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
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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.
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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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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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 $100,000 with respect to the fiscal years ended
December 31, 1998, 1997 and 1996.
Annual Compensation Long-Term Compensation
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Awards Payouts
----------- -----------
Securities
Other Annual Restricted Underlying LTIP
Name and Principal Salary Bonus Compensation Stock Options/ Payouts All Other
Position Year ($) ($) ($) Awards ($) SARs(#) ($) Compensation
- ------------------ ----- -------- ------ ------------ ---------- ----------- ---------- -------------
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 -- --
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(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive's salary and bonus
(2) Mr. Berman joined the Company in March 1997 as the President, Chief
Executive Officer and Director. In November 1997, he became the
Chairman of the Board, Chief Executive Officer and a Director.
(3) Mr. Leonard Parker joined the Company in March 1997 as Chairman of the
Board and Director. In November 1997, he became Chairman Emeritus of
the Board of Directors.
(4) Mr. Douglas Parker joined the Company in March 1997 as
President--Purchasing Division and a Director. In November 1997, he
became the President and a Director.
(5) Mr. Montero joined the Company in August 1995 as Vice
President-Operations and Chief Operating Officer of HRB. Currently, Mr.
Montero is President of HRB.
(6) Mr. Anders joined the Company in October 1994 as Executive Vice
President, Chief Operating Officer and Director. In February 1996, he
resigned as a Director of the Company and became the Chief Financial
Officer, Executive Vice President and Secretary.
Option/SAR Grants in Last Fiscal Year
There were no option/SAR grants to any of the Named Executive Officers
during the fiscal year ended December 31, 1998.
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Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
The following table sets forth certain information regarding
unexercised stock options held by the Named Executive Officers as of December
31, 1998.
Number of
Securities Value of Unexercised
Shares Underlying In-the-Money
Acquired Unexercised Options/SARs Options/SARs At
On Value At Fiscal Year-End Fiscal Year-End
Name Exercise Realized($) Exercisable/Unexercisable(1) Exercisable/Unexercisable
- ----------------------------- ---------------- ----------- -------------------------------- --------------------------
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
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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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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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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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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.
Convertible
Common Stock Percent of Preferred Stock Percent of
Beneficial Owner(1) Beneficially Owned Class(2) Beneficially Owned Class
- ------------------------------------- ------------------ ---------- ------------------ ----------
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%
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* 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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(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.
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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.
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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-
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.
-12-
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-