SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
HEADWAY CORPORATE RESOURCES, INC.
(Name of Registrant as Specified in Its Charter)
Commission File Number: 0-23170
Not Applicable
(Name of Persons Filing Proxy Statement If Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:_______________________________
2) Aggregate number of securities to which transaction
applies:_____________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined): _______________
4) Proposed maximum aggregate value of transaction:_____
5) Total fee paid:___________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:______________________________
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4) Date Filed:__________________________________________
HEADWAY CORPORATE RESOURCES, INC.
850 Third Avenue, 11th Floor
New York, New York 10022
ANNUAL MEETING OF STOCKHOLDERS
JUNE 26, 1997
PROXY STATEMENT AND NOTICE
SOLICITATION OF PROXIES
The enclosed proxy is being solicited by the Board of
Directors of Headway Corporate Resources, Inc., 850 Third Avenue,
11th Floor, New York, New York 10022, a Delaware corporation
("Headway" or the "Company"), for use at the Annual Meeting of
the Stockholders of Headway (the "Annual Meeting") to be held at
3:30 p.m., on June 26, 1997, at the principal office of the
Company listed above, and at any adjournment thereof. This Proxy
Statement, together with the Company's 1996 Annual Report, serves
as notice of the Annual Meeting, a description of the proposals
to be addressed at the Annual Meeting, and a source of
information on the Company and its management.
Stockholders may revoke their proxies by delivering a
written notice of revocation to the Secretary of the Company at
any time prior to the exercise thereof, by the execution of a
later-dated proxy by the same person who executed the prior proxy
with respect to the same shares, or by attendance at the Annual
Meeting and voting in person by the person who executed the prior
proxy.
The solicitation will be primarily by mail but may also
include telephone, telegraph or oral communication by officers or
regular employees. Officers and employees will receive no
additional compensation in connection with the solicitation of
proxies. All costs of soliciting proxies will be borne by the
Company. The approximate mailing date of the proxy statement and
proxy to stockholders is May 14, 1997.
All proxies will be voted as specified. In the absence of
specific instructions, proxies will be voted FOR:
(1) the election of G. Chris Andersen and Richard B.
Salomon as Class 3 Directors of Headway to serve for a term of
three years and until their successors are duly elected and
qualified;
(2) ratification of the appointment of Ernst & Young LLP
as independent auditors of the Company for 1997; and
(3) approval of all other matters by the persons named
in the proxies in accordance with their judgment.
PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS ON THE PROXY.
STOCKHOLDERS RECEIVING MORE THAN ONE PROXY BECAUSE OF SHARES
REGISTERED IN DIFFERENT NAMES OR ADDRESSES MUST COMPLETE AND
RETURN EACH PROXY IN ORDER TO VOTE ALL SHARES TO WHICH ENTITLED.
OUTSTANDING SHARES AND VOTING RIGHTS
Record Date. Stockholders of record at the close of
business on May 5, 1997, are entitled to notice of and to vote at
the Annual Meeting or any adjournment thereof.
Shares Outstanding. As of May 5, 1997, a total of 7,193,569
shares of the Company's Common Stock (the "Common Stock") and 572
shares of the Company's Series B Preferred Stock were outstanding
and entitled to vote. No other outstanding series of preferred
stock of the Company is entitled to vote at the Annual Meeting.
Voting Rights and Procedures. Each outstanding share of
Common Stock is entitled to one vote on all matters submitted to
a vote of stockholders. The holders of Series B Preferred Stock
are entitled to vote their shares on an as converted basis with
the Common Stock, without distinction as to class, on all matters
submitted to a vote of stockholders. The voting power of the
Series B Preferred Stock entitled to vote at the Annual Meeting
is equivalent to 27,315 shares of Common Stock.
The Company's Bylaws and Delaware law require the presence,
in person or by proxy, of a majority of the outstanding shares
entitled to vote to constitute a quorum to convene the Annual
Meeting. Shares represented by proxies that reflect abstentions
or "broker non-votes" (i.e., shares held by a broker or nominee
which are represented at the meeting, but with respect to which
such broker or nominee is not empowered to vote on a particular
proposal) will be counted as shares that are present and entitled
to vote for purposes of determining the presence of a quorum.
Stockholder Proposals for the 1998 Annual Meeting.
Proposals from stockholders intended to be included in the
Company's proxy statement for the 1998 Annual Meeting must be
received by the Secretary of the Company on or before January 14,
1998 (not less than 120 days prior to the day in 1998 which
corresponds to the date on which this Proxy Statement is released
to stockholders), and may be omitted unless the submitting
stockholder meets certain requirements. It is suggested that the
proposal be submitted by certified mail, return-receipt
requested.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Company's Certificate of Incorporation and Bylaws
provide that the Board be divided into three classes to be
designated as Class 1, Class 2 and Class 3, each of which is to
be as nearly equal in number as possible. The Directors in each
Class serve for a term ending on the date of the third annual
meeting following the meeting at which the Directors of that
Class are elected. At the 1997 Annual Meeting, Directors of
Class 3, consisting of two persons, are up for election to serve
until the annual meeting of stockholders in the year 2000.
The Board of Directors has nominated for election as the
Class 3 Directors G. Chris Andersen and Richard B. Salomon, who
currently serve in those positions.
Set forth below under the caption "DIRECTORS AND EXECUTIVE
OFFICERS", is information on the age, presently held positions
with the Company, principal occupation now and for the past five
years, other directorships in public companies, and tenure of
service with the Company as a Director for each of the nominees.
Each Director is elected by vote of a plurality of the
shares of voting stock present and entitled to vote, in person or
by proxy, at the Annual Meeting. Abstentions or broker non-votes
as to the election of directors will not affect the election of
the candidates receiving the plurality of votes. Unless
instructed to the contrary, the shares represented by the proxies
will be voted FOR the election of the nominees named above as
directors. Although it is anticipated that each nominee will be
able to serve as a director, should any nominee become
unavailable to serve, the proxies will be voted for such other
person or persons as may be designated by the Company's Board of
Directors.
The Board Recommends a Vote "FOR" The Nominees
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
The accounting firm of Ernst & Young LLP ("Ernst & Young")
has been approved by the Board, upon recommendation by the Audit
Committee, to serve as independent auditors of the Company for
1997, subject to approval by the stockholders by an affirmative
vote of a majority of the outstanding shares of the Company's
Common Stock represented at the Annual Meeting. Ernst & Young
served as independent auditors of the Company in 1996. The
Company has been advised that neither Ernst & Young nor any of
its members or associates has any relationship with the Company
or any of its affiliates, except in the firm's proposed capacity
as the Company's independent auditors. The independent auditors
of the Company for 1995 were Moore Stephens, P.C. (formerly
Mortenson & Associates, P.C.).
Representatives of Ernst & Young will be present at the
Annual Meeting of Stockholders, will be afforded an opportunity
to make a statement if they desire, and will be available to
respond to appropriate questions from stockholders. The Company
does not expect representatives of Moore Stephens, P.C. to be
present at the Annual Meeting to make a statement or respond to
questions.
The affirmative vote of a majority of the shares of Common
Stock represented at the Annual Meeting in person or by proxy is
required to approve the selection of Ernst & Young to serve as
independent auditors of the Company for 1997.
The Board of Directors Recommends a Vote "For" Ratification of
the Appointment of Ernst & Young LLP.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth as of May 5, 1997, the number
and percentage of the outstanding shares of Common Stock which,
according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of the Company, (ii) each Named Executive Officer (as defined
below), (iii) all current directors and executive officers of the
Company as a group and (iv) each person who, to the knowledge of
the Company, 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
Principal Stockholders Common Options/ Preferred % of
Shares Warrants Stock Class
(1) (2)
Gary S. Goldstein (3)(4) 1,739,639 65,000 29,378 25.17
850 Third Avenue
New York, NY 10022
Edward E. Furash (3)(5) 565,700 16,389 8.07
2001 L Street, N.W.
Washington, DC 20036
Alicia C. Lazaro (4) 314,197 18,333 31,628 5.03
850 Third Avenue
New York, NY 10022
The Tail Wind Fund Ltd. (6) 36,497 240,000 264,905 6.56
18-20 North Quay, Douglas
Isle of Man 1M95 1NR
ING (U.S.) Capital 575,000 7.40
Corporation (7)
135 East 57th Street
New York, NY 10022
Officers, Directors and
Nominees
G. Chris Andersen (4) 13,126 0.18
1330 Avenue of the Americas
New York, NY 10019
Bruce R. Ellig 50,000 10,000 0.83
25 East End Avenue
New York, NY 10028
Ehud D. Laska (4) 184,856 5,251 2.57
630 Fifth Avenue
New York, NY 10111
Charles E.F. Millard 10,000 0.14
110 Williams Street
New York, NY 10038
Barry S. Roseman (4) 83,360 105,000 78,881 3.62
850 Third Avenue
New York, NY 10022
Richard B. Salomon (4) 13,126 0.18
620 Fifth Avenue
New York, NY 10020
Philicia G. Levinson (4) 8,333 17,501 0.36
850 Third Avenue
New York, NY 10022
All Executive officers and 2,438,699 383,189 173,652 38.65
Directors as a Group
(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) Messrs. Goldstein and Furash are also officers and
directors of the Company.
(4) These persons are holders of Series A Convertible
Preferred Stock of the Company, a portion of which is convertible
to Common Stock of the Company. The figures presented are for
the Common Stock issuable on conversion.
(5) Mr. Furash is the holder of Series B Convertible
Preferred Stock of the Company which is convertible to 16,389
shares of Common Stock.
(6) The Tail Wind Fund Ltd. ("TWF") holds 12 shares of the
Company's Series D Convertible Preferred Stock (the "Series D
Stock"). The face value for each share of Series D Stock is
$50,000 and is convertible to Common Stock of the Company at the
lesser of $5.210625 or 80% of the market price of the Company's
Common Stock on the date of conversion. Dividends are payable on
the Series D Stock at the rate of 8% per annum. The Company may,
at its election, issue Common Stock in payment of the dividends.
On conversion of the Series D Stock, the holder is entitled to
receive a warrant to purchase one share of Common Stock for every
four shares of Common Stock issued on conversion. The amounts
reflected in the foregoing table for TWF assume that all Series D
Stock is converted into Common Stock on May 5, 1997, at an
estimated conversion price of $3.00 per share. TWF also holds
warrants to purchase 240,000 shares of the Company's Common Stock
at an exercise price of $4.25 per share.
(7) ING (U.S.) Capital Corporation ("ING"), holds a warrant
(the "Series E Warrant") to purchase 575,000 shares of Series E
Convertible Preferred Stock ("Series E Stock") of the Company at
an exercise price of $0.02 per share. The Series E Stock is
convertible at the election of the holder into Common Stock of
the Company at the rate of one share for one share, subject to
adjustment based on anti-dilution provisions. Assuming exercise
in full of the Series E Warrant and the conversion of all of the
Series E Stock into Common Stock, ING would receive 575,000
shares of Common Stock.
DIRECTORS AND EXECUTIVE OFFICERS
Directors and Officers
The following table sets forth the names, ages, and
positions with the Company for each of the directors and officers
of the Company. 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 42 Chairman, Chief Executive Class 1
Officer and Director 1999
Barry S. Roseman 44 President, Treasurer, Chief Class 1
Operating Officer and Director 1999
G. Chris Andersen(2) 59 Director Class 3
1997
Bruce R. Ellig 60 Director Class 1
1999
Edward E. Furash 62 Vice Chairman and Director Class 2
1998
Ehud D. Laska 47 Director Class 2
1998
Charles E.F. Millard 40 Director Class 2
1998
Richard B. Salomon(2) 49 Director Class 3
1997
Philicia G. Levinson 33 Senior Vice President and N/A
Secretary
(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.
(2) G. Chris Andersen and Richard B. Salomon are members of
Class 3 of the Board of Directors, and have been nominated by the
Board for re-election at the Annual Meeting. See "PROPOSAL NO. 1
- -- ELECTION OF DIRECTORS", above.
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 the Company 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 the Company'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.
Barry S. Roseman oversees all operation of the Company and
its subsidiaries. He joined the Company as its Senior Executive
Vice President and Chief Operating Officer in January 1992, and
became President in September 1996. He is currently a director
and executive officer of each of the Company'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 the Company 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, in New
York City. Mr. Andersen also serves as a director of three other
public companies, Sunshine Mining and Refining Company, TEREX
Corporation, and United Waste Incorporated.
Bruce R. Ellig became a director of the Company 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 currently serves on the
SHRM board of directors, and 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.
Edward E. Furash founded Furash & Company, Inc., in 1980 and
currently serves as its Chairman and Chief Executive Officer. He
has served as the Vice Chairman and a director of the Company
since June 1995. Mr. Furash has extensive experience in all
aspects of the financial services industry and management of
financial services companies. He also advises major companies
outside of the financial services industry on their entry into
the industry. A seasoned banker, he served nearly twelve years
as Senior Vice President at the Shawmut Corporation and
subsequently was a Managing Associate and member of the Board of
Directors of Golembe Associates. He is listed in Who's Who in
Finance and Industry and America. Mr. Furash has earned degrees
from The Wharton School and Harvard College and later served on
the faculty of both institutions.
Ehud D. Laska was appointed a director of the Company in
August 1993. He is the Chairman of Coleman and Company
Securities, Inc., a New York Stock Exchange member investment
bank. Mr. Laska is also a founding partner and Managing Director
of InterBank/Birchall Acquisition Partners, 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. Prior to May 1992, Mr.
Laska was an investment banker with Laidlaw Equities.
Charles E.F. Millard became a director of the Company in
April 1997. He has served as the President of the New York City
Economic Development Corporation since January 1992, and as a
member of the New York City Council since December 1995. From
May 1995 to December 1995, he served as Managing Director of the
investment banking firm, Cambridge Partners LLP.
Richard B. Salomon became a director of the Company 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 Christy & Viener, counsel to the Company. 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.
Philicia G. Levinson was appointed Secretary of the Company
in September 1996. She has served as Senior Vice President,
Director of Corporate Development and has managed the Company's
acquisition activities since April 1995. She was hired by the
Company in December 1992 to provide marketing consulting services
to investment banking clients. Prior to her employment by the
Company, she was employed by Bloomingdale's of New York City
where her responsibilities included product management and
development.
Board Meetings and Committees/Compensation
The Board of Directors has established three committees.
The Compensation Committee considers salary and benefit matters
for the executive officers and key personnel of the Company. The
members of the Compensation Committee include G. Chris Andersen
and Ehud D. Laska. The Finance Committee assists the Board in
areas of financing proposals, budgeting, and acquisitions. The
members of the Finance Committee include Gary S. Goldstein, Barry
S. Roseman, G. Chris Andersen, and Ehud D. Laska. The Audit
Committee is responsible for financial reporting matters,
internal controls, and compliance with financial polices of the
Company, and meets with the Company's auditors when appropriate.
The members of the Audit Committee include Ehud D. Laska and
Richard B. Salomon.
The Board of Directors met two times during the past fiscal
year. Each of the Compensation Committee, Finance Committee, and
Audit Committee met twice during the year. All directors
attended all meetings of the Board of Directors and the
committees on which they serve. Directors who are not employees
of the Company are paid $1,000 for attendance at each Board
meeting, and are reimbursed for travel expenses incurred to
attend each meeting. In April 1997, the Board of Directors
adopted a new compensation arrangement for non-employee
directors, which will be effective September 1, 1997. Under the
new arrangement, non-employee directors will receive $2,500 for
each meeting of the Board of Directors attended, and $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. Non-
employee directors will also receive in September of each year
options to purchase 5,000 shares of the Company's Common Stock
exerciseable over a period of ten years at an exercise price
equal to the fair market value of the Company's Common Stock on
the date of issuance.
In consideration for the agreement of Bruce R. Ellig and
Charles E.F. Millard to serve as directors of the Company, they
each received options to purchase 10,000 shares of the Company's
Common Stock exerciseable over a period of ten years at an
exercise price of $3.50, which was the fair market value of the
Company's Common Stock on the date of grant.
Section 16(a) Filing Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires officers and Directors of the Company 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
their ownership on Forms 3, 4, and 5 with the Securities and
Exchange Commission, and forward copies of such filings to the
Company. Based on the copies of filings received by the Company,
during the most recent fiscal year the directors, officers, and
beneficial owners of more than ten percent of the equity
securities of the Company 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.
Significant Employees
The following is information on positions with the Company
and business experience of employees whom the Company believes
will make significant contributions to its business.
Irene Cohen, age 60, has served as a Vice Chairman and
Executive Vice President of Headway Corporate Staffing Services,
Inc., a subsidiary of the Company ("HCSS"), President and Chief
Executive Officer of Corporate Staffing Alternatives, Inc., a
subsidiary of HCSS ("CSA"), and a director of Headway Personnel,
Inc. ("HPI"), a subsidiary of HCSS, since May 31, 1996. She is a
founder of Irene Cohen Temps, Inc. ("ICT"), CSA, and HPI., all
corporations acquired by the Company in 1996, and served as a
director and executive officer of those corporations for over
four years prior to May 1996.
Michael List, age 40, has served as President and a director
of HCSS, ICT, and Certified Technical Staffing, Inc., a
subsidiary of HCSS ("CTS"), since May 1996. Prior to the
Company's acquisition of these corporations in 1996, Mr. List
served with them as a director and executive officer. Mr. List
currently serves on the advisory board of Concorde Technologies
of Knoxville, Tennessee, a company engaged in the business of
developing staffing service database and management systems.
Ronald Wendlinger, age 41, has served since May 1996 as a
Vice Chairman and Executive Vice President of HCSS, and as a
director and executive officer of ICT and CTS. Mr. Wendlinger
was employed by these corporations in various positions during
the four year period prior to their acquisition by the Company in
May 1996.
EXECUTIVE COMPENSATION
Annual Compensation
The following table sets forth certain information regarding
the annual and long-term compensation for services in all
capacities to the Company for the prior fiscal years ended
December 31, 1996, 1995, and 1994, of those persons who were
either (i) the chief executive officer of the Company during the
last completed fiscal year or (ii) one of the other four most
highly compensated executive officers of the Company as of the
end of the last completed fiscal year whose annual salary and
bonuses exceeded $100,000 (collectively, the "Named Executive
Officers").
Long Term All Other
Name and Principal Annual Compensation Compensation Compensation
Position (1)
Other Annual Options/
Year Salary($) Bonus($) Compensation SARs (#)
Gary S. Goldstein 1996 470,000 210,000 51,388 -- 2,375
Chairman, Chief 1995 470,000 90,000 28,483 50,000 2,310
Executive Officer 1994 470,000 397,700 24,653 55,000 2,310
Barry S. Roseman 1996 250,000 150,000 25,230 50,000 2,375
President, Chief 1995 250,000 50,000 24,379 60,000 2,310
Operating Officer 1994 250,000 100,000 29,812 40,000 2,310
Edward E. Furash 1996 250,000 -- 50,000 -- --
Vice Chairman/ 1995 250,000 -- 50,000 -- 5,115
CEO of Furash 1994 -- -- -- -- --
Philicia Levinson 1996 100,000 70,000 -- -- 2,062
Senior Vice 1995 94,375 35,000 -- 10,000 1,180
President, Secretary 1994 80,000 -- -- 5,000 1,250
(1) Represents contributions by the Company to the defined contribution
[401(k)] plan.
Employment and Other Arrangements
The Company adopted in 1993 a form employment agreement
for its executive officers and key employees for the purpose of
memorializing annual base compensation. The employment agreement
also provides that the employee is entitled to participate in
group insurance and benefit plans. Furthermore, the Company may,
at its election, obtain key-man life insurance on the employee.
From September 1993 through December 1996, Gary S. Goldstein and
Barry S. Roseman each entered into employment agreements
providing for annual compensation of $470,000 and $250,000,
respectively.
Beginning January 1, 1997, the Company implemented new
compensation arrangements for Messrs. Goldstein and Roseman by
resolution of the Board of Directors adopted on the
recommendation of the Compensation Committee. Under the new
arrangements, the base salaries of Messrs. Goldstein and Roseman
have been fixed at $300,000 and $250,000, respectively.
Additional incentive compensation is payable to each of them
equal to an escalating percentage of the Company's annual
earnings (before interest, income tax, depreciation, and
amortization expenses) in excess of $3,000,000; provided, that
the maximum cash compensation payable to Mr. Goldstein for any
one year is $750,000, and the maximum payable to Mr. Roseman for
any one year is $500,000. 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 Compensation Committee.
The Company maintains key-man life insurance on Gary S.
Goldstein in the amount of $3,500,000 and on the lives of four
other employees in the aggregate amount of $2,950,000. All
policies are owned by the Company, and the Company is the named
beneficiary.
The Company has entered into a four year employment
agreement with Edward E. Furash, which was effective on January
1, 1995. Under the agreement, Mr. Furash will receive an annual
salary of $250,000, and is entitled to participate in a bonus
plan established for employees of Furash. The bonus plan
provides that, if the net income before taxes of Furash during
each fiscal year commencing January 1, 1995, based on at least
$4,000,000 of total revenue, is greater than 8%, a portion of the
excess about 8% will be set aside in a bonus pool and distributed
to the employees of Furash as determined by a committee
consisting of two executive officers of Furash and one executive
officer of the Company. Mr. Furash is currently one of the
officers of Furash serving on the committee.
Defined Contribution Plan
The Company's subsidiaries have adopted qualified 401(k)
contribution plans for their employees. Under the plans of two
subsidiaries, employees may elect to defer a portion of their
salary up to 15% of total compensation, and the employer is
required to make matching contributions up to 25% of the amount
deferred not to exceed 10% of total compensation. Employees are
fully vested on their contributions when made, and are fully
vested on employer contributions after five years of service.
Contributions to the plans for the fiscal years ended December
31, 1996 and 1995, were $55,000 and $65,000, respectively. Under
the remaining plan of a third subsidiary, employees may elect to
defer a portion of their salary up to 15% of total compensation,
but the employer is not required to make matching contributions.
Stock Options
The following table sets forth certain information with
respect to grants of stock options during 1996 to the Named
Executive Officers pursuant to the Company's 1993 Incentive Stock
Plan ("Plan").
% of Total
Number of Options/SARs
Securities Granted to Exercise or
Name and Principal Underlying Employees in Base Price Expiration
Position Options Granted Fiscal year ($/Sh) Date
Gary S. Goldstein -0- -0- -- --
Chairman, Chief
Executive Officer
Barry S. Roseman 50,000 6.9 $2.50 1/22/06
President, Chief
Operating Officer
Edward E. Furash -0- -0- -- --
Vice Chairman/
CEO of Furash
Philicia G. Levinson -0- -0- -- --
Senior Vice President,
Secretary
The following table sets forth certain information with
respect to unexercised options held by the Named Executive
Officers as of December 31, 1996. No outstanding options held by
the Named Executive Officers were exercised in 1996.
Number of Securities Value of Unexercised
Name and Principal Underlying Unexercised In-the-Money Options
Position Options at FY End (#) at FY End ($) (1)
Exerciseable/Unexerciseable Exerciseable/Unexerciseable
Gary S. Goldstein 53,333/ 51,667 96,933/ 95,467
Chairman, Chief
Executive Officer
Barry S. Roseman 96,667/ 53,333 191,734/ 99,016
President, Chief
Operating Officer
Edward E. Furash -0-/ -0- -0-/ -0-
Vice Chairman/
CEO of Furash
Philicia G. Levinson 6,667/ 8,333 12,534/ 15,666
Senior Vice President,
Secretary
(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 Plan was adopted by the Company's board of directors in
August 1993, and approved by the Company's stockholders in
October 1993. The Plan provides for the grant of awards in the
form of options to purchase shares of Common Stock, stock
appreciation rights, shares of Common Stock subject to vesting
and/or forfeiture restrictions, or any combination thereof.
Awards under the Plan are granted by a committee (the
"Committee") consisting of at least two disinterested directors
of the Company appointed by the Company's board of directors.
The maximum number of shares of Common Stock issuable pursuant to
awards granted under the Plan is 3,771,567 shares. Directors
(other than directors serving on the Committee), officers, and
key employees of the Company who are expected to make significant
contributions to the Company are eligible to receive Plan awards
upon such terms, and subject to such conditions as the Committee,
in its sole discretion, shall determine, including, without
limitation, the number of shares issuable pursuant to the award,
type of award, restrictions upon the exercise of awards, vesting
conditions, and the manner of payment to be accepted for awards.
The Committee is authorized, within the provisions of the Plan,
to amend certain of the terms of outstanding awards, and to
modify or extend outstanding options with a higher exercise price
than new options.
During 1996, the Company granted options to purchase 719,950
shares of Common Stock to a number of employees. The exercise
price for all options granted is the fair market value of the
Company's Common Stock on the date of grant based on the price in
the over-the-counter market, and range from $2.50 to $5.06 per
share. A total of 92,503 options were canceled during the year,
leaving 1,220,947 outstanding at December 31, 1996. The vesting
period for outstanding options varies, and includes immediate
vesting, vesting over three years subject to continued employment
by the Company, and vesting over five years subject to continued
employment by the Company. Furthermore, all options are
exerciseable for a period of five to ten years from the date of
grant; provided, that all options expire one month following the
date on which employment is terminated for any reason.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following discussion includes certain relationships and
related transactions which occurred during the Company's fiscal
year ended December 31, 1996, as well as the interim period ended
March 31, 1997.
In 1996 and 1995, corporations of which Ehud D. Laska is an
owner and an associate of Mr. Laska provided finance and advisory
services to the Company in connection with the Company's debt and
equity financings. For these services, the Company paid $582,500
in 1996 and $80,000 in 1995. In addition, the Company granted to
Mr. Laska and his associate warrants to purchase 240,000 shares
of Common Stock exerciseable over a period of four years
commencing May 31, 1997, at an exercise price of $4.25 per share.
In May 1996, the Company loaned a total of $507,366 to 10
employees and certain directors of the Company at 8% interest per
annum payable quarterly over a term of five years. The funds
were used by the employees and directors to purchase a total of
2,170 shares of the Company's Series A Convertible Preferred
Stock ("Series A Stock") from True North Communications, Inc.
("True North"). These purchases were part of a total sale of
2,800 shares of Series A Stock by True North to 15 purchasers.
The 2,800 shares of Series A Stock is convertible to a total of
1,332,412 shares of Common Stock. Loans made to persons who, at
the time of the transaction, were officers and directors of the
Company (Gary S. Goldstein received a loan of $59,059 to purchase
235 shares of Series A Stock and Barry S. Roseman received a loan
of $157,608 to purchase 631 shares of Series A Stock) are
collateralized by the Series A Stock purchased and additional
assets with a value in excess of the principal amount of each
loan. Prior to the sale of Series A Stock, True North had a
voice in all acquisition and financing activities of the Company
under the original agreement pursuant to which True North
acquired the Series A Stock. Sale of the Series A Stock
terminated True North's participation in the affairs of the
Company. Sale of the Series A Stock also provided an opportunity
to give management and other employees a greater equity interest
in the Company as an incentive for future performance.
Accordingly, the disinterested directors of the Company approved
the loans to facilitate the sale of Series A Stock.
Richard B. Salomon, a director of the Company, is also a
partner in the law firm of Christy & Viener, which represents the
Company on various legal matters from time to time. In 1996 and
1995, Christy & Viener received total payments of $246,266 and
$24,000, respectively, from the Company for legal services and
costs.
On May 31, 1996, the Company entered into a Credit Agreement
with ING (U.S.) Capital Corporation ("ING"). Under the Credit
Agreement, ING made a term loan of $9,000,000 to the Company, and
established a $6,000,000 revolving credit facility for the
Company. In connection with this financing arrangement, the
Company granted to ING the Series E Warrant to purchase 575,000
shares of Series E Stock of the Company at an exercise price of
$0.02 per share. The Series E Stock is convertible at the
election of the holder to Common Stock of the Company at the rate
of one share for one share, subject to adjustment based on anti-
dilution provisions. The Company also entered into a
Registration Rights Agreement with ING pertaining to the Common
Stock of the Company issuable on conversion of the Series E
Stock. Under the terms of the Registration Rights Agreement, the
Company is required to file and keep effective a shelf
registration covering the Common Stock issuable to ING. In the
Registration Rights Agreement, ING agreed not to make any private
or public sale of the Common Stock prior to May 31, 1997.
During the first part of 1996, The Tail Wind Fund Ltd.
("TWF"), provided consulting and advisory services in connection
with structuring the Company's private offerings of securities
totaling $7,000,000, and assisted the Company in locating
potential investors. In consideration for these services, TWF
received from the Company fees consisting of $350,000 in cash and
warrants to purchase 240,000 shares of the Company's Common Stock
exerciseable over a period of five years at a price of $4.25 per
share.
At the end of 1996, Gary S. Goldstein was indebted to the
Company in the aggregate amount of $1,159,722, which represented
principal and accrued interest on outstanding loans that
originated in 1993. With the approval of the Board of Directors
(Mr. Goldstein not participating) given on the recommendation of
the Compensation Committee, the Company purchased from Mr.
Goldstein 78,960 shares of the Company's Common Stock for
$399,735 or a price of $5.0625 per share, which was the closing
bid price for the Company's Common Stock on December 20, 1996.
Out of the purchase price for the stock, $63,062 paid all accrued
interest on the loans, $231,945 was applied to reduce principal,
and $104,728 was retained by Mr. Goldstein to cover his income
tax liability arising from the transaction.
FORM 10-KSB
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE TO
STOCKHOLDERS, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1996, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS
SHOULD BE DIRECTED TO BARRY S. ROSEMAN, PRESIDENT, HEADWAY
CORPORATE RESOURCES, INC., 850 THIRD AVENUE, 11TH FLOOR, NEW
YORK, NEW YORK 10022.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of
Directors of the Company knows of no other matters which may come
before the Annual Meeting. However, if any matters other than
those referred to herein should be presented properly for
consideration and action at the Annual Meeting, or any
adjournment or postponement thereof, the proxies will be voted
with respect thereto in accordance with the best judgment and in
the discretion of the proxy holders.
Please sign the enclosed proxy and return it in the enclosed
return envelope.
Dated: May 14, 1997
APPENDIX/PROXY FORM
HEADWAY CORPORATE RESOURCES, INC.
850 THIRD AVENUE, 11TH FLOOR
NEW YORK, NEW YORK 10022
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gary S. Goldstein and Barry S.
Roseman as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and
to vote, as designated below, all the shares of Common Stock of
Headway Corporate Resources, Inc. (the "Company") held of record
by the undersigned on May 5, 1997, at the Annual Meeting of
Stockholders to be held on June 26, 1997, and at any adjournment
or postponement thereof.
(1) The election of each of the following persons as Class 3
directors of the Company to serve for a term of three years and
until their successors are duly elected and qualified
G. Chris Andersen For [ ] Against [ ] Abstain [ ]
Richard B. Salomon For [ ] Against [ ] Abstain [ ]
(2) Ratification of the appointment of Ernst & Young LLP as
independent auditors of the Company for 1997; and
For [ ] Against [ ] Abstain [ ]
(3) The proxies are authorized to vote in accordance with
their judgment on any matters other than those referred to herein
that are properly presented for consideration and action at the
Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
All other proxies heretofore given by the undersigned to vote
shares of stock of the Company, which the undersigned would be
entitled to vote if personally present at the Annual Meeting or
any adjournment or postponement thereof, are hereby expressly
revoked.
Dated:________________________, 1997
____________________________________
____________________________________
Please date this Proxy and sign it exactly as your name or names
appear below. When shares are held by joint tenants, both should
sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If shares
are held by a corporation, please sign in full corporate name by
the President or other authorized officer. If shares are held by
a partnership, please sign in partnership name by an authorized
person.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD USING
THE ENCLOSED ENVELOPE. IF YOUR ADDRESS IS INCORRECTLY SHOWN,
PLEASE PRINT CHANGES.