plan or
subject to any options theretofore granted, and the option prices, shall be
appropriately and equitably adjusted so as to maintain the proportionate number
of Shares without changing the aggregate option price.
(c) Adjustments under this Section 7 shall be made by the Committee
whose determination as to what adjustments, if any, shall be made, and the
extent thereof, shall be final.
8. Privileges of Stock Ownership
No option holder shall be entitled to the privileges of stock ownership
as to any Shares not actually issued and delivered to him.
9. Securities Regulation
(a) Each option shall be subject to the requirement that if at any
time the Board of Directors or Committee shall in its discretion determine that
the listing, registration or qualification of the Shares subject to such option
upon any securities exchange or under any Federal or state law, or the approval
or consent of any governmental regulatory body, is necessary or desirable in
connection with the issuance or purchase
-6-
<PAGE>
of Shares thereunder, such option may not be exercised in whole or in part
unless such listing, registration, qualification, approval or consent shall have
been effected or obtained free from any conditions not reasonably acceptable to
the Board of Directors or Committee.
(b) Unless at the time of the exercise of an option and the issuance
of the Shares thereby purchased by any option holder hereunder there shall be in
effect as to such Shares a Registration Statement under the Securities Act and
the rules and regulations of the Securities and Exchange Commission, or there
shall be available an exemption from the registration requirements of the
Securities Act, the option holder exercising such option shall deliver to the
Company at the time of exercise a certificate (i) acknowledging that the Shares
so acquired may be "restricted securities" within the meaning of Rule 144
promulgated under the Securities Act, (ii) certifying that he is acquiring the
Shares issuable to him upon such exercise for the purpose of investment and not
with a view to their sale or distribution; and (iii) containing such option
holder's agreement that such Shares may not be sold or otherwise disposed of
except in accordance with applicable provisions of the Securities Act. The
Company shall not be required to issue or deliver certificates for Shares until
there shall have been compliance with all applicable laws, rules and
regulations, including the rules and regulations of the Securities and Exchange
Commission.
10. Employment of Employee
Nothing contained in the Plan or in any option agreement executed and
delivered thereunder shall confer upon any option holder any right to continue
in the employ of the Company or any Subsidiary or to interfere with the right of
the Company or any Subsidiary to terminate such employment at any time.
11. Withholding; Disqualifying Disposition
(a) The Company shall deduct and withhold from any salary or other
compensation for employment services of an option holder, all amounts required
to satisfy withholding tax liabilities arising from the grant or exercise of an
option under the Plan or the acquisition or disposition of Shares acquired upon
exercise of any such option.
(b) In the discretion of the Committee and in lieu of the deduction
and withholding provided for in subsection (a) above, the Company shall deduct
and withhold Shares otherwise issuable to the option holder having a fair market
value on the date income is recognized pursuant to the exercise of an option
equal to the amount required to be withheld.
-7-
<PAGE>
(c) In the case of disposition by an option holder of Shares acquired
upon exercise of an ISO within (i) two years after the date of grant of such
ISO, or (ii) one year after the transfer of such Shares to such option holder,
such option holder shall give written notice to the Company of such disposition
not later than 30 days after the occurrence thereof, which notice shall include
all such information as may be required by the Company to comply with applicable
provisions of the Code and shall be in such form as the Company shall from time
to time determine.
12. Amendment, Suspension and Termination of the Plan
Subject to any required regulatory approval, the Board of Directors or
Committee may at any time amend, suspend or terminate the Plan, provided that,
except as set forth in Section 7 above, no amendment may be adopted without the
approval of stockholders which would:
(a) increase the number of Shares which may be issued pursuant to the
exercise of options granted under the Plan;
(b) permit the grant of an option under the Plan with an option price
less than 100% of the Fair Market Value of the Shares at the time such option is
granted;
(c) change the provisions of Section 4;
(d) extend the term of an option or the period during which an option
may be granted under the Plan;
(e) decrease an option exercise price (provided that the foregoing
does not preclude the cancellation of an option and a new grant at a lower
exercise price without stockholder approval); or
(f) materially increase the benefits accruing to participants of the
Plan.
Unless the Plan shall theretofore have been terminated by the Board of Directors
or Committee, the Plan shall terminate on June 5, 2006. No option may be granted
during the term of any suspension of the Plan or after termination of the Plan.
The amendment or termination of the Plan shall not, without the written consent
of the option holder to be affected, alter or impair any rights or obligations
under any option theretofore granted to such option holder under the Plan.
13. Effective Date
The effective date of the Plan shall be June 5, 1996, subject to its
approval by shareholders of the Company not later than June 4, 1997.
AMENDMENT TO STOCK PURCHASE AGREEMENT
AMENDMENT dated as of April 28, 1999 (the "Amendment") to STOCK
PURCHASE AGREEMENT dated as of March 30, 1999 (the "Agreement") by and among
WATERMARK INVESTMENTS LIMITED LLC, a Delaware limited liability company, as
Buyer (the "Buyer"), each of the parties listed as sellers on the signature
pages to the Agreement (the "Sellers") and Hospitality Worldwide Services, Inc.,
a New York corporation ("HWS").
W I T N E S S E T H
WHEREAS, the Buyer, the Sellers and HWS are parties to the Agreement;
and
WHEREAS, the Buyer, the Sellers and HWS desire to amend and restate
certain provisions of the Agreement;
NOW, THEREFORE, in consideration of the premises and representations,
warranties and agreements herein contained, the parties hereto, intending to be
legally bound, hereby agree as follows:
Section 1. Section 1.2 of the Agreement is hereby restated to read in
its entirety as follows:
"Section 1.2 Purchase Consideration. The aggregate consideration to be
paid for the Shares (the "Purchase Price") shall consist of:
(i) $250,000 (the "Deposit") to be paid by Buyer to the Escrow Agent no
later than the date hereof to hold in escrow until the Closing (as
defined herein), at which time the Deposit shall be paid by the
Escrow Agent to the Sellers as set forth on Exhibit 1, in
accordance with the terms of this Agreement and the escrow
agreement dated as of the date hereof among the Sellers, Buyer and
the Escrow Agent in the form attached hereto as Exhibit 4 (the
"Escrow Agreement"), and
(ii) $250,000 to be paid by Buyer to Greenberg Traurig, P.A., as
representative of the Sellers no later than the close of business
on April 28, 1999 (the "Deposit Payment"), such Deposit Payment to
be non-refundable under any circumstances, plus
(iii) the amounts set forth on Exhibit 1 to be paid by Buyer to the
Sellers at the Closing, by certified check or wire transfer of
immediately available funds to accounts designated by each Seller."
<PAGE>
Section 2. Section 2.1 of the Agreement is hereby restated to read in
its entirety as follows:
"Section 2.1 Closing Date. The closing (the "Closing") of the
transactions contemplated by this Agreement shall take place as soon as
practicable after satisfaction or waiver of all conditions set forth
herein and no later than June 18, 1999, at the offices of Olshan
Grundman Frome Rosenzweig & Wolosky LLP, 505 Park Avenue, New York, New
York 10022, or such other time and place as Buyer and the Sellers shall
agree (the date on which such closing occurs being herein referred to
as the "Closing Date")."
Section 3. Sections 9.1 and 9.2 are hereby restated to read in their
entirety as follows:
"Section 9.1 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement abandoned at any time prior
to the Closing:
(a) By mutual written consent of Buyer and all Sellers;
(b) By either Buyer or any Seller if the transactions contemplated by
this Agreement shall not have been consummated on or before June
18, 1999; provided, however, neither Buyer nor any Seller, as the
case may be, may terminate this Agreement pursuant to this
Section 9.1(b) if any condition specified in Article VI or
Article VII, respectively, is not satisfied or waived or any such
condition can no longer be satisfied;
(c) By any Seller if any condition specified in Article VI hereto has
not been met, or waived by the Sellers, at such time as such
condition can no longer be satisfied; or
(d) By Buyer if any condition specified in Article VII of this
Agreement has not been met, or waived by Buyer, at such time as
such condition can no longer be satisfied.
Section 9.2 Effect of Termination; Release of Deposit.
(a) In the event of any termination of this Agreement in accordance
with Section 9.1(a) hereof, this Agreement shall forthwith become
void and there shall be no liability under this Agreement on the
part of any party hereto or their respective affiliates,
officers, directors, employees or agents by virtue of such
termination and
-2-
<PAGE>
the Escrow Shares and any other documents delivered to the Escrow
Agent shall be delivered by the Escrow Agent to the Sellers and
the Deposit shall be delivered to the Buyer, each in accordance
with the terms of the Escrow Agreement.
(b) In the event of any termination of this Agreement in accordance
with Section 9.1(d) (other than resulting from a failure to
satisfy Section 7.1(g)) on or prior to June 18, 1999, Buyer
reserves its right to take any action permitted by law, including
as provided in Section 10.3 hereof. In the case of such
termination, Buyer shall notify the Sellers and the Escrow Agent,
pursuant to Section 4(c) of the Escrow Agreement.
(c) Except as specifically provided above, at the close of business
on June 18, 1999, the Deposit and the Escrow Shares shall be
delivered by the Escrow Agent to the Sellers and this Agreement
shall forthwith become void and there shall be no liability under
this Agreement on the part of any party hereto or their
respective affiliates, officers, directors, employees or agents
by virtue of such termination. In addition, in the event of any
termination by any Seller pursuant to Section 9.1(c) based on the
failure of Buyer to satisfy the conditions set forth in Section
6.1(a) or 6.1(b), Sellers reserve the right to take any action
permitted by law, including as provided in Section 10.3 hereof."
Section 4. Exhibit 1 to the Agreement is hereby restated as Exhibit 1
attached hereto.
Section 5. All other provisions of the Agreement shall remain in full
force and effect.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year hereinabove first set forth.
WATERMARK INVESTMENTS LIMITED, LLC
By:__________________________________________
Name:
Title:
SELLERS
- ------------------------------ ---------------------------------------------
DOUGLAS PARKER PHILIP PARKER
- ------------------------------ ---------------------------------------------
MITCHELL PARKER GREGG PARKER
- ------------------------------ ---------------------------------------------
BRADLEY PARKER LEONARD PARKER
Solely with respect to Sections 10.4 & 10.5
HOSPITALITY WORLDWIDE SERVICES, INC.
By:__________________________________________
Name:
Title:
-4-
<PAGE>
EXHIBIT 1
SHARES
Shares of Shares of
Seller Common Stock Preferred Stock
- ------ ------------ ---------------
Leonard Parker 271,435 0
Douglas Parker 401,200 0
Philip Parker 375,000 0
Mitchell Parker 175,000 40,000
Gregg Parker 191,198 40,000
Bradley Parker 0 40,000
--------- ---------
1,413,833 120,000
PURCHASE PRICE
<TABLE>
<CAPTION>
Escrow Deposit Closing Aggregate
Seller Payment Payment Payment Purchase Price
- ------ ------- ------- ------- --------------
<S> <C> <C> <C> <C>
Leonard Parker $ 33,441.00 $ 33,441.00 $1,222,434.25 $1,289,316.25
Douglas Parker 49,428.00 49,428.00 1,806,844.00 1,905,700.00
Philip Parker 46,200.00 46,200.00 1,688,850.00 1,781,250.00
Mitchell Parker 47,497.00 47,497.00 1,736,256.00 1,831,250.00
Gregg Parker 47,497.00 47,497,00 1,813,196.50 1,908,190.50
Bradley Parker 25,937.00 25,937.00 948,126.00 1,000,000.00
----------- ------------- ------------- -------------
$250,000.00 $250,000.00 $9,215,706.75 $9,715,706.75
</TABLE>
