UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Amendment No. 2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934: For the fiscal year endedDecember 31, 1999
[ ] 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 0-23170
HEADWAY CORPORATE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2134871
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
850 Third Avenue, 11th Floor, New York, NY 10022
(Address of Principal Executive Offices and Zip Code)
Registrant's Telephone Number: (212) 508-3560
Securities registered pursuant to Section 12(b) of the Act:None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, Par Value $0.0001
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 (229.405 of this chapter)
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 ]
State the aggregate market value of the voting and non-voting
common equity held by non-affiliates of the registrant. The
aggregate market value computed on the basis of the last sale
price on March 24, 2000, is $33,992,631.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date. 11,372,561
DOCUMENTS INCORPORATED BY REFERENCE
This Amendment No. 2 to the Annual Report on Form 10-K of
Headway Corporate Resources, Inc., for the year ended December
31, 1999, is filed to present the information required by Part
III of Form 10-K, including Item 10. Directors and Executive
Officers of the Registrant, Item 11. Executive Compensation, Item
12. Security Ownership of Certain Beneficial Owners and
Management, and Item 13. Certain Relationships and Related
Transactions. Incorporated herein by this reference is Amendment
No. 1 to the 1999 Form 10-K containing Items 1 through 10 of Form
10-K filed with the Securities and Exchange Commission on March
30, 2000.
TABLE OF CONTENTS
ITEM NUMBER AND CAPTION Page
Part III
10. Directors and Executive Officers of the Registrant 1
11. Executive Compensation 5
12. Security Ownership of Certain Beneficial Owners and 12
Management
13. Certain Relationships and Related Transactions 14
2
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors and Officers
The following table sets forth the names, ages, and
positions with Headway for each of the directors and officers of
Headway. The Board of Directors is divided into three classes,
and only one class of directors is elected at each annual meeting
of stockholders. The table indicates the class of which each
director is a member and the year in which his term expires based
on the class.
Name Age Positions (1) Term Ends
Gary S. Goldstein 45 Chairman, Chief Executive Class 1
Officer and Director 2002
Barry S. Roseman 47 President, Chief Operating Class 1
And Financial Officer and 2002
Treasurer, Director
G. Chris Andersen 62 Director Class 3
2000
E. Garrett Bewkes, III 49 Director Class 2
2001
Bruce R. Ellig 63 Director Class 1
2002
Ehud D. Laska 50 Director Class 2
2001
Richard B. Salomon 52 Director Class 3
2000
___________________________________________
(1) All executive officers are elected by the Board and hold
office until the next Annual Meeting of stockholders and until
their successors are elected and qualify.
The following is information on the business experience of
each director and officer.
Gary S. Goldstein has served in a number of executive
positions with Headway and its predecessors over the past twelve
years, including, Chairman, President, and Chief Executive
Officer. He is currently a director and executive officer of
each of Headway's subsidiary corporations. Mr. Goldstein has
extensive experience in human resource recruitment within all
areas of the financial services industry. Prior to entering the
recruitment industry, Mr. Goldstein was on the audit and
consulting staffs of Arthur Andersen & Co., in New York. Mr.
Goldstein is an active member of the Young Presidents'
Organization, Inc., and serves on its Metro Division Board of
Directors. He is also an active member of The Brookings Council
of the Brookings Institution, The Presidents Association of the
American Management Association, and is listed in Who's Who in
Finance and Industry.
3
Barry S. Roseman oversees all operation of Headway and its
subsidiaries. He joined Headway as its Senior Executive Vice
President and Chief Operating Officer in January 1992, and became
President in September 1996. In August 1999, he took over the
role of Chief Financial Officer. He is currently a director and
executive officer of each of Headway's subsidiary corporations.
For nine years prior to 1992, Mr. Roseman was employed at
FCB/Leber Katz Partners, Inc., a division of True North
Communications, Inc., in various positions; most recently as
Senior Vice President Director of Agency Operations.
G. Chris Andersen became a director of Headway in June 1995.
He is one of the founders of Andersen, Weinroth & Co., L.P., a
merchant banking firm, which commenced operations in January
1996. For over five years prior to 1996, Mr. Andersen served as
the Vice Chairman of PaineWebber Incorporated. Mr. Andersen also
serves as a director of four other public companies, Sunshine
Mining and Refining Company, TEREX Corporation, GP Strategies,
and Compost America.
E. Garrett Bewkes, III, became a director of Headway in
March 1998 pursuant to the terms of the new financing obtained by
Headway in that month. From November 1995 to the present he has
served as a Managing Member of GarMark Associates L.L.C. He was
a member of the Management Committee of Investcorp International,
Inc., from March 1994 to November 1995, where he headed the North
American Investment Group. Mr. Bewkes was with Bear Stearns and
Co., Inc., for nine years prior to March 1994, most recently as
Vice Chairman and Co-Head of Investment Banking.
Bruce R. Ellig became a director of Headway in April 1997.
Currently Mr. Ellig is an independent consultant and adviser on
human resource matters. From 1985 through October 1996, Mr.
Ellig served as a Corporate Vice President of the research-based
health care company, Pfizer Inc., with worldwide responsibility
for its personnel functions. He is a member of the American
Compensation Association and the Society for Human Resource
Management ("SHRM"). Mr. Ellig was the Chairman of the SHRM
board in 1996. Prior to his retirement from Pfizer, Mr. Ellig
was a member of many human resource organizations, and received
numerous awards for his contributions to the field. He is a
fellow of the National Academy of Human Resources, and is listed
in Who's Who in Finance and Industry, the East, America, and the
World.
Ehud D. Laska was appointed a director of Headway in August
1993. He is the Chairman of Coleman and Company Securities,
Inc., a member firm of the National Association of Securities
Dealers, Inc. Mr. Laska is also a founding partner and President
of InterBank Capital Group, LLC. Through these firms, Mr. Laska
specializes in building up companies through same industry
consolidation and acquisitions. From August 1994 to February
1996, Mr. Laska served as a managing director at the investment
banking firm of Continuum Capital, Inc. While serving as a
Managing Director with Tallwood Associates, Inc., a boutique
investment banking firm, from May 1992 to August 1994, Mr. Laska
founded the Private Equity Finance Group, which merged with
Continuum Capital, Inc. in August 1994.
Richard B. Salomon became a director of Headway in June
1995. He has been engaged in the private practice of law for the
past five years, during which period he has been a partner in the
law firm of Salans Hertzfeld Heilbronn Christy & Viener, counsel
to Headway. Mr. Salomon's practice is primarily in the areas of
real estate and corporate law. He currently serves as a director
of Tweedy Browne Fund, Inc., a mutual fund based in New York
City.
Board Meetings and Committees/Compensation
In 1999 the Board of Directors had four committees. The
Executive Compensation Committee considers salary and benefit
matters for the executive officers and key personnel of Headway.
The members of the Executive Compensation Committee in 1999 were
G. Chris Andersen, E. Garrett Bewkes,
4
III, Bruce R. Ellig, and Ehud D. Laska (only until April 1999).
The Finance Committee assists the Board in areas of financing
proposals, budgeting, and acquisitions. Members of the Finance
Committee in 1999 included Gary S. Goldstein, Barry S. Roseman,
G. Chris Andersen, E. Garrett Bewkes, III, and Ehud D. Laska.
The Audit Committee is responsible for financial reporting
matters, internal controls, and compliance with financial polices
of Headway, and meets with Headway's auditors when appropriate.
The members of the Audit Committee in 1999 were E. Garrett
Bewkes, III, Ehud D. Laska, and Richard B. Salomon. The
Governance Committee makes recommendations to the Board regarding
appropriate governance policies and practices, as well as Board
and committee membership candidates. Members of the Governance
Committee in 1999 included E. Garrett Bewkes, III, Bruce R.
Ellig, and Richard B. Salomon.
The Board of Directors met four times during the past fiscal
year. All directors attended at least 75% of the meetings of the
Board of Directors. The Executive Compensation Committee met 21
times in 1999, and all director members of those committees
attended at least 75% of the meetings. The Finance Committee met
five times in 1999, and all director members of that committee
attended at least 75% of the meetings, except for G. Chris
Andersen. The Audit Committee met once during 1999, and all
director members of that committee attended the meeting. The
Governance Committee did not meet in 1999.
Non-employee directors receive $2,500 for each meeting of
the Board of Directors attended, $500 for each committee meeting
attended, which is held on a day other than a day when a Board of
Directors meeting is also held, and reimbursement for travel
expenses. In September of each year, non-employee directors
receive options to purchase 5,000 shares of Headway's Common
Stock exercisable over a period of ten years at an exercise price
equal to the fair market value of Headway's Common Stock on the
date of issuance. Non-employee directors also receive at the
time they are first elected or appointed to the board of
directors options to purchase 10,000 shares of Headway's Common
Stock exercisable over a period of ten years at an exercise price
equal to the fair market value of Headway's Common Stock on the
date of issuance.
Section 16(a) Filing Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires officers and Directors of Headway and persons who own
more than ten percent of a registered class of Headway's equity
securities to file reports of ownership and changes in their
ownership on Forms 3, 4, and 5 with the Securities and Exchange
Commission, and forward copies of such filings to Headway. Based
on the copies of filings received by Headway, during the most
recent fiscal year the directors, officers, and beneficial owners
of more than ten percent of the equity securities of Headway
registered pursuant to Section 12 of the Exchange Act have filed
on a timely basis all required Forms 3, 4, and 5 and any
amendments thereto.
Item 11. Executive Compensation
Annual Compensation
The following table sets forth certain information regarding
the annual and long-term compensation for services in all
capacities to Headway for the prior fiscal years ended December
31, 1998, 1997, and 1996, of those persons who were either (i)
the chief executive officer of Headway during the last completed
fiscal year or (ii) one of the other four most highly compensated
executive officers of Headway as of the end of the last completed
fiscal year whose annual salary and bonuses exceeded $100,000
(collectively, the "Named Executive Officers").
5
Annual Compensation
________________________________
Other
Name and Principal Position Year Salary ($) Bonus ($) Annual
Compensation
Gary S. Goldstein 1999 327,375 468,250 62,489
Chairman, Chief 1998 302,375 450,000 55,961
Executive Officer 1997 300,000 425,000 44,222
Barry S. Roseman 1999 252,375 135,000 23,390
President, Chief 1998 252,375 212,500 26,727
Operating Officer 1997 250,000 169,000 24,416
Long Term Compensation
_______________________
Securities
Restricted Underlying LTIP All Other
Name and Principal Position Year Stock Awards($) Options/SARs(#) Payouts Compensation (1)
Gary S. Goldstein 1999 593,750 (2) -- 350,000 --
Chairman, Chief 1998 -- -- -- --
Executive Officer 1997 -- 250,000 -- 2,375
Barry S. Roseman 1999 -- -- 200,000 --
President, Chief 1998 -- -- -- --
Operating Officer 1997 -- -- -- 2,375
__________________________________________
(1) Represents contributions by Headway to the former defined
contribution 401(k) plan.
(2) Represents a restricted stock award of 125,000 shares of
common stock approved in July 1999. The restrictions will lapse
on the earlier of the date that the market price for the common
stock of Headway achieves certain performance criteria or June
30, 2006.
Employment and Other Arrangements
In 1999 Headway implemented new compensation arrangements
for Messrs. Goldstein and Roseman on the recommendation of the
Executive Compensation Committee. The base salary of Mr.
Goldstein increased July 1, 1999, to $352,375 and Mr. Roseman's
salary was unchanged. The new annual incentive plan for Messrs.
Goldstein and Roseman will pay to them annually a percentage of
salary to the extent earnings per share for the year meet,
exceed, or do not meet the amount budgeted for the year.
Additionally, because of his position as President of Whitney,
Gary S. Goldstein receives a percentage of salary to the extent
that Whitney meets, exceeds, or does not meet the operating
income budgeted for the year. The new long-term incentive plan
for the same individuals is a four-year plan with interim
phasing. The first payment will be in 2000 for 1998-1999
performance (two years). The second payment will be in 2001 for
1998-2000 performance (three years). This is followed by a
payment in 2002 for 1998-2001 performance (four years). All
three plans use 1997 as the base year. These are performance
unit plans with each unit in the described plans worth $1.
Payment is predicated on Headway's performance versus a peer
group of companies in terms of earnings per share and stock
price. Thus, while the annual plan is based on absolute
performance, the long-term plan is based on Headway's performance
relative to its peer group. Messrs. Goldstein and Roseman may
receive additional bonus or stock incentive compensation from
time to time as determined by the Board of Directors on the
recommendation of the Executive Compensation Committee.
6
Headway maintains key-man life insurance on Gary S.
Goldstein in the amount of $5,893,000, Barry S. Roseman in the
amount of $1,868,000, and on the lives of three other employees
in the amount of $2,228,000. All policies are owned by Headway,
and Headway is the named beneficiary.
Defined Contribution Plan
At January 1, 1998, Headway implemented a 401(k) retirement
plan covering substantially all employees. The plan does not
require matching contributions by Headway, and Headway made no
contributions to the plan for 1999. Benefits payable to an
employee under the plan are determined solely on the basis of the
employee's contributions. Prior to 1998, Headway had four
qualified 401(k) contribution plans for its employees. Under one
plan, Headway was required to make matching contributions up to
25% of the amount contributed by the employees. Employees are
fully vested on their contributions when made, and are fully
vested on employer contributions after five years of service.
Contributions to the old plans for the year ended December 31,
1997 were $53,000.
Stock Options
In 1999 the Board of Directors and stockholders approved
Headway's Amended 1993 Incentive Plan. The purpose of the Plan
is to provide directors, officers, employees, and consultants
with additional incentives by increasing their ownership
interests in the Company. Directors, officers, and other
employees of the Company and its subsidiaries are eligible to
participate in the Plan. In addition, awards may be granted to
consultants providing valuable services to the Company. Awards
under the Plan are granted by the Executive Compensation
Committee of the Board and may include incentive stock options,
non-qualified stock options, stock appreciation rights, stock
units, restricted stock, restricted stock units, performance
shares, performance units, or cash awards. No stock options or
other awards were granted in 1999 to the Named Executive
Officers.
The following table sets forth certain information with
respect to unexercised options held by the Named Executive
Officers as of December 31, 1999. No outstanding options held by
the Named Executive Officers were exercised in 1999.
Number of Securities Value of Unexercised
Name and Principal Underlying Unexercised Options In-the-Money Options
Position at FY End (#) at FY End ($) (1)
Exercisable/Unexercisable Exercisable/Unexercisable
Gary S. Goldstein 271,667/ 83,333 206,458/ 20,417
Chairman, Chief
Executive Officer
Barry S. Roseman 150,000/ -0- 252,500/ -0-
President, Chief
Operating Officer
___________________________________________
(1) This value is determined on the basis of the difference
between the fair market value of the securities underlying the
options and the exercise price at fiscal year end. The fair
market value of Headway's common stock at fiscal year end was
$4.375, which is the last sale price on December 31, 1999.
7
Report of the Executive Compensation Committee of the Board Of
Directors On Executive Compensation
The Executive Compensation Committee (the "Committee") of
Headway's Board of Directors sets the salaries and other
compensation of Headway's executive officers, including the
Chairman and Chief Executive Officer and other Named Executive
Officers. Compensation for these executive officers consists
mainly of three items:
* Salaries which are the basis on which annual and long-term
awards are based. It is intended that salaries be competitive,
however, they are not performance-based, as are the annual and
long-term elements.
* Annual incentive awards are based on Headway performance
versus standards adopted early in the year. The Committee may
include a subjective assessment in setting the award, but did not
do so for 1999.
* Long term incentive awards consist of stock options and
performance unit awards. No stock options were granted to any
executive officers during 1999.
The Committee put in place new annual and long-term
incentive plans for the Chairman/Chief Executive Officer and
President/Chief Operating Officer. The annual plan pays a
percentage of salary dependent on the extent budgeted earnings
per share for the year was met, exceeded, or not met.
Additionally, because of his position as President of Whitney,
Gary S. Goldstein receives a percentage of salary dependent on
the extent that the operating income budget for Whitney was met,
exceeded or not met. The bonus percentages are shown in the
following table.
Gary S. Goldstein Barry S. Roseman
Chairman, CEO President, COO
Maximum
Headway 100% 120%
Whitney 100% ------
200% 120%
Target
Headway 50% 60%
Whitney 50% ------
100% 60%
Threshold
Headway 10% 12%
Whitney 5% ------
15% 12%
Additionally, the Committee put in place a new long-term
incentive plan for the same individuals. It is a four-year plan
with interim phasing. The first payment will be in 2000 for 1998-
1999 performance (two years). The second payment will be in 2001
for 1998-2000 performance (three years). This is followed by a
payment in 2002 for 1998-2001 performance (four years). All
three plans, use 1997 as the base year. These are performance
unit plans with each unit in the described plans worth $1.
Payment is predicated on Headway's performance versus a peer
group of companies in terms of earnings per share and stock
price. Thus, while the annual plan is based on absolute
performance, the long-term plan is based on Headway's performance
relative to its peer group. Threshold, target and maximums are
shown below.
8
Gary S. Goldstein Barry S. Roseman
Chairman, CEO President, COO
Maximum
1998-1999 $350,000 $200,000
1998-2000 525,000 300,000
1998-2001 700,000 400,000
Target
1998-1999 $150,000 $100,000
1998-2000 225,000 150,000
1998-2001 300,000 200,000
Threshold
1998-1999 $50,000 $25,000
1998-2000 75,000 38,000
1998-2001 100,000 50,000
The Committee met extensively during 1999 because it
undertook direct responsibility for the design of the incentive
plans when it became obvious that the costs for designing the
program were going to run into the hundreds of thousands of
dollars.
Chief Executive Officer Compensation: The Committee set Mr.
Goldstein's salary at $352,375 per annum on July 1, 1999, this
represents a $50,000 increase from his salary in effect since
January 1, 1999. It was believed this adjustment was necessary
based on competitive data in order to properly establish the
relationship with new annual and long-term incentive plans.
The Committee also decided to do a one-year phase-in of the
long-term incentive plan for Mr. Goldstein. Although earnings
per share and stock price relative to the peer group would have
resulted in an award of $175,000, since the year 1998 had already
been concluded it did not seem appropriate to retroactively apply
the full program. A payout at target of $75,000 was made.
In accordance with the approved annual incentive plan,
Whitney having come in at 126% of operating budget generated an
annual incentive of $247,000 and Headway's earnings per share
before non-recurring items being $0.50 per share, an additional
award of $146,250 was made. The Committee in accordance with the
incentive plan approved both these payments earlier in the year.
This total of $393,250 replaced a previous year amount of
$450,000 based on qualitative and quantitative factors.
Based on Headway's compound change in its earnings per share
and stock price versus the identified peer group (those are shown
in the cumulative stock graph following this report) Headway was
found to be in the 92nd percentile in earnings per share and 83rd
percentile in stock price thereby generating a cash payment of
$350,000 in accordance with the terms of the plan approved by the
Committee during the year.
The Committee also approved in July 1999 a stock award to
Mr. Goldstein of 125,000 shares with restrictions. Said
restrictions shall lapse on the first occurrence of:
* Headway stock trades at or above $12 a share for at least 20
consecutive days (closing price) after December 31, 1999 but
prior to December 31, 2004, or
* Headway stock trades at or above $15 a share (closing price)
after January 1, 2005 but prior to March 31, 2006, or
9
* June 30, 2006
Section 162(m) of the Internal Revenue Code: This section of
the Internal Revenue Code (the "Code") limits Headway to a
deduction for federal income tax purposes of no more than
$1,000,000 of compensation paid to any name executive officer in
a taxable year. Compensation above $1,000,000 may be deducted if
it is a "performance-based compensation" within the meaning of
the Code. The shareholders approved, at its 1999 shareholders
meeting, performance based compensation.
Conclusion: The Committee will continue to monitor the
annual and long-term compensation of the named executive officers
making it contingent on Headway's performance, linking
realization of rewards closely to increases in financial
performance and shareholder value. Headway is committed to this
philosophy of pay for performance, recognizing the competitive
market for talented executives and the volatility of Headway's
business may result in highly variable compensation for the
period.
Members of the Compensation Committee
Bruce R. Ellig, Chair
G. Chris Anderson
E. Garrett Bewkes, III
Compensation Committee Interlocks and Insider Participation
The members of the Executive Compensation Committee are
listed above. The committee is composed solely of non-employee
directors.
10
Performance Graph
Headway Corporate Resources, Inc.
Comparison of Five Year Cumulative Total Return*
Headway Corporate Resources, Inc., Russell 2000, and the Staffing
Industry Index 1994 to 1999
[Performance graph]
Cumulative Total Return* 1995 1996 1997 1998 1999
Headway Corporate 93 185 174 245 175
Resources, Inc.
Russell 2000 126 145 175 169 202
Staffing Industry Index 117 218 223 202 175
___________________________________________
* Cumulative Total Return assumes an initial investment of
$100. No dividends were paid by Headway during the five-year
period, so no assumption is made with respect to reinvestment.
The Staffing Industry Index includes: CDI Corporation,
Interim Services, Inc., Kelly Services, Inc., Labor Ready Inc.,
Manpower Inc., Modis Professional Services Inc., On Assignment
Inc., Personnel Group of America Inc., Remedy Temp, Inc., Robert
Half International Inc., Kforce.com, Inc., SOS Staffing Services
Inc., and StaffMark Inc.
11
Item 12. Security Ownership Of Management And Principal
Stockholders
Principal Stockholders
The following table sets forth as of April 15, 2000, the
number and percentage of the outstanding shares of Common Stock
which, according to the information supplied to Headway, were
beneficially owned by each person who, to the knowledge of
Headway, is the beneficial owner of more than 5% of the
outstanding Common Stock. Except as otherwise indicated, the
persons named in the table have sole voting and dispositive power
with respect to all shares beneficially owned, subject to
community property laws where applicable.
Amount and Nature of
Beneficial Ownership
_________________________
Options,
Common Warrants and Percent
Shares Rights (1) of Class(2)
Gary S. Goldstein 1,877,005 355,000 20.2
850 Third Avenue
New York, NY 10022
G. Chris Andersen (3) 549,965 15,000 5.3
Anderson, Weinroth & Co., L.P.
1330 Avenue of the Americas
New York, NY 10019
GarMark Partners, L.P. (4) -0- 2,410,681 18.4
1325 Avenue of the Americas
26th Floor
New York, NY 10019
Moore Global Investments, Ltd. (5) -0- 896,057 7.7
Remington Investment Strategies, L.P.
c/o Moore Capital
1251 Avenue of the Americas
53rd Floor
New York, NY 10020
____________________________________________
(1) These figures represent options and warrants that are vested
or will vest within 60 days from the date as of which information
is presented in the table.
(2) These figures represent the percentage of ownership of the
named individuals assuming each of them alone has exercised his
or her options, warrants, or conversion rights, and percentage
ownership of all officers and directors of a group assuming all
such purchase or conversion rights held by such individuals are
exercised.
(3) Anderson, Weinroth & Co., L.P. ("AWLP"), is a Delaware
private investment partnership. G. Chris Anderson and Stephen D.
Weinroth are the sole limited partners of AWLP. The general
partner of
12
AWLP is A.W. & Co. GP Inc. ("AW Inc."), a Delaware corporation.
Messrs. Anderson and Weinroth are the sole stockholders,
officers, and directors of AW Inc. As a result of these
relationships, Messrs. Anderson and Weinroth and AW Inc. may be
deemed to have shares voting and investment control over 500,000
shares of Common Stock held by AWLP. Mr. Anderson individually
holds options to purchase 15,000 shares. The G. Chris Andersen
Family foundation, of which Mr. Andersen is a trustee, holds
49,965 shares of Common Stock. Mr. Weinroth, AWLP, and AW Inc.
disclaim any beneficial ownership of the option held by Mr.
Andersen and the Common Stock held by the G. Chris Andersen
Family Foundation.
(4) GarMark Partners, L.P., is the holder of Series F
Convertible Preferred Stock of Headway, which is convertible to
the 2,390,681 shares of Common Stock, subject to adjustment in
certain circumstances. E Garrett Bewkes, III, and Mark Solow are
the Managing Members of GarMark Associates L.L.C., the general
partner of GarMark Partners, L.P., and, therefore, these persons
may be deemed to have shared voting and investment control with
respect to such shares. Mr Bewkes serves as a non-employee
director of Headway, for which he is entitled to receive annually
5,000 options to purchase Common Stock. Mr. Bewkes has elected
to have all such options issued to GarMark Partners, L.P., so the
figure in the table includes the options.
(5) Moore Capital Management, Inc. ("MCM"), is the discretionary
investment manager of Moore Global Investments, Ltd., a Bahamian
corporation ("MGI"). MGI is the holder of Series F Convertible
Preferred Stock of Headway, which is convertible to 734,767
shares of Common Stock, subject to adjustment in certain
circumstances. Moore Capital Advisors, LLC ("MCA"), is the
discretionary investment manager and general partner of Remington
Investment Strategies, L.P., a Delaware limited partnership
("RIS"). RIS is the holder of Series F Convertible Preferred
Stock of Headway, which is convertible to 161,290 shares of
Common Stock, subject to adjustment in certain circumstances.
Louis M. Bacon is the Chairman and Chief Executive Officer,
director, and controlling equity owner of both MCM and MCA.
Accordingly, Mr. Bacon and MCM, and Mr. Bacon and MCA,
respectively, may be deemed to have shared voting and investment
control with respect to the shares held, respectively, by MGI and
RIS.
Management
The following table sets forth as of April 15, 2000, the
number and percentage of the outstanding shares of Common Stock
which, according to the information supplied to Headway, were
beneficially owned by (i) each person who is currently a director
of Headway, (ii) each Named Executive Officer (as defined below),
and (iii) all current directors and executive officers of Headway
as a group. Except as otherwise indicated, the persons named in
the table have sole voting and dispositive power with respect to
all shares beneficially owned, subject to community property laws
where applicable.
13
Amount and Nature of
Beneficial Ownership
----------------------------
Options,
Common Warrants and Percent of
Shares Rights (1) Class (2)
Gary S. Goldstein 1,877,005 355,000 20.2
Barry S. Roseman 383,629 150,000 4.9
G. Chris Andersen (3) 549,965 15,000 5.3
E. Garrett Bewkes, III (4) -0- 2,410,681 18.4
Bruce R. Ell ig 65,000 10,000 0.7
Ehud D. Laska 79,580 135,000 2.0
Richard B. Salomon 49,965 15,000 0.6
All Executive officers and 3,005,144 3,090,681 44.2
Directors as a Group (7 Persons)
____________________________________________
(1) These figures represent options and warrants that are vested
or will vest within 60 days from the date as of which information
is presented in the table.
(2) These figures represent the percentage of ownership of the
named individuals assuming each of them alone has exercised his
or her options, warrants, or conversion rights, and percentage
ownership of all officers and directors of a group assuming all
such purchase or conversion rights held by such individuals are
exercised.
(3) The figure for Common Stock includes the 500,000 shares of
Anderson, Weinroth & Co., L.P., because of the relationships
described in Note (3) to the table for Principal Stockholders.
(4) The figure for options, warrants and rights includes the
shares of GarMark Partners, L.P., because of the relationships
described in Note (4) to the table for Principal Stockholders.
Item 13. Certain Relationships and Related Transactions
Rights of Series F Stock
In March 1998, Headway obtained $105,000,000 of financing
consisting of $85,000,000 in debt and $20,000,000 of equity
financing. The equity financing was obtained through the sale of
1,000 shares of Series F Convertible Preferred Stock of Headway
("Series F Stock"). GarMark Partners, L.P. ("GarMark"), Moore
Global Investments, Ltd. ("Moore"), and Remington Investment
Strategies, L.P. ("Remington"), purchased 666.67, 205, and 45
shares of the Series F Stock, respectively. The Series F Stock
is convertible to Common Stock of Headway on the basis of the
liquidation preference of the Series F Stock at a conversion
price of $5.58 per share. Assuming GarMark, Moore, and Remington
each converted their shares of Series F Stock, they would receive
2,390,681, 734,767, and 161,290 shares of
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Common Stock, respectively, which together would represent
approximately 23.5% of the outstanding shares assuming no other
outstanding options, warrants, or rights were exercised.
Consequently, GarMark, Moore, and Remington would have, assuming
conversion of their Series F Stock, a significant voice in any
matter voted on by the stockholders of Headway.
The terms of the Series F Stock also provide that GarMark
has the right to designate for election one voting member of
Headway's Board of Directors and one voting member of each
committee of the Board. Each of GarMark and Moore also have the
right to designate one non-voting observer of Headway's Board of
Directors and one non-voting observer to each of the committees
of the Board. Pursuant to these requirements, Headway appointed
E. Garrett Bewkes, III, the designee of GarMark, as a director of
Headway and a member of each committee of the Board.
If at any time there is a default in the payment of any
dividend on the Series F Stock, which remains unpaid for four
consecutive quarters, or if Headway fails to redeem any shares of
Series F Stock when required at the election of the holders on
the occurrence of a default or breach of the terms of the Series
F Stock, then Headway is required to increase the number of
directors constituting the Board by such number that the number
of directors nominated and elected by the holders of the Series F
Stock is at least one-third of the entire Board and the holders
of the Series F Stock shall have the exclusive right to nominate
and elect the new directors. In the event the default or breach
is subsequently cured, the right of the holders of the Series F
Stock to nominate and elect one-third of the Board terminates.
At the time the terms of the financing and Series F Stock
were negotiated between Headway and the participants, none of the
participants, including, GarMark, Moore, Remington, and E.
Garrett Bewkes, III, were affiliated with Headway.
Other Matters
Richard B. Salomon, a director of Headway, is also a partner
in the law firm of Salans Hertzfeld Heilbronn Christy & Viener,
which represents Headway on various legal matters from time to
time.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Exchange Act, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
Headway Corporate Resources, Inc.
Date: April 27, 2000 By: /s/ Barry S. Roseman, President
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.
Dated: April 27, 2000 /s/ Gary S. Goldstein, Principal
Executive Officer and Director
Dated: April 27, 2000 /s/ Barry S. Roseman Principal
Financial and Accounting Officer and
Director
Dated: April 20, 2000 /s/ G. Chris Andersen, Director
Dated: April 27, 2000 /s/ E. Garrett Bewkes, III, Director
Dated April 27, 2000 /s/ Bruce R. Ellig, Director
Dated: April 27, 2000 /s/ Ehud D. Laska, Director
Dated: April 27, 2000 /s/ Richard B. Salomon, Director
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