OLSHAN
Olshan Grundman Frome Rosenzweig & Wolosky LLP
PARK AVENUE TOWER
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NEW YORK, NEW YORK 10022
TELEPHONE: 212.451.2300
FACSIMILE: 212.451.2222
August 8, 2005
WWW.OLSHAN.COM
DIRECT DIAL: 212.451.2289
EMAIL: AFINERMAN@OLSHANLAW.COM
BY FEDERAL EXPRESS
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: Adam Halper
Re: COMPUTER HORIZONS CORP. (THE "COMPANY")
PRELIMINARY SCHEDULE 14A FILED ON JULY 22, 2005
FILED BY THE COMPUTER HORIZONS FULL VALUE COMMITTEE
FILE NO. 0-07282
Dear Mr. Halper:
We acknowledge receipt of the letter of comment dated August 4, 2005
from the Staff (the "Comment Letter") with regard to the above-referenced
matter. We have reviewed the Comment Letter with The Computer Horizons Full
Value Committee and provide the following supplemental response on its behalf.
Unless otherwise indicated, the page references below are to the marked version
of the enclosed paper copy of the Preliminary Schedule 14A filed on the date
hereof. Capitalized terms used herein and not separately defined have the
meanings given to them in the Preliminary Schedule 14A. Our responses are
numbered to correspond to your comments.
GENERAL
1. The Staff has advised that each statement or assertion of opinion or
belief made in the Proxy Statement and/or additional soliciting
materials must be characterized as such and be supported by a
reasonable basis that is self-evident, disclosed in the proxy
materials, or provided to the Staff on a supplemental basis. The
paragraphs below set forth the Committee's basis for certain
statements of opinion or belief set forth in the Proxy Statement.
The Committee believes that this information provides a reasonable
basis for each opinion or belief in the Proxy Statement.
NEW JERSEY OFFICE
2001 ROUTE 46/ SUITE 202
PARSIPPANY, NEW JERSEY 07054
TELEPHONE: 973.335.7400
FACSIMILE: 973.335.8018
August 8, 2005
Page 2
(a) THE CHIMES BUSINESS HAS "ACHIEVED CRITICAL MASS" AND THAT THE
BUSINESS IS "EXPECTED TO BECOME A PRINCIPAL GROWTH ENGINE" AND IS A
"STRONG BOTTOM LINE CONTRIBUTOR."
This statement has been revised to disclose that it is based on
statements made by management of the Company during a conference
call held on February 17, 2005 (the "February 17 Conference Call"),
a copy of which is attached hereto. See page 5 of Proxy Statement.
(b) THE FEDERAL SEGMENT CONTINUES TO DERIVE "HIGH MARGINS."
This statement has been revised to disclose that it is based on
statements made by management of the Company during the February 17
Conference Call, a copy of which is attached hereto. See page 5 of
Proxy Statement.
(c) CHIMES IS ONE OF THE "LEADERS" IN THE "BURGEONING" VMS INDUSTRY
AND IT WILL BE ATTRACTIVE BECAUSE OF THE "OPERATIONAL LEVERAGE" IT
ENJOYS DUE TO ITS "HIGH FIXED AND LOW VARIABLE COSTS STRUCTURE."
The statement that Chimes is "one of the leaders" in the VMS
industry has been revised to disclose that it is based on statements
made by Computer Horizons management in an earnings conference call
held on April 13, 2005 and slide-show presentation dated March 2005,
copies of which are attached hereto. See page 7 of Proxy Statement.
The disclosure has also been revised to delete the reference that
Chimes "is particularly attractive because of the operational
leverage that the business enjoys due to its high fixed and low
variable cost structure." See page 7 of Proxy Statement.
(d) THE "STAFFING INDUSTRY, IS A LOW-MARGIN, COMMODITY-LIKE INDUSTRY
WITH FEW DIFFERENTIATING FACTORS BESIDES PRICE," AND ITS
PROFITABILITY IS DECLINING.
The statement that the staffing industry is a "commodity-like
industry with few differentiating factors besides price" has been
deleted. See page 9 of Proxy Statement.
The statement that the staffing industry is a "low margin-industry"
has been revised to disclose that it is based on statements made by
management of the Company during a conference call held on October
8, 2004, a copy of which is attached hereto. See page 9 of Proxy
Statement.
The statement that the "profitability of the staffing business is
declining due to industry trends including the advent of VMS, which
serve to lower the gross margins for vendors, and the current trend
of using offshore outsourcing centers, which serves to lower overall
revenues" has been revised to focus on the current trend of using
offshore outsourcing centers and that the basis for this statement
is described in further detail in the risk factors section of the
Company's Form S-4, a copy of which is attached hereto. See page 9
of Proxy Statement.
August 8, 2005
Page 3
2. Arnaud Ajdler is an employee of Crescendo Partners, L.P. He is not a
member of the Committee. Mr. Ajdler has been removed from the Proxy
Card as an attorney and agent shareholders would appoint to vote
their shares and replaced with Mark Harnett, an employee of the
Committee's proxy solicitor. See Proxy Card.
3. As of the date hereof, the Committee has no plans, proposals or
arrangements with respect to the actions contemplated in the last
paragraph of Item 4 of the Schedule 13D other than what has already
been disclosed in the Proxy Statement.
4. The Committee was not aware that the Daily Record article was
published until July 29, 2005. The Committee notes the requirements
for timely filings under Rule 14a-12(b).
5. The Committee did not give consideration to naming Mr. Cassesse as a
participant in the solicitation.
PROXY STATEMENT COVER PAGE
6. The disclosure has been revised as requested. See Cover Letter and
pages 1 and 2 of Proxy Statement.
7. The disclosure has been revised as requested. See page 19 of Proxy
Statement.
8. The disclosure has been revised as requested. See page 2 of Proxy
Statement.
9. For matters for which the Committee is aware a reasonable time
before the solicitation is commenced, the Committee confirms that it
will revise its Proxy Card and soliciting materials to address these
matters.
10. The disclosure has been revised as requested. See page 2 of Proxy
Statement.
PROPOSAL NO. 1 / REASONS TO VOTE AGAINST THE PROPOSED MERGER
11. Copies of the transcripts of the Company's conference calls
announcing the Company's strategy to focus on the high-end solutions
business are attached hereto. All references that Analysts' staffing
business is "lower margin" have been deleted. See pages 5 and 9 of
Proxy Statement.
12. The direct transaction cost estimate of approximately $13.6 million
has been revised to include the $738,000 in cash certain Analysts
employees will receive in exchange for change of control waivers,
for a total of approximately $14.4 million in direct transaction
costs. The disclosure has also been revised to specify that the
$14.4 million figure does not include the issuance of the 377,000
shares of Analysts restricted stock that will be issued to the
Analysts employees in exchange for the change of control waivers.
See Pages 5 and 9-10 of Proxy Statement. The statement, "We believe
the consummation of the proposed Merger will have the effect of
significantly reducing Computer Horizons' cash balance" has been
deleted. See page 5 of Proxy Statement.
August 8, 2005
Page 4
WE BELIEVE THERE ARE POTENTIALLY MORE FAVORABLE STRATEGIC OPPORTUNITIES
13. Neither the Committee nor any of its members has (a) proposed that a
specific investment banking firm be retained by the Company to
explore strategic alternatives, (b) engaged the services of an
investment banking firm or similar financial analyst to explore any
strategic alternatives or has any understanding to engage an analyst
in the future, or (c) entered into any agreements with any outside
entity or person with regards to an alternative plan of financing or
merger.
WE BELIEVE COMPUTER HORIZONS IS PAYING TOO MUCH FOR ANALYSTS
14. The disclosure relating to management's view of the adequacy of the
$5.00 per Share offer has been deleted. See page 7 of Proxy
Statement.
15. The disclosure has been revised to explain the Committee's belief
that the exchange ratio is set too high and Computer Horizons is
using an undervalued currency to acquire Analysts. See pages 4 -7 of
Proxy Statement.
WE BELIEVE THERE ARE POTENTIALLY MORE FAVORABLE STRATEGIC OPPORTUNITIES FOR
COMPUTER HORIZONS THAN THE PROPOSED MERGER WITH ANALYSTS
16. The disclosure has been revised as requested. See page 10 of Proxy
Statement.
17. The statements, "The Committee is made up of shareholders like you.
We have no interest in this proposal other than seeking the highest
value for our Shares" have been deleted. See page 11 of Proxy
Statement.
CERTAIN INFORMATION REGARDING THE PROPOSED MERGER
18. The disclosure has been revised as requested. See page 13 of Proxy
Statement.
SOLICITATION OF PROXIES
19. The disclosure has been revised as requested. See page 17 of Proxy
Statement.
20. The Committee has entered into an oral agreement with MacKenzie
Partners, Inc. for solicitation and advisory services in connection
with the solicitation, for which MacKenzie Partners, Inc. will
receive a fee not to exceed $50,000.00, together with reimbursement
for its reasonable out-of-pocket expenses. There are no other
material terms to this oral agreement. The disclosure has been
revised as requested. See page 17 of Proxy Statement.
21. The Committee confirms its understanding that it must file under the
cover of Schedule 14A, on the date of first use, all written
soliciting materials, including any scripts to be used in soliciting
proxies by personal interview, telephone, television or radio.
August 8, 2005
Page 5
OTHER PARTICIPANT INFORMATION
22. The Committee confirms that the Proxy Statement contains all of the
information with respect to participants in the solicitation as
required by Item 5(a) of Schedule 14A.
23. The disclosure has been revised as requested. See page 19 of Proxy
Statement.
SCHEDULE I
24. The Committee confirms that beneficial ownership information it
provides in the Proxy Statement will be as of the most recent
practicable date. See Schedule I of Proxy Statement.
* * * * *
In connection with responding to the Staff's comments, attached
please find a certificate signed by each of the participants containing the
three acknowledgments requested by the Staff.
We appreciate the Staff's comments to the Committee's proxy
materials. The Committee has complied with all of the Staff's comments. As you
know, the Company's Form S-4 has gone effective and we have responded to the
Staff's comments within 2 business days. In order for the Committee to have
adequate time to solicit proxies and for shareholders not to be prejudiced by
not having enough time to review both the Company's and the Committee's proxy
materials, we respectfully request the Staff not to object to the Committee
filing definitive proxy materials.
The Staff is invited to contact the undersigned with any comments or
questions it may have. We would appreciate your prompt advice as to whether the
Staff has any further comments.
Very truly yours,
/s/ Adam W. Finerman
--------------------
Adam W. Finerman
Enclosures
cc: Eric Rosenfeld
Alan Bazaar
ACKNOWLEDGMENT
In connection with responding to the comments of the Staff of the
Securities and Exchange Commission ("SEC") relating to the preliminary proxy
statement on Schedule 14A (the "Proxy Statement") filed by The Computer Horizons
Full Value Committee on July 22, 2005, the undersigned acknowledge the
following:
o The undersigned is responsible for the adequacy and accuracy of
the disclosure in the Proxy Statement.
o The Staff's comments or changes to disclosure in response to
Staff comments do not foreclose the SEC from taking any action
with respect to the Proxy Statement.
o The undersigned may not assert Staff comments as a defense in
any proceeding initiated by the SEC or any person under the
federal securities laws of the United States.
Dated: August 8, 2005 CRESCENDO PARTNERS II, L.P., SERIES R
By: Crescendo Investments II, LLC
General Partner
By: /s/ Eric Rosenfeld
---------------------------
Name: Eric Rosenfeld
Title: Managing Member
CRESCENDO INVESTMENTS II, LLC
By: /s/ Eric Rosenfeld
---------------------------
Name: Eric Rosenfeld
Title: Managing Member
/s/ Eric Rosenfeld
-------------------------------
ERIC ROSENFELD
F. ANNETTE SCOTT FLORIDA TRUST
By: /s/ Richard L. Scott
---------------------------
Name: Richard L. Scott
Title: Trustee
RICHARD L. SCOTT FLORIDA TRUST
By: /s/ Stephen T. Braun
---------------------------
Name: Stephen T. Braun
Title: Trustee
SCOTT FAMILY FLORIDA PARTNERSHIP TRUST
By: /s/ Stephen T. Braun
---------------------------
Name: Stephen T. Braun
Title: Trustee
/s/ Richard L. Scott
-------------------------------
RICHARD L. SCOTT
/s/ Stephen T. Braun
-------------------------------
STEPHEN T. BRAUN
