<Page>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K/A
                                  AMENDMENT NO. 1

(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, 2002

/ / 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 0-7282

                             COMPUTER HORIZONS CORP.
                  -------------------------------------------------
             (Exact name of registrant as specified in its charter)

          New York                                       13-2638902
-------------------------------                      --------------
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                      Identification No.)

49 Old Bloomfield Avenue
Mountain Lakes, New Jersey                               07046-1495
---------------------------                            --------------
(Address of principal                                   (Zip Code)
 executive offices)

Registrant's telephone number,
    including area code:                               (973) 299-4000
                                                     ----------------

Securities registered pursuant to Section 12(b) of the Act:

                                                     Name of each exchange
Title of each class                                  on which registered
-------------------                                  -------------------

      None                                                  None

<Page>

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock (Par Value $.10 Per Share)
                     ---------------------------------------
                                (Title of class)

                    Series A Preferred Stock Purchase Rights
                    ----------------------------------------
                                (Title of class)



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 HI of this Form 10-K or any
amendment to this Form. 1O-K. / /

Indicate by check mark whether the registrant is an accelerated filer (as
defined in the Exchange Act Rule 12b-2). Yes /X/ No / /

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 28, 2002 was approximately $158,700,000.

The number of shares outstanding of each of the registrant's classes of
common stock as of March 26, 2003 were 30,286,125 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

     There is incorporated herein by reference the registrant's (i) portions
of the Annual Report to Shareholders for the year ended December 3l, 2002, in
Part II of this Report and (ii) portions of the Definitive Proxy Statement
for the 2003 Annual Meeting of Shareholders, filed with the Securities and
Exchange Commission on April 10, 2003, in Part III hereof.

                                 EXPLANATORY NOTE

     This Amendment No. 1 on Form 10-K/A to our annual report on Form 10-K
for the year ended December 31, 2002 is being filed solely for the purposes
of responding to comments received by us from the Staff of the Securities and
Exchange Commission. This Amendment speaks as of the original filing date of
our annual report on Form 10-K and has not been updated to reflect events
occurring subsequent to the original filing date. For the convenience of the
reader, we have refiled our annual report on Form 1O-K in its entirety with
the applicable changes.

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                                     PART I
Item 1.  BUSINESS

GENERAL


     Computer Horizons Corp., or CHC, is a strategic human capital management
and professional services company with more than thirty-six years of
experience, specifically in information technology. As a systems integration
and managed services company, CHC enables companies to maximize technology
investments. By leveraging its IT services' business and proprietary
technology through Chimes, CHC is enabling its Global 2000 customer base,
which according to Forbes magazine, represents the biggest and most important
companies, as measured by sales, profits, assets and market value, to align
and integrate business planning with human resource management across an
enterprise's business functions.


     The Company markets solutions to existing and potential clients with the
objective of becoming a preferred provider of comprehensive information
technology services and solutions for such clients. The Company believes that
the range of services and solutions that it offers, combined with its
proprietary Chimes technology, provides it with competitive advantages in the
information technology marketplace.

     The Company's clients primarily are Global 2000 companies with
significant information technology budgets and recurring staffing needs. In
2002, the Company provided information technology services to 905 clients.
During 2002, the Company's largest client accounted for 6% of the Company's
consolidated revenues. The Company offers its clients a broad range of
business and technical services as an outsourcer and systems integrator
capable of providing complex total solutions. This total solutions approach
comprises proprietary software and tools, proven processes and methodologies,
tested project management practices and resource management and procurement
programs.

     The Company offers global technology services and solutions, which are
divided into three divisions; (1) IT Services, (2) Solutions and (3) Chimes.


     (1) IT Services: CHC's IT Services Group provides highly skilled software
professionals to augment the internal information management staffs of major
corporations. The Company offers its clients a just-in-time solution to supply
their staffing needs from among the Company's over 1,500 IT professionals.
Customers are serviced through the Company's branch network of offices in the
United States and Canada, and virtually through Chimes. The customer is
responsible for managing and supervising our software professionals. In
addition, gross margins in this business area are significantly less than
Solutions services. Revenue for the IT Services Group is recognized as services
are rendered on a time and material basis. Hourly or daily rates are determined
in advance and agreed to with the customer. Time worked is documented in
various forms using the applicable timekeeping process (i.e. the client's or
the Company's timekeeping systems).

     (2) Solutions: CHC Solutions Group (including CHC Healthcare Solutions
and CHC's training/education practice) is an e-Business Solutions provider,
enabling enterprises to build business-critical and highly scalable
solutions. The Company offers a comprehensive list of integrated solutions
including e-business strategy and assessment; HIPAA compliance; on shore,
near-shore and offshore outsourcing; e-procurement solutions for human
capital; enterprise network management; web architecture design; hosting and
integration; application development; customer relationship management (CRM);
project management; systems integration; networking services and
education/training. CHC is responsible for the project management and
supervision. Generally, the gross margins in this business division are higher
than that of the IT Services division. Revenues in the Solutions Group are also
recognized as services are performed under either time and material or a fixed
fee basis. However, adjustments are made if necessary to reflect progress
against milestones or deliverables.


          (2a) Outsourcing: Spurred by global competition and rapid
technological change, large companies, in particular, are downsizing and
outsourcing for reasons ranging from cost reduction to capital asset
improvement and from improved technology introduction to better strategic
focus. In response to this trend, the Company has created a group of
outsourcing centers onshore, near-shore in Montreal and offshore in Chennai,
India with 24 hour / 7 day a week support, which are fully equipped with the
latest technology and communications, as well as a complete staff that
includes experienced project managers, technicians and operators. These
professionals facilitate essential data functions including: applications
development, systems maintenance, data network management, voice network
administration and help desk operations.

                                        3
<Page>

          (2b) CHC Healthcare Solutions, LLC: CHC Healthcare Solutions was
formed, in 2002, as a consortium of Computer Horizons Corp. and a healthcare
consulting firm, ZA Consulting, LLC. CHC Healthcare Solutions, reported under
CHC Solutions, offers services and solutions to the healthcare vertical from an
operational, compliance, and technology viewpoint.

          (2c) Education/Training: The Company's education division offers
custom-designed and/or existing training programs to enhance the competencies of
client staff in specific technologies, languages, methodologies and
applications. The prevailing focus of the Company is to assist clients through
instructor-led, on-site training and consulting in the transitioning IT
organization of Global 2000 corporations nationwide. To support these changing
technologies, the Company has developed extensive curriculum offerings in Web
technologies, Relational Databases, Programming Languages, Reporting Tools,
Process Improvement, UNIX, Client/Server and Mainframe technologies.

          (2d) Software Products: Princeton Softech, Inc. a wholly-owned
subsidiary of the Company which was sold March 25, 2002, was a software products
company that delivered leveraging technologies for enterprise-scale solutions.

          (2e) Enterprise Network Management: eB Networks, Inc., a wholly-owned
subsidiary of the Company which was sold September 10, 2001, was a company
specializing in building and implementing strategic network infrastructure to
assist companies in achieving e-Business objectives.

     (3) Chimes: Chimes, Inc., a wholly-owned subsidiary of CHC, provides
workforce procurement and management services to Global 2000 companies. Through
scalable, web-based software, Chimes administers the hiring cycle to identify,
leverage and manage the enterprise-wide spend on human capital. Chimes'
portfolio of services addresses contingent hiring (CVM), full-time hiring (CAM),
program management (RPM) and consolidated time sheet and expense processing
(CTE).

PERSONNEL

     As of December 3l, 2002, the Company had a staff of 2,800, including
approximately 2,100 IT professionals and 200 Chimes payrolled consultants. The
Company devotes significant resources to recruitment of qualified professionals
and provides continuing in-house training and education, and a career path
management development program within the Company.

COMPETITION

     The Company competes in the commercial information technology services
market which is highly competitive and served by numerous firms, many of which
serve only their respective local markets. The market includes participants in a
variety of market segments, including systems consulting and integration firms,
professional services companies, application software firms, temporary
employment agencies, the professional service groups of computer equipment
companies, facilities management and management information systems or MIS
outsourcing companies, certain accounting firms, and general management
consulting firms. The Company's competitors also include companies such as
Analysts International Corp., CIBER, Inc., Computer Task Group Inc., iGATE Corp.
and Covansys Corp. Many participants in the information technology consulting
and software solutions market have significantly greater financial, technical
and marketing resources and generate greater revenues than the Company. The
Company believes that the principal competitive factors in the commercial
information technology services industry include responsiveness to client needs,
speed of application software development, quality of service, price, project
management capability and technical expertise. Pricing has its greatest
importance as a competitive factor in the area of professional service staffing.
The Company believes that its ability to compete also depends in part on a
number of competitive factors outside its control, including the ability of its
competitors to hire, retain and motivate skilled technical and management
personnel, the

                                        4
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ownership by competitors of software used by potential clients, the price at
which others offer comparable services and the extent of its competitors'
responsiveness to customer needs.

AVAILABLE INFORMATION

     The Company's internet website address is www.computerhorizons.com. The
Company's annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and amendments to those reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Exchange Act are available free of charge
through our website as soon as reasonably practicable after they are
electronically filed with, or furnished to, the Securities and Exchange
Commission.

Item 2.   PROPERTIES

     The Company's Corporate and Financial Headquarters, as well as its Eastern
Regional Office, comprising approximately 63,000 square feet of general
office space, are located at 49 Old Bloomfield Avenue, Mountain Lakes, New
Jersey. The Mountain Lakes lease is for a term expiring December 31, 2003, at
a current annual rental of approximately $1,400,000. As of December 3l, 2002,
the Company also maintained other office facilities, which are shared between
the IT Services and Solutions business segments, in California, Connecticut,
Florida, Georgia, Illinois, Indiana, Michigan, Minnesota, New Jersey, New
York, Ohio, Tennessee, Texas, and Washington as well as international
operations located in Europe and Canada, with an aggregate of approximately
262,000 square feet. Chimes maintains office facilities in California,
Illinois, Michigan, Minnesota and New Jersey. The leases for all of these
office facilities are at a current annual aggregate rental of approximately
$4,400,000. These leases expire at various times with no lease commitment
longer than March 15, 2008.

Item 3.   LEGAL PROCEEDINGS

     There are no material pending legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

                                        5
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EXECUTIVE OFFICERS OF THE COMPANY

     The following table sets forth certain information with respect to the
executive officers of the Company, who are elected to serve until the next
annual meeting of the Board of Directors and until their successors are elected
and qualify. All the positions listed are or were held by such officers with the
Company as of the filing date of the document.

<Table>
<Caption>
                                                                                    PERIOD
NAME                       AGE                        TITLE                      POSITION HELD
----                       ---                        -----                      -------------
<S>                        <C>               <C>                                 <C>
William J. Murphy          58                President and CEO                   2003 - Present
                                             Director                            1999 - Present
                                             Executive Vice President
                                             and Chief Financial Officer         1997 - 2003

Michael J. Shea            42                Chief Financial Officer             2003 - Present
                                             Vice President                      1996 - Present
                                             Controller                          1995 - 2003

Kristin Evins              35                Controller                          2003 - Present
                                             Assistant Controller                2001 - 2003
                                             Manager of Financial Reporting      2000 - 2001
</Table>

                                        6
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                                     PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's common stock is quoted on the Nasdaq National Market, under
the symbol CHRZ. The range of high and low closing stock prices, as reported by
the Nasdaq National Market, for each of the quarters for the years ended
December 31, 2002 and 2001 is as follows:

<Table>
<Caption>
                                       2002                  2001
                                 High       Low        High        Low
                                ------     ------     ------      ------
<S>                             <C>        <C>        <C>         <C>
Quarter
First                           $ 4.19     $ 3.11     $ 5.19      $ 2.19
Second                            4.87       3.65       4.08        2.00
Third                             4.65       3.40       4.49        2.53
Fourth                            4.00       2.95       3.32        2.50
</Table>

     The Company plans to reinvest its earnings in future growth opportunities
and, therefore, does not anticipate paying cash dividends in the near future and
has not paid any to date. As of March 26, 2003, there were approximately
1,051 registered holders of common stock, per the Company's transfer agent.

     Information concerning the Company's equity compensation plans is shown
under Item 12 - Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.

                                        7
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Item 6.   SELECTED FINANCIAL DATA

Consolidated Statement of Operations Data:


<Table>
<Caption>
                                               2002            2001            2000            1999           1998
                                           ------------    ------------    ------------    ------------   ------------
                                              --------(dollar amounts in thousands, except per share data)--------
<S>                                        <C>             <C>             <C>             <C>            <C>
Revenues                                   $    297,115    $    400,784    $    445,479    $    534,594   $    514,921

Costs and expenses:
Direct costs                                    216,181         281,576         312,815         365,310        326,795
Selling, general and administrative              86,347         125,435         143,691         127,720        107,829
Bad debt expense                                  4,996           3,397          26,452           3,367          1,676
Amortization of intangibles                          --           2,695           7,434           6,202          3,530
Restructuring charges                             2,515           1,048           1,166           6,355             --
Write-down of assets held for sale                   --           5,473          40,362              --             --
Merger-related expenses                              --              --              --              --          4,272
                                           ------------    ------------    ------------    ------------   ------------
Income / (loss) from operations                 (12,924)        (18,840)        (86,441)         25,640         70,819
                                           ------------    ------------    ------------    ------------   ------------

Other income / (expense):
Gain/(loss) on sale of assets                     5,890          (3,197)             --              --             --
Net (loss) / gain on investments                    (61)             90              --              --             --
Interest income                                     928           2,293             620           1,353          5,334
Interest expense                                   (174)         (1,944)         (1,825)         (1,355)          (750)
Equity in net earnings of joint venture              --              --              --              --            (90)
Gain on sale of joint venture                        --              --              --              --          4,180
                                           ------------    ------------    ------------    ------------   ------------

Income / (loss) before income taxes              (6,341)        (21,598)        (87,646)         25,638         79,493

Income taxes / (benefit)                          1,869          (7,148)        (29,819)         11,013         35,906
                                           ------------    ------------    ------------    ------------   ------------

Income / (loss) before cumulative effect
  of change in accounting principle              (8,210)        (14,450)        (57,827)         14,625         43,587
Minority interest                                    35              --              --              --             --
Cumulative effect of change in accounting
  principle                                     (29,861)             --              --              --             --
                                           ------------    ------------    ------------    ------------   ------------

Net income / (loss)                        $    (38,036)   $    (14,450)   $    (57,827)   $     14,625   $     43,587
                                           ============    ============    ============    ============   ============

Earnings / (loss) per share:
Basic                                      $      (1.22)   $      (0.45)   $      (1.83)   $       0.47   $       1.41
                                           ============    ============    ============    ============   ============

Diluted                                    $      (1.22)   $      (0.45)   $      (1.83)   $       0.46   $       1.35
                                           ============    ============    ============    ============   ============

Weighted average number of shares
 outstanding:
Basic                                        31,243,000      31,911,000      31,656,000      30,940,000     30,925,000
                                           ============    ============    ============    ============   ============

Diluted                                      31,243,000      31,911,000      31,656,000      31,647,000     32,230,000
                                           ============    ============    ============    ============   ============
</Table>


                                        8
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Item 6.  SELECTED FINANCIAL DATA (CONTINUED)


<Table>
<Caption>
                                                                           December 31,
                                               2002            2001            2000            1999           1998
                                           ------------    ------------    ------------    ------------   ------------
                                              --------(dollar amounts in thousands, except per share data)--------
<S>                                        <C>             <C>             <C>             <C>            <C>
Analysis (%)
Revenues                                          100.0%          100.0%          100.0%          100.0%         100.0%
Gross margin                                       27.2            29.7            29.8            31.7           36.6
  Selling, general and administrative              29.1            31.3            32.3            23.9           20.9
  Bad debt expense                                  1.7             0.8             5.9             0.6            0.3
  Amortization of intangibles                        --             0.7             1.7             1.2            0.7
  Restructuring charges                             0.8             0.2             0.3             1.2             --
  Write-down of assets held for sale                 --             1.4             9.0              --             --
  Merger-related expenses                            --              --              --              --            0.8
                                           ------------    ------------    ------------    ------------   ------------
Income / (loss) from operations                    (4.4)           (4.7)          (19.4)            4.8           13.8
  Gain / (loss) on sale of assets                   2.0            (0.8)             --              --             --
  Interest income / (expense) - net                 0.3             0.1            (0.3)             --            0.9
  Gain on sale of joint venture                      --              --              --              --            0.8
                                           ------------    ------------    ------------    ------------   ------------
Income / (loss) before income taxes                (2.1)           (5.4)          (19.7)            4.8           15.5
Income taxes / (benefit)                            0.6            (1.8)           (6.7)            2.1            7.0

Income / (loss) before cumulative effect of
  change in accounting principle                   (2.7)           (3.6)          (13.0)            2.7            8.5

Cumulative effect of change in accounting
  principle                                       (10.1)             --              --              --             --
                                           ------------    ------------    ------------    ------------   ------------

Net income / (loss)                               (12.8)           (3.6)          (13.0)            2.7            8.5
                                           ============    ============    ============    ============   ============

Revenue growth / (decline) YOY                    (25.9)          (10.0)          (16.7)            3.8           47.0
Net income growth / (decline)YOY                 (163.2)           75.0          (495.4)          (66.4)          77.7
Return on equity, average                         (22.7)           (7.3)          (24.6)            5.7           20.2
Effective tax rate                                 29.5            33.1            34.0            43.0           45.2

Consolidated Balance Sheet Data:
At year-end
Total assets                               $    193,731    $    237,721    $    269,396    $    347,994   $    296,052
Working capital                                 100,656         115,747         134,472         129,857        158,760
Long-term debt                                       --              --              --           4,100             --
Shareholders' equity                            145,855         189,855         207,924         262,652        246,534

Other Data:
Stock price                                $       3.27    $       3.21    $       2.44    $      16.19   $      26.63
P/E multiple                                        N/A             N/A             N/A              34             19

Employees                                         2,800           3,313           4,186           4,149          4,834
Clients (during year)                               905             879             800             785            768
Offices (worldwide)                                  36              52              43              50             55
</Table>


                                        9
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

FORWARD-LOOKING STATEMENTS

Statements included in this Management's Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this document that do not
relate to present or historical conditions are "forward-looking statements"
within the meaning of that term in Section 27A of the Securities Act of 1933, as
amended, and in Section 21F of the Securities Exchange Act of 1934, as amended.
Additional oral or written forward-looking statements may be made by the Company
from time to time, and such statements may be included in documents that are
filed with the Securities and Exchange Commission (SEC). Such forward-looking
statements involve risks and uncertainties that could cause results or outcomes
to differ materially from those expressed in such forward-looking statements.
Forward-looking statements may include, without limitation, statements relating
to the Company's plans, strategies, objectives, expectations and intentions and
are intended to be made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Words such as "believes," "forecasts,"
"intends," "possible," "expects," "estimates," "anticipates," or "plans" and
similar expressions are intended to identify forward-looking statements. Among
the important factors on which such statements are based are assumptions
concerning the anticipated growth of the information technology industry, the
continued need of current and prospective customers for the Company's services,
the availability of qualified professional staff, and price and wage inflation.

REVENUE GENERATING ACTIVITIES AND CRITICAL ACCOUNTING POLICIES

REVENUE GENERATING ACTIVITIES

The majority of the Company's revenues are derived from professional services
rendered in the information technology sector. The Company also owned a
stand-alone software products company, Princeton Softech Inc., or Princeton,
which accounted for less than 1% of consolidated revenues in 2002 and less than
10% of consolidated revenues in 2001. On March 25, 2002, the net assets of
Princeton were sold for a cash payment of approximately $16 million.

The Company operates its business in three basic segments, IT Services, the
Solutions Group and Chimes, Inc. The distinctions between the IT Services and
Solutions Group segments primarily relate to the management and supervision of
services performed and related gross margins. Chimes, Inc., a wholly-owned
subsidiary of CHC, provides workforce procurement and management services to
Global 2000 companies.

The IT Services business consists of providing technology consultants to large
organizations on a temporary hire basis. The consultant work is supervised and
managed by the customer. For the most recent year 2002, this segment represented
approximately 68% of total revenues. The IT Services business tends to be a
lower risk, lower gross margin business with very competitive pricing.

The Solutions Group, tends to be a higher margin, higher risk business, due to
the fact that the Company is responsible for project deliverables and other
conditions contained in statements of work and/or contracts with customers.
Virtually all projects performed by the Solutions Group are IT related and
consist of practices such as application development, outsourcing arrangements,
governments services, Health Insurance Portability and Accountability Act, or

                                       10
<Page>

HIPAA, services, technology training and managed services. For the year 2002,
the Solutions Group accounted for 26% of consolidated revenue.

Chimes, Inc. is a human capital management solution that, through the use of
proprietary software and processes, manages the temporary workforce of large
organizations. During 2002, Chimes accounted for approximately 6% of total
revenues.

CRITICAL ACCOUNTING POLICIES

The most critical accounting policies used in the preparation of the Company's
financial statements are related to revenue recognition, the evaluation of
long-lived assets for impairment and the evaluation of goodwill and other
intangible assets.

REVENUE RECOGNITION


For the IT Services division revenues are recognized as services are performed
under time-and-material contracts. Under a typical time and materials billing
arrangement, our customers are billed on a regularly scheduled basis, such as
biweekly or monthly. At the end of each accounting period, revenue is
estimated and accrued for services performed since the last billing cycle.
These unbilled amounts are billed the following month.

The Solutions Group recognizes revenue either on a time and material basis or
on a fixed fee basis, however, principally on a time and material basis.
For fixed-fee contracts, revenue is recognized on the basis of the estimated
percentage of completion based on costs incurred relative to total estimated
costs. Each fixed fee contract has different terms, milestones and
deliverables. The milestones and deliverables primarily relate to the work to
be performed and the timing of billing. If it becomes apparent that estimated
cost will be exceeded, an adjustment will be made. The cumulative effect of
revisions in estimated revenues and costs are recognized in the period in
which the facts that give rise to the impact of any revisions become known.

Approximately 93% and 97% of consolidated revenue in 2002 and 2001,
respectively, was derived from time-and-material contracts.

Unbilled accounts receivable, in the IT Services and Solutions Group,
represent amounts recognized as revenue based on services performed in
advance of customer billings principally on a time and material basis. At the
end of each accounting period, revenue is accrued for services performed
since the last billing cycle. These unbilled amounts are billed the following
month. Costs and estimated earnings in excess of billings on fixed fee
contracts arise when percentage of completion accounting is used. Such
amounts are billed at specific dates or at contract completion.

The Company's Chimes subsidiary recognizes revenue on a transaction fee
basis. The Chimes service offering aggregates the suppliers of temporary
workers to the customer and renders one invoice to the customer. Upon payment
from the customer, Chimes deducts a transaction fee and remits the balance of
the client payment to the applicable vendor. Chimes recognizes only their fee
for the service, not the aggregate billing to the customer. The gross amount
of the customer invoicing is not considered revenue or receivable to Chimes
because there is no earnings process for the gross amount and by contract
terms, Chimes is not obligated to pay the vendor until paid by the customer.


Princeton recognized revenue in accordance with AICPA Statement of Position 97-2
("SOP 97-2"), "Software Revenue Recognition," and AICPA Statement of Position
98-9 ("SOP 98-9"). Under SOP 97-2, the Company recognized software license
revenue when a noncancelable license agreement had been executed, fees were
fixed and determinable, the software had been delivered, and collection was
considered probable.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

Up to and including the year ended December 31, 2001, the Company evaluated its
long-lived assets and certain identifiable intangibles for impairment whenever
events or changes in circumstances indicated that the carrying amount of such
assets or intangibles may not be recoverable. Recoverability of assets to be
held and used was measured by a comparison of the carrying amount of an asset to
future net cash flows expected to be generated by the asset. If such an asset
was considered to be impaired, the impairment to be recognized was measured by
the amount by which the carrying amount of the asset exceeded the fair value of
the assets. Assets to be disposed of were reported at the lower of the carrying
amount or fair value, less costs to sell.

                                       11
<Page>

At the end of 2000, the Company made certain strategic decisions to realign
businesses and declared certain assets for sale or disposition. These decisions
resulted in the application of the above mentioned policy and the recording of
$40.3 million of non-cash charges in 2000 for related write-offs. As of December
31, 2002, all assets previously declared for sale were disposed of.

Effective on January 1, 2002, the Company adopted Financial Accounting Standard
No. 144 "Accounting for the Impairment or Disposal of Long Lived Assets," ("SFAS
144"). This supercedes SFAS 121, while retaining many of the requirements of
such statement. The effect of this statement is immaterial to the Company.

GOODWILL AND OTHER INTANGIBLE ASSETS

In June 2001, the Financial Accounting Standards Board approved the issuance of
SFAS No. 141, "Business Combinations" and in July 2001, SFAS No. 142, "Goodwill
and Other Intangible Assets." The new standards require that all business
combinations initiated after June 30, 2001 must be accounted for under the
purchase method. In addition, all intangible assets acquired that are obtained
through contractual or legal right, or are capable of being separately sold,
transferred, licensed, rented or exchanged shall be recognized as an asset apart
from goodwill. Goodwill and intangibles with indefinite lives will no longer be
subject to amortization, but will be subject to at least an annual assessment
for impairment by applying a fair value based test. The Company adopted SFAS 142
as of January 1, 2002 and in compliance with this new regulation has
discontinued the amortization of goodwill.

During the quarter ended June 30, 2002, the Company completed the initial
valuation of the carrying value of goodwill existing at January 1, 2002. As a
result, a non-cash charge of $29.9 million, or $(0.96) per share was
retroactively recorded as the cumulative effect of an accounting change in the
six months ended June 30, 2002 statement of operations. For the year ended
December 31, 2002 the Company completed a second valuation of the carrying value
of the remaining goodwill and it was determined that no further impairment had
occurred.

The changes in the carrying amount of goodwill for the year ended December 31,
2002, are as follows (in 000's):

<Table>
<Caption>
Reporting Units                         Solutions      It Services       Education         Chimes        Consolidated
                                      -------------   -------------    -------------    -------------   -------------
<S>                                   <C>             <C>              <C>              <C>             <C>
Balance as of December 31, 2001       $      18,864   $      29,422    $         439    $          --   $      48,725

Addition to goodwill                            339              --               --               --             339
Impairment Losses                                --         (29,422)            (439)              --         (29,861)
                                      -------------   -------------    -------------    -------------   -------------

Balance as of December 31, 2002       $      19,203   $          --    $          --    $          --   $      19,203
                                      =============   =============    =============    =============   =============
</Table>

The reporting units are equal to, or one level below, reportable segments. The
Company engaged independent valuation consultants to assist with the
transitional goodwill impairment tests.

The fair value of each of the reporting units was calculated using the following
approaches: (i) market approach and (ii) income approach. Under the market
approach, value is estimated by comparing the performance fundamentals relating
to similar public companies' stock prices.

                                       12
<Page>

Multiples are then developed of the value of the publicly traded stock to
various measures and are then applied to each reporting unit to estimate the
value of its equity. Under the income approach, value was determined using the
present value of the projected future cash flows to be generated by the
reporting unit.


The fair value conclusion of the reporting units reflects an appropriately
weighted value of the market multiple approach and the income approach
discussed above. As a result of performing steps one and two of the goodwill
impairment test, a loss of $29.9 million was recognized and recorded as a
cumulative effect of change in accounting principle in the accompanying
Consolidated Statements of Operations. There was no income tax effect on the
impairment charge as approximately $19 million of the charge related to
goodwill in foreign tax jurisdictions where the Company believes it is more
likely than not that future taxable income in these jurisdictions will not be
sufficient to realize the related income tax benefits associated with the
charge. The remaining $11 million of the charge was related primarily to
goodwill that was acquired prior to the ability to deduct goodwill for tax
purposes.


The following pro forma table shows the effect of amortization expense and the
cumulative effect of change in accounting principle on the Company's net loss as
follows:

<Table>
<Caption>
                                                                        Twelve Months Ended
                                                                 DECEMBER 31,          December 31,
                                                                    2002                  2001
                                                               --------------------------------------
      <S>                                                           <C>                   <C>
      Reported Net Loss                                             $ (38,036)            $ (14,450)
      Cumulative Effect of Change in Accounting Principle              29,861                    --
      Amortization of Intangibles                                          --                 2,695
                                                                    ---------             ---------
      Adjusted Net Loss                                             $  (8,175)            $ (11,755)
                                                                    =========             =========
      Reported Loss per Share:
      Basic & Diluted                                               $   (1.22)            $   (0.45)
      Adjustments for Cumulative Effect of Change in
        Accounting Principle
      Basic & Diluted                                                    0.96                    --
      Adjustment for Amortization of Intangibles:
      Basic & Diluted                                                      --                  0.08
                                                                    ---------             ---------
      Adjusted Loss per Share:
      Basic & Diluted                                               $   (0.26)            $   (0.37)
                                                                    =========             =========
</Table>

In November 2002, the EITF reached a consensus on Issue No. 00-21, "Accounting
for Revenue Arrangements with Multiple Deliverables." This Issue provides
guidance on when and how to separate elements of an arrangement that may involve
the delivery or performance of multiple products, services and rights to use
assets into separate units of accounting. The guidance in the consensus is
effective for revenue arrangements entered into in fiscal periods beginning
after

                                       13
<Page>

June 15, 2003. The transition provision allows either prospective application or
a cumulative effect adjustment upon adoption. The Company is currently
evaluating the impact of adopting this guidance.

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001
REVENUES


Consolidated revenue decreased to $297.1 million in the year ended December
31, 2002 from $400.8 million in the year ended December 31, 2001, a decrease
of $103.7 million, or 25.9%.

Solutions Group revenues, which included revenue from assets held for sale of
$2.9 million for Princeton in 2002, and $29.0 million for Princeton and $11.5
million for Eb Networks in 2001, decreased to $79.3 million in the year ended
December 31, 2002 from $116.9 million in the year ended December 31, 2001, a
decrease of $37.6 million or 32.2%. The Solutions Group revenue, excluding
the revenue of Princeton in 2002 and Princeton and EBN in 2001 remained flat
at $76.4 million in the year ended December 31, 2002 and December 31, 2001,
respectively.

IT Services revenues decreased to $201.3 million in the year ended December
31, 2002 from $274.4 million in the year ended December 31, 2001, a decrease
of $73.1 million or 26.6%. The decrease in IT Services revenue of $73.1
million is the result of continued decreases in the demand for temporary
technology workers, the trend of companies to outsource technology jobs
offshore, the impact of pricing decreases by customers and the lagging
economy. For the year ended December 31, 2002, IT Services consultant average
headcount decreased by 24%. The balance of the decrease in revenue is
primarily attributable to a reduction in average bill rates. The Company does
not anticipate any growth during 2003 in IT Services from the year-end 2002
headcount levels unless the economy recovers and IT spending increases.

Chimes revenue increased to $16.5 million in the year ended December 31,
2002, from $9.5 million in the year ended December 31, 2001, an increase of
$7 million, or 73.7%. This increase was primarily due to new customers,
partially offset by a decrease in revenue at certain existing customers
because of their reduction in temporary workers.


DIRECT COSTS

Direct costs decreased to $216.2 million in the year ended December 31, 2002
from $281.6 million in the year ended December 31, 2001. Gross margin decreased
to 27.2% in the year ended December 31, 2002 from 29.7% in the year ended
December 31, 2001.


Direct costs, excluding $494,000 of direct expense from Princeton in 2002 and
$6.3 million of direct expense from Princeton and $7.3 million from EBN in
2001, decreased to $215.7 million in the year ended December 31, 2002 from
$268.0 million in the year ended December 31, 2001. Gross margins excluding
these expenses in both years increased to 26.7% in the year ended December 31,
2002 from 25.6% in the year ended December 31, 2001.

This increase in gross margins was primarily attributable to the increase in
higher margin business, primarily in Chimes.


SELLING, GENERAL, AND ADMINISTRATIVE


Selling, general and administrative expenses (excluding amortization expense,
restructuring charges and the write-down of assets held for sale) decreased to
$91.3 million, or 30.7% of revenue, in the year ended December 31, 2002 from
$128.8 million, or 32.1% of revenue, in the year ended December 31, 2001, a
decrease of $37.5 million or 29.1%.

Selling, general and administrative expenses (excluding assets held for sale
of $4.3 million expense for Princeton in 2002 and $28.4 million for Princeton
and $5.3 million for EBN in 2001, amortization expense, restructuring charges
and the write-down of assets held for sale) decreased to $87.0 million, or
29.3% of revenue, in the year ended December 31, 2002 from $95.1 million or
23.7% of revenue in the year ended December 31, 2001, a decrease of $8.1
million or 8.5%.



                                       14
<Page>


The decrease in selling, general and administrative expenses was primarily
attributable to cost reductions in the IT Services group, the Solutions group
and Corporate, primarily related to a reduction in SG&A salaries and fringe
benefits, with average headcount decreasing 37% from approximately 675 at
December 31, 2001 to approximately 424 at December 31, 2002. In addition,
office rent expense decreased as a result of office closings. The decreases
were offset by a $3.5 million increase in Chimes as the Company continues to
invest in this subsidiary. Chimes average headcount increased 21% from
approximately 168 at December 31, 2001 to 204 at December 31, 2002.


RESTRUCTURING CHARGES / (CREDITS)


During the fourth quarter of 2002, the Company recorded a restructuring
charge of $2.8 million pertaining to 2002 office closings, along with a
reversal of $192,000 of the previously recorded restructure reserves
pertaining to lease buyouts and $140,000 pertaining to severance adjustments.
These office closings were made to eliminate the infrastructure costs related
to having offices in certain areas. The Company did not eliminate marketing
efforts or business in these areas, but rather turned these areas into virtual
marketplaces whereby sales personnel work from their homes. As a result of
these office closings, in both IT Services and the Solutions business areas,
rent expense and the related reduction of SG&A headcount (salary and fringe
benefits) were eliminated from the current SG&A cost structure.


During the fourth quarter of 2001, the Company recorded a restructuring charge
adjustment of $1.0 million primarily due to the termination, by the sublessee,
of the sublease contracts for closed offices included in the 1999 restructure
charge. Since the sublessee defaulted on the rent payments, it was necessary to
restore the Company's liability for the remaining lease obligations.

WRITE-DOWN OF ASSETS HELD FOR SALE


In the second quarter of 2001, the Company recorded $5.5 million expense for
the write-down of assets held for sale to further reduce the carrying amount
of eB Networks to the estimated net realizable value.


INCOME / (LOSS)  FROM OPERATIONS


The Company's loss from operations, excluding restructuring charges,
write-down of assets held for sale and amortization expense in 2001, totaled
$10.4 million in the year ended December 31, 2002, a decline of $0.8 million
or 8.3%, from a loss of $9.6 million in the year ended December 31, 2001. The
composition of the operating loss of $10.4 million included a loss of $2.2
million in IT Services, profit of $748,000 in the Solutions Group and a loss
of $8.9 million in Chimes. This compares to the operating loss of $9.6
million in the year ended December 31, 2001, consisting of profit of $7.7
million in IT Services, loss of $7.2 million in the Solutions Group and loss
of $10.1 million in Chimes. Operating margins, excluding restructuring
charges, write-down of assets held for sale and amortization expense in 2001,
were a loss of 3.5% in the year ended December 31, 2002 as compared to a loss
of 2.4% in the year ended December 31, 2001.

The Company's loss from operations, excluding the losses from the assets held
for sale of $1.9 million loss in Princeton in 2002 and $5.7 million loss for
Princeton and $1.1 million loss for EBN in 2001, restructuring charges,
amortization expense and the write-down of assets held for sale, totaled $8.5
million in the year ended December 31, 2002, a decline of $5.6 million or
193.1%, from a loss of $2.9 million in the year ended December 31, 2001. The
composition of the operating loss of $8.5 million included a loss of $2.4
million in IT Services, profit of $2.8 million in the Solutions Group and a
loss of $8.9 million in Chimes. This compares to the operating loss of $2.9
million in the year ended December 31, 2001, consisting of profit of $5.7
million in IT Services, profit of $1.5 million in the Solutions Group and
loss of $10.1 million in Chimes. Operating margins, excluding restructuring
charges, write-down of assets held for sale and amortization expense in 2001,
were a loss of 2.9% in the year ended December 31, 2002 as compared to a loss
of 0.8% in the year ended December 31, 2001.


OTHER INCOME / EXPENSE

For the year ended December 31, 2002, other income increased to $6.6 million
from other expense of $2.8 million in the year ended December 31, 2001. This
increase in other income

                                       15
<Page>


was primarily attributable to a $3.2 million gain on the sale of Princeton and
a $2.7 million gain on the sale of Spargo which resulted from a favorable
purchase price adjustment after the final resolution of outstanding accounts
receivables and the termination of leases. In 2001, a $4.0 million loss was
recorded on the sale of Eb Networks offset in part by a $332,000 gain on the
sale of ICM Education and the original $438,000 gain recorded for the sale of
Spargo in 2001.


PROVISION FOR INCOME TAXES

The effective tax rate for Federal, state, and local income taxes was 29.5% for
the year ended December 31, 2002, and a tax benefit rate of 33.1% in the year
ended December 31, 2001. The primary reason for the change in the effective tax
rate in 2002 was the establishment of a valuation allowance of state deferred
tax assets. A review of all available positive and negative evidence was
conducted by the Company, including the Company's current and past performance,
the market environment in which the company operates, and the length of
carryback and carryforward periods. In January 2003, the Company received a
federal income tax refund of $20 million, resulting from the Economic Stimulus
Act of 2002 (see Note 8).

NET INCOME / (LOSS)

The Company recorded a net loss of $38.0 million in the year ended December 31,
2002, a decline of $23.5 million or 162.1% from net loss of $14.5 million in the
year ended December 31, 2001. Net loss per share (diluted) totaled $1.22 in the
year ended December 31, 2002 from net loss per share (diluted) of $0.45 in the
year ended December 31, 2001. The net loss in 2002 includes the cumulative
effect of change in accounting principle of $29.9 million, or $0.96 per share
and differences in the effective tax rate primarily relating to the recording of
a valuation allowance in the Company's state deferred tax assets of
approximately $4.0 million, or $0.13 per share. The effect of restructuring
charges, operations of assets held for sale, gain on sale of assets, cumulative
effect of change in accounting principle and the valuation allowance on deferred
tax assets amounted to $1.06 loss per share, net of taxes, in 2002. The effect
of restructuring charges, loss on sale of assets, amortization expense and the
operations of the assets held for sale amounted to $0.40 loss per share, net of
taxes, in 2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000
REVENUES


Consolidated revenues decreased to $400.8 million in the year ended December
31, 2001 from $445.5 million in the year ended December 31, 2000, a decrease
of $44.7 million, or 10.0%.

Solutions Group revenues, including business units held for sale; $29.0
million for Princeton and $11.5 million for EBN in 2001, along with $39.8
million for Princeton, $30.7 million for EBN and $11.3 million for Spargo in
2000, decreased to $126.4 million in the year ended December 31, 2001 from
$141.8 million in the year ended December 31, 2000, a decrease of $15.4
million or 10.9%. Chimes was not a separate line of business in 2000 because
the stand alone operations were not identifiable and are included in the
Solutions Group in 2000.

The decrease in Solutions Group revenue is primarily attributable to the
decline experienced by the business units held for sale. Solutions Group
revenue, excluding the operations of units held for sale increased to $85.9
million in the year ended December 31, 2001 from $60.0 million in the year
ended December 31, 2000, an increase of $25.9 million or 43.2%. This increase
was due to an increase in average billable headcount of 6% in the Solutions
division from 353 in the year ended December 31, 2000 to 373 in the year
ended December 31, 2001.

IT Services revenues decreased to $274.4 million in the year ended December
31, 2001 from $303.7 million in the year ended December 31, 2000, a decrease
of $29.3 million or 9.6%. The decrease in IT Services revenue of $29.3
million is the result of continued decreases in the demand for temporary
technology workers, the impact of pricing decreases by customers and the
lagging economy. In addition, for the year 2001, IT Services consultant
average headcount decreased by 11% from 2,532 during 2000 to 2,263 during 2001.


                                       16
<Page>

DIRECT COSTS

Direct costs decreased to $281.6 million in the year ended December 31, 2001
from $312.8 million in the year ended December 31, 2000. Gross margin
remained essentially flat at 29.7% in the year ended December 31, 2001 from
29.8% in the year ended December 31, 2000.


Direct costs, excluding $6.3 million expense from Princeton and $7.3 million
from EBN in 2001 and $7.5 million expense from Princeton, $20.8 million from
EBN and $8.9 million from Spargo in 2000, decreased to $268.0 million in the
year ended December 31, 2001 from $275.6 million in the year ended December
31, 2000. Gross margins, excluding these expenses in both years, increased to
25.6% in the year ended December 31, 2001 from 24.2% in the year ended
December 31, 2000.

Gross margins increased due to the change in the revenue mix increasing the
higher margin Solutions business which includes the increase in Chimes
business.


SELLING, GENERAL, AND ADMINISTRATIVE


Selling, general and administrative expenses (excluding bad debt expense,
amortization expense and restructuring charges) decreased to $125.4 million,
or 31.3% of revenue, in the year ended December 31, 2001 from $143.7 million,
or 32.3% of revenue, in the year ended December 31, 2000, a decrease of $18.3
million or 12.7%.

Selling, general and administrative expenses (excluding business units held for
sale: $28.4 million expenses for Princeton and $5.3 million expenses for EBN in
2001 and $31.5 million for Princeton, $15.6 million for EBN and $3.3 million
for Spargo in 2000, bad debt expense, amortization expense, restructuring
charges and the write-down of assets held for sale) decreased to $91.7 million,
or 22.9% of revenue, in the year ended December 31, 2001 from $93.3 million, or
20.9% of revenue, in the year ended December 31, 2000, a decrease of $1.6
million or 1.7%.

The decrease in selling, general and administrative expenses was primarily
attributable to a decrease in SG&A salaries and fringe benefits, with SG&A
average headcount decreasing 18% from approximately 596 at December 31, 2000
to approximately 490 at December 31, 2001. In addition, office rent expense
decreased as a result of office closings. These expenses were offset by a
$9.7 million increase in Chimes as the Company continues to invest in this
subsidiary. Chimes average headcount increased 147% from approximately 68 at
December 31, 2000 to approximately 168 at December 31, 2001.

BAD DEBT EXPENSE


Bad debt expense decreased to $3.4 million in the year ended December 31,
2001 from $26.5 million in the year ended December 31, 2000, a decrease of
$23.1 million. The 2000 bad debt expense includes a charge of $21.6 million
in the fourth quarter of 2000 as a direct result of problems created in late
1998 and early 1999 relating to the flawed implementation of an
enterprise-wide information system. The system implementation in late 1998
and early 1999 caused billing delays which resulted in a significant increase
in  receivables and created numerous billing and reconciliation issues with
the Company's clients. The system was stabilized in the latter part of 1999
and much of 2000 was spent reconciling outstanding balances with customers.
Although sales were recorded in 1998 and 1999 based on services performed
pursuant to signed contracts, bad debt expense was recorded in the fourth
quarter of 2000 when it became evident that major concessions with our
customers for the old balances would have to be made in order to retain
customers and avoid long protracted and possibly damaging conflicts.
Collection efforts were ceased in the fourth quarter of 2000.


AMORTIZATION OF INTANGIBLES

Amortization of intangibles decreased to $2.7 million in the year ended December
31, 2001 from $7.4 million in the year ended December 31, 2000, a decrease of
$4.7 million or 63.5%. This decrease in amortization expense was due to the
reduction of intangibles related to the assets held for sale.

RESTRUCTURING CHARGES / (CREDITS)

During the fourth quarter of 2001, the Company recorded a restructuring charge
adjustment of $1.0 million primarily due to the termination, by the sublessee,
of the sublease contracts for closed offices included in the 1999 restructure
charge. Since the sublessee defaulted on the rent

                                       17
<Page>

payments, it was necessary to restore the Company's liability for the remaining
lease obligations.

During the fourth quarter of 2000, the Company recorded a restructuring
charge of $1.2 million related to the closing of seven offices and the size
reduction of other IT Services offices. During the second quarter of 2000,
the Company recorded a restructuring credit of $2.4 million. This credit
resulted primarily from the earlier than expected subleasing of discontinued
properties that were part of the third quarter 1999 restructuring charge.


WRITE-DOWN OF ASSETS HELD FOR SALE

In the second quarter of 2001, the Company recorded a non-cash $5.5 million
expense for the write-down of assets held for sale to further reduce the
carrying amount of eB Networks to its estimated net realizable value.

During the fourth quarter of 2000, the Company evaluated its strategic
direction and determined that it needed to refocus its efforts and resources
in three primary areas. These areas were IT Services (Staff Augmentation), a
Solutions Practice focused primarily on application development and
maintenance services, and Chimes. As a result, the Company placed four
businesses for sale, Princeton Softech, Inc., including its Select division,
Eb Networks, Spargo and the ICM Microsoft training business. In addition, the
Company decided to exit the ESG certified SAP training business.

In connection with this plan a non-cash write-down of approximately $40
million was recorded to reduce the assets to estimated net realizable value.
This $40 million write-down is comprised of $6.9 million of Select software,
$26.2 million of Eb Networks and $7.2 million related to the exit of the ESG
SAP training business.

As a result of these strategic decisions the SG&A expense structure of the
Company was significantly reduced and the Company no longer offered for sale
software tools and products surrounding the movement and storage of data,
network architectural and design services and certified SAP Microsoft
training.


INCOME / (LOSS)  FROM OPERATIONS


Income / (loss) from operations, excluding restructuring charges, write-down
of assets held for sale and bad debt expense, improved to a loss of $8.9
million in the year ended December 31, 2001 from a loss of $18.5 million in
the year ended December 31, 2000, an improvement of $9.6 million or 51.9%.
Operating margins, excluding restructuring charges, write-down of assets held
for sale and bad debt expense, improved to a loss of 2.2% in the year ended
December 31, 2001 from a loss of 4.1% in the year ended December 31, 2000.

Income / (loss) from operations, excluding results of assets held for sale
($5.7 million loss for Princeton and $1.1 million loss for EBN in 2001 and
$1.5 million loss for Princeton, $7.4 million loss for EBN and $945,000 loss
for Spargo in 2000) restructuring charges, the write-down of assets held for
sale and bad debt expense, improved to income of $417,000 in the year ended
December 31, 2001 from a loss of $5.3 million in the year ended December 31,
2000, an improvement of $5.7 million or 107.9%. Operating margins, excluding
the expenses listed above, improved to income of 0.1% in the year ended
December 31, 2001 from a loss of 1.4% in the year ended December 31, 2000.


OTHER INCOME / EXPENSE

For the year ended December 31, 2001, other expense increased to $2.8 million.
This increase in other expenses was primarily due to the loss on sale of assets,
partially offset by higher interest income on investments and a stock
distribution received on the demutualization of the Company's previous group
health provider of $1.5 million.

PROVISION FOR INCOME TAXES

The effective tax rate for Federal, state, and local income taxes was 33.1% and
34.0% in the years ended December 31, 2001 and 2000, respectively.

NET INCOME / (LOSS)

Net income / (loss) improved to a loss of $14.5 million in the year ended
December 31, 2001 from net loss of $57.8 million in the year ended December 31,
2000, an improvement of $43.3 million or 74.9%. Net loss per share (diluted)
improved to $0.45 in the year ended December 31, 2001 from net loss per share
(diluted) of $1.83 in the year ended December 31, 2000. The effect of
restructuring charges and the operations of the assets held for sale amounted to
$0.34 loss per share, net of taxes, in 2001. The effect of the bad debt special
charge, restructuring charges and operations of assets held for sale amounted to
$1.62 loss per share, net of taxes, in 2000.

                                       18
<Page>

LIQUIDITY AND CAPITAL RESOURCES

Computer Horizons has historically financed its operations primarily through
cash generated from operations, borrowings against bank lines of credit and the
public sale of its common stock. At December 31, 2002, the Company had $100.7
million in working capital, of which $59.8 million was cash and cash
equivalents. The Company's working capital ratio at December 31, 2002 was 3.2 to
1. During the first quarter of 2002, $10 million of short-term debt was repaid
and the Company has remained debt free throughout the remainder of 2002. In
January 2003, the Company received a federal income tax refund of $20 million,
resulting from the Economic Stimulus Act of 2002. The Company may use these
additional resources to continue to buy back its stock and potentially make
acquisitions.

Net cash provided by operating activities for the years ended December 31, 2002,
December 31, 2001 and December 31, 2000 totaled $20.7 million, $31.9 million and
$9.9 million, respectively. In 2002, this was primarily attributable to a
reduction in accounts receivable. In 2001, this was primarily attributable to
income tax refunds, other non-cash charges and a reduction in accounts
receivable. In 2000, it was primarily attributable to a non-cash charge relating
to an increase in the provision for bad debts, the amortization and write-off of
intangibles and the write-down of assets held for sale, offset in part by the
operating loss.

Net cash provided by investing activities was $13.0 million and $6.1 million for
the years ended December 31, 2002 and 2001, respectively. In both years this was
primarily attributable to cash received from the sale of assets. Net cash used
in investing activities was $9.1 million in the year ended December 31, 2000,
primarily attributable to acquisition related earnouts and the purchase of
furniture and fixtures.

For the years ended December 31, 2002 and 2001, respectively, net cash used in
financing activities was $14.6 million and $12.6 million, resulting from $10.0
million reduction of debt and $6.1 million used in the repurchase of the
Company's common stock in 2002 and from $10.7 million reduction of debt and $3.4
million used in the repurchase of the Company's common stock in 2001. For the
year ended December 31, 2000, net cash provided by financing activities was $1.1
million, resulting from $1.2 million in borrowings against the Company's bank
lines of credit, $2.2 million of stock issued as a result of the Company's
employee stock purchase program and stock option exercises partially offset by a
reduction of $4.1 million of the Company's long-term debt.

On July 31, 2001, the Company entered into a secured asset-based lending
facility which replaced its two unsecured discretionary lines of credit. This
new line of credit is a three-year, $40 million facility with availability
based primarily on eligible customer receivables. The interest rate for the
first ninety days from closing was Prime plus 0.5%, thereafter the rate was
LIBOR plus 2.75% based on the unpaid principal. The borrowing base less
outstanding loans must equal or exceed $17.5 million. At the time of closing
there was a $170,000 commitment fee paid to the agent. As of December 31,
2002, the Company had no outstanding loan balance against this facility.
Based on the Company's eligible customer receivables and cash balances, $20.5
million and $24.7 million was available for borrowing as of February 28, 2003
and December 31, 2002, respectively.

The Company believes that its cash and cash equivalents, asset-based lending
facility, internally generated funds and tax refunds (received in 2003) will be
sufficient to meet its working capital needs through 2003.

                                       19
<Page>

The Company's billed accounts receivable were $49.4 million and $76.1 million at
December 31, 2002 and December 31, 2001, respectively. Including both billed and
unbilled receivables, days sales outstanding were 76 days at December 31, 2002
and 88 days at December 31, 2001, based on quarterly sales.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The Company does not utilize off balance sheet financing other than operating
lease arrangements for office premises and related equipment. Leases are short
term in nature and non-capital. The following table summarizes all commitments
under contractual obligations as of December 31, 2002:

<Table>
<Caption>
                                          Total                                             Over 5
                                         Amount      1 year     2-3 years     4-5 years     years
                                      --------------------------------------------------------------
                                                   ------------in thousands------------
     <S>                              <C>          <C>          <C>          <C>          <C>
     Operating Leases                 $   10,606   $    4,192   $    5,088   $    1,314   $       12
     Other long term                       1,320        1,320           --           --           --
                                      ----------   ----------   ----------   ----------   ----------

     Total Cash Obligations           $   11,926   $    5,512   $    5,088   $    1,314   $       12
                                      ==========   ==========   ==========   ==========   ==========
</Table>

FOREIGN CURRENCY EXPOSURE

The Company's international operations expose it to translation risk when the
local currency financial statements are translated to U.S. dollars. As currency
exchange rates fluctuate, translation of the financial statements of
international businesses into U.S. dollars will affect the comparability of
revenues and expenses between years. None of the components of the Company's
consolidated statements of income was materially affected by exchange rate
fluctuations in 2002, 2001 or 2000. At December 31, 2002 the Company had
$379,000 in cash maintained in overseas financial institutions.

RECENT DEVELOPMENTS

Impact of Economic Stimulus Act on Income Tax Refund Claim

On March 9, 2002, the Job Creation and Worker Assistance Act of 2002 (the "Act")
was enacted into law. This Act contains many economic and tax incentives,
including the extension of the carryback period for losses arising in years
ending during 2001 and 2002 to five years from the previous two year carryback
rule. As a result, the Company's tax refund claim of approximately $10 million
at December 31, 2001 was increased to approximately $30 million. The additional
refund amount of $20 million was received in January 2003.

                                       20
<Page>

Sale of Solutions UK

On February 14, 2003, the Company sold the business and net assets of Computer
Horizons e-Solutions (Europe) Limited, ("Solutions UK") to Systems Associates
Limited for 92,822 British Sterling Pounds (approximately US$ 145,500).

Purchase of Westfield - India

On January 31, 2003, the Company acquired the IT Solutions operations of Global
Business Technology Solutions (GBTS), from Alea (Bermuda) Limited, a member of
the Alea Group of companies and Westfield Services, Inc., a subsidiary of
Westfield Financial Corporation. The outsourcing facility and its IT
professionals are located in Chennai (Madras), India. This transaction was
completed for $400,000.

Stock Option Exchange Program

On January 8, 2003, the Company commenced a tender offer to its employees to
exchange stock options granted under the Company's 1994 Incentive Stock Option
and Appreciation Plan with an exercise price of $10.01 or greater for new stock
options with a new exercise price. The tender offer expired on February 10,
2003, and 1,635,526 options were accepted for exchange. Please see Item 12 on
Form 10-K - Security Ownership of Certain Beneficial Owners and Management.

Purchase of Treasury Stock

Subsequent to December 31, 2002, the Company has purchased 211,800 shares of its
common stock at an aggregate cost of approximately $694,000.

Management Changes

On March 13, 2003, John J. Cassese, the Company's CEO, President and Chairman,
informed the Board that he has taken a leave of absence as CEO and President and
resigned his position as Director and Chairman of the Board as a result of being
informed that the Justice Department obtained an indictment relating to Mr.
Cassese's June 1999 purchase and sale of an unrelated company's shares. The
Board has named William J. Murphy to the position of Acting President and CEO,
appointed Thomas J. Berry Chairman of the Board and named Michael J. Shea to the
position of acting Chief Financial Officer.

                                       21
<Page>

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK EXPOSURE

The Company has financial instruments that are subject to interest rate risk.
Historically, the Company has not experienced material gains or losses due to
interest rate changes. Based on the current holdings, the exposure to interest
rate risk is not material. Additionally, at December 31, 2002 the Company was
debt free.

                                       22
<Page>

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
Computer Horizons Corp.

We have audited the accompanying consolidated balance sheets of Computer
Horizons Corp. and Subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 2002. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Computer Horizons
Corp. and Subsidiaries as of December 31, 2002 and 2001 and the consolidated
results of their operations and their consolidated cash flows for each of the
three years in the period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the Company
adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" on January 1, 2002.


/s/ Grant Thornton LLP
----------------------
GRANT THORNTON LLP


Edison, New Jersey
February 25, 2003

                                       23
<Page>

                    Computer Horizons Corp. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS


<Table>
<Caption>
                                                                        December 31,
                                                               ----------------------------
                                                                   2002            2001
                                                               ------------    ------------
                                                           (in thousands, except per share data)
<S>                                                            <C>            <C>
ASSETS

CURRENT ASSETS:
Cash and cash equivalents (Note 1)                             $     59,769   $     41,033
Accounts receivable (Note 4)                                         56,616         83,564
Net assets held for sale (Note 2)                                        --         10,381
Deferred income taxes (Note 8)                                        4,557         13,030
Refundable income taxes                                              19,051          7,992
Other                                                                 7,219          5,238
                                                               ------------   ------------

Total current assets                                                147,212        161,238
                                                               ------------   ------------

PROPERTY AND EQUIPMENT:
Furniture, equipment and other                                       37,643         34,354
Less accumulated depreciation                                        26,626         21,881
                                                               ------------   ------------

                                                                     11,017         12,473
                                                               ------------   ------------

OTHER ASSETS - NET:
Goodwill (Note 1)                                                    19,203         48,725
Deferred income taxes (Note 8)                                        8,020          5,708
Other                                                                 8,279          9,577
                                                               ------------   ------------

                                                                     35,502         64,010
                                                               ------------   ------------

Total Assets                                                   $    193,731   $    237,721
                                                               ============   ============
</Table>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                       24
<Page>

                    Computer Horizons Corp. and Subsidiaries

                     CONSOLIDATED BALANCE SHEETS (continued)

<Table>
<Caption>
                                                                        December 31,
                                                               ----------------------------
                                                                   2002            2001
                                                               ------------    ------------
                                                           (in thousands, except per share data)
<S>                                                            <C>             <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of long-term debt (Note 5)                     $         --    $     10,000
Accrued payroll, payroll taxes and benefits                           9,452          12,782
Accounts payable                                                     10,830          15,196
Restructuring reserve (Note 14)                                       3,266           2,090
Tax benefit reserve (Note 8)                                         19,600              --
Other accrued expenses                                                3,408           5,423
                                                               ------------    ------------

Total current liabilities                                            46,556          45,491
                                                               ------------    ------------

Other liabilities                                                     1,320           2,375
                                                               ------------    ------------

SHAREHOLDERS' EQUITY:
Preferred stock, $.10 par; authorized and unissued,
  200,000 shares, including 50,000 Series A
  Common stock, $.10 par; authorized, 100,000,000
  shares; issued 33,153,107 shares at
  December 31, 2002 and 2001, respectively                            3,315           3,315
Additional paid-in capital                                          133,518         135,230
Accumulated comprehensive loss                                       (4,306)         (2,932)
Retained earnings                                                    28,255          66,291
                                                               ------------    ------------

                                                                    160,782         201,904
Less shares held in treasury, at cost; 2,660,667
  shares and 1,720,191 shares at December 31, 2002 and 2001,
  respectively                                                      (14,927)        (12,049)
                                                               ------------    ------------

Total shareholders' equity                                          145,855         189,855
                                                               ------------    ------------

Total Liabilities and Shareholders' Equity                     $    193,731    $    237,721
                                                               ============    ============
</Table>

                                       25
<Page>

                    Computer Horizons Corp. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                           Year Ended December 31,
                                                               --------------------------------------------
                                                                   2002            2001           2000
                                                               ------------    ------------    ------------
                                                                   (in thousands, except per share data)
<S>                                                            <C>             <C>             <C>
Revenues                                                       $    297,115    $    400,784    $    445,479
                                                               ------------    ------------    ------------
COSTS AND EXPENSES:
Direct costs                                                        216,181         281,576         312,815
Selling, general and administrative                                  86,347         125,435         143,691
Bad debt expense                                                      4,996           3,397          26,452
Amortization of intangibles                                              --           2,695           7,434
Restructuring charges (Note 14)                                       2,515           1,048           1,166
Write-down of assets held for sale (Note 14)                             --           5,473          40,362
                                                               ------------    ------------    ------------
                                                                    310,039         419,624         531,920
                                                               ------------    ------------    ------------
Loss from operations                                                (12,924)        (18,840)        (86,441)
                                                               ------------    ------------    ------------

OTHER INCOME /(EXPENSE):
Gain / (loss) on sale of assets (Note 3)                              5,890          (3,197)             --
Net gain /(loss) on investments                                         (61)             90              --
Interest income                                                         928           2,293             620
Interest expense                                                       (174)         (1,944)         (1,825)
                                                               ------------    ------------    ------------
                                                                      6,583          (2,758)         (1,205)
                                                               ------------    ------------    ------------
Loss before income taxes                                             (6,341)        (21,598)        (87,646)
                                                               ------------    ------------    ------------

INCOME TAXES / (BENEFIT) (NOTES 1 AND 8):
Current                                                              (4,292)        (10,292)        (19,339)
Deferred                                                              6,161           3,144         (10,480)
                                                               ------------    ------------    ------------
                                                                      1,869          (7,148)        (29,819)
                                                               ------------    ------------    ------------

Loss before cumulative effect of change in accounting principle      (8,210)        (14,450)        (57,827)

Cumulative effect of change in accounting principle (Note 1)        (29,861)             --              --
Minority Interest                                                        35              --              --
                                                               ------------    ------------    ------------
Net Loss                                                       $    (38,036)   $    (14,450)   $    (57,827)
                                                               ============    ============    ============

Loss per share - Basic and Diluted (Notes 1 and 9):
Before cumulative effect of change in accounting principle     $      (0.26)   $      (0.45)   $      (1.83)
                                                               ============    ============    ============
Cumulative effect of change in accounting principle            $      (0.96)   $         --    $         --
                                                               ============    ============    ============
Net Loss                                                       $      (1.22)   $      (0.45)   $      (1.83)
                                                               ============    ============    ============
Weighted average number of shares outstanding:
Basic and Diluted                                                31,243,000      31,911,000      31,656,000
                                                               ============    ============    ============
</Table>


     THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                       26
<Page>

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                  Years ended December 31, 2002, 2001 and 2000

<Table>
<Caption>
                                   Common Stock
                                   ------------
                                                                        Accumulated Other
                                                          Additional       Comprehensive
                                  Shares       Amount   Paid-in Capital    Income/(Loss)
                                ----------    -------   ---------------   --------------
                                ---------------(dollars in thousands)---------------

<S>                             <C>           <C>          <C>              <C>
BALANCE, DECEMBER 31, 1999      33,149,595    $ 3,315      $  138,821       $    385
                                ----------    -------      ----------       --------

Net loss for the year
Other comprehensive loss:
Foreign currency
translation
  adjustments                                                                 (1,365)

Total comprehensive loss

Stock options exercised
Other issuances of common
  stock                              2,611
Tax benefits related to
  stock option plans                                               64
Issuance of common stock
  for purchase of assets                                          237
Employee stock purchase
  program                                                         296
                                ----------    -------       ---------       --------
BALANCE, DECEMBER 31, 2000      33,152,206      3,315         139,418           (980)
                                ----------    -------       ---------       --------
Net loss for the year
Other comprehensive loss:
Foreign currency
translation adjustments                                                       (1,952)

Total comprehensive loss

Stock options exercised
Other issuances of common
    stock                              901
Issuance of common stock
  for purchase of assets                                         (360)
Employee stock purchase
    program                                                    (3,828)
Purchase of treasury shares
                                ----------    -------       ---------       --------
BALANCE, DECEMBER 31, 2001      33,153,107      3,315         135,230         (2,932)
                                ----------    -------       ---------       --------
Net loss for the year
Other comprehensive loss:
Current year unrealized
  loss on serp investments                                                    (1,100)
Foreign currency
Translation
    adjustments                                                                 (274)

Total Comprehensive loss

Stock options exercised
Employee stock purchase
    program                                                  (1,712)
Purchase of treasury shares
                                ----------    ------       --------          -------
BALANCE, DECEMBER 31, 2002      33,153,107    $3,315       $133,518          $(4,306)
                                ==========    ======       ========          =======

<Caption>

<Page>

                                                      Treasury Stock
                                                      --------------
                               Retained
                               Earnings          Shares           Amount              Total
                             ----------        ---------         ---------          ---------
<S>                          <C>               <C>               <C>                <C>
BALANCE, DECEMBER 31, 1999   $ 138,568         1,780,721         $ 18,437           $ 262,652
                             ----------        ---------        ---------           ---------

Net loss for the year          (57,827)                                               (57,827)
Other comprehensive loss:
Foreign currency
translation
  adjustments                                                                          (1,365)
                                                                                   ----------
Total comprehensive loss                                                              (59,192)

Stock options exercised                         (171,311)          (1,695)              1,695
Other issuances of common
  stock
Tax benefits related to
  stock option plans                                                                       64
Issuance of common stock
  for purchase of assets                         (32,470)            (266)                503
Employee stock purchase
  program                                       (232,325)          (1,906)              2,202
                              --------         ---------         --------           --------
BALANCE, DECEMBER 31, 2000      80,741         1,344,615           14,570             207,924
                              --------         ---------         --------           --------
Net loss for the year          (14,450)                                               (14,450)
Other comprehensive loss:
Foreign currency
translation adjustments                                                                (1,952)
                                                                                   ----------
Total comprehensive loss                                                              (16,402)
Stock options exercised                          (15,000)             (30)                 30
Other issuances of common
    stock
Issuance of common stock
  for purchase of assets                         (77,144)            (633)                273
Employee stock purchase
    program                                     (643,280)          (5,273)              1,445
Purchase of treasury shares                    1,111,000            3,415              (3,415)
                              --------         ---------         --------          ----------
BALANCE, DECEMBER 31, 2001      66,291         1,720,191           12,049             189,855
                              --------         ---------         --------          ----------
Net loss for the year          (38,036)                                               (38,036)
Other comprehensive loss:
Current year unrealized
  loss on serp investments                                                             (1,100)
Foreign currency
Translation
    adjustments                                                                          (274)
                                                                                   ----------
Total comprehensive loss                                                              (39,410)
                                                                                   ----------
Stock Options Exercised                         (265,858)            (449)                449
Employee Stock Purchase
    Program                                     (405,366)          (2,814)              1,102
Purchase Of Treasury Shares                    1,611,700            6,141              (6,141)
                              --------         ---------         --------          ----------
BALANCE, DECEMBER 31, 2002    $ 28,255         2,660,667         $ 14,927          $  145,855
                              ========         =========         ========          ==========
</Table>

     THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.

                                       27
<Page>

                    Computer Horizons Corp. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                                     Year Ended December 31,
                                                                         --------------------------------------------
                                                                             2002            2001            2000
                                                                         ------------    ------------    ------------
                                                                         ---------------(in thousands)---------------
<S>                                                                      <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                 $    (38,036)   $    (14,450)   $    (57,827)
                                                                         ------------    ------------    ------------
Adjustments to reconcile net loss to net cash provided by/(used in)
   operating activities:
    Deferred taxes                                                              6,161           3,144         (10,480)
    Depreciation                                                                4,634           5,301           7,655
    Amortization of intangibles                                                    --           2,695           7,434
    Provision for bad debts                                                     4,996           3,397          26,452
    Write-down of assets held for sale                                             --           5,473          33,114
    Loss / (gain) on sale of assets                                            (5,890)          3,197              --
    Write off of goodwill                                                      29,861              --           7,248
    Changes in assets and liabilities, net of acquisitions:
    Accounts receivable                                                        21,952          11,060          18,278
    Other current assets                                                       (1,981)         (2,240)         (2,873)
    Assets held for sale                                                          397           5,401          (6,428)
    Other assets                                                                1,298            (474)          3,778
    Refundable income taxes/benefit reserve                                     8,541          13,333         (12,862)
    Accrued payroll, payroll taxes and benefits                                (4,430)         (1,412)         (3,261)
    Accounts payable                                                           (4,366)         (2,749)          1,475
    Other accrued expenses                                                     (1,432)           (560)         (1,267)
    Other liabilities                                                          (1,055)            815            (544)
                                                                         ------------    ------------    ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                      20,650          31,931           9,892
                                                                         ------------    ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Purchases of furniture and equipment                                       (3,178)         (3,732)         (5,607)
    Proceeds received from the sale of assets                                  16,467          10,027              --
    Changes in goodwill                                                          (339)           (156)         (3,496)
                                                                         ------------    ------------    ------------
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES                            12,950           6,139          (9,103)
                                                                         ------------    ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Notes payable - banks, net                                                (10,000)        (10,704)          1,202
    Long-term debt                                                                 --              --          (4,100)
    Stock options exercised                                                       449              30           1,759
    Purchase of treasury shares                                                (6,141)         (3,415)             --
    Stock issued on employee stock purchase plan                                1,102           1,445           2,202
                                                                         ------------    ------------    ------------
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES                           (14,590)        (12,644)          1,063
                                                                         ------------    ------------    ------------
   Foreign currency losses                                                       (274)         (1,952)         (1,365)
NET INCREASE IN CASH AND CASH EQUIVALENTS                                      18,736          23,474             487
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                 41,033          17,559          17,072
                                                                         ============    ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                 $     59,769    $     41,033    $     17,559
                                                                         ============    ============    ============
</Table>

                                       28
<Page>

                    Computer Horizons Corp. and Subsidiaries
                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

<Table>
<Caption>
                                                                           Year Ended December 31,
                                                               --------------------------------------------
                                                                   2002            2001             2000
                                                               ------------    ------------    ------------
                                                                 -------------(in thousands)-------------
<S>                                                            <C>             <C>             <C>
Supplemental disclosures of cash flow information:
Cash paid/(received) during the year for:
Interest                                                       $       (461)   $       (106)   $      1,538
Income taxes                                                        (10,967)        (24,097)         (2,890)

Book value of assets held for sale, net of cash                $         --    $     22,116    $     80,035
Liabilities                                                              --          11,735          18,075
                                                               ------------    ------------    ------------
Net assets held for sale before write-down, net of cash                  --          10,381          61,960
Write-down of assets held for sale                                       --              --          33,114
                                                               ------------    ------------    ------------
Net assets held for sale, net of cash                          $         --    $     10,381    $     28,846
                                                               ============    ============    ============
</Table>

NON CASH ACTIVITIES:

During 2002, the Company recorded a refundable income tax and tax benefit
reserve of $19.6 million.

     THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                       29
<Page>

                    Computer Horizons Corp. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2002, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Computer Horizons Corp. is a strategic e-Business solutions and professional
services company. The Company enables its Global 2000 customer base to realize
competitive advantages through three major divisions, IT Services, Solutions and
Chimes, Inc. The IT Services division provides highly skilled software
professionals to augment the internal information management staffs of major
corporations. The Solutions division provides enterprise application services,
e-business solutions, customized Web development and Web enablement of strategic
applications, Customer Relationship Management (CRM), network services,
strategic outsourcing and managed resourcing as well as software and relational
database products. Chimes, Inc., a wholly-owned subsidiary of CHC, provides
workforce procurement and management services to Global 2000 companies.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Computer Horizons
Corp. and its wholly-owned and majority-owned subsidiaries (the "Company"). All
subsidiaries of the Company have been consolidated into these financial
statements. All material intercompany accounts and transactions have been
eliminated.

REVENUE RECOGNITION


For the IT Services division revenues are recognized as services are performed
under time-and-material contracts. Under a typical time and materials billing
arrangement, our customers are billed on a regularly scheduled basis, such as
biweekly or monthly. At the end of each accounting period, revenue is
estimated and accrued for services performed since the last billing cycle.
These unbilled amounts are billed the following month.

The Solutions Group recognizes revenue either on a time and material basis or
on a fixed fee basis, however, principally with time and material contracts.
For fixed-fee contracts, revenue is recognized on the basis of the estimated
percentage of completion based on costs incurred relative to total estimated
costs. Each fixed fee contract has different terms, milestones and
deliverables. The milestones and deliverables primarily relate to the work to
be performed and the timing of billing. If it becomes apparent that estimated
cost will be exceeded an adjustment will be made. The cumulative effect of
revisions in estimated revenues and costs are recognized in the period in
which the facts that give rise to the impact of any revisions become known.

Approximately 93% and 97% of consolidated revenue in 2002 and 2001,
respectively, was derived from time-and-material contracts.

Unbilled accounts receivable represent amounts recognized as revenue based on
services performed in advance of customer billings principally on a time and
material basis. At the end of each accounting period, revenue is accrued for
services performed since the last billing cycle. These unbilled amounts are
billed the following month. Costs and estimated earnings in excess of
billings on fixed fee contracts arise when percentage of completion
accounting is used. Such amounts are billed at specific dates or at contract
completion.

The Company's Chimes subsidiary recognizes revenue on a transaction fee
basis. The Chimes service offering aggregates the suppliers of temporary
workers to the customer and renders one invoice to the customer. Upon payment
from the customer, Chimes deducts a transaction fee and remits the balance of
the client payment to the applicable vendor. Chimes recognizes only their fee
for the service, not the aggregate billing to the customer. The gross amount
of the customer invoicing is not considered revenue or receivable to Chimes
because there is no earnings process for the gross amount and by contract
terms. Chimes is not obligated to pay the vendor until paid by the customer.


                                       30
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company's Princeton subsidiary recognized revenue in accordance with AICPA
Statement of Position 97-2 ("SOP 97-2"), "Software Revenue Recognition," and
AICPA Statement of Position 98-9 ("SOP 98-9"). Under SOP 97-2, the Company
recognized software license revenue when a noncancelable license agreement had
been executed, fees were fixed and determinable, the software had been
delivered, and collection was considered probable. Princeton Softech was sold on
March 25, 2002, (see Note 3).

RECRUITMENT COSTS

Recruitment costs are charged to operations as incurred.

ADVERTISING COSTS

The Company expenses all advertising costs as incurred and classifies these
costs under selling, general and administrative expenses. Advertising costs for
the years ended December 31, 2002, 2001 and 2000 were $0.3 million, $0.6 million
and $0.8 million, respectively.

RESEARCH AND DEVELOPMENT COSTS

The Company charges all costs incurred to establish the technological
feasibility of software products or product enhancements to research and
development costs, which are included in selling, general and administrative
expenses. Research and Development costs for the years ended December 31, 2002,
2001 and 2000 were $0.9 million, $5.4 million and $6.9 million, respectively.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include highly liquid instruments with an original
maturity of three months or less at the time of purchase and consist of the
following at December 31:

<Table>
<Caption>
                                         2002           2001
                                     ------------   ------------
                                     ------(in thousands)-------
      <S>                            <C>            <C>
      Cash                           $     22,806   $     19,121
      Commercial paper                     36,963         21,912
                                     ------------   ------------
                                     $     59,769   $     41,033
                                     ============   ============
</Table>

                                       31
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CONCENTRATIONS OF CREDIT RISK

Financial instruments, which potentially subject the Company to concentrations
of credit risk, regardless of the degree of such risk, consist principally of
cash and cash equivalents and trade accounts receivable. On July 31, 2001,
amended February 14, 2003, the Company entered into a secured asset-based
lending facility which replaced its two unsecured discretionary lines of
credit. This new line of credit is a three-year, $40 million facility with
availability based primarily on eligible customer receivables. The interest
rate for the first ninety days from closing is Prime plus 0.5%, thereafter
the rate is LIBOR plus 2.75% based on the unpaid principal. The borrowing
base less outstanding loans must equal or exceed $17.5 million. At the time of
closing there was a $170,000 commitment fee paid to the agent. As of December
31, 2002, the Company had no borrowings outstanding against the facility. The
Company invests the majority of its excess cash in overnight commercial paper
of high-credit, high-quality financial institutions or companies, with
certain limitations as to the amount that can be invested in any one entity.

The Company maintains its cash balances principally in seven financial
institutions located in the United States, Canada and the United Kingdom. The
balances in U.S. banks are insured by the Federal Deposit Insurance Corporation
up to $100,000 for each entity at each institution. The balance in the Canadian
bank is insured by the Canadian Deposit Insurance Corporation up to $60,000
Canadian (approximately $38,000 U.S.). There is no depository insurance in the
United Kingdom. At December 31, 2002, uninsured amounts held by the Company at
these financial institutions total approximately $59,031,000.


The Company's customers are generally very large, Global 2000 companies in
many industries and with wide geographic dispersion. The Company's largest
customer, the City of New York, accounts for approximately 19.2% and 21.0% of
billed accounts receivable at December 31, 2002 and 2001, respectively.
Revenues from this customer totaled approximately $11.9 million, or 4% of
total consolidated revenues, for the year ended December 31, 2002 and $9.1
million, or 2% of total consolidated revenues, for the year ended December 31,
2001. Historically, there have been no collection issues with this customer;
however, the payment cycle is significantly slower than the Company's
commercial customers. The Company establishes an allowance for doubtful
accounts based upon factors surrounding the credit risk of specific customers,
historical trends, and other information.


FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of financial instruments (principally consisting of cash and
cash equivalents, accounts receivable and payable) approximates fair value
because of the short maturities currently offered to the Company.

                                       32
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY AND EQUIPMENT AND DEPRECIATION

Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets which range
from three to seven years.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

Up to and including the year ended December 31, 2001, the Company evaluated its
long-lived assets and certain identifiable intangibles for impairment whenever
events or changes in circumstances indicated that the carrying amount of such
assets or intangibles may not be recoverable. Recoverability of assets to be
held and used was measured by a comparison of the carrying amount of an asset to
future net cash flows expected to be generated by the asset. If such an asset
was considered to be impaired, the impairment to be recognized was measured by
the amount by which the carrying amount of the asset exceeded the fair value of
the assets. Assets to be disposed of were reported at the lower of the carrying
amount or fair value less costs to sell.

Effective on January 1, 2002, the Company adopted Financial Accounting Standard
No. 144 "Accounting for the Impairment or Disposal of Long Lived Assets,"
("SFAS 144"). This supercedes SFAS 121, while retaining many of the requirements
of such statement. The effect of this statement is immaterial to the Company.

INCOME TAXES

The Company and its domestic subsidiaries file a consolidated Federal income tax
return. The foreign subsidiaries file in each of their local jurisdictions.

Deferred income taxes result from temporary differences between income reported
for financial and income tax purposes. These temporary differences result
primarily from net operating loss carryovers, amortization of goodwill, the
allowance for doubtful accounts provision and certain accrued expenses which are
deductible, for tax purposes, only when paid. A valuation allowance is provided
when it is more likely than not that some portion or all of the deferred tax
asset will not be realized.

Tax benefits from early disposition of the stock by optionees under incentive
stock options and from exercise of non-qualified options are credited to
additional paid-in capital.

The Company provides United States income taxes on the earnings of foreign
subsidiaries, unless they are considered permanently invested outside the United
States. As of December 31, 2002, there is no cumulative amount of earnings on
which United States income taxes have not been provided.

EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of common
shares outstanding without consideration of common stock equivalents. Diluted
earnings per share is based on the weighted average number of common and common
equivalent shares outstanding, except when the effect is anti-dilutive. The
calculation takes into account the shares that may be issued upon

                                       33
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

exercise of stock options, reduced by the shares that may be repurchased with
the funds received from the exercise, based on the average price during the
year.

USE OF ESTIMATES IN FINANCIAL STATEMENTS

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

FOREIGN CURRENCY TRANSLATION

For operations outside the United States that prepare financial statements in
currencies other than the United States dollar (Canadian dollar and British
pound), results of operations and cash flows are translated at the average
exchange rates during the period, and assets and liabilities are translated at
end of period exchange rates. Translation adjustments are included as a separate
component of comprehensive income/(loss) within the statement of shareholders'
equity.

ACCOUNTS RECEIVABLE

Accounts receivable are generally due within 30 days and are stated at amounts
due from customers net of an allowance for doubtful accounts. Accounts
outstanding longer than the contractual payment terms are considered past due.
The Company determines its allowance by considering a number of factors,
including the length of time trade accounts receivable are past due, the
Company's previous loss history, the customer's current ability to pay its
obligation to the Company and the condition of the general economy and the
industry as a whole. The Company writes off accounts receivable when they become
uncollectible, and payments subsequently received on such receivables are
credited to the allowance for doubtful accounts.

GOODWILL AND OTHER INTANGIBLE ASSETS

In June 2001, the Financial Accounting Standards Board approved the issuance of
SFAS No. 141, "Business Combinations" and in July 2001, SFAS No. 142, "Goodwill
and Other Intangible Assets." The new standards require that all business
combinations initiated after June 30, 2001 must be accounted for under the
purchase method. In addition, all intangible assets acquired that are
obtained through contractual or legal right, or are capable of being
separately sold, transferred, licensed, rented or exchanged shall be
recognized as an asset apart from goodwill. Goodwill and intangibles with
indefinite lives will no longer be subject to amortization, but will be
subject to at least an annual assessment for impairment by applying a fair
value based test. The Company adopted SFAS 142 as of January 1, 2002 and in
compliance with this new regulation has discontinued the amortization of
goodwill.

                                       34
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

During the quarter ended June 30, 2002, the Company completed the initial
valuation of the carrying value of goodwill existing at January 1, 2002. As a
result, a non-cash charge of $29.9 million, or $(0.96) per share was
retroactively recorded as the cumulative effect of an accounting change in the
six months ended June 30, 2002 statement of operations. For the year ended
December 31, 2002 the Company completed a second valuation of the carrying value
of the remaining goodwill and it was determined that no further impairment had
occurred. The changes in the carrying amount of goodwill for the year ended
December 31, 2002, are as follows:

<Table>
<Caption>

Reporting Units                             Solutions       It Services        Education            Chimes         Consolidated
                                        ---------------   ---------------    ---------------    ---------------   ---------------
                                        ---------------------------------------in thousands--------------------------------------
<S>                                     <C>               <C>                <C>                <C>               <C>
Balance as of December 31, 2001         $        18,864   $        29,422    $           439    $            --   $        48,725
Additions to goodwill                               339                --                 --                 --               339
Impairment losses                                    --           (29,422)              (439)                --           (29,861)
                                        ---------------   ---------------    ---------------    ---------------   ---------------

Balance as of December 31, 2002         $        19,203   $            --    $            --    $            --   $        19,203
                                        ===============   ===============    ===============    ===============   ===============
</Table>

                                       35
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The reporting units are equal to, or one level below, reportable segments. The
Company engaged independent valuation consultants to assist with the
transitional goodwill impairment tests.

The fair value of each of the reporting units was calculated using the following
approaches: (i) market approach and (ii) income approach. Under the market
approach, value is estimated by comparing the performance fundamentals relating
to similar public companies' stock prices. Multiples are then developed of the
value of the publicly traded stock to various measures and are then applied to
each reporting unit to estimate the value of its equity. Under the income
approach, value was determined using the present value of the projected future
cash flows to be generated by the reporting unit.


The fair value conclusion of the reporting units reflects an appropriately
weighted value of the market multiple approach and the income approach
discussed above. As a result of performing steps one and two of the goodwill
impairment test, a loss of $29.9 million was recognized and recorded as a
cumulative effect of change in accounting principle in the accompanying
Consolidated Statements of Operations. There was no income tax effect on the
impairment charge as approximately $19 million of the charge related to
goodwill in foreign tax jurisdictions where the Company believes it is more
likely than not that future taxable income in these jurisdictions will not be
sufficient to realize the related income tax benefits associated with the
charge. The remaining $11 million of the charge was related primarily to
goodwill that was acquired prior to the ability to deduct goodwill for tax
purposes.


                                       36
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The following pro forma table shows the effect of amortization expense and the
cumulative effect of change in accounting principle on the Company's net loss as
follows:

<Table>
<Caption>
                                                                     Twelve Months Ended
                                                                 DECEMBER 31,     December 31,
                                                                    2002              2001
                                                               ---------------------------------
      <S>                                                           <C>               <C>
      Reported Net Loss                                             $ (38,036)        $ (14,450)
      Cumulative Effect of Change in Accounting Principle              29,861                --
      Amortization of Intangibles                                          --             2,695
                                                                    ---------         ---------
      Adjusted Net Loss                                             $  (8,175)        $ (11,755)
                                                                    =========         =========
      Reported Loss per Share:
      Basic & Diluted                                               $   (1.22)        $   (0.45)
      Adjustment for Cumulative Effect of Change in
      Accounting Principle:
      Basic & Diluted                                                    0.96                --
      Adjustment for Amortization of Intangibles:
      Basic & Diluted                                                      --              0.08
                                                                    ---------         ---------
      Adjusted Loss per Share:
      Basic & Diluted                                               $   (0.26)        $   (0.37)
                                                                    =========         =========
</Table>

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2002, the Financial Accounting Standards Board approved the issuance of
SFAS No. 146, "Accounting for Exit or Disposal Activities," ("SFAS 146"), which
supersedes Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." The new standards
require that a liability for a cost associated with an exit or disposal
activity, including costs related to terminating a contract that is not a
capital lease and the termination benefits that employees who are involuntarily
terminated receive under the terms of a one-time benefit arrangement that is not
ongoing or an individual deferred-compensation contract, be recognized when the
liability is incurred. Previously, under Issue No. 94-3, a liability for an exit
cost was recognized at the date of an entity's commitment to an exit plan, which
may not necessarily meet the definition of a liability. SFAS 146 is effective
for exit or

                                       37
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

disposal activities of the Company that are initiated after December 31, 2002.
The Company is currently evaluating the impact of this statement to the Company.

In December 2002, the Financial Accounting Standards Board approved the issuance
of SFAS No. 148, "Accounting for Stock-Based Compensation - Translation and
Disclosure." This statement amends FASB Statement No. 123, "Accounting for
Stock-Based Compensation," to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.

The exercise price per share on all options granted may not be less than the
fair value at the date of the option grant. The Company applies Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," as
modified by FIN 44, "Accounting for Certain Transactions Involving Stock
Compensation," in accounting for stock-based employee compensation, whereby no
compensation cost had been recognized for the plans. The Company expects to
continue following the guidance under APB 25 for stock based compensation to
employees. Had compensation cost for the plans been determined based on the fair
value of the options at the grant dates and been consistent with the method of
SFAS No. 123, the Company's net income and earnings per share would have been
reduced to the pro forma amounts indicated below:

<Table>
<Caption>
                                                               2002                  2001                  2000
                                                          --------------        --------------        --------------
<S>                         <C>                           <C>                   <C>                   <C>
Net loss                    As reported                   $  (38,036,000)       $  (14,450,000)       $  (57,827,000)
                            Deduct: Total
                             stock-based employee
                             compensation expense
                             determined under fair
                             value based method for
                             all awards, net of
                             related tax effects              (3,334,000)           (3,847,000)           (4,068,000)
                                                          --------------        --------------        --------------
                            Pro forma                     $  (41,370,000)       $  (18,297,000)       $  (61,895,000)
                                                          ==============        ==============        ==============
Earnings per share
Basic                       As reported                   $        (1.22)       $        (0.45)       $        (1.83)
                            Pro forma                              (1.32)                (0.57)                (1.96)
Diluted                     As reported                   $        (1.22)                (0.45)                (1.83)
                            Pro forma                              (1.32)                (0.57)                (1.96)
</Table>

                                       38
<Page>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes options-pricing model with the following weighted-average
assumptions used for grants in 2002, 2001 and 2000, respectively: expected
volatility of 64%, 84% and 105%; risk-free interest rates of 3.62%, 5.14% and
4.71%; and expected lives of 4.4, 8.1 and 4.5 years.

In November 2002, the EITF reached a consensus on Issue No. 00-21, "Accounting
for Revenue Arrangements with Multiple Deliverables." This Issue provides
guidance on when and how to separate elements of an arrangement that may involve
the delivery or performance of multiple products, services and rights to use
assets into separate units of accounting. The guidance in the consensus is
effective for revenue arrangements entered into in fiscal periods beginning
after June 15, 2003. The transition provision allows either prospective
application or a cumulative effect adjustment upon adoption. The Company is
currently evaluating the impact of adopting this guidance.

RECLASSIFICATIONS

Certain reclassifications have been made to the 2001 and 2000 comparative
financial statements to conform to the 2002 presentation.

                                       39
<Page>

NOTE 2 - NET ASSETS HELD FOR SALE

The Company decided in 2000 to offer three of its subsidiaries (Princeton
Softech "Princeton", including the SELECT Software Tools division "Select", CHC
International Limited "Spargo", and eB Networks) for sale or disposition and
accordingly classified these entities as "assets held for sale."

During 2001, two of the subsidiaries and Select were sold (See Note 3). During
2002, the last remaining asset held for sale, Princeton, was sold (See Note 3).
During the years ended December 31, 2002, 2001 and 2000, these respective
entities generated net losses of $1.3 million, $4.4 million and $9.3 million,
respectively including amortization expense of $3.6 million in 2000. At December
31, 2001, the assets and liabilities of the remaining subsidiary Princeton, were
classified in the consolidated balance sheet as net assets held for sale and
were included in the Solutions segment (see Note 10). Such net assets consisted
of the following:

<Table>
<Caption>
                                                           December 31,
                                                               2001
                                                          (in thousands)
                                                            Princeton
                                                          --------------
     <S>                                                  <C>
     Current assets                                       $       19,607
     Property and equipment                                        1,370
     Other assets                                                  1,139
                                                          --------------
     Total assets                                                22,116
     Total liabilities                                          (11,735)
                                                          --------------
     Total net assets held for sale                       $       10,381
                                                          ==============
</Table>

For the year ended December 31, 2002, Princeton's revenue was $2.9 million and
its loss, net of taxes, was $1.3 million.

                                       40
<Page>

NOTE 3 - SALE OF SUBSIDIARIES

On March 25, 2002, the Company sold the net assets of Princeton Softech to Apax
Partners, Inc. and LLR Partners, for cash of $16 million, including amounts held
in escrow of $1.5 million. The gain from the transaction was initially estimated
as $3.6 million and was adjusted in the fourth quarter of 2002 to $3.2 million
due to a purchase price adjustment. The results of operations are included in
the consolidated financial statements through February 28, 2002 within the
Solutions group.

On September 10, 2001, the Company sold the assets of eB Networks to Inrange
Technologies, a storage networking company, for cash of $5.4 million, including
amounts held in escrow of $540,000. The loss from the transaction was initially
estimated as $3.2 million, which included the final write-down of related
goodwill of $2.1 million. A purchase price adjustment was recorded in the fourth
quarter of 2002 resulting in an increase to the loss of $144,000. The results of
operations are included in the consolidated financial statements through
September 10, 2001 within the Solutions group.

On August 30, 2001, the Company sold the ICM Education name to AlphaNet
Solutions, Inc., an IT professional services firm, for $0.5 million. The gain
from the transaction was $332,000. The results of operations are included in the
consolidated financial statements through August 30, 2001 within the Solutions
group. In November 2002, the Company received an additional $100,253 from
AlphaNet Solutions, Inc. relating to an earnout.

On April 17, 2001, the Company sold the SELECT Software Tools division "Select"
of Princeton Softech to Aonix, a member of the Gores Technology Group, for
approximately $895,000 including $545,000 of cash received and a note receivable
of $350,000, subsequently written off with the sale of Princeton Softech on
March 25, 2002. This sale included all the software assets and intellectual
property rights of Select and was sold at book value. The results of operations
are included in the consolidated financial statements through April 17, 2001
within the Solutions group.

On January 31, 2001, the Company sold the stock of CHC International Limited,
("Spargo"), to an information technology consultancy services provider for cash
of $3.2 million. The gain from the transaction was initially estimated as
$438,000. A purchase price adjustment of $2.7 million was recorded, in the
fourth quarter of 2002, to increase the gain after the final resolution of
outstanding accounts receivables and the termination of leases. The results of
operations for January 2001 were not material to the consolidated financial
statements.

                                       41
<Page>

NOTE 4 - ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at December 31:

<Table>
<Caption>
                                                         2002          2001
                                                     ------------   ------------
                                                     -------(in thousands)------
     <S>                                             <C>            <C>
     Billed                                          $     49,453   $     76,127
     Unbilled                                              14,859         14,979
                                                     ------------   ------------
                                                           64,312         91,106
     Less allowance for doubtful accounts                   7,696          7,542
                                                     ------------   ------------
                                                     $     56,616   $     83,564
                                                     ============   ============
</Table>

NOTE 5 - LONG-TERM DEBT AND LINES OF CREDIT

Long-term debt and lines of credit consisted of $10 million at December 31,
2001.

LINES OF CREDIT

On July 31, 2001, amended February 14, 2003, the Company entered into a secured
asset-based lending facility that replaced its two unsecured discretionary lines
of credit. This new line of credit is a three-year, $40 million facility with
availability based primarily on eligible customer receivables. The interest rate
for the first ninety days from closing was Prime plus 0.5%, thereafter the rate
was LIBOR plus 2.75% based on the unpaid principal. The borrowing base less
outstanding loans must equal or exceed $17.5 million. At the time of closing
there was a $170,000 commitment fee paid to the agent. As of December 31,
2002, the Company had no outstanding loan balance against the facility. Based
on the Company's eligible customer receivables and cash balances, $24.7
million was available for borrowing as of December 31, 2002. The fee for the
unused portion of the line of credit is 0.375% per annum charged to the
Company monthly. This charge was approximately $144,000 and $42,000 for the
years ended December 31, 2002 and 2001, respectively. This line of credit
includes covenants relating to the maintenance of cash balances and providing
for limitations on incurring obligations and spending limits on capital
expenditures.

NOTE 6 - PURCHASE OF TREASURY STOCK

In April of 2001, the Board of Directors approved the repurchase in the open
market of up to 10% of its common shares outstanding, or approximately 3.2
million shares. For the year ended December 31, 2002, the Company had
repurchased, in the open market, 1,611,700 shares of its stock at an average
price of $3.81 per share for an aggregate purchase amount of $6.1 million. For
the year ended December 31, 2001, the Company had repurchased, in the open
market, 1,111,000 shares of its stock at an average price of $3.22 per share for
an aggregate purchase amount of $3.6 million. As of December 31, 2002 the
remaining authorization for repurchase is approximately 485,000 shares.

                                       42
<Page>

NOTE 7 - SHAREHOLDERS' EQUITY

STOCK OPTIONS

In 1994, the Company adopted a stock option plan which provides for the granting
of options, to officers and key employees, for the purchase of a maximum of
7,594,000 shares of common stock and stock appreciation rights (SARs). Options
and SARs generally expire ten years from the date of grant and become
exercisable in specified amounts during the life of the respective options. No
SARs have been granted as of December 31, 2002. This plan, which replaces the
Company's 1985 Plan, will terminate on June 15, 2004. There were 2,036,000,
1,930,000 and 2,655,000 shares available for option at December 31, 2002, 2001
and 2000.

In 1998, the Company amended the non-qualified Directors' Stock Option Plan,
providing that each new director of the Company who is not an employee of the
Company (i) shall immediately receive options to purchase 10,000 shares of its
common stock and (ii) shall receive annual grants to purchase 10,000 shares of
its common stock. The plan expired on March 4, 2001 and was extended for three
additional years by the Board of Directors and Shareholders. There were 334,000,
384,000 and 424,000 shares available for grant at December 31, 2002, 2001 and
2000.

A summary of the status of the Company's stock option plans as of December 31,
2002, 2001 and 2000, and changes during the years ending on those dates is
presented below:

<Table>
<Caption>
                                                2002                       2001                      2000
                                      ------------------------   ------------------------   ------------------------
                                                    Weighted                    Weighted                   Weighted
                                                     Average                     Average                   Average
                                         Shares     Exercise       Shares       Exercise     Shares        Exercise
                                        (000'S)       Price        (000's)        price      (000's)        price
<S>                                     <C>         <C>            <C>         <C>               <C>      <C>
Outstanding - January 1                    4,841    $    10.11        4,216    $    13.05        3,600    $    13.46
Granted                                    1,340          3.68        1,535          2.17        1,500         11.98
Exercised                                   (266)         1.47          (15)         2.02         (159)         9.90
Canceled/forfeited/expired                (1,388)        12.45         (895)        10.47         (725)        13.60
                                      ----------    ----------   ----------    ----------   ----------    ----------
Outstanding - December 31                  4,527          7.93        4,841         10.11        4,216         13.05
                                      ==========    ==========   ==========    ==========   ==========    ==========
Options exercisable - December 31          2,573         10.89        2,749         12.97        2,125         13.81
                                      ==========    ==========   ==========    ==========   ==========    ==========
Weighted average fair value of
  options granted during the year                   $     2.72                 $     1.85                 $     9.42
</Table>

                                       43
<Page>

NOTE 7 - SHAREHOLDERS' EQUITY (CONTINUED)

The following information applies to options outstanding at December 31, 2002:

<Table>
<Caption>
                                                     Weighted
                                Outstanding as        average                         Exercisable as       Weighted
                                of December 31,       remaining       Weighted        of December 31,      average
                                     2002           contractual       average         2002 (000's)         exercise
Range of exercise prices           (000's)             life        exercise price                           price
       <S>                                <C>                <C>   <C>                         <C>     <C>
       $ 0.00 - $ 9.99                     2,653             8.2   $          3.14               911   $          3.17
         10.00 - 14.99                     1,135             2.7             11.58               935             11.55
         15.00 - 19.99                       242             4.8             16.57               230             16.53
        20.00 and over                       497             3.4             21.21               497             21.21
                                 ---------------                                     ---------------

                                           4,527             6.1   $          7.93             2,573   $         10.89
                                 ===============   =============   ===============   ===============   ===============
</Table>

Prior to 2002, certain officers had the right to borrow from the Company against
the exercise price of options exercised. As of December 31, 2002 and 2001, total
outstanding borrowings, pertaining to one officer, amounted to $100,000 which
was issued by the Company in 1999, prior to the adoption of FIN 44 and the
Sarbanes-Oxley Act of 2002.

In 2001, the Company adopted a stock option plan for its Princeton subsidiary
which provided for the granting, to Princeton key employees, of options for the
purchase of a maximum of 3,000,000 shares of Princeton common stock. These
options expire ten years from the date of grant and become exercisable in two
years. As of the date of the sale of Princeton, the stock option plan was
terminated.

The Company has issued warrants to purchase shares of its common stock to two
outside business/ legal consulting firms. There were no warrants issued in 2002,
2001 or 2000. The exercise price is the fair value at the date of grant. As of
December 31, 2002, 29,375 warrants were outstanding. There were no warrants
exercised in 2002, 2001 or 2000.

SHAREHOLDER RIGHTS PLAN

In July 1989, the Board of Directors declared a dividend distribution of .131
preferred stock purchase right on each outstanding share of common stock of the
Company. The rights were amended on February 13, 1990. Each right will, under
certain circumstances, entitle the holder to buy one one-thousandth (1/1000) of
a share of Series A preferred stock at an exercise price of $90.00 per one
one-thousandth (1/1000) share, subject to adjustment. Each one one-thousandth
(1/1000) of a share of Series A preferred stock has voting, dividend and
liquidation rights and preferences substantively equivalent to one share of
common stock.

The rights will be exercisable and transferable separately from the common stock
only if a person or group acquires 20% or more, subject to certain exceptions,
of the Company's outstanding common stock or announces a tender offer that would
result in the ownership of 20% or more of the common stock. If a person becomes
the owner of at least 20% of the Company's common shares (an "Acquiring
Person"), each holder of a right other than the Acquiring Person is entitled,
upon payment of the then current exercise price per right (the "Exercise
Price"), to receive shares of common stock (or common stock equivalents) having
a market value equal to twice the Exercise Price.

                                       44
<Page>

NOTE 7 - SHAREHOLDERS' EQUITY (CONTINUED)

Additionally, if the Company subsequently engages in a merger or other business
combination with the Acquiring Person in which the Company is not the surviving
corporation, or in which the outstanding shares of the Company's common stock
are changed or exchanged, or if more than 50% of the Company's assets or earning
power is sold or transferred, a right would entitle a Computer Horizon Corp.
shareholder, other than the Acquiring Person and its affiliates, to purchase
upon payment of the Exercise Price, shares of the Acquiring Person having a
market value of twice the Exercise Price. Prior to a person becoming an
Acquiring Person, the rights may be redeemed at a redemption price of one cent
per right, subject to adjustment. The rights are subject to amendment by the
Board. No shareholder rights have become exercisable. The rights originally
would have expired on July 16, 1999, however, the Board of Directors approved
the adoption of a new Shareholder Rights Plan to replace the existing plan. The
terms of the new Rights Plan are substantially the same as the original plan.
The new rights will expire on July 15, 2009.


NOTE 8 - INCOME TAXES

The following is a geographical breakdown of the Company's loss before taxes:

<Table>
<Caption>
                                    Year Ended December 31,
                          2002               2001                 2000
                       ---------          -----------          -----------
                       -----------------(in thousands)--------------------
     <S>               <C>                <C>                  <C>
     Domestic          $  (6,005)         $   (20,679)         $   (85,463)
     Foreign                (336)                (919)              (2,183)
                       ---------          -----------          -----------

                       $  (6,341)         $   (21,598)         $   (87,646)
                       =========          ===========          ===========
</Table>

                                       45
<Page>

NOTE 8 - INCOME TAXES (CONTINUED)

The provision for income taxes/(benefit) consists of the following for the years
ended December 31:

<Table>
<Caption>
                                           2002                2001                  2000
                                         ---------          ----------            ----------
                                          -----------------(in thousands)------------------
     <S>                                 <C>                <C>                   <C>
     Current
        Federal                          $  (4,993)         $  (10,032)           $  (18,775)
        State                                  701                (280)                 (662)
        Foreign                                 --                  20                    98
                                         ---------          ----------            ----------

             Total current                  (4,292)            (10,292)              (19,339)

     Deferred
        Federal                                819               3,501                (7,736)
        State                                5,342               (508)                (5,079)
        Foreign                                 --                 151                 2,335
                                         ---------          ----------            ----------

             Total deferred                  6,161               3,144               (10,480)
                                         ---------          ----------            ----------

                                         $   1,869          $  (7,148)            $  (29,819)
                                         =========          ==========            ==========
</Table>

Refundable income taxes result primarily from net operating loss carrybacks.

                                       46
<Page>

NOTE 8 - INCOME TAXES (Continued)

Deferred tax assets and liabilities consist of the following at December 31:

<Table>
<Caption>
                                                                    2002                  2001
                                                                 ----------            ----------
                                                                 ---------(in thousands)---------
     <S>                                                         <C>                 <C>
     Deferred tax liabilities
        Depreciation                                             $   (1,086)           $   (1,223)
        Amortization of intangibles                                      --                (1,988)
                                                                 ----------            ----------
              Total deferred tax liabilities                         (1,086)               (3,211)
                                                                 ----------            ----------
     Deferred tax assets
        Accrued insurance                                                --                    36
        Federal and state net operating losses                        9,764                 6,413
        Foreign net operating losses                                  3,767                 3,202
        Amortization of intangibles                                   3,985                    --
        Accrued payroll and benefits                                  2,007                 2,228
        Deferred revenue                                                 --                 2,462
        Allowance for doubtful accounts                               1,150                 1,389
        Restructuring charges                                         1,593                 6,301
        Accrued severance and lease costs                                --                   526
        Other                                                         1,686                 2,732
                                                                 ----------            ----------

              Total deferred tax assets                              23,952                25,289
                                                                 ----------            ----------

     Valuation allowance                                            (10,289)               (3,340)

     Net deferred tax assets                                     $   12,577            $   18,738
                                                                 ==========            ==========
</Table>

                                       47
<Page>

NOTE 8 - INCOME TAXES (Continued)

A reconciliation of income taxes/(benefit), as reflected in the accompanying
statements, with the statutory Federal income tax rate of 35% for the years
ended December 31, 2002, 2001 and 2000 is as follows:

<Table>
<Caption>
                                                         2002             2001           2000
                                                      ---------------(in thousands)--------------
<S>                                                   <C>              <C>             <C>
Statutory Federal income taxes                        $  (2,219)       $  (7,559)      $  (30,676)
State and local income taxes/(benefit), net of
  Federal tax benefit                                        91             (757)          (3,732)
Amortization of goodwill                                     --              452              688
Change in valuation allowance, sale of assets            (1,855)              --               --
Change in valuation allowance, other                      5,095              613            2,727
Other, net                                                  757              103            1,174
                                                      ---------        ---------       ----------

                                                      $   1,869        $  (7,148)      $  (29,819)
                                                      =========        =========       ==========
</Table>

At December 31, 2002 the Company has a federal net operating loss carryforward
of approximately $21 million; $9.8 million expires in 2021 and $11.2 million
expires in 2022.

At December 31, 2002 the Company has state deferred tax assets, net of federal
tax effect, of approximately $6.5 million relating primarily to state net
operating loss carryforwards. These state net operating loss carryforwards are
subject to limitations which differ from federal law. Many states do not allow
the carryback of net operating losses, have shorter carryforward periods, and do
not allow the filing of consolidated returns. Additionally, New Jersey and
California have temporarily suspended the deduction for net operating loss
carryforwards. These state limitations create uncertainties with respect to the
realization of these state deferred tax assets. Accordingly, the Company has
recorded a valuation allowance of approximately $5.2 million with respect to
these assets.

                                       48
<Page>

NOTE 8 - INCOME TAXES (Continued)

Certain foreign subsidiaries of the Company have net operating loss
carryforwards at December 31, 2002, totaling approximately $11.8 million
(including $4.5 million in Canada and $7.3 million in the United Kingdom);
$507,000 expires in 2005, $1.7 million expires in 2006, $833,000 expires in
2007, $1.4 million expires in 2008, and the remainder has no expiration. A full
valuation allowance has been recorded on the foreign taxes due to the
uncertainty of the recognition of certain of these net operating loss
carryforwards.

During 1998, the Company completed a business combination which, for financial
statement purposes, has been accounted for as a pooling-of-interests. For income
tax purposes the Company believes the transaction qualifies as a taxable
purchase that gives rise to future tax deductions. Upon the sale of the acquired
business in 2001, these deductions were recognized for tax purposes. The tax
benefit of $19.6 million relating to the part of these deductions that was
carried back to prior years was included in refundable income taxes in 2002.
Since the tax structure of the transaction is subject to determination by the
tax authorities, the Company has recorded a reserve for the tax benefits
resulting from the carryback and has not recorded deferred tax assets for the
tax benefits being carried forward. When resolved, the Company will record a
deferred tax asset for the part of the tax benefits being carried forward and a
tax benefit for the portion that was carried back, net of an appropriate
valuation allowance. The tax benefit will be reflected as an increase in
additional paid-in capital. Any adjustments to the valuation allowance will be
charged or credited to income.

                                       49
<Page>

NOTE 9 - EARNINGS/(LOSS) PER SHARE DISCLOSURES

The computation of diluted earnings per share excludes options with exercise
prices greater than the average market price. During 2002, there were 2,072,000
excluded options outstanding at December 31, 2002 with exercise prices of $4.00
to $26.63 per share. During 2001, there were 3,120,000 excluded options
outstanding at December 31, 2001 with exercise prices of $7.38 to $26.63 per
share. During 2000, there were 3,003,000 excluded options outstanding at
December 31, 2000 with exercise prices of $11.13 to $26.63 per share.

NOTE 10 - SEGMENT INFORMATION

The Company has identified three business segments: IT Services, the
Solutions Group and Chimes, Inc. The IT Services division provides highly
skilled software professionals to augment the internal information management
staffs of major corporations. IT Services is primarily staffing augmentation.
The Solutions division provides enterprise application services, e-business
solutions, customized Web development and Web enablement of strategic
applications, Customer Relationship Management (CRM), network services,
strategic outsourcing and managed resourcing as well as software and
relational database products, up to the time of sale, March 25, 2002, of
Princeton Softech Inc.


During 2002, Princeton made up the following within the Solutions Group; $2.9
million of revenue, $2.4 million of gross margin, $1.9 million operating loss
and depreciation expense of $84,000. During 2001, Princeton made up the
following within the Solutions Group; $29.0 million of revenue, $22.7 million
of gross margin, $5.7 million of operating loss and depreciation expense of
$582,000. During 2000, Princeton made up the following within the Solutions
Group; $39.8 million of revenue, $32.3 million of gross margin, $1.5 million
of operating loss and depreciation expense of $2.2 million. During these years
Princeton was classified as an asset held for sale.

Chimes, Inc., a wholly-owned subsidiary of CHC, provides workforce procurement
and management services to Global 2000 companies, which according to Forbes
Magazine, represent the biggest and most important companies, as measured by
sales, profits, assets and market value. Operating income/(loss) consists of
income/(loss) before income taxes, excluding interest income, interest
expense, gain/(loss) on the sale of assets, restructuring charge, net
gain/(loss) on investments and amortization of intangibles. These exclusions
total income of $4.1 million and expense of $12.0 million and $50.2 million at
December 31, 2002, 2001 and 2000, respectively. Long-term assets include
goodwill and property, plant and equipment for 2002, 2001 and 2000. Corporate
services, consisting of general and administrative services are provided to
the segments from a centralized location. Such costs are allocated to the
segments based on either revenue or headcount.



                                       50
<Page>

NOTE 10 - SEGMENT INFORMATION (Continued)

<Table>
<Caption>
BY LINE OF BUSINESS                        2002          2001             2000
                                      ---------------(in thousands)---------------
<S>                                   <C>             <C>             <C>
REVENUE
     IT Services                      $    201,295    $    274,379    $    303,713
     Solutions Group                        79,283         116,873         141,766
     Chimes(1)                              16,537           9,532              --
                                      ------------    ------------    ------------

          Total Revenue               $    297,115    $    400,784    $    445,479
                                      ------------    ------------    ------------

GROSS MARGIN
     IT Services                      $     40,626    $     58,752    $     64,557
     Solutions Group                        25,712          51,419          68,107
     Chimes(1)                              14,596           9,037              --
                                      ------------    ------------    ------------
          Total Gross Margin          $     80,934    $    119,208    $    132,664
                                      ------------    ------------    ------------

OPERATING INCOME / (LOSS)
     IT Services                      $     (2,243)   $      7,735    $    (14,615)
     Solutions Group                           748          (7,204)        (22,864)
     Chimes(1)                              (8,914)        (10,155)             --
                                      ------------    ------------    ------------

          Total Operating Loss        $    (10,409)   $     (9,624)   $    (37,479)
                                      ------------    ------------    ------------

ASSETS
     IT Services                      $     47,876    $     93,920    $    131,694
     Solutions Group                        29,640          63,126          63,947
     Chimes(1)                              26,762           8,354              --
     Corporate and other                    89,453          72,321          73,755
                                      ------------    ------------    ------------

          Total Assets                $    193,731    $    237,721    $    269,396
                                      ------------    ------------    ------------

DEPRECIATION EXPENSE
     IT Services                      $        482    $        762    $      1,267
     Solutions Group                         1,133           1,764           3,930
     Chimes(1)                               1,044             524              --
     Corporate and other                     1,975           2,251           2,458
                                      ------------    ------------    ------------

          Total Depreciation          $      4,634    $      5,301    $      7,655
                                      ------------    ------------    ------------
</Table>

(1) Chimes was not a separate line of business in 2000 because stand alone
operations were not identifiable. Chimes is included in the Solutions Group
during this year.

                                       51
<Page>

NOTE 10 - SEGMENT INFORMATION (CONTINUED)

<Table>
<Caption>
BY GEOGRAPHIC AREA                         2002          2001          2000
                                      ---------------(in thousands)-------------
<S>                                   <C>            <C>            <C>
REVENUE
     United States                    $    270,890   $    361,884   $    393,060
     Europe                                  2,775         12,617         26,777
     Australia                                  60          2,102          3,602
     Canada                                 23,390         24,181         22,040
                                      ------------   ------------   ------------

          Total Revenue               $    297,115   $    400,784   $    445,479
                                      ============   ============   ============

LONG-TERM ASSETS
     United States                    $     29,486   $     41,716   $     43,433
     Europe                                    106            163          1,462
     Canada                                    628         19,319         20,411
                                      ------------   ------------   ------------

          Total Long-Term Assets      $     30,220   $     61,198   $     65,306
                                      ============   ============   ============
</Table>


        RECONCILIATION OF SEGMENTS OPERATING LOSS TO CONSOLIDATED LOSS
                            BEFORE INCOME TAXES

<Table>
<Caption>
                                           2002          2001          2000
                                      ---------------(in thousands)-------------
<S>                                   <C>            <C>            <C>
Total Segments Operating Loss         $    (10,409)  $     (9,624)  $    (37,479)
                                      ------------   ------------   ------------
Adjustments:
     Interest income                           928          2,293            620
     Interest expense                         (174)        (1,944)        (1,825)
     Net gain/(loss) on investments            (61)            90             --
     Gain/(loss) on sale of assets           5,890         (3,197)            --
     Write-down of assets held for
      sale                                      --         (5,473)       (40,362)
     Restructuring charges                  (2,515)        (1,048)        (1,166)
     Amortization of intangibles                --         (2,695)        (7,434)
                                      ------------   ------------   ------------
Total Adjustments                            4,068        (11,974)       (50,167)
                                      ------------   ------------   ------------

Consolidated Loss Before Income Taxes $     (6,341)  $    (21,598)  $    (87,646)
                                      ============   ============   ============
</Table>


NOTE 11 - SAVINGS PLAN AND OTHER RETIREMENT PLANS

The Company maintains a defined contribution savings plan covering eligible
employees. The Company makes contributions up to a specific percentage of
participants' contributions. The Company contributed approximately $1,089,000,
$1,413,000 and $1,563,000 in 2002, 2001 and 2000, respectively.

In 1995, the Company instituted a Supplemental Executive Retirement Plan, or
SERP, whereby key executives are entitled to receive lump-sum payments (or, if
they elect, a ten-year payout) upon reaching the age of 65 and being in the
employment of the Company. The maximum commitment if all plan members remain in
the employment of the Company until age 65 is approximately $13.8 million.
Benefits accrue and vest based on a formula which includes total years with the
Company and total years possible until age 65. The plan is nonqualified and not
formally funded. Life insurance policies on the members are purchased to assist
in funding the cost. The SERP expense is charged to operations during the
remaining service lives of the members and was $407,000 in 2002, $115,000 in
2001 and $311,000 in 2000.

                                       52
<Page>

NOTE 11 - SAVINGS PLAN AND OTHER RETIREMENT PLANS (CONTINUED)

During 1999 the Company adopted an Employee Stock Purchase Plan to provide
substantially all employees who have completed one year of service an
opportunity to purchase shares of its common stock through payroll deductions,
up to 10 percent of eligible compensation. Quarterly, participant account
balances are used to purchase shares of stock at 85 percent of its fair market
value on either the first or last trading day of each calendar quarter. There
were 405,366, 643,280 and 232,325 shares purchased under the plan in 2002,
2001 and 2000, respectively.

In addition, the Company adopted a Deferred Compensation Plan for Key Executives
that permits the individuals to defer a portion of their annual salary or bonus
for a period of at least five years. There is no effect on the Company's
operating results since any amounts deferred under the plan are expensed in the
period incurred. Amounts deferred have been included in accrued payroll and
amounted to $4.9 million, $4.7 million and $4.1 million as of December 31, 2002,
2001 and 2000, respectively.

NOTE 12 - COMMITMENTS

Leases

The Company leases office space under long-term operating leases expiring
through 2008. As of December 31, 2002, approximate minimum rental commitments
were as follows:

<Table>
<Caption>
        Year ending                      (in thousands)
        <S>                                <C>
        2003                               $   4,192
        2004                                   3,120
        2005                                   1,968
        2006                                     859
        2007                                     455
        Thereafter                                12
                                           ---------

                                           $  10,606
                                           =========
</Table>

Office rentals are subject to escalations based on increases in real estate
taxes and operating expenses. Rent expense, net of sublease income of
approximately $480,000, $208,000 and $167,000 for December 31, 2002, 2001, and
2000, respectively, for operating leases approximated $5,320,000, $7,789,000 and
$8,369,000 in the years ended December 31, 2002, 2001 and 2000, respectively.

                                       53
<Page>

NOTE 13 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

For the years ended December 31, 2002 and 2001, selected quarterly financial
data is as follows:



<Table>
<Caption>
                                                                      QUARTERS
                                                   FIRST        SECOND        THIRD         FOURTH
                                                ----------    ----------    ----------    ----------
                                                --------(IN THOUSANDS, EXCEPT PER SHARE DATA)-------
<S>                                             <C>           <C>           <C>           <C>
2002
Revenues                                        $   79,219    $   77,318    $   73,574    $   67,004
Direct costs                                        58,192        56,570        52,865        48,554
Selling, general and administrative                 26,459        22,452        22,347        20,085
Restructuring charges                                   --            --            --         2,515
Loss from operations                                (5,432)       (1,704)       (1,638)       (4,150)
Gain on sale of assets                               3,570            --            --         2,320
Net loss on investments                                (61)           --            --            --
Interest income/(expense) - net                         55           255           247           197
Loss before income taxes                            (1,868)       (1,449)       (1,391)       (1,633)
Income taxes/(benefit)                                (635)         (493)         (473)        3,470
Loss before cumulative effect of change in
  accounting principle                              (1,233)         (956)         (918)       (5,103)
Cumulative effect of change in accounting
  principle                                        (29,861)           --            --            --
Minority interest                                       --            --            --            35
Net loss                                        $  (31,094)   $     (956)   $     (918)   $   (5,068)

Loss per share (basic and diluted):
  Before cumulative effect of change in
     accounting principle                       $    (0.04)   $    (0.03)   $    (0.03)   $    (0.16)
  Cumulative effect of change in accounting
     principle                                  $    (0.95)   $       --    $       --    $       --
  Net loss                                      $    (0.99)   $    (0.03)   $    (0.03)   $    (0.16)
</Table>


                                       54
<Page>

NOTE 13 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (CONTINUED)


<Table>
<Caption>

                                                                      QUARTERS

                                                   FIRST        SECOND        THIRD         FOURTH
                                                ----------    ----------    ----------    ----------
                                                --------(IN THOUSANDS, EXCEPT PER SHARE DATA)-------
<S>                                             <C>           <C>           <C>           <C>
2001
Revenues                                        $  106,481    $  104,995    $   94,212    $   95,096
Direct costs                                        72,916        74,927        67,672        66,061
Selling, general and administrative                 34,664        32,558        30,404        31,206
Amortization of intangibles                            707           723           650           615
Restructuring charges                                   --            --            --         1,048
Write-down of assets held for sale                      --         5,473            --            --
Loss from operations                                (1,806)       (8,686)       (4,514)       (3,834)
Gain/(loss) on sale of assets                          438            --        (2,833)         (802)
Net gain on investments                                 --            --            --            90
Interest income/(expense) - net                       (175)          256            43           225
Loss before income taxes                            (1,543)       (8,430)       (7,304)       (4,321)
Income taxes benefit                                  (525)       (2,866)       (2,483)       (1,274)
Net loss                                            (1,018)       (5,564)       (4,821)       (3,047)

Loss per share:
  Basic                                         $    (0.03)   $    (0.17)   $    (0.15)   $    (0.10)
  Diluted                                       $    (0.03)   $    (0.17)   $    (0.15)   $    (0.10)
</Table>

                                       55
<Page>


NOTE 14 - RESTRUCTURING CHARGES AND THE WRITE-DOWN OF ASSETS HELD FOR SALE


During the fourth quarter of 2002, the Company recorded a restructuring charge
of $2.8 million pertaining to 2002 office closings.

<Table>
<Caption>
                                                      Remaining at
                                                       December 31
                             Recorded       Paid          2002
                            ----------   ----------    ----------
                            ------------(in thousands)-----------
<S>                         <C>          <C>           <C>
Severance:
United States               $      133   $     (133)   $       --
                            ----------   ----------    ----------

Lease Obligations:
United States               $    2,714   $     (231)   $    2,483
                            ----------   ----------    ----------

Total                       $    2,847   $     (364)   $    2,483
                            ==========   ==========    ==========
</Table>

During the fourth quarter of 2001, the Company recorded a restructuring charge
of $410,000 pertaining to 2001 office closings.


In addition, during the second quarter of 2001, the Company recorded an
additional $5.5 million in the write-down of assets held for sale to reduce
the carrying amount of eB Networks to its estimated net realizable value.

During the fourth quarter of 2000, the Company recorded restructuring charges
of $3.5 million and a write-down of assets held for sale of $40.4 million. The
Company's restructuring plan included the offering for sale of four businesses
acquired between 1998 and 1999, including Princeton Softech, Inc., SELECT
Software Tools division ("Select"), eB Networks and CHC International, Ltd
(formerly Spargo Consulting PLC). In addition, the restructuring plan included
the shutdown of Enterprise Solutions Group ("ESG") which was acquired in 1998,
the closing of seven offices and the site reduction of two other IT Services
offices.


                                       56
<Page>

NOTE 14 - RESTRUCTURING CHARGES AND THE WRITE-DOWN OF ASSETS HELD FOR
SALE (CONTINUED)

At December 31, 2000, the Company recorded a write-down of goodwill of $7.2
million for the shutdown of ESG. In addition, a non-cash charge writing down
goodwill of $26 million and purchased software of $6.9 million was recorded, in
the fourth quarter of 2000, in connection with the write down of assets held for
sale to realizable value.

The closing of IT Services' and Solutions' offices resulted in the termination
of 90 employees with a severance charge of $1.3 million. As of December 31,
2002, $1,126,000 had been paid in severance to the terminated employees. The
balance remaining at December 31, 2002 includes continuing rent on six
properties terminating in 2003, 2004 and 2005 and severance for one individual
with payments through January of 2003.


<Table>
<Caption>
                                                                    Remaining at
                                                      Non-cash        December
                        Recorded    Cash Charges      Charges         31, 2000       Recorded
                        --------      --------       ----------       --------       --------
<S>                     <C>           <C>            <C>              <C>            <C>
     RESTRUCTURING
          CHARGES:

        Severance:
     United States      $  1,267      $   (247)      $       --       $  1,020       $     --
                        --------      --------       ----------       --------       --------

Lease Obligations:
     United States      $  2,275      $   (675)      $       --       $  1,600       $    410
                        --------      --------       ----------       --------       --------
             Total
     Restructuring
           Charges      $  3,542      $   (922)      $       --       $  2,620       $    410
                        ========      ========       ==========       ========       ========



                                                                                   Remaining
                                        Non-       Remaining at                       at
                         Paid/         cash          December        Paid/         December
                        Reversed      Charges        31, 2001       Reversed       31, 2002
                        --------      --------       --------       --------       --------

     RESTRUCTURING
          CHARGES:

        Severance:
<S>                     <C>           <C>            <C>            <C>            <C>
     United States      $   (777)     $   --         $    243       $   (242)      $      1
                        --------      --------       --------       --------       --------

Lease Obligations:
     United States      $   (789)     $   --         $  1,221       $   (927)      $    294
                        --------      --------       --------       --------       --------
             Total
     Restructuring
           Charges      $ (1,566)     $   --         $  1,464       $ (1,169)       $   295
                        ========      ========       ========       ========       ========



                                                                    Remaining at
                                                      Non-cash        December
                        Recorded    Cash Charges      Charges         31, 2000       Recorded
                        --------      --------       ----------       --------       --------


     WRITE DOWN OF
            ASSETS
    HELD FOR SALE:

       eB Networks      $ 26,171      $     --       $  (26,171)      $     --       $  5,473

            Select         6,943            --           (6,943)            --             --
                        --------      --------       ----------       --------       --------

      Write-off of
 ceased operations
    - ESG Goodwill      $  7,248      $     --       $   (7,248)      $     --       $     --
                        --------      --------       ----------       --------       --------

             Total
     Write Down of
            Assets
    Held for Sale:      $ 40,362      $     --       $  (40,362)      $     --       $  5,473
                        ========      ========       ==========       ========       ========


                                                                                   Remaining
                                       Non-        Remaining at                       at
                         Paid/         cash          December        Paid/         December
                        Reversed      Charges        31, 2001       Reversed       31, 2002
                        --------      --------       --------       --------       --------

     WRITE DOWN OF
            ASSETS
    HELD FOR SALE:

       eB Networks      $   --        $ (5,473)      $   --         $   --         $   --

            Select          --            --             --             --             --
                        --------      --------       --------       --------       --------

      Write-off of
 ceased operations
    - ESG Goodwill      $   --        $   --         $   --         $   --         $   --
                        --------      --------       --------       --------       --------

             Total
     Write Down of
            Assets
    Held for Sale:      $   --        $ (5,473)      $   --         $   --         $   --
                        ========      ========       ========       ========       ========


</Table>


                                       57
<Page>

NOTE 14 - RESTRUCTURING CHARGES (CONTINUED)

During the third quarter of 1999, the Company recorded a restructuring charge of
$6.4 million primarily related to the consolidating and closing of certain
facilities, generally used for Year 2000 and other legacy related services, as
well as attendant reduction of related staff levels. The provision included an
accrued payment of approximately $4.0 million relating to the future costs
associated with continuing rent and severance commitments at December 31, 1999.

During the second quarter of 2000, the Company recorded a restructuring credit
of $2.4 million. This credit resulted primarily from the earlier than expected
occupancy of two abandoned properties that were part of the 1999 restructuring
reserve and the reversal of an over accrual of employee severance benefits due
to terminated employees in the UK and Canada. During the fourth quarter of 2001,
the Company recorded a restructuring charge adjustment of $638,000 pertaining to
the termination, by the sublessee, of the sublease contracts for closed offices
included in the 1999 restructure charge. The balance remaining at December 31,
2002 includes continuing rents on one property with the lease terminating in
2005.

<Table>
<Caption>
                        Balance                      Balance                                    Balance                      Balance
                           at                          at                                         at                           at
                        Dec. 31,       Paid/         Dec. 31,     Recorded        Paid/        Dec. 31,        Paid/        Dec. 31,
                          1999       Reversed         2000                      Reversed          2001       Reversed         2002
                        -------       -------        -------       -------       -------        -------       -------        -------
<S>                     <C>           <C>            <C>           <C>           <C>            <C>           <C>            <C>
Severance:
   United States        $   151       $   (33)       $   118       $    --       $  (118)       $    --       $    --        $    --
   Europe                   352          (352)            --            --            --             --            --             --
   Canada                    33           (33)            --            --            --             --            --             --
                        -------       -------        -------       -------       -------        -------       -------        -------

      Total Severance   $   536       $  (418)       $   118       $    --       $  (118)       $    --       $    --        $    --
                        -------       -------        -------       -------       -------        -------       -------        -------


Lease Obligations:
   United States        $ 3,310       $(3,043)       $   267       $   638       $  (279)       $   626       $  (138)       $   488
   Canada                    76           (76)            --            --            --             --            --             --
                        -------       -------        -------       -------       -------        -------       -------        -------


Total Lease
   Obligations          $ 3,386       $(3,119)       $   267       $   638       $  (279)       $   626       $  (138)       $   488
                        -------       -------        -------       -------       -------        -------       -------        -------

General Office
   Closure:
     Canada             $    81       $   (81)       $    --       $    --       $    --        $    --       $    --        $    --
                        -------       -------        -------       -------       -------        -------       -------        -------

      Total             $ 4,003       $(3,618)       $   385       $   638       $  (397)       $   626       $  (138)       $   488
                        =======       =======        =======       =======       =======        =======       =======        =======
</Table>

                                       58
<Page>

NOTE 15 - MAJORITY-OWNED SUBSIDIARY

On September 30, 2002, the Company announced that it had joined its existing
HIPAA compliance, healthcare information technology and other compliance
business practices with ZA Consulting LLC (ZAC) to form CHC Healthcare
Solutions, LLC. Under the terms of the agreement, CHC has an 80% interest in the
newly formed company.

NOTE 16 - ACQUISITIONS

On October 18, 1999, the Company acquired G. Triad Enterprises, Inc. ("G.
Triad"), a New Jersey- based Internet / Intranet development firm, for
approximately $14.5 million in cash and stock. The acquisition was accounted for
as a purchase. The resulting goodwill of approximately $14 million was being
amortized to operations over a 20-year period. Subsequently in 2000, the Company
recorded an additional earnout of $500,000 to goodwill based on G. Triad meeting
a projected revenue target.

On May 6, 1999, the Company acquired all the common stock of Integrated Computer
Management ("ICM"), a New Jersey-based solutions company that provides
technology consulting, packaged software integration, customer software
development, systems integration and advanced learning solutions, for stock,
cash and promissory notes totaling approximately $17 million. The acquisition
was accounted for as a purchase. The resulting goodwill of approximately $15
million was being amortized to operations over a 20-year period. Effective April
1, 2000 the assets of ICM were divided between three divisions of the Company,
G. Triad, eB Networks and IT Services. Approximately $10 million of its net
goodwill was allocated to eB Networks in 2000 and has been subsequently written
off with the sale of eB Networks on September 10, 2001.

                                       59
<Page>

NOTE 16 - ACQUISITIONS (CONTINUED)

On June 1, 1999, Princeton Softech Inc. ("Princeton"), a wholly-owned subsidiary
of the Company, acquired the software products, intellectual property rights and
certain other assets of SELECT Software Tools plc ("Select"), a London-based
software firm, for approximately $8 million cash plus the assumption of certain
liabilities such as severance, certain payments due to a vendor under a contract
that the Company expected to derive no future benefit, and certain other assumed
liabilities in connection with its acquisition. These liabilities had the effect
of increasing the value of the intangible assets (purchased software) that were
acquired. The amount of such liabilities aggregated $3,100,000 of which
approximately $1,800,000 had been paid prior to December 31, 1999. Substantially
all of the accrued severance (which was for employees that had been made
redundant upon acquisition in the United Kingdom) had been paid prior to
December 31, 1999. The remaining accrued liabilities of approximately $1,300,000
consist primarily of payments due pursuant to the contract discussed above. The
acquisition was accounted for as a purchase. The cost of the purchased software
and other intangibles approximates $12 million, and was being amortized to
operations over a five-year period. During the fourth quarter of 2000 the
Company made the decision to sell Select. On April 17, 2001, the Company sold
Select to Aonix (see Note 3).

On September 25, 1998, the Company acquired the assets of Enterprise Solutions
Group, LLC ("ESG"), a Cincinnati, Ohio-based technology organization that
provides training and educational services as well as consulting services for
Global 1000 companies. The acquisition was accounted for as a purchase. The
total adjusted purchase price was approximately $8,883,000 in cash and common
stock which was being amortized to operations over a 20-year period.
Approximately $1,550,000 was to be paid out in two payments, approximately $1
million was paid in January of 2000 and the remaining $550,000 was paid in
January of 2001. The Company has shut down these operations and has written off
the remaining net goodwill of $7.2 million, which is a component of the
restructure charge.

On August 4, 1998, the Company acquired the assets of RPM Consulting ("RPM"), a
Maryland based provider of network consulting services, specializing in
architecting, designing and upgrading large enterprise networks. The subsidiary
subsequently changed its name in 2000 to eB Networks. The purchase agreement was
for a combination of cash and common stock totaling approximately $27,700,000,
and two earnout payments (totaling $2.2 million) based on pretax profit margins,
which were paid during 1999. The acquisition was accounted for as a purchase and
was being amortized to operations over a 20-year period. In the fourth quarter
of 2000, the Company made the decision to sell eB Networks. On September 10,
2001, the Company sold the assets of eB Networks to Inrange Technologies (see
Note 3).

On July 2, 1998, the Company's Canadian subsidiary acquired the net assets of
Infomatics Search Group ("ISG"), a Toronto, Canada-based information technology
service firm, offering both professional staffing and career placement services.
The acquisition was accounted for as a purchase and was being amortized to
operations over a 20-year period. The total purchase price was approximately
$21,600,000 in cash. The purchase agreement includes an earnout clause equal to
two times increases in prior period adjusted earnings (as defined in the
purchase agreement) to be earned in 1999 and 2000. During 2000, the Company
recorded $2.9 million as an addition to goodwill based on meeting the earnout.
There were no earnout adjustments for 1999.

                                       60
<Page>

NOTE 16 - ACQUISITIONS (CONTINUED)

On June 24, 1998, the Company acquired all of the common stock of Spargo
Consulting PLC ("Spargo"), an information technology consultancy service
provider, organized under the laws of the United Kingdom for 1,887,000 shares of
Computer Horizons stock. This transaction was accounted for as a pooling of
interests and, accordingly, the consolidated financial statements for the
periods presented have been restated to include the accounts of Spargo. On
January 31, 2001, the Company sold the stock of Spargo (see Note 3).

On February 27, 1998, the Company acquired all of the common stock of Princeton
Softech, Inc. ("Princeton") in exchange for 954,213 shares of Computer Horizons
stock. Princeton specializes in relational databases, data synchronization,
intelligent data migration and data management tools, and is based in Princeton,
New Jersey. This transaction was accounted for as an immaterial pooling of
interests and the results of Princeton have been included since January 1, 1998.
On March 25, 2002 the Company sold Princeton to Apax Partners, Inc. and LLR
Partners (see Note 3).

NOTE 17 - SUBSEQUENT EVENTS (UNAUDITED)

 Impact of Economic Stimulus Act on Income Tax Refund Claim

On March 9, 2002, the Job Creation and Worker Assistance Act of 2002 (the "Act")
was enacted into law. This Act contains many economic and tax incentives,
including the extension of the carryback period for losses arising in years
ending during 2001 and 2002 to five years from the previous two year carryback
rule. As a result, the Company's tax refund claim of approximately $10 million
at December 31, 2001 was increased to approximately $30 million. The additional
refund amount of $20 million was received in January 2003.

Sale of Solutions UK

On February 14, 2003, the Company sold the business and net assets of Computer
Horizons e-Solutions (Europe) Limited, ("Solutions UK") to Systems Associates
Limited for 92,822 British Sterling Pounds (approximately US$ 145,500).

Purchase of Westfield - India

On January 31, 2003, the Company acquired the IT Solutions operations of Global
Business Technology Solutions (GBTS), from Alea (Bermuda) Limited, a member of
the Alea Group of companies and Westfield Services, Inc., a subsidiary of
Westfield Financial Corporation. The outsourcing facility and its IT
professionals are located in Chennai (Madras), India. This transaction was
completed for $400,000.

Stock Option Exchange Program

On January 8, 2003, the Company commenced a tender offer to its employees to
exchange stock options granted under the Company's 1994 Incentive Stock Option
and Appreciation Plan with an exercise price of $10.01 or greater for new stock
options with a new exercise price. The tender offer expired on February 10,
2003, and 1,635,526 options were accepted for exchange. Please see Item 12 on
Form 10-K - Security Ownership of Certain Beneficial Owners and Management.

                                       61
<Page>

NOTE 17 - SUBSEQUENT EVENTS (UNAUDITED)

Purchase of Treasury Stock

Subsequent to December 31, 2002, the Company has purchased 211,800 shares of its
common stock at an aggregate cost of approximately $694,000.

Management Changes

On March 13, 2003, John J. Cassese, the Company's CEO, President and Chairman,
informed the Board that he has taken a leave of absence as CEO and President and
resigned his position as Director and Chairman of the Board as a result of being
informed that the Justice Department obtained an indictment relating to Mr.
Cassese's June 1999 purchase and sale of an unrelated company's shares. The
Board has named William J. Murphy to the position of Acting President and CEO,
appointed Thomas J. Berry Chairman of the Board and named Michael J. Shea to the
position of acting Chief Financial Officer.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     There have been no disagreements with the Company's independent accountants
involving accounting and financial disclosure matters.

                                       62
<Page>

                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          (a)  The information called for by Item 10 with respect to
               identification of directors of the Company is incorporated herein
               by reference to the material under the caption "Election of
               Directors" in the Company's Proxy Statement for its 2003 Annual
               Meeting of Shareholders which is expected to be filed with the
               Securities and Exchange Commission on or before April 10, 2003
               (the "2003 Proxy Statement").

          (b)  The information called for by Item 10 with respect to executive
               officers of the Company is included in Part I herein under the
               caption "Executive Officers of the Company."

          (c)  The Company's Board of Directors has designated Mr. Earl Mason as
               the Audit Committee Financial Expert. Mr. Mason is independent,
               as that term is used in Item 7(d)(3)(iv) of Schedule 14A under
               the Securities Exchange Act of 1934.

Item 11.  EXECUTIVE COMPENSATION

     The information called for by Item 11 with respect to management
remuneration and transactions is incorporated herein by reference to the
material under the caption "Executive Compensation" in the 2003 Proxy Statement.


      The following table sets forth the compensation paid by the Company for
the fiscal years indicated, to the Chief Executive Officer and to each of the
Company's other executive officers (together, the "named executive officers"),
as of December 31, 2002.

      On March 13, 2003, the Company issued a press release reporting that
John J. Cassese, its CEO, President and Chairman, has taken a leave of absence
as CEO and President and resigned his position as Director and Chairman of the
Board as a result of being informed that the Justice Department obtained an
indictment relating to the June 1999 purchase and sale of an unrelated
company's shares. The Board has name William J. Murphy to the position of
President and CEO, appointed Thomas J. Berry Chairman of the Board and named
Michael J. Shea to the position of Chief Finanical Officer.

                         SUMMARY COMPENSATION TABLE
                              as of December 31,

<Table>
<Caption>
                                                                                        Long-Term Compensation
                                                                                        -------------------------
                                              Annual Compensation                         Awards          Payouts
                                       ----------------------------------               ---------        ---------
                                                                   Other                     Securities                 All
                                                                   Annual     Restricted     Underlying                Other
                                                                   Compen-      Stock         Options/      LTIP      Compen-
                                       Year     Salary    Bonus     sation      Awards           SARs      Payments   sation(1)
                                       ----    --------  -------   -------    ----------     ----------    --------  ----------
<S>                                    <C>     <C>       <C>       <C>        <C>            <C>           <C>       <C>
John J. Cassese                        2002    $475,000  $  --        --          --           100,000        --     $ 237,334
Chairman of the Board,                 2001     475,000     --        --          --            75,000        --       256,644
President and Chief Executive Officer  2000     475,000   55,000      --          --            75,000        --       256,269

William J. Murphy                      2002    $290,000  $  --        --          --            75,000        --     $   4,580
Executive Vice President               2001     290,000     --        --          --            50,000        --         2,580
Chief Financial Officer and Secretary  2000     290,000   25,000      --          --            50,000        --         2,880

Michael J. Shea                        2002    $150,000  $  --        --          --            30,000        --     $   3,180
Vice President and Controller          2001     150,000   25,000      --          --            30,000        --         3,180
                                       2000     150,000   17,500      --          --            20,000        --         3,065

Kristin Evins                          2002    $ 77,600  $  --        --          --             5,000        --     $   1,467
Assistant Controller                   2001      77,600    8,000      --          --             5,000        --         1,460
                                       2000      72,600    6,000      --          --             2,000        --           679
</Table>
--------------------
(1)  In 2001, the Company paid the premiums on a whole life insurance policy
     of $80,000, a universal life insurance policy of $800,000 and a term life
     insurance policy of $150,000 for Mr. Cassese. The Company also paid the
     premium on a $3,000,000 split-dollar life insurance policy on the joint
     lives of Mr. Cassese and his spouse and a split-dollar survivorship policy.
     In connection with the enactment of the Sarbanes-Oxley Act, Company
     payments were discontinued. In addition, the Company paid the premiums
     on a $150,000 term life insurance policy for both Mr. Murphy and Mr. Shea.
     Under each such insurance policy, the insured has the right to designate
     the beneficiaries. The Company maintains a defined contribution (401K)
     savings plan and contributes $.50 for every dollar contributed by all
     participating employees up to 4% of each employee's salary deferral. The
     amounts for all other compensation in the year 2002 were as follows:
     Mr. Cassese Flex premium joint insurance, $179,500; car allowance,
     $25,440; tax preparation fees, $15,000; Universal Life Insurance, $10,000;
     401K match, $5,500; Whole life insurance, $1,714 and term-life insurance,
     $180. Mr. Murphy 401K match, $4,400 and term-life insurance, $180.
     Mr. Shea 401K match, $3,000 and term-life insurance, $180. Ms. Evins 401K
     match, $1,467.

     The Company entered into an executive compensation exchange program with
     Mr. Cassese. Under the program, Mr. Cassese waived payments due to be
     made to him under the non-qualified supplemental retirement agreement,
     except for a $2,000,000 payment to be made in the event that a change of
     control occurs. In conjunction with this waiver, the Company entered
     into an arrangement to purchase a life insurance policy for the benefit
     of a trust established by Mr. Cassese. The cost of the life insurance
     policies to the Company has been actuarially determined and will not
     exceed the after-tax cost the Company expected to incur in connection
     with the payments under the non-qualified supplemental retirement
     agreement. In addition, the Company has non-qualified supplemental
     retirement benefit agreements with Messrs. Murphy and Shea. Under their
     agreements Messrs, Murphy and Shea will be entitled to receive
     $1,000,000 each, upon retirement from the Company at age 65. If Mr.
     Murphy or Mr. Shea retires from continuous employment with the Company
     prior to age 65 as a result of total and permanent disability, he will
     be deemed to have continuously employed by the Company until age 65 for
     purposes of his agreement. If Mr. Murphy or Mr. Shea terminates his
     employment with the Company prior to reaching age 65, other than as a
     result of death or total and permanent disability, he will be entitled
     to receive, upon reaching age 65, a retirement benefit based on accrual
     and vesting formulas set forth in his respective agreement. Had either
     Mr. Murphy or Mr. Shea terminated his employment as of the date of this
     Proxy Statement or during the year of 2002, Mr. Murphy's accrued and
     vested benfit would be $250,000 and Mr. Shea's accrued and vested
     benefit would be $34,500. If Mr. Murphy or Mr. Shea were to die prior to
     age 65, while still in the employ of the Company, his beneficiaries
     would be entitled to receive a lump sum benefit equal to the greater of
     his accrued and vested benefit or $500,000. Benefits payable upon
     retirement may be paid in a lump sum or in annual installments at the
     discretion of the beneficiary. In the event that a Change of Control
     occurs, Mr. Murphy's and Mr. Shea's entitlements will immediately vest
     and become payable.


Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information called for by Item 12 with respect to security ownership of
certain beneficial owners and management is incorporated herein by reference to
the material under the caption "Certain Holders of Voting Securities" in the
2003 Proxy Statement.

                                       63
<Page>

     The following table summarizes information about the Company's equity
compensation plans as of December 31, 2002.

                      Equity Compensation Plan Information

<Table>
<Caption>
                                                                                               Number of securities
                                                                                              remaining available for
                               Number of securities to be                                  future issuance under equity
                                issued upon exercise of       Weighted-average exercise         compensation plans
                                 outstanding options,           price of outstanding           (excluding securities
Plan Category                    warrants and rights         options warrants and rights      reflected in Column (a)
-----------------------------------------------------------------------------------------------------------------------
                                          (a)                            (b)                            (c)
<S>                                    <C>                              <C>                          <C>
Equity compensation plans
  approved by security
  holders                              4,527,000                        7.93                         2,370,000
                                                                                                    (1) (2) (3)

Equity compensation plans
  not approved by security
  holders                                    -0-                         -0-                               -0-

TOTAL                                  4,527,000                        7.93                         2,370,000
</Table>

     (1)  Consists of 2,036,000 shares of the Company's common stock reserved
          under the Company's 1994 Incentive Stock Option and Appreciation Plan,
          334,000 shares of the Company's common stock reserved under the
          Company's 1991 Directors' Stock Option Plan.

     (2)  On March 28, 2003, the Company's Board of Directors reserved an
          additional 3,500,000 shares of the Company's common stock under the
          Employee Stock Purchase Plan, subject to stockholder approval.

     (3)  On January 8, 2003, the Company commenced a tender offer to its
          employees to exchange all options granted under the Company's 1994
          Incentive Stock Option and Appreciation Plan with an exercise price of
          $10.01 or greater for new stock options with a new exercise price. For
          options priced between $10.01 and $14.99 per share, for every two
          options surrendered, one new option will be granted. The tender offer
          expired on February 10, 2003 and on February 11, 2003, the Company
          accepted for exchange and cancelled options to purchase 1,635,526
          shares of the Company's common stock. A total of 612,850 options with
          an exercise price greater than or equal to $15.00 per share were
          accepted for exchange, representing approximately 37% of the options
          that were tendered. Of these options 63% were tendered by officers of
          the Company. A total of 1,022,676 options with an exercise price of
          between $10.01 and $14.99 were accepted for exchange, representing
          approximately 63% of the options that were tendered of these options
          24% were tendered by officers of the Company. The Company anticipates
          that it will grant 715,621 new options with new exercise prices on or
          about August 12, 2003, which is six months and one day after the
          cancellation of the original options.

                                       64
<Page>

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
     None

Item 14. CONTROLS AND PROCEDURES

     (a)  Evaluation of Disclosure Controls and Procedures

     Within 90 days prior to the filing of this yearly report on Form 10-K, the
     Company's President and Chief Financial Officer evaluated the effectiveness
     of the design and operation of the Company's disclosure controls and
     procedures and concluded that the Company's disclosure controls and
     procedures are effective to ensure that information required to be
     disclosed by the Company in reports that it files or submits under the
     Exchange Act is accumulated and communicated to the Company's management,
     including its officers, as appropriate to allow timely decisions regarding
     required disclosure, and are effective to ensure that such information is
     recorded, processed, summarized and reported within the time periods
     specified in the Securities and Exchange Commission's rules and forms.

     (b)  Changes in Internal Controls

     The Company's President and Chief Financial Officer have also concluded
     there were no significant changes in the Company's internal controls or in
     other factors that could significantly affect these controls subsequent to
     the date of their evaluation, including any corrective actions with regard
     to significant deficiencies and material weaknesses.

                                       65
<Page>

                                     PART IV

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Financial Statements and Financial Statement Schedules

1.  Consolidated financial statements
  -  Report of independent certified public accountants on the consolidated
     financial statements
  -  Consolidated balance sheets as of December 3l, 2002 and 2001
  -  Consolidated statements of operations for each of the three years in the
     period ended December 31, 2002
  -  Consolidated statement of shareholders' equity for each of the three years
     in the period ended December 31, 2002
  -  Consolidated statements of cash flows for each of the three years in the
     period ended December 31, 2002
  -  Notes to consolidated financial statements

2.  Schedule II - Valuation and qualifying accounts for the years ended
December 31, 2002, 2001 and 2000.

                                       66
<Page>

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(CONTINUED)

Report of independent certified public accountants on the financial statements
schedule.

All other schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes thereto.

3.   List of Exhibits

<Table>
<Caption>
Exhibit   Description                                 Incorporated by Reference to
<S>       <C>                                         <C>
3(a-1)    Certificate of Incorporation as             Exhibit 3(a) to Registration
          amended through 1971.                       Statement on Form S-1 (File
                                                      No. 2-42259).

3(a-2)    Certificate of Amendment dated              Exhibit 3(a-2) to Form 10K
          May 16, 1983 to Certificate of              for the fiscal year ended
          Incorporation.                              February 28, 1983.

3(a-3)    Certificate of Amendment dated              Exhibit 3(a-3) to Form 10K
          June 15, 1988 to Certificate of             for the fiscal year ended
          Incorporation.                              December 31, 1988.

3(a-4)    Certificate of Amendment dated              Exhibit 3(a-4) to Form 10K
          July 6, 1989 to Certificate of              for the fiscal year ended
          Incorporation.                              December 31, 1994.

3(a-5)    Certificate of Amendment dated              Exhibit 3(a-5) to Form 10K
          February 14, 1990 to Certificate of         for the fiscal year ended
          Incorporation.                              December 31, 1989.

3(a-6)    Certificate of Amendment dated              Exhibit 3(a-6) to Form 10K
          May 1, 1991 to Certificate of               for the fiscal year ended
          Incorporation.                              December 31, 1994.

3(a-7)    Certificate of Amendment dated              Exhibit 3(a-7) to Form 10K
          July 12, 1994 to Certificate of             for the fiscal year ended
          Incorporation.                              December 31, 1994.

3(b)      Bylaws, as amended and                      Exhibit 3(b) to Form 10K for
          presently in effect.                        the year ended December 31,
                                                      1988.

4(a)      Rights Agreement dated as of                Exhibit 1 to Registration
          July 6, 1989 between the                    Statement on Form 8-A dated
          Company and Chemical Bank, as               July 7, 1989.
          Rights Agent ("Rights Agreement")
          which includes the form of Rights
          Certificate as Exhibit B.
</Table>

                                       67
<Page>

<Table>
<S>       <C>                                         <C>
4(b)      Amendment No. 1 dated as of                 Exhibit 1 to Amendment No.
          February 13, 1990 to Rights                 1 on Form 8 dated February
          Agreement.                                  13, 1990 to Registration
                                                      Statement on Form 8-A.

4(c)      Amendment No. 2 dated as of                 Exhibit 4(c) to Form 10K
          August 10, 1994 to Rights                   for the fiscal year ended
          Agreement.                                  December 31, 1994.

4(d)      Employee's Savings Plan and                 Exhibit 4.4 to Registration
          Amendment Number One.                       Statement on Form S-8 dated
                                                      December 5, 1995.

4(e)      Employee's Savings Plan Trust               Exhibit 4.5 to Registration
          Agreement as Amended and                    Statement on Form S-3 dated
          Restated Effective January 1,               December 5, 1995.
          1996.

4(f)      Amendment No. 3 dated as of                 Exhibit 4.1 to Form 8-K
          July 13, 1999 to Rights                     dated July 13, 1999.
          Agreement.

10(a)     Employment Agreement dated as               Exhibit 10(a) to Form 10K for
          of February 16, 1990 between the            the year ended December 31,
          Company and John J. Cassese.                1989.

10(b)     Employment Agreement dated as               Exhibit 10(g) to Form S-3 dated
          of January 1, 1997 between the              August 14, 1997.
          Company and William J. Murphy.

10(c)     Employment Agreement dated as               Exhibit 10(c) to Form 10K for
          of March 6, 1997 between the                the year ended December 31,
          Company and Michael J. Shea.                1996.

10(d)     1991 Directors' Stock Option                Exhibit 10(g) to Form 10-K
          Plan, as amended.                           for the year ended December 31,
                                                      1994.

10(e)     1994 Incentive Stock Option and             Exhibit 10(h) to Form 10K
          Appreciation Plan.                          for the fiscal year ended
                                                      December 31, 1994.

10(f)     $15,000,000 Discretionary Line of           Exhibit 10(h) to Form S-3
          Credit payable to Chase Manhattan           dated August 14, 1997.
          Bank dated as of June 30, 1998.

10(g)     $10,000,000 Discretionary Line              Exhibit 10(h) to Form 10K
          of Credit from PNC Bank dated               for the fiscal year ended
          as of June 5, 1998.                         December 31, 1996.
</Table>

                                       68
<Page>


<Table>
<S>       <C>                                         <C>
10(h)     1999 Employee Stock Purchase                Exhibit 99.1 to Form S8 dated
          Plan.                                       March 17, 1999.

10 (i)    Amendment to the employment                 Exhibit 10(i) to Form 10K
          agreement dated as of March 24,             for the fiscal year ended
          2000 between the Company and                December 31, 1999.
          William J. Murphy.

10 (j)    $15,000,000 Discretionary Line of           Exhibit 10(j) to Form 10K
          Credit payable to Chase Manhattan           for the fiscal year ended
          Bank dated as of June 30, 1998, as          December 31, 1999.
          amended on March 15, 2000
          (increased to 30,000,000).

10 (k)    $20,000,000 Discretionary Line of           Exhibit 10(k) to Form 10K
          Credit payable to Chase Manhattan           for the fiscal year ended
          Bank dated as of March 20, 2001.            December 31, 2000.

10 (l)    $40,000,000 Asset-Based Lending             Exhibit 10(l) to Form 10K
          Agreement payable to CIT dated as of        for the fiscal year ended
          July 31, 2001.                              December 31, 2001

10(m)     Offer to Exchange Outstanding               Exhibit (a)(1) to Schedule
          Options, dated as of January 8, 2003        TO, dated January 8, 2003,
                                                      as amended on February 14, 2003.

10(n)     Amendment to the $40,000,000                Exhibit 10(n) to Form 10K for the
          Asset-Based Lending Agreement               fiscal year ended December 31, 2002
          Payable to CIT dated as of February 14,
          2003

10(o)     Non-qualified supplemental retirement       Filed Herewith
          benefit agreement for William J. Murphy

10(p)     Non-qualified supplemental retirement       Filed Herewith
          benefit agreement for Michael J. Shea

10(q)     First Amendment to the non-qualified        Filed Herewith
          supplemental retirement benefit agreement
          for William J. Murphy

10(r)     First Amendment to the non-qualified        Filed Herewith
          supplement retirement benefit agreement
          for Michael J. Shea

21        List of Subsidiaries.                       Exhibit 21 to Form 10K for the
                                                      fiscal year ended December 31, 2002.

23        Consent of Grant Thornton LLP,              Filed Herewith
          Independent Public Accountants.

31.1      CEO Certification required by Rule 13a-     Filed Herewith
          14(a)/15d-14(a) under the Securities
          Exchange Act of 1934.

31.2      CFO Certification required by Rule 13a-     Filed Herewith
          14(a)/15d-14(a) under the Securities
          Exchange Act of 1934.

32.1      CEO Certification pursuant to 18 U.S.C.     Filed Herewith
          Section 1350, as adopted pursuant to
          Section 906 of the Sarbanes-Oxley Act of
          2002.

32.2      CFO Certification pursuant to 18 U.S.C.     Filed Herewith
          Section 1350, as adopted pursuant to
          Section 906 of the Sarbanes-Oxley Act of
          2002.
</Table>


4. Reports on form 8-K during the fourth quarter of fiscal 2002.
     No reports on Form 8-K were filed during the fourth quarter of fiscal 2002.

                                       69
<Page>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                 COMPUTER HORIZONS CORP.

Date:  August 28, 2003                By: /s/ William J. Murphy
                                      -------------------------
                                      William J. Murphy, President, CEO
                                      (Principal Executive Officer) and Director

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
amendment has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

                                 COMPUTER HORIZONS CORP.

Date:  August 28, 2003                By: /s/ William J. Murphy
                                      -------------------------
                                      William J. Murphy, President, CEO
                                      (Principal Executive Officer) and Director

Date:  August 28, 2003                By: /s/ Michael J. Shea
                                      -----------------------
                                      Michael J. Shea,
                                      Vice President and CFO
                                      (Principal Financial Officer)

Date:  August 28, 2003                By: /s/ Kristin Evins
                                      ---------------------
                                      Kristin Evins
                                      Controller
                                      (Principal Accounting Officer)

Date:  August 28, 2003                By: /s/ Earl Mason
                                      -----------------------
                                      Earl Mason, Chairman of the Board
                                      and Director

Date:  August 28, 2003                By: /s/ William M. Duncan
                                      -------------------------
                                      William M. Duncan, Director

Date:  August 28, 2003                By: /s/ William J. Marino
                                      -------------------------
                                      William J. Marino, Director

Date:  August 28, 2003
                                      ---------------------
                                      Karl L. Meyer, Director


Date:  August 28, 2003
                                      -----------------------------
                                      Robert A. Trevisani, Director


                                       70
<Page>

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 31, 2002, 2001 and 2000


<Table>
<Caption>
Column A                                             Column B          Column C        Column D           Column E

                                         Balance at beginning   Charged to cost    Deductions -     Balance at end
Description                                         of period      and expenses        describe          of period
<S>                                              <C>                  <C>            <C>              <C>
Year ended December 31, 2002

         Allowance for doubtful accounts         $  7,542,000         4,996,000       4,842,000  (1)  $  7,696,000

         Deferred tax asset valuation            $  3,340,000         6,949,000              --       $ 10,289,000

         2002 Restructure Reserve                $          -         2,847,000         364,000  (3)  $  2,483,000

         2000 Restructure Reserve                $  1,464,000                --       1,169,000       $    295,000

         1999 Restructure Reserve                $    626,000                --         138,000       $    488,000

Year ended December 31, 2001

         Allowance for doubtful accounts         $  2,702,000         3,397,000      (1,443,000) (1)  $  7,542,000

         Deferred tax asset valuation            $  2,727,000           613,000              --       $  3,340,000

         2000 Restructure Reserve                $  2,620,000           410,000      (1,566,000)      $  1,464,000

         1999 Restructure Reserve                $    385,000           638,000         397,000       $    626,000

Year ended December 31, 2000

         Allowance for doubtful accounts         $  5,819,000        26,452,000      29,569,000  (1)  $  2,702,000

         Deferred tax asset valuation            $          -         2,727,000              --       $  2,727,000

         2000 Restructure Reserve                $          -         3,542,000        (922,000)      $  2,620,000

         1999 Restructure Reserve                $  4,003,000         1,242,000      (2,376,000) (2)  $    385,000
</Table>


Notes

(1)     Uncollectible accounts written off, net of recoveries.
(2)     Credit recorded resulting from earlier than expected subleasing of
        properties.
(3)     Includes charge for office closings

                                       71
<Page>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTS ON SCHEDULE II

Board of Directors and Shareholders
Computer Horizons Corp.

In connection with our audit of the consolidated financial statements of
Computer Horizons Corp. and Subsidiaries referred to in our report dated
February 25, 2003, which is included in the 2002 Annual Report to Shareholders
on Form 10-K, we have also audited Schedule II for each of the years ended
December 31, 2002, 2001 and 2000. In our opinion, this schedule presents
fairly, in all material respects, the information required to be set forth
therein.

/s/ Grant Thornton LLP
----------------------
Grant Thornton LLP


Edison, New Jersey
February 25, 2003

                                       72