FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 [FEE REQUIRED]

                 For the fiscal year ended December 31, 1998 OR

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from   Not Applicable      to
                                 --------------             ---------------

Commission file number                                    0-17840 

                          NEW HORIZONS WORLDWIDE, INC.
             (Exact name of Registrant as specified in its charter)

            Delaware                                            22-2941704
-----------------------------------------                   --------------------
(State of other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                             Identification No.)

500 Campus Drive, Morganville, New Jersey                           07751       
-----------------------------------------                   --------------------
(Address of principal executive offices)                          (Zip Code)

Registrant"s telephone number, including area code:  (732) 536-8501
                                                     --------------

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

Title of each Class                   Name of each exchange on which registered

Not Applicable                                         Not Applicable
-------------------                   -----------------------------------------


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

                          Common Stock, $.01 Par Value
                          ----------------------------
                                 Title of Class
<PAGE>




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [x]  No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant"s  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]
    
The  aggregate  market value of the Common Stock held by  non-affiliates  of the
Registrant as of March 26, 1999 was approximately  $96,250,982,  computed on the
basis of the last reported  sales price per share  ($19.25) of such stock on The
Nasdaq Stock Market.

The number of shares of the  Registrant"s  Common Stock  outstanding as of March
26, 1999 was 7,540,028.

              DOCUMENTS OR PARTS THEREOF INCORPORATED BY REFERENCE

Part of Form 10-K                                 Documents Incorporated
Part III (Items 10, 11, 12 and 13)                by Reference
----------------------------------               -------------------------------
                                                  Portions of  the  Registrant"s
                                                  definitive Proxy  Statement to
                                                  be used in connection with its
                                                  Annual Meeting of Stockholders
                                                  to be held on May 4, 1999
 
<PAGE>



                          NEW HORIZONS WORLDWIDE, INC.
                             INDEX TO ANNUAL REPORT
                                   ON FORM 10K

                                     PART I
Item 1.   Business.............................................................1
          General..............................................................1
          Information Technology Education and Training Market.................2
          New Horizons Business Model..........................................2
               Company-owned Training Centers..................................3
               Franchising.....................................................4
          Customers............................................................6
          Sales and Marketing..................................................6
          Training Authorizations..............................................6
          Competition..........................................................6
          Information about Forward Looking Statements.........................7
          Regulations..........................................................9
          Insurance............................................................9
          Trademarks...........................................................9
          Employees............................................................9

Item 2.   Properties...........................................................9

Item 3.   Legal Proceedings...................................................10

Item 4.   Submission of Matters to a Vote of Security Holders.................10

                                     PART II

Item 5.   Market for Registrant"s Common Equity
          and Related Shareholder Matters.....................................10

Item 6.   Selected Consolidated Financial Data................................11

Item 7.   Management"s Discussion and Analysis of
          Financial Condition and Results of Operations.......................12

Item 7a.  Quantitative and Qualitative Disclosures about Market Risk .........18

Item 8.   Financial Statements and Supplementary Data.........................18

Item 9.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure..............................18

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant..................19

Item 11.  Executive Compensation..............................................20

Item 12.  Security Ownership of Certain Beneficial Owners
          and Management......................................................20

Item 13.  Certain Relationships and Related Transactions......................20

                                     PART IV

Item 14.  Exhibits and Reports on Form 8-K ...................................21

SIGNATURES....................................................................22

<PAGE>
                                     PART I

ITEM 1. BUSINESS

This  Annual  Report  on Form 10-K  contains  forward-looking  statements  which
involve  risks and  uncertainties.  The  Company"s  actual  results  may  differ
significantly  from the results  discussed  in the  forward-looking  statements.
Factors that may cause such a difference include,  but are not limited to, those
discussed  throughout  this  document and under the caption  "Information  About
Forward Looking Statements."

New Horizons Worldwide,  Inc., (the "Company" or "New Horizons") formerly Handex
Corporation,  through various  subsidiaries,  both owns and franchises  computer
training centers.  System-wide  revenues include revenues for all centers,  both
owned and franchised.  The Company sold its  environmental  business segment and
changed  its name to New  Horizons  in late 1996,  in order to  concentrate  its
resources on the technology  training market.  The Company"s common stock trades
on The Nasdaq Stock Market under the symbol "NEWH".

GENERAL

New Horizons' 1998  system-wide  revenues of $357.5 million makes it the largest
independent  provider in the fragmented PC software  applications  and technical
certification training industry. Through various subsidiaries,  the Company both
owns and franchises  computer training  centers.  Through these training centers
the  Company   offers  a  variety  of  flexible   training   choices   including
instructor-led classes, Web-based Training (WBT),  Computer-based Training (CBT)
via CD-ROM,  computer labs,  certification  exam preparation tools, and 24-hour,
seven-day-a-week  free help desk support. The goal of the training is to deliver
to the student  information  and skills which have immediate and practical value
in the workplace.

The New Horizons  worldwide network  delivered over 2.4 million  student-days of
technology training in 1998, generating system-wide revenues, which include both
the results of company-owned and franchised  operations,  of $357.5 million,  up
34% from $267.4  million in 1997. The network has over 1,080  classrooms,  1,280
instructors and 1,300 account executives.

New Horizons  specializes  in  instructor-led  training  which is the industry's
dominant delivery method for information  technology  training.  The Company has
become a leader in the  industry by  developing  the  processes  for  delivering
quality  training  for the largest  technology  training  segments:  PC software
applications  and  technical  certification  training.  The  network's  training
centers  offer a broad  range of  courses  for  several  of the  major  software
vendors,  including  Microsoft,  Novell,  Lotus,  Adobe,  Aldus, Apple Computer,
Corel,  Symantec,  Sun  Microsystems,  and Unix.  New  Horizons  has the largest
network of Microsoft Certified Technical Education Centers and Novell Authorized
Education  Centers  in  the  world.  Additionally,  with  certification  testing
becoming increasingly  important,  New Horizons also has established the largest
number of Authorized Prometric Testing Centers in the world. Classes can be held
at New Horizons locations or on-site at the client's facility. Curriculum can be
tailored to the client's  specific needs.  The Company can also provide training
and courseware  for customers'  proprietary  software.  Additionally,  using its
courseware as the source  material,  the Company has entered into an arrangement
with a company  to develop  its own line of  computer-based  products,  entitled
Masterware,  which became available to franchisees for sale in the third quarter
of 1997. Additionally,  the Company has a reseller agreement with a company that
has an extensive  offering of computer-based  training courses that will prepare
customers for certification exams.

New Horizons owns and operates 11 computer training  facilities located in Santa
Ana, Burbank, Los Angeles, and Irvine, California; Chicago, Illinois; Cleveland,
Ohio; two in New York City,  New York;  Memphis and  Nashville,  Tennessee;  and
Hartford,  Connecticut.  The  Santa Ana  location  was  acquired  as part of the
original  purchase of New Horizons in 1994. The remaining  California  locations
are part of a strategy  to expand in the large  southern  California  technology
training market, while the Chicago,  Cleveland,  Memphis, Nashville and Hartford
locations and the initial New York location  were acquired from  franchisees  as
part of the  Company's  strategy to operate  company-owned  training  centers in
select  markets  within the United  States.  A second New York  training  center
opened in the first quarter of 1997. The Company acquired the  Albuquerque,  New
Mexico franchise on March 1, 1999.

As of December 31, 1998, the Company's franchisees operated 117 locations in the
United  States and  Canada and 77  locations  in 28 other  countries  around the
world.  An additional 24 franchises  have been sold and are scheduled for future
openings.
<PAGE>

The Company was incorporated in Delaware on December 15, 1988, and its principal
executive  offices are  located at 500 Campus  Drive,  Morganville,  New Jersey,
07751. The Company's  principal  operating offices are located at 1231 East Dyer
Road, Suite 140, Santa Ana, California 92705. The Company maintains a website at
http://www.newhorizons.com.

THE INFORMATION TECHNOLOGY EDUCATION AND TRAINING MARKET

The rapidly growing role of information technology in business organizations and
the emergence of the Internet are creating significant and increasing demand for
information  technology  training. A 1998 International Data Corporation ("IDC')
study  estimated that in 1997 the worldwide  market for  information  technology
education and training was about $16.4 billion and is expected to grow at a pace
of 11.1% per year to over $28 billion in the year 2002. The study indicated that
nearly  one-fifth  of the top U.S.  IT  executives  rated  the  lack of  skilled
personnel as the most serious  constraint  to the growth of their  businesses in
1997.  A survey  published  in 1997 by  Information  Technology  Association  of
America (ITAA) stated that the number of unfilled  positions for IT employees at
large and midsized U.S. companies is approximately 190,000.

The  growing  need for  technology  training  is driven by several  developments
including:  (i) increased use of computers in the workplace  requiring employees
to acquire  and apply  information  technology  skills;  (ii) rapid and  complex
technological  changes in  operating  systems,  new  software  development,  and
technical  training;  (iii)  continuing  emphasis by  industry on  productivity,
increasing the number of functions  being  automated  throughout  organizations;
(iv)  greater  focus  by  organizations  on core  competencies  with a  shifting
emphasis  to  outsourcing  of  non-core  activities;  (v)  corporate  downsizing
requiring  remaining  personnel to develop a greater variety of skills; and (vi)
development  of the Internet.  In its survey,  the ITAA announced that education
will be a key facet of any solution to the skills problem.

Although a significant  portion of  technology  training is provided by in-house
training  departments,  IDC, in its study,  identified a decided  shift  towards
outsourcing to external training professionals. This outsourcing is motivated by
several factors, including: (i) the lack of internal trainers experienced in the
latest software; (ii) the cost of maintaining an in-house staff of trainers; and
(iii) the cost of developing and maintaining internal courseware.

Organizations  are  searching  out and  selecting  outside  technology  training
services that can provide the  following:  (i) cost  effective  delivery of high
quality  instruction;  (ii) qualified,  technically  expert  instructors;  (iii)
flexibility to deliver a consistent training product at geographically dispersed
facilities;  (iv) ability to tailor the training products to specific customers'
needs; (v) definitive,  current  courseware;  (vi) testing and  certification of
technical competency;  (vii) effective training methods delivering knowledge and
skills  with  immediate  practical  value in the  workplace;  (viii) a depth and
breadth of curriculum; and (ix) flexible and convenient scheduling of classes.

Instructor-led classroom training is the dominant delivery method for technology
training with 78.4% of the information  technology education market according to
the 1998 IDC report. IDC projects that instructor-led  training will continue to
maintain  a  significant   share  of  the  market  because  trainees  value  the
personalized  attention,  interfacing  and  problem-solving  with classmates and
instructors,  and the  insulation  classroom  training  provides from  workplace
interruptions.  While IDC projects  instructor-led  training will continue to be
the  leading   delivery   method  in  the  market  through  2001,  the  role  of
technology-based  training,  consisting of  computer-based  training,  Web-based
training,  and CD-ROM  multimedia is gaining greater  acceptance.  IDC estimates
that  technology-based  training will have 54.9% of the  information  technology
education  market by 2002 while  instructor-led  classroom  training will have a
42.4%  share.  IDC  projects  that  revenues  generated  through  instructor-led
training will still grow through 2000, but at that point will start to decline.

THE NEW HORIZONS BUSINESS MODEL

New  Horizons'   company-owned   and  franchised   operations  both  provide  an
instructor-led  training  delivery  system  to  customers  that is  executed  by
certified  employee  instructors  primarily in fully equipped  classrooms in New
Horizons  facilities.  Approximately  17% of  classes  are given  on-site at the
customer's location. New Horizons often supplies the computer hardware for these
on-site  classes.  The Company sells its services  primarily to  businesses  and
government agencies as opposed to individuals.
<PAGE>

Curriculum  is  centered  on  software  applications  (approximately  63% of the
courses) and technical  certification programs  (approximately 37%). Classes are
concise,  generally  ranging  from  one to five  days,  and are  designed  to be
intensive  skill  building  experiences.  The  Company  offers a broad  array of
information  technology courses covering the most popular software  applications
and  technical  certification  programs.  The Company also  provides  customized
training for customers' proprietary software applications.  The Company believes
it offers more classes more often than any other company in the industry.

In addition to  certified  instructors  and broad  curriculum,  the New Horizons
business model is designed to provide its customers  significant  training value
by featuring:  (i)  guaranteed  training  through the Company's  free  six-month
repeat  privileges;  (ii)  skills  assessment  on  subjects  and skills for both
standard or proprietary  software;  (iii) professional  certification  training;
(iv) the largest network of authorized training centers in the industry ensuring
quality and consistency; (v) free 24 hours-a-day, 7 day-a-week help desk service
for a full  sixty-day  period  after a class has been  completed;  (vi)  on-site
training at customer's facilities; (vii) customized courseware from a library of
over 1,200 titles in 12 languages; (viii) club memberships providing a series of
classes for one platform at one low price;  (ix) flexible  scheduling  including
evening and weekend classes;  (x) a Major Accounts Program which coordinates the
national and/or  international  delivery of training  for clients with  training
requirements in multiple  locations;  and (xi) its Choice Learning program which
allows  customers  to blend  the  delivery  methodology  between  instructor-led
training and technology-based training.

The Company has historically  grown through the sale of franchises,  the opening
of new company-owned facilities,  the buy back of franchises in certain markets,
and revenue growth for the existing training  centers.  Locations open more than
twelve  months  grew  more  than  28% in 1998.  The  Company  believes  a mix of
franchised and  company-owned  centers will enable it to combine the accelerated
expansion opportunities provided by franchising while maintaining ownership of a
significant  number of training  centers.  The Company plans to continue to grow
through  the  (i)   improvement   of  revenues   and  profits  at  both  current
company-owned and franchised  operating  locations;  (ii) the sale of additional
franchises;  (iii) the  selective  buyback of existing  franchises in the United
States which have demonstrated the ability to achieve exceptional  profitability
while increasing  market share, and (iv) the potential  acquisition of companies
in similar or complementary businesses.

Company-owned Training Centers
------------------------------
At the end of 1998 the Company owned and operated eleven  training  centers that
generated $52.5 million in revenue.  The locations open at the beginning of 1998
were as follows:

     California            Illinois           New York               Ohio
     ----------            --------           --------               ----
     Santa Ana             Chicago            New York (2)           Cleveland
     Irvine
     Burbank
     Los Angeles
 
The franchise locations acquired in 1998 were as follows:

       Memphis and Nashville, Tennessee              Acquired April 30, 1998
       Hartford, Connecticut                         Acquired October 30, 1998

In addition,  the Company  acquired the  Albuquerque,  New Mexico,  franchise on
March 1, 1999.

The  acquisitions  are a  result  of the  Company's  strategy  to  acquire well-
performing franchises in select United States markets. The selling shareholders,
who have  continued  to manage  the  acquired  training  centers,  will  receive
additional   consideration  if  certain   performance   criteria  are  met.  The
acquisitions  have been recorded using the purchase method of accounting and the
operating results have been included in the Company's financial  statements from
the date of acquisition.

<PAGE>
Franchising
-----------
At the end of 1998 the  Company  supported a  worldwide  network of  independent
franchises which provide information  technology training at 194 locations in 30
countries.  There are an additional 24 franchised locations which have been sold
and which are scheduled to open at various times during 1999.  The franchisee is
given a  non-exclusive  license  and  franchise  to  participate  in and use the
business  model and sales  system  developed  and  refined by the  Company.  The
Company  initially  offered  franchises  for sale in 1991  and  sold  its  first
franchise in 1992. The Company had 147 franchised locations operating at the end
of 1996;  175 at the end of 1997;  and 194 at the end of 1998, of which 117 were
in the United States and Canada and 77 were abroad.

The offer and sale of franchises  are subject to regulation by the United States
Federal  Trade  Commission  and  certain  foreign  countries.  There  also exist
numerous  state laws that regulate the offer and sale of franchises and business
opportunities,  as well as the  ongoing  relationship  between  franchisors  and
franchisees,  including  the  termination,  transfer,  and renewal of  franchise
rights.  The  failure  to comply  with these  laws  could  adversely  affect the
Company's operations.

New Horizons  estimates the initial  investment  required to acquire and start a
franchise   operation,   including  the  initial   franchise  fee,  ranges  from
approximately $250,000 to $450,000.

United States and Canada
------------------------

Franchise Fees
--------------
A franchisee in the United States and Canada is charged an initial franchise fee
and ongoing monthly royalties, which become effective a specified period of time
after the center  begins  operation.  The initial  franchise fee is based on the
size of the  territory  granted as defined in the  Franchise  Agreement.  In the
United  States and Canada,  the size of a territory is measured by the number of
personal  computers  ("PC's") in the territory.  On October 1, 1998, the Company
increased the initial franchise fees for its territories.  The initial franchise
fee for a  start-up  center  for a Type 1  territory  (150,000  or more PC's) is
$75,000;  for a Type 2 territory (75,000 to 149,999 PC's) is $50,000; and a Type
3 territory  (50,000 to 75,000  PC's) is $25,000.  Entrepreneurs  converting  an
existing training center to a New Horizons center receive a 20% reduction in the
initial fee as a conversion  allowance.  Based on  information  furnished by IDC
concerning the number of PC's in various  geographic  areas,  as of December 31,
1998, the Company has  identified 22 Type 1 territories,  32 Type 2 territories,
and 14 Type 3 territories as the remaining  territories  currently available for
sale as franchises in the United States and Canada.

The initial  franchise fee is payable upon execution of the Franchise  Agreement
and is not  refundable  under any  circumstances.  The  territory  is a "limited
exclusive"  territory  in that New Horizons  agrees not to own or franchise  any
other New Horizons Computer Learning Center provided the franchisee  operates in
compliance with the terms of its franchise agreement.  The geographic boundaries
of a territory  are typically  determined  by United  States Postal  Service zip
codes.  Unless  the  Franchise  Agreement  terminates  or is  amended  by mutual
agreement,  a territory  will not be altered.  Franchises are expected to market
their  business to customers  located  within the defined  territory  and not to
customers  within  territories  of other New Horizons  franchises or affiliates.
Franchisees  generally  have six months  from the date of the  execution  of the
Franchise Agreement to open a center.

Royalties
---------
In addition to the initial franchise fee,  franchisees pay the following fees to
New Horizons: (i) a monthly continuing royalty fee, consisting of the greater of
3% to 6% of monthly gross  revenues or a minimum flat fee of $1,500 for a Type 1
territory or $1,000 for a Type 2 and Type 3 territory;  (ii) a monthly marketing
and advertising fee of 1% of gross  revenues;  and (iii) a course  materials and
proprietary  computer-based  training  products  surcharge  of 9% of  the  gross
revenues from course materials and proprietary  computer-based training products
sold to third parties. Each franchisee also pays a $50 per month maintenance fee
for customized software developed and maintained by New Horizons. The 6% royalty
fee rate was effective for franchises sold during September 1996 or later.
<PAGE>
Franchise Agreement
-------------------
The Franchise  Agreement  runs for an initial term of ten years and is renewable
for additional  five-year  terms. The franchise is exclusive within the specific
defined  territory  and is subject to a number of  limitations  and  conditions.
These limitations and conditions  include,  but are not limited to: (i) staffing
requirements,  including  a General  Manager  plus a minimum  number of  account
executives  based on the  territory  type;  (ii) a minimum  number of classrooms
depending on the territory type; (iii) full-time and continuous operations; (iv)
a pre-defined  minimum required  curriculum;  (v) computer  equipment and system
requirements;  (vi) signage and display  material  requirements;  (vii)  minimum
insurance requirements;  and (viii) record keeping  requirements.  The agreement
also contains  non-competition  restrictions  which bar: (i) competing  with New
Horizons  during  the term of the  Franchise  Agreement  and for one year  after
termination  of the  franchise,  within  a 25 mile  radius  of any New  Horizons
center;  (ii)  diverting or attempting to divert any customer or business of the
franchise business to any competitor; (iii) performing any act that is injurious
or prejudicial to the goodwill associated with the New Horizons service marks or
operating system; and (iv) soliciting any person who is at that time employed by
the  franchisor  or any of  its  affiliated  corporations  to  leave  his or her
employment.  In addition,  there are certain  restrictions  on the  franchisees'
rights to transfer the franchise  license.  New Horizons also maintains a "right
of first refusal" if a transfer effects a change of control.  The agreement also
contains default and termination remedies.

International
-------------

Franchise fees
--------------
Initial  franchisee  fees  and  territories  for  international  franchises  are
market/country  specific.  While the  Company  does  have  some unit  franchises
internationally,  the Company has  predominantly  entered into Master  Franchise
Agreements providing franchisees with the right to award sub-franchises to other
parties within a particular region. The Master Franchisee pays an initial master
franchise  fee that is based upon the expected  number of  sub-franchises  to be
sold.  The master  franchise fee is then earned  ratably over the opening of the
sub-franchises.  Under  the  terms of these  Master  Franchise  Agreements,  the
franchisee commits to open or cause to be opened a specified number of locations
within a specified  timeframe.  The Master  Franchisee  is  responsible  for the
pre-opening and ongoing support of the  sub-franchises.  The Company shares with
the  master  franchisee  in the  proceeds  of  subsequent  sales  of  individual
franchises  and also  receives a  percentage  of the  royalties  received by the
Master Franchisee.  In 1998 the Company entered into Master Franchise Agreements
for the development of Australia,  Austria, Italy and the Benelux countries.  To
bolster its international field support,  the Company opened regional offices in
Amsterdam  and  Singapore  in  1998.   Approximately   14.5%  of  the  Company's
system-wide  revenues  were  generated by  international  locations in 1998.  In
addition to those markets  currently served by its franchisees,  the Company has
identified  over 200  additional  international  markets  which  may  support  a
training center.

The initial  franchise fee is payable upon execution of the Franchise  Agreement
and is not  refundable  under any  circumstances.  The  territory  is a "limited
exclusive"  territory  in that New Horizons  agrees not to own or franchise  any
other New Horizons Computer Learning Center provided the franchisee  operates in
compliance  with the terms of its  Franchise  Agreement.  Unless  the  Franchise
Agreement terminates or is amended by mutual agreement,  a territory will not be
altered.  Franchises are expected to market their business to customers  located
within the defined  territory and not to customers  within  territories of other
New Horizons  franchises or  affiliates.  Franchisees  generally have six months
from the date of the execution of the Franchise Agreement to open a center.

Royalties
---------
In addition to the initial franchise fee,  franchisees pay the following fees to
New Horizons:  (i) Unit Franchisees:  a monthly  continuing royalty fee, ranging
from 3% to 6% of monthly gross revenues with minimum royalties ranging from $350
to $3,000,  depending on the marketplace;  (ii) Master  Franchisees:  40% of the
royalties received from their Subfanchisees with those royalties ranging from 3%
to 6% with  the  aforementioned  minimums;  and  (iii) a  course  materials  and
proprietary  computer-based  training  products  surcharge  of 9% of  the  gross
revenues from course materials and proprietary  computer-based training products
sold to third parties. Each franchisee also pays a $50 per month maintenance fee
for customized software developed and maintained by New Horizons. The 6% royalty
fee rate was effective for franchises sold during September 1996 or later.
<PAGE>

Master Franchise Agreement
--------------------------
A Master Franchisee  receives a "Protected Area" which is typically a country or
a region encompassing  multiple countries.  Under the Master Franchise Agreement
the  Master   Franchisee  shall:  (i)  license  and  service  third  party  Unit
Subfranchises operated by persons other than the Master Franchisee; and (ii) own
and operate at least one New Horizons  location  under a separate Unit Franchise
Agreement.  The Master Franchise Agreement runs for an initial term of ten years
and is  renewable  for  additional  ten-year  terms.  The Master  Franchisee  is
expected to: (i) grant unit franchises in a form of Unit Franchise  Agreement as
prescribed  by  New  Horizons;  (ii)  perform  and  enforce  against  each  Unit
Subfranchise the terms of any Unit Subfranchise  Agreement it enters into; (iii)
provide  the  initial   training  in  the  New  Horizons  system  to  each  Unit
Subfranchise;  and (iv) provide  ongoing  support,  consulting and assistance to
each Unit  Subfranchise  after the initial  training.  For these obligations the
Master  Franchisee  retains  60% of the initial  franchise  fees and the ongoing
royalties received from the Unit Subfranchises.

Unit Franchise Agreement
------------------------
The Franchise  Agreement  runs for an initial term of ten years and is renewable
for additional  five-year  terms. The franchise is exclusive within the specific
defined  territory,  typically a city, and is subject to a number of limitations
and conditions.  These limitations and conditions  include,  but are not limited
to: (i) staffing requirements, including a General Manager plus a minimum number
of  account  executives  based  on the  territory;  (ii)  a  minimum  number  of
classrooms   depending  on  the  territory;   (iii)   full-time  and  continuous
operations;  (iv)  a  pre-defined  minimum  required  curriculum;  (v)  computer
equipment   and  system   requirements;   (vi)  signage  and  display   material
requirements;  (vii) minimum  insurance requirements;  and (viii) record keeping
requirements.  The agreement also contains  non-competition  restrictions  which
bar: (i) competing with New Horizons during the term of the Franchise Agreement;
(ii) diverting or attempting to divert any customer or business of the franchise
business  to any  competitor;  (iii)  performing  any act that is  injurious  or
prejudicial to the goodwill  associated  with the New Horizons  service marks or
operating system; and (iv) soliciting any person who is at that time employed by
the  franchisor  or any of  its  affiliated  corporations  to  leave  his or her
employment.  In addition,  there are certain  restrictions  on the  franchisees'
rights to transfer the franchise  license.  New Horizons also maintains a "right
of first refusal" if a transfer effects a change of control.  The agreement also
contains default and termination remedies.

Franchise Support
-----------------
In return for the initial  franchise fee and the other monthly fees, the Company
provides  franchisees  with the following  services,  products,  and  managerial
support:  (i) two weeks of initial franchise training at the Company's operating
headquarters  in Santa Ana,  California,  and one week of field  training at the
franchisee's location;  (ii) franchise and sales system information contained in
the Company's  Confidential  Operations Manual and other training manuals; (iii)
ongoing  operating  support via on-site visits from Regional  Franchise  Support
Managers,  access to  troubleshooting  and business  planning  assistance;  (iv)
current  applications  courseware  at printing  cost only (over 1,200  titles in
twelve languages);  (v) access to the Major Accounts Program which coordinates a
national/international  referral  system and  delivery  network of training  for
major clients which have training requirements in multiple locations;  (vi) site
selection  assistance;  (vii) periodic regional and  international  meetings and
conferences; and (viii) advisory councils and monthly communications.

CUSTOMERS

Customers for the training provided at New Horizons company-owned and franchised
training centers are  predominantly  employer-sponsored  individuals from a wide
range of public and  private  corporations,  service  organizations,  government
agencies  and  municipalities.  Little,  if any, of the  Company's  revenues are
generated from Title IV entitlement programs.

No single customer accounted for more than 10% of New Horizons revenues in 1998.

The New Horizons  system  delivered over 2.4 million  student-days of technology
training in 1998.

SALES AND MARKETING

New Horizons  markets its services  primarily  through  account  executives  who
utilize  telesales to target and contact potential  customers.  The New Horizons
sales system is organized and  disciplined.  After  undergoing a formal  initial
training program, account executives are expected to generate their own database
of customers  through  telephone sales,  make a minimum number of calls per day,
and invoice and collect a minimum  amount of revenue each month.  These minimums
escalate  over the first eight  months an account  executive  is selling and are
designed  to  move  the  account  executive  from  being  compensated,   with  a
non-recoverable  draw  against  commission  to a  full  commission  compensation
program.  Account  executives' target sales areas are local and regional.  Sales
opportunities  which  involve  national and  international  accounts and involve
delivery  of training at  multiple  locations  are turned over to the  Company's
Major Accounts Program.
<PAGE>

In 1995 the Company  established  a Major  Accounts  Program  designed to market
computer  training  services to large  organizations  which have  facilities and
training  needs  throughout  the world.  This  program  provides  New  Horizons'
national  and  international  customers  with a single  point of  contact to the
entire New Horizons  network of training and support  services.  During 1998 New
Horizons  competed for and won national and  international  contracts  with TRW,
Storage Technology, Robert Half, and UPS, among others.

The Company  maintains a web site for  marketing  its products over the Internet
(http://www.newhorizons.com). The Company believes that the Internet will become
an increasingly important tool in its marketing program.

TRAINING AUTHORIZATIONS

New  Horizons  is  authorized  to  provide  certified  training  by more than 30
software publishers,  including Microsoft,  Novell, Apple, and Sun Microsystems.
Many of the industry's major software vendors do not offer training, but support
their  products  through  independent  training  companies  using  a  system  of
standards and performance criteria. In support of these vendors, the Company has
112 Microsoft (CTEC), 93 Novell (NAEC),  and 31 Lotus (LAEC) authorized  centers
worldwide.  The authorization  agreements are typically annual in length and are
renewable at the option of the publishers.  While New Horizons believes that its
relationships  with software  publishers  are good, the loss of any one of these
agreements could have a material  adverse impact on its business.  Additionally,
with certification  testing becoming  increasingly  important,  New Horizons has
grown its number of Authorized Prometric Testing Centers to 117.

COMPETITION

The  information  technology  training  market  is  highly  competitive,  highly
fragmented,  has low  barriers  to  entry,  and has no single  competitor  which
accounts  for a dominant  share of the market.  The  Company's  competitors  are
primarily in-house training  departments and independent  education and training
organizations.  Computer retailers,  computer resellers, and others also compete
with the Company. Periodically,  some of these competitors offer instruction and
course  titles  similar to those  offered by New  Horizons at lower  prices.  In
addition,  some of these  competitors  may have greater  financial  strength and
resources than New Horizons.

New Horizons believes that competition in the industry is based on a combination
of pricing,  breadth of  offering,  quality of  training,  and  flexibility  and
convenience of service.

The  Company   recognizes   that  the  emergence  of  desktop   multimedia   and
computer-based training, as well as distance learning and online training on the
Internet, are important and growing competitive developments in the industry.

In-house Training Departments:
------------------------------
In-house  training  departments  provide  companies  with the highest  degree of
control  over the  delivery  and  content of  information  technology  training,
allowing  for  customized  instruction  tailored  to  specific  needs.  However,
according to IDC, the demand for outsourced training is expected to grow as more
companies switch to outside training  organizations.  By outsourcing,  companies
can choose to spend based on  real-time  training  needs while  alleviating  the
overhead costs for in-house instructors' salaries and benefits.

Independent Education and Training Organizations:
-------------------------------------------------
Although the majority of independent training organizations are relatively small
and focus on local or  regional  markets,  the  Company  competes  directly on a
national  level with several firms  providing  similar  curriculum.  Executrain,
Productivity Point, Global Knowledge Network, Learning Tree, and Catapult target
the same  customer base and operate in some of the same markets as New Horizons.
The Company believes that the combination of its market presence,  the depth and
breadth of its course offerings,  its flexible  customer service  approach,  its
centralized control of delivery to national customers, its status as the world's
largest network of Microsoft  Certified  Technical  Education Centers and Novell
Authorized  Education  Centers,  and its organized and disciplined  sales system
distinguishes it from these competitors.

The Company also  competes in certain  locations  with computer  resellers  like
Inacom and IKON, as well as computer retailers such as CompUSA.
<PAGE>

Multimedia, Computer-Based Training, Distance Learning, and Web-based Training:
-------------------------------------------------------------------------------
Instructor-led  training has historically  been the dominant delivery method for
information  technology  training.   Multimedia,  CBT,  distance  learning,  and
Web-based training (WBT) have been small but growing delivery methods. According
to IDC,  these training  delivery  methods are expected to grow at a faster rate
than instructor-led  training through the year 2002. The Company recognizes that
its future  success  depends on, among other  factors,  the  market's  continued
acceptance  of  instructor-led  training  as a delivery  method for  information
technology  training,  the Company's  ability to continue to market  competitive
instructor-led  course  offerings,  and the  Company's  ability to  successfully
capitalize on the  potential of  multimedia,  CBT,  distance  learning,  and WBT
delivery methods.  Using its courseware as the source material,  the Company has
entered  into  an  arrangement  with a  company  to  develop  its  own  line  of
computer-based  products,   entitled  Masterware,   which  became  available  to
franchisees  for sale in the third  quarter of 1997.  As of December  31,  1998,
there were 40 Masterware  titles  available for sale.  IDC's 1998 research found
that IT  professionals  use 2.8 methods of study and preparation  when preparing
for  certification  exams.  The Company has a reseller  agreement with a company
that has an extensive  offering of CBT courses that will prepare  customers  for
certification exams.

WBT  represents  an emerging  trend in the  computer  training  industry and IDC
estimates  that the online  learning  market will  increase from $197 million in
1997, to $5.5 billion by 2002.  The Company has entered into an agreement with a
company  that will allow New  Horizons  customers  worldwide  to have  access to
tutor-supported WBT computer courses seven days a week, 24 hours a day.

Information  technology  training can be broken into three  segments:  Segment 1
includes the most sophisticated  levels of training for programmers and software
developers; Segment 2 includes certification for engineers (Microsoft,  Novell);
and  Segment 3 includes  the end users of  standard  application  software.  The
Company  competes in Segments 2 and 3, with an  estimated  37% of revenues  from
Segment 2 and 63% from Segment 3.

The Company competes with Catapult,  Executrain, IKON, and Productivity Point in
Segments 2 and 3. The Company competes  marginally with Learning Tree and Global
Knowledge Network in Segment 2. Currently, the Company does very little training
of programmers and software developers.

INFORMATION ABOUT FORWARD LOOKING STATEMENTS

The  statements  made in this Annual Report on Form 10-K that are not historical
facts are  forward  looking  statements.  Such  statements  are based on current
expectations but involve risks, uncertainties, and other factors which may cause
actual  results to differ  materially  from those  contemplated  by such forward
looking  statements.  Important  factors  which may  result in  variations  from
results  contemplated by such forward looking statements include,  but are by no
means limited to: (i) the Company's ability to respond  effectively to potential
changes in the manner in which  computer  training is  delivered,  including the
increasing  acceptance  of  technology-based  training  which  could  have  more
favorable  economics with respect to timing and delivery costs and the emergence
of just-in-time  interactive training; (ii) the Company's ability to attract and
retain qualified instructors;  (iii) the rate at which new software applications
are introduced by  manufacturers  and the Company's  ability to keep up with new
applications  and  enhancements  to  existing  applications;  (iv) the  level of
expenditures  devoted to upgrading  information systems and computer software by
customers;  (v) the  Company's  ability  to  compete  effectively  with low cost
training providers who may not be authorized by software manufacturers; and (vi)
the Company's ability to manage the growth of its business.

The  Company's  strategy  focuses on  enhancing  revenues and profits at current
locations,   and  also  includes  the  possible  opening  of  new  company-owned
locations,  the sale of  additional  franchises,  the selective  acquisition  of
existing  franchises in the United States which have demonstrated the ability to
achieve  exceptional  profitability  while  increasing  market  share,  and  the
acquisition of companies in similar or complementary  businesses.  The Company's
growth strategy is premised on a number of assumptions  concerning trends in the
information  technology  training  industry.  These include the  continuation of
growth in the market for  information  technology  training and the trend toward
outsourcing. To the extent that the Company's assumptions with respect to any of
these matters are inaccurate,  its results of operations and financial condition
could be adversely effected.
<PAGE>

REGULATIONS

The offer and sale of  franchises  and  business  opportunities  are  subject to
regulation by the United States Federal Trade Commission, as well as many states
and foreign  jurisdictions.  There also exist  numerous  laws that  regulate the
ongoing  relationship   between  franchisors  and  franchisees,   including  the
termination,  transfer  and renewal of franchise  rights.  The failure to comply
with any such laws could have an adverse effect on the Company.

INSURANCE

The Company maintains  liability insurance in amounts it believes to be adequate
based on the nature of its business. While the Company believes that it operates
its business  safely and prudently,  there can be no assurance that  liabilities
incurred with respect to a particular  claim will be covered by insurance or, if
covered,  that the dollar amount of such  liabilities  will not exceed  coverage
limits.

TRADEMARKS

The  Company  has  issued   trademark   registrations   and  pending   trademark
applications  for  the  word  mark  "NEW  HORIZONS"  and  for  other  trademarks
incorporating  the words  "NEW  HORIZONS."  The  Company  believes  that the New
Horizons name and  trademarks  are  important to its  business.  The Company has
obtained the new Community trademark which protects its name and mark throughout
Europe.  The  Company  is not  aware of any  pending  or  threatened  claims  of
infringement  or challenges to the Company's  right to use the New Horizons name
and  trademarks in its business.  However,  the Company has been advised that it
cannot  register the word mark "NEW HORIZONS" in certain  foreign  countries and
that it cannot register or use any of the New Horizons  trademarks in Australia.
The Company has an  application  filed with the Australian  trademark  office to
protect Skill Master as its trademark in Australia, and its franchises there are
using that name and  trademark.  The Company  believes  that neither the pending
claim nor the inability to register certain of its trademarks in certain foreign
countries  will have a material  adverse  effect on its  financial  condition or
results of operations.

EMPLOYEES

As of February 28, 1999, the Company  employed a total of 762 individuals in its
corporate operations and company-owned  facilities.  Of these employees, 247 are
instructors,  171  are  account  executives,  and  344  are  administrative  and
executive personnel. New Horizons also utilizes the services of outside contract
instructors to teach some of its curriculum,  primarily technical  certification
programs which require  instructors who are certified by Microsoft,  Novell, and
Lotus.

None of New Horizons'  employees is  represented  by a labor  organization.  New
Horizons considers relations with its employees and outside contract instructors
to be satisfactory.


ITEM 2. PROPERTIES

The Company's  corporate  headquarters occupy 1,500 square feet in a facility in
Morganville,  New Jersey. The space is being sublet under a short-term agreement
with the facility's primary tenant.

The offices for the Company's  franchising  and  company-owned  training  center
businesses  are  located in Santa Ana,  California,  pursuant  to a lease  which
expires in 2002.

As of December 31,  1998,  New Horizons  operated  training  centers at 13 other
leased facilities in California, Illinois, Ohio, Connecticut,  Tennessee and New
York with leases that expire from 1999 to 2008.

The Company believes that its facilities are well maintained and are adequate to
meet current  requirements and that suitable additional or substitute space will
be available  as needed to  accommodate  any  expansion  of  operations  and for
additional offices if necessary.

On October 2, 1998, the Company purchased 8.3 acres of undeveloped land in Santa
Ana, California for approximately $5.1 million. The Company intends to construct
a  building  on the land  that  will  serve as the  world  headquarters  for its
franchising  company  and the  main  training  facility  for its  Orange  County
company-owned training center.
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in several  lawsuits  incidental to the ordinary conduct
of its  business.  Under  the terms of the sale of the  Company's  environmental
business, the Company is required to indemnify the purchaser against liabilities
arising out of pending litigation. The Company does not believe that the outcome
of any or all these claims will have a material adverse effect upon its business
or financial condition or results of operations.


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

None

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The common stock is traded on The Nasdaq Stock Market under the symbol NEWH. The
following table sets forth the range of high and low bid quotations per share of
common stock from January 1, 1997 through  December 31, 1998, as reported by The
Nasdaq Stock Market.

1998                                                 HIGH                  LOW
----                                                 ----                  ---
1st Quarter        (January 1 - March 31)           15 1/2               12 1/4
2nd Quarter        (April 1 - June 30)              20                   13 1/2
3rd Quarter        (July 1 - September 30)          22 1/2               16 5/8
4th Quarter        (October 1 - December 31)        23 1/8               14 1/8

1997                                                HIGH                  LOW
----                                                ----                  ---
1st Quarter        (January 1 - March 31)           13 7/8                 9
2nd Quarter        (April 1 - June 30)              12 1/4                8 1/8
3rd Quarter        (July 1 - September 30)          13 3/4               10 1/4
4th Quarter        (October 1 - December 31)        16 1/8               12 5/8


As of March 26,  1999,  the  Company's  common  stock was held by 197 holders of
record. The Company has never paid cash dividends on its common stock and has no
present intention to pay cash dividends in the foreseeable  future.  The Company
currently  intends to retain any future  earnings  to finance  the growth of the
Company.
<PAGE>
ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share)
<TABLE>
<CAPTION>

Selected Consolidated
Statements of Operations Data                                           1998         1997         1996         1995           1994
-----------------------------                                           ----         ----         ----         ----           ----
<S>                                                                  <C>          <C>          <C>           <C>           <C>
Total revenues .................................................     $ 72,629     $ 52,633     $ 41,269      $ 23,733      $  5,989
Cost of revenues ...............................................       32,749       26,814       20,599        13,164         3,269
Selling, general and administrative expenses ...................       31,354       23,368       19,063        11,757         2,813
                                                                     --------     --------     --------      --------      --------
Operating income (loss) ........................................        8,526        2,451        1,607        (1,188)          (93)
Interest income (expense), net .................................        1,169          832         (140)          131            43
Gain from release of certain
    franchise obligations.......................................         --          2,600         --            --            --
                                                                     --------     --------     --------      --------      --------
Income (loss) from continuing operations
    before income taxes ........................................        9,695        5,883        1,467        (1,057)          (50)
Provision (benefit) for income taxes ...........................        3,813        2,269          669          (440)          (35)
                                                                     --------     --------     --------      --------      --------
Income (loss) from continuing operations .......................        5,882        3,614          798          (617)          (15)
                                                                     --------     --------     --------      --------      --------
Income (loss) from discontinued operations .....................         --            349         (130)          424         2,346
Loss on disposal of discontinued operations ....................         --           --         (7,303)         --            --
                                                                     --------     --------     --------      --------      --------
Income (loss) from discontinued operations .....................         --            349       (7,433)          424         2,346
                                                                     --------     --------     --------      --------      --------
Net income (loss) ..............................................     $  5,882     $  3,963     $ (6,635)     $   (193)     $  2,331
                                                                     ========     ========     ========      ========      ========

Basic Earnings Per Share
------------------------
Income (loss) per share from continuing operations .............     $   0.80     $   0.51     $   0.12      $  (0.09)     $   --
Income (loss) per share from discontinued operations ...........         --           0.05        (1.08)         0.06          0.34
                                                                     --------     --------     --------      --------      --------
Net income (loss) per share ....................................     $   0.80     $   0.56     $  (0.96)     $  (0.03)     $   0.34
                                                                     ========     ========     ========      ========      ========

Diluted Earnings Per Share
--------------------------
Income (loss) per share from continuing operations .............     $   0.77     $   0.50     $   0.12      $  (0.09)     $   --
Income (loss) per share from discontinued operations ...........         --           0.05        (1.08)         0.06          0.34
                                                                     --------     --------     --------      --------      --------
Net income (loss) per share ....................................     $   0.77     $   0.55     $  (0.96)     $  (0.03)     $   0.34
                                                                     ========     ========     ========      ========      ========
</TABLE>
<TABLE>
<CAPTION>

                                                    December 31,     December 31,     December 28,     December 30,     December 31,
Selected Consolidated Balance Sheet Data                1998            1997             1996             1995             1994
----------------------------------------            ------------     ------------     -----------      ------------     -----------
<S>                                                    <C>              <C>              <C>              <C>             <C>    
Working capital ...............................        $20,951          $27,030          $23,066          $28,898         $30,802
Total assets ..................................         86,746           66,571           60,472           56,477          53,651
Long term obligations
     less current portion .....................            267            1,516            2,330              650             464
Total stockholders' equity ....................         61,569           49,056           43,757           49,428          49,637
<FN>

(1)  Certain reclassifications were made in 1997 to conform with the presentation in 1998.

(2)  The Company  acquired  certain  assets of New  Horizons  Computer  Learning  Center of Santa Ana,  Inc. and all  the issued and
     outstanding shares  of stock of New Horizons Computer  Learning  Centers, Inc.  on August 15, 1994 and,  accordingly,  the 1994
     results reflect a partial year.

(3)  As of December 31, 1997,  the  Company  adopted  Statement of Financial  Accounting  Standards  No. 128,  "Earnings  Per Share"
     (EPS), ("SFAS No.  128").  SFAS No. 128 requires the Company to report Basic EPS, as defined therein, which assumes no dilution
     from outstanding options, and Diluted EPS, as  defined therein,  which assumes dilution from the outstanding options.  Earnings
     per share amounts for all periods presented have been restated to conform to the requirements of SFAS No. 128.
</FN>
</TABLE>
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
(Dollars in thousands, except per share data)

The following  discussion  should be read in conjunction  with the  Consolidated
Financial  Statements  and related  notes and "SELECTED  CONSOLIDATED  FINANCIAL
DATA" included elsewhere in this report.

GENERAL

The  Company  operates  computer  training  centers  in the  United  States  and
franchises  computer training centers in the United States and abroad.  Prior to
1997 the Company  also  operated an  environmental  remediation  business.  As a
result of the completion of the sale of Handex Environmental,  Inc. to ECB, Inc.
in December  1996,  the results of operations  for the  Company's  environmental
business segment have been classified as discontinued operations for all periods
presented in the accompanying  consolidated  financial  statements.  The Company
operates in two business segments:  one operates  wholly-owned computer training
centers and the other supplies  systems of  instruction,  sales,  and management
concepts concerning computer training to independent franchisees.

Corporate revenues are defined as revenues from company-owned  training centers,
initial franchise fees, royalties, and other revenues from franchise operations.
System-wide  revenues  are  defined as total  revenues  from all  centers,  both
company-owned and franchised.  System-wide revenues are used to gauge the growth
rate of the entire New Horizons training network.

Revenues from  company-owned  training  centers operated by New Horizons consist
primarily  of  training  fees and  fees  derived  from  the  sale of  courseware
material.  Cost of  revenues  consists  primarily  of  instructor  costs,  rent,
utilities,  classroom  equipment,   courseware  costs,  and  computer  hardware,
software   and   peripheral   expenses.   Included  in   selling,   general  and
administrative  expenses are  personnel  costs  associated  with  technical  and
facilities support, scheduling, training, accounting and finance, and sales.

Revenues from franchising  consist  primarily of initial  franchise fees paid by
franchisees  for the purchase of specific  franchise  territories  and franchise
rights,  training  royalty and  advertising  fees based on a percentage of gross
training revenues realized by the franchisees,  percentage royalty fees received
on the sale of courseware,  and revenue earned from the Major Accounts  Program.
Cost of revenues  consists  primarily of costs associated with franchise support
personnel who provide  system  guidelines and advice on daily  operating  issues
including sales, marketing,  instructor training, and general business problems.
Included in selling,  general and administrative expenses are technical support,
courseware  development,  accounting and finance support,  Major Account Program
support, advertising expenses, and franchise sales expenses.

RESULTS OF OPERATIONS  1998 VERSUS 1997 -- CONTINUING OPERATIONS

Revenues
--------
Revenues  for 1998  increased  $19,996  to  $72,629  or 38.0%  over the  $52,633
realized in 1997.  Revenues  include revenues from  company-owned  locations and
initial franchise fees and royalties from franchise operations.  The increase in
revenues was attributable to significant growth in royalties,  revenue increases
at the Santa Ana and Cleveland company-owned  locations,  and the acquisition of
the Memphis and Nashville, Tennessee and the Hartford, Connecticut franchises.

Revenues at  company-owned  centers  increased  35.8% to $52,545 from $38,692 in
1997. The increase was primarily attributable to a 16.3% increase at the centers
owned at January 1, 1998 and the  acquisition  of the  Memphis,  Nashville,  and
Hartford franchises.

In the Company's  franchising  segment,  royalty fees for 1998 were $16,189,  up
36.2% over the 1997 total of $11,887.  The  increase  was  principally  due to a
30.3% revenue  increase at locations open more than one year and the addition of
22 franchise  locations during the year, less three franchises  purchased by the
Company and operated as  company-owned  locations.  Franchise fees for 1998 were
$1,704,  up 35.8% from the 1997 total of $1,255.  At the end of 1998, there were
194 franchise locations in operation,  up 10.9% over the 175 in operation at the
end of 1997. One hundred seventeen  franchise  locations operate in the U.S. and
Canada  while  77  operate  in  28  other  countries  around  the  world.  Other
franchising  revenues for 1998 increased  $1,392, up 174% from the 1997 total of
$799.  The increase was due mainly to higher  revenues  from the Major  Accounts
Program.
<PAGE>

System-wide  revenues,  which are defined as  revenues  from all  centers,  both
company-owned and franchised, increased to $357,503 at the end of 1998, up 33.7%
from $267,377 in 1997.

Cost of Revenues
----------------
Cost of  revenues  increased  $5,935 or 22.1% for 1998  compared  to 1997.  As a
percentage of revenues,  cost of revenues decreased to 45.1% for 1998 from 50.9%
for 1997. Cost of revenues  includes  direct training costs,  such as instructor
payroll and benefits,  facilities rent, cost of computer  equipment,  courseware
consumption costs, and other training delivery costs.

The increase in cost of revenues in absolute  dollars was due to the acquisition
of Memphis,  Nashville, and Hartford franchises and the increased training costs
at the Santa Ana and Cleveland  locations resulting from the growth in revenues.
The decrease as a percentage  of revenue  resulted from the control of the costs
to deliver training.

Selling, General and Administrative Expenses 
---------------------------------------------
Selling,  general and administrative expenses increased $7,986 or 34.2% for 1998
compared  to  1997.   As  a  percentage  of  revenues,   selling,   general  and
administrative  expenses  declined  to 43.2% for 1998 from  44.4% for 1997.  The
increase in absolute dollars for selling,  general and  administrative  expenses
was due  primarily  to growth in spending  in the areas of sales and  marketing,
national  advertising,  expansion of the Major Accounts  Program,  and franchise
support for  international  operations.  The  decrease  in selling,  general and
administrative  expense as a percentage of revenues was  principally  due to the
significant  growth in  revenues  and  control of the  addition  of  non-revenue
producing employees.

Operating Income
----------------
Operating  income  for 1998  increased  $6,075 to $8,526 or 248% from  $2,451 in
1997. As a percentage of revenues,  operating  income was 11.7% compared to 4.7%
in 1997. The increase in operating  income for 1998 in absolute dollars and as a
percentage of revenues was due  principally to the growth in  company-owned  and
franchising  revenues  and the  reduction  in all  expenses as a  percentage  of
revenues.

Investment Income (Expense)
---------------------------
Investment income for 1998 increased $123 or 9.5% to $1,424 compared with $1,301
in 1997. As a percentage of revenues,  investment  income  decreased to 2.0% for
1998 from 2.5% for 1997.  The Company  earned $938 in tax-free  income,  up from
$835 in 1997.  The increase in investment  income in 1998, in absolute  dollars,
was due  mainly to the  substantial  increase  in short  term  investment  funds
resulting from the 1996 sale of the environmental business and the cash received
from the  release of certain  franchise  obligations  in 1997.  The  decrease in
investment income as a percentage of revenue was due to the growth in revenues.

Interest  expense  decreased  $214 to $255 for 1998 or 45.6% compared to $469 in
1997. As a percentage of revenues, interest expense was 0.4% in 1998 and 0.9% in
1997. The decrease in interest  expense in absolute  dollars was due mainly to a
reduction in debt.

Income Taxes
------------
The provision for income taxes as a percentage of income before income taxes was
39.3% for 1998  compared to 38.6% for 1997.  The increase in the  effective  tax
rate was due principally to increased  foreign taxes and the smaller  percentage
of the tax-free investment income to total income before taxes.

Net Income
----------
Net income from continuing operations for 1998 was $5,882, an increase of $2,268
or 62.8% as compared to $3,614 for 1997.
<PAGE>

RESULTS OF OPERATIONS  1997 VERSUS 1996 -- CONTINUING OPERATIONS

Revenues
--------
Revenues  for 1997  increased  $11,364  to  $52,633  or 27.5%  over the  $41,269
realized in 1996.  Revenues  include revenues from  company-owned  locations and
initial franchise fees and royalties from franchise operations.  The increase in
revenues was attributable to significant  growth in royalties and from growth in
revenues at company-owned locations.

Revenues at  company-owned  centers  increased  23.1% to $38,692 from $31,425 in
1996. The increase was primarily  attributable to the addition of a new training
center in New York City, the full year's  operation of the Los Angeles  training
center, and the addition of classrooms in the Santa Ana training facility.

In the  Company's  franchising  segment,  royalty  and other  fees for 1997 were
$12,686,  up 48.0% over the 1996 total of $8,574.  The increase was  principally
due to a 39.4%  revenue  increase at  locations  open more than one year and the
addition of 28 franchise locations during the year. Franchise fees for 1997 were
$1,255,  down 1.3% from the 1996 total of $1,271.  At the end of 1997 there were
175 franchise locations in operation,  up 19.0% over the 147 in operation at the
end of 1996. One hundred fourteen locations operate in the U.S. and Canada while
61 operate in 21 other countries around the world.

System-wide  revenues,  which are defined as  revenues  from all  centers,  both
company-owned and franchised, increased to $267,377 at the end of 1997, up 39.2%
from $192,134 in 1996.

Cost of Revenues
----------------
Cost of  revenues  increased  $6,214 or 30.2% for 1997  compared  to 1996.  As a
percentage of revenues,  cost of revenues increased to 50.9% for 1997 from 49.9%
for 1996. Cost of revenues  includes  direct training costs,  such as instructor
payroll and benefits,  facilities rent, cost of computer  equipment,  courseware
consumption, and other training delivery costs.

The  increase in cost of revenues in  absolute  dollars and as a  percentage  of
revenues  was due to higher  training,  facilities,  and  depreciation  expenses
associated  with the addition of a new center in New York City, the expansion of
the center in Santa Ana, and the full year's operation of the new  company-owned
training center in Los Angeles.

Selling, General and Administrative
-----------------------------------
Selling,  general and administrative expenses increased $4,305 or 22.6% for 1997
compared  to  1996.   As  a  percentage  of  revenues,   selling,   general  and
administrative  expenses  declined  to 44.4% for 1997 from  46.2% for 1996.  The
increase in absolute dollars for selling,  general and  administrative  expenses
was due  primarily  to growth in spending  in the areas of sales and  marketing,
national advertising, expansion of the Major Accounts Program, franchise support
for domestic and international operations,  and expenses associated with the new
center in Los Angeles and  expansion in New York City.  The decrease in selling,
general and  administrative  expense as a percentage of revenues was principally
due to the  significant  growth in  revenues  and  control  of the  addition  of
non-revenue producing employees.

Operating Income
----------------
Operating income for 1997 increased $844 to $2,451 or 52.5% from $1,607 in 1996.
As a percentage of revenues, operating income was 4.7% compared to 3.9% in 1996.
The  increase  in  operating  income  for  1997  in  absolute  dollars  and as a
percentage of revenues was due  principally to the growth in  company-owned  and
franchising  revenues and the reduction in selling,  general and  administrative
expenses, as a percentage of revenues.
<PAGE>

Investment Income, Net
----------------------
Investment income for 1997 increased $1,090 or 517% to $1,301 compared with $211
in 1996. As a percentage of revenues,  investment  income  increased to 2.5% for
1997 from 0.5% for 1996.  The Company  earned $835 in tax-free  income,  up from
$211 in 1996.  The  increase  in  investment  income in 1997,  both in  absolute
dollars  and as a  percentage  of  revenues,  was due mainly to the  substantial
increase  in  short  term  investment  funds  resulting  from  the  sale  of the
environmental  business  and the cash  received  from  the  release  of  certain
franchise obligations discussed below.

Interest  expense  increased  $118 to $469 for 1997 or 33.6% compared to $351 in
1996. As a percentage of revenues,  interest  expense was 0.9% for both 1997 and
1996.  The rise in  interest  expense  in  absolute  dollars  was due  mainly to
purchases  of  equipment  under  capital  lease  arrangements  in 1996  and bank
financing in 1997.


Gain from Release of Certain Franchise Obligations
--------------------------------------------------
On February 28,  1997,  the Company  received  cash  consideration  of $2,600 in
return for releasing the franchise  obligations of an owner of four New Horizons
training  centers  in the  state  of  New  York.  The  Company  is  aggressively
attempting to re-franchise  the territories that became available as a result of
this  transaction.  As of December 31,  1997,  one of the  territories  has been
resold.

Income Taxes
------------
The provision for income taxes as a percentage of income before income taxes was
38.6% for 1997  compared to 45.6% for 1996.  The decrease in the  effective  tax
rate was due principally to higher tax-free  interest income  resulting from the
investment of excess cash, primarily in tax-free municipal bond funds.

Net Income
----------
Net income from continuing operations for 1997 was $3,614, an increase of $2,816
or 353% as compared to $798 for 1996.

DISCONTINUED OPERATIONS

Sale of Environmental Business Unit and Change of Corporate Name
----------------------------------------------------------------
On December 27, 1996, Handex Corporation completed the sale of its environmental
business segment to ECB, Inc. ("ECB"), a Florida corporation, and simultaneously
changed its name from Handex  Corporation to New Horizons  Worldwide,  Inc. (the
"Company"  or "New  Horizons").  This name  change  was  effected  so as to more
closely  identify  with  its  continuing  educational  training  business  which
conducts business under the name New Horizons  Computer  Learning Centers.  Both
the transaction and the name change were authorized by stockholders at a special
meeting of the stockholders held on December 20, 1996.

Description of the Transaction
------------------------------
The Company sold all of the issued and  outstanding  shares of capital  stock of
Handex  Environmental,  Inc., a wholly-owned  subsidiary of the Company, to ECB,
Inc. Handex  Environmental,  Inc. was a holding company for several subsidiaries
("Environmental  Subsidiaries")  which  conducted  the  Company's  environmental
remediation services.

Under the sale agreement,  ECB acquired the stock of the Company's environmental
subsidiaries  with a net asset  value of $10,300  for $4,600 in cash,  and other
consideration,  including a promissory note and preferred stock in the amount of
$3,700 and $2,000, respectively. Assets of the discontinued segment in excess of
$10,300,  consisting  principally of accounts  receivable,  were retained by the
Company.  The Company  incurred a loss on the disposal of the segment of $7,303,
consisting  primarily  of  valuation  reserves  on the  promissory  note and the
preferred stock in the amount of $2,960,  and $1,600,  respectively,  a goodwill
write-off of approximately  $1,800, and transaction costs of approximately $966.
There is no expected tax benefit from this loss.

<PAGE>

Consideration Received by the Company; Use of Proceeds
------------------------------------------------------
The Company received aggregate consideration in the face amount of approximately
$21,954.  The  consideration  received by the Company from ECB consisted of: (i)
$4,600 in cash;  (ii) a  promissory  note in the  original  principal  amount of
$3,700  (subject  to  adjustment  in certain  events)  due on April 30, 2002 and
bearing  interest at the rate of 6% per annum;  (iii)  2,000  shares of Series A
Preferred  Stock,  stated value $1,000 per share of ECB; (iv) a six-year warrant
to acquire  300,000 common shares of ECB at a price of $1.32 per share ("Warrant
A"); (v) a six-year warrant to acquire 85,000 common shares of ECB at a price of
$1.60 per share ("Warrant B") (Warrant A and Warrant B are collectively referred
to herein as the  "Warrants");  and (vi) one-third of the redemption  value of a
small interest in a joint venture,  when paid or available to be paid to ECB. In
addition,  immediately prior to the closing,  the Company received a dividend of
cash,  accounts  receivable,   and  other  assets  owned  by  the  environmental
subsidiaries having a book value of $11,654 at December 27, 1996.

The face amount of the non-cash consideration received by the Company (excluding
the Warrants) was $5,700. However, because ECB was a newly organized entity with
no  history  of prior  operations  and  because  of the  significant  amount  of
indebtedness  that ECB incurred in connection with the transaction,  the Company
established a valuation  reserve with respect to the non-cash  consideration  in
the amount of $4,560. In addition,  neither the Warrants nor the interest in the
joint  venture were given any value in  determining  the loss on the disposal of
the environmental business or for balance sheet presentation purposes.

For a more detailed  description  of the  transaction,  see the Company's  Proxy
Statement  dated  December 3, 1996 and the  appendices  thereto and  information
incorporated by reference therein.

Results of Discontinued Operations 1998 versus 1997, and 1997 versus 1996
-------------------------------------------------------------------------
For the years ended  December  31, 1998 and December  31,  1997,  the  Company's
involvement  in  the  discontinued  operations  of  Handex  Environmental,  Inc.
consisted  primarily of collecting  accounts  receivable and  liquidating  other
assets  received as part of the  aforementioned  dividend and resolving  certain
legal matters pertinent to the wind-down of the environmental business.

In December 1997 the Company received $2,000 from ECB, Inc. in redemption of the
2,000 shares of Series A Preferred  Stock which had a stated value of $1,000 per
share. In 1996 the Company had established a valuation reserve of $1,600 against
the face amount of the Preferred Stock which it reversed upon the receipt of the
redemption  proceeds.   Upon  further  analysis  of  the  remaining  assets  and
liabilities of the  environmental  business,  the Company recorded an additional
provision  of $1,251 to reflect the expected  realization  value of those assets
and liabilities.  As a result of the redemption of the Series A Preferred Stock,
ECB,  Inc.  was also able to redeem at no cost the  six-year  warrant to acquire
300,000  common  shares of ECB at a price of $1.32  per  share and the  six-year
warrant to acquire  85,000  common  shares of ECB at a price of $1.60 per share.
The Company,  in 1996,  ascribed no value to the warrants,  so the redemption in
1997 had no effect on its financial results.

As a result  of the sale of the  environmental  business  in 1996,  the  Company
incurred a third  quarter  non-cash,  after tax  charge of $7,303,  or $1.06 per
share.  This  charge,  representing  a loss  on  the  disposal  of  discontinued
operations,  consisted primarily of the write-off of goodwill which approximated
$1,800,  transaction costs which  approximated $966, and valuation reserves that
totaled about $4,560. An operating loss from discontinued operations of $130, or
$0.02 per share, combined with the loss on disposal resulted in a full year 1996
loss from discontinued operations of $7,433, or $1.08 per share.

LIQUIDITY AND  CAPITAL RESOURCES

As of December  31,  1998,  the  Company's  current  ratio was 1.9 to 1, working
capital was $20,951,  and its cash, cash  equivalents and short-term investments
totaled $22,694.  Working capital as of December 31, 1998,  reflected a decrease
of $6,079 from $27,030 as of December 31, 1997. The decrease was due principally
to the use of cash to purchase undeveloped land in Santa Ana, California and the
purchase of the Memphis and Nashville,  Tennessee franchises.  This decrease was
partially offset by increased cash from operations.

As part of the sale  transaction  of the  environmental  business  in 1996,  the
Company  retained  over $9,300 in net  accounts  receivable.  By the end of 1998
substantially all of these receivables had been collected by the Company.

<PAGE>
The  Company  currently  maintains  a credit  facility  with a  commercial  bank
providing availability of $3,750 at a variable interest rate equal to 1.0% under
the bank's  prime rate (7.75% at December  31,  1998).  As of December 31, 1998,
there was no amount  outstanding  under this  facility.  On October 30, 1998, as
part  of the  acquisition  of the  Hartford  franchise,  the  Company  issued  a
promissory  note  for  $3,000  due  January  1999.  The  note is  secured  by an
irrevocable  standby letter of credit issued by the Company's  commercial  bank.
The issuance of the standby letter of credit reduced the availability  under the
credit facility to $750. The note was paid in full in January 1999.

The  nature  of  the  information  technology  and  training  industry  requires
substantial cash commitments for the purchase of computer  equipment,  software,
and training facilities.  During 1998 New Horizons spent approximately $8,444 on
capital items. Capital expenditures for 1999 are expected to total approximately
$8,600.

Management  believes that its current working capital position,  cash flows from
operations,  along with its credit  facility,  will be  adequate  to support its
current and anticipated capital and operating expenditures and its strategies to
grow its computer education and training business.

IMPACT OF ACCOUNTING PRONOUNCEMENTS

In June 1998 the Financial Accounting Standards Board (FASB) issued Statement of
Financial  Accounting Standards No. 133, "Accounting for Derivatives and Hedging
Activities"  ("SFAS No. 133").  SFAS No. 133 must be  implemented by the Company
for the year  ended  December  31,  2000.  The  effects  of SFAS No.  133 on the
Company's financial statements are not expected to be significant.

YEAR 2000

The issues raised by the inability of computers,  software,  and other equipment
utilizing   microprocessors  to  recognize  and  properly  process  data  fields
containing a 2-digit year are commonly  referred to as Year 2000 ("Y2K") issues.
A  company-wide  Y2K  compliance  program has been  implemented to determine Y2K
issues and develop strategies to assure  compliance.  The compliance program has
four major areas of  concentration:  internal  information  technology  systems,
non-information   technology   systems,   systems  and  processes   utilized  by
franchisees,  and compliance  issues related to major  suppliers.  A Y2K project
team has been  established  and is directing  the activity  regarding the issues
confronted  in each area,  monitoring  progress  of the  effort,  and  reporting
findings to management.  As the Y2K  compliance  program  proceeds,  contingency
plans will be prepared,  updated,  and  implemented  as necessary to address the
risks identified.

With respect to internal information technology systems, among the most critical
systems to the  ongoing  operations  of both the  company-owned  and  franchised
training  centers are those systems which provide  customer  contact and student
registration  information.  The  systems  currently  used  by the  company-owned
centers  are not Y2K  compliant,  but the  Company has  prepared  the  necessary
upgrades.  The  cost of  developing  these  upgrades  has not  been,  and is not
expected to be, material.  Certain franchised  locations use the same systems as
the  company-owned  centers and have received  these  upgrades from the Company.
Other franchised  locations use contact  management and/or student  registration
software from various  vendors  which,  in many cases,  may require  updating to
become Y2K compliant.  Franchisees  have been and will continue to be advised to
bring their systems into compliance.  However,  simultaneous with these efforts,
the  Company  has  also  engaged  a  third  party  to  develop  a  comprehensive
replacement  information  management  system (NHMS) for use in all company-owned
and franchised  locations.  The Company  expects to commence  deployment of this
system, which is designed to be Y2K compliant,  in the third quarter of 1999. In
addition to the foregoing,  the Company is reviewing its other computer hardware
and software systems and upgrading or replacing them as necessary.  With respect
to the Company's  accounting  system currently used to consolidate  results from
the company-owned  centers,  the Company has selected a new system.  The cost of
the new system is expected to be less than $450.  Installation is expected to be
completed for the locations that do not have Y2K compliant accounting systems by
the second  quarter of 1999.  The new system will be installed in the  remaining
centers by September 1999.

Regarding  non-information  technology systems, the project team has inventoried
the  items  potentially  affected  by Y2K  issues,  and is  currently  assessing
compliance  of those  systems  considered  to have the  potential for a material
impact.  Those items which appear to have the  potential for such an effect that
are determined not to be in compliance will be upgraded or replaced by mid-1999.
Those costs are not expected to be material.

<PAGE>

The project team prepared a Y2K readiness compliance outline and disseminated it
to franchisees at the end of 1998. The operation of a franchise is substantially
similar to the operation of a company-owned center, and accordingly, this report
is a  by-product  of  the  analysis  the  project  team  is  performing  on  the
company-owned  locations.  As noted above, it is believed that many  franchisees
have contact  management and/or student  registration  systems which are not Y2K
compliant. Because the Company derives a significant portion of its revenue from
royalties  received  from its  franchisees,  the  Company  could  be  materially
adversely  affected  if the  systems  utilized  by the  franchisees  are not Y2K
compliant. In order to minimize this exposure, which the Company believes is its
most  reasonably  likely worst case scenario,  the Company  intends to make NHMS
available to franchisees  in 1999 and to furnish to users of older  systems,  of
the type used by the Company, upgrades which are expected to bring these systems
into Y2K compliance.  However,  there can be no assurance that  franchisees will
implement NHMS or the necessary system upgrades before January 1, 2000.

As part  of its  Y2K  compliance  efforts,  the  Company  has  initiated  formal
communications  with  suppliers  providing  goods or  services  material  to the
Company's  operations  in order to determine  the extent to which the  Company's
systems and  operations  are  vulnerable to any failure by such third parties to
remediate  their Y2K  problems.  There can be no  assurance,  however,  that the
systems of those  suppliers  will be converted in a timely  fashion and will not
have an adverse effect on the Company. The lack of Y2K compliance on the part of
a customer of a  company-owned  or  franchised  center  should not have a direct
adverse  impact on the  operations  of the Company.  However,  to the extent the
costs associated with Y2K compliance reduces a customer's information technology
training budget, the Company could experience a reduction in revenues.

The  Company  believes  that  the  cost of the Y2K  compliance  efforts  for its
information and  non-information  technology systems will not be material to its
financial position or results of operations in any given year.  However,  due to
the inherent  uncertainties  surrounding  Y2K issues,  there can be no assurance
that  Y2K  failures  or  implications,  including  litigation,  will  not have a
material  adverse  effect  on the  Company's  business,  operating  results,  or
financial  position,  particularly  in the event any  significant  third parties
cannot in a timely  manner  provide  the Company  with  products,  services,  or
systems that meet the Y2K  requirements.  The  conclusions and estimates in this
Y2K  information   include   forward-looking   statements  and  are  based  upon
management's current best estimates of future events.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk  related to changes in interest  rates.  A
discussion of the Company's  accounting  policies for financial  instruments and
further disclosures  relating to financial  instruments is included in the Notes
to Consolidated Financial Statements.  The Company monitors the risks associated
with interest rates and financial instrument positions.

The Company's revenue derived from international operations is not material, and
therefore, the risk related to foreign currency exchange rates is not material.

Investment  Portfolio
--------------------   
The Company has no derivative  financial  instruments  or  derivative  commodity
instruments in its cash and cash equivalents and investments. The Company's cash
and cash  equivalents and investments  consist of high-quality and highly liquid
investments  including taxable money market  investments,  municipal bond funds,
short-term  closed end funds,  and tax-exempt  government notes and bonds. As of
December 31, 1998, the Company's cash and cash  equivalents and investments have
varying  maturity  dates  from one month to three  and  one-half  years  with an
average yield of 5.0%.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Pages F-1 to F-21  contain  the  Financial  Statements  and  supplementary  data
specified for Item 8 of Part II of Form 10-K.

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

None
<PAGE>







                          Independent Auditors' Report
                          ----------------------------
 


The Board of Directors and Stockholders
New Horizons Worldwide, Inc.


     We have audited the accompanying consolidated balance sheet of New Horizons
Worldwide,  Inc. and subsidiaries (the Company) as of December 31, 1998 and 1997
and the related  consolidated  statements of operations,  comprehensive  income,
stockholders'  equity,  and cash flows for the years then ended. 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  generally  accepted  auditing
standards.  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,  such consolidated  financial  statements referred to above
present fairly, in all material respects, the financial position of New Horizons
Worldwide,  Inc.  and  subsidiaries  as of December  31, 1998 and 1997,  and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with generally accepted accounting principles.
 
DELOITTE & TOUCHE LLP
Costa Mesa, California
February 24, 1999



                                      F-1
<PAGE>






                          Independent Auditors' Report
                          ----------------------------



The Board of Directors and Stockholders
New Horizons Worldwide, Inc.


     We have audited the  accompanying  consolidated  statements of  operations,
stockholders'  equity,  and cash flows of New Horizons  Worldwide,  Inc. for the
year ended December 28, 1996. These  consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

     We conducted our audit in accordance  with  generally  accepted  standards.
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 audit provides a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all material  respects,  the results of operations and cash
flows of New Horizons  Worldwide,  Inc. for the year ended  December 28, 1996 in
conformity with generally accepted accounting principles.


KPMG LLP
Cleveland, Ohio
February 14, 1997



                                      F-2
<PAGE>
                           CONSOLIDATED BALANCE SHEETS

                  New Horizons Worldwide, Inc. and Subsidiaries

                     December 31, 1998 and December 31, 1997
                             (Dollars in thousands)

Assets                                                      1998          1997
------                                                      ----          ----
Current assets:
     Cash and cash equivalents .....................     $  6,873      $  3,129
     Investments ...................................       15,821        23,058
     Accounts receivable, less allowance
          for doubtful accounts of $927 in
          1998 and $1,693 in 1997 (Note 2) .........       16,538        11,887
     Inventories ...................................          784           720
     Prepaid expenses ..............................        1,039           731
     Deferred income tax assets (Note 6) ...........        2,202         1,429
     Other current assets ..........................          773           887
                                                         --------      --------
         Total current assets ......................       44,030        41,841

Property, plant and equipment, net (Note 4) ........       13,818         7,848

Excess of cost over net assets of acquired
     companies, net of accumulated
     amortization of $1,844 in 1998 and
     $1,238 in 1997 (Note 12) ......................       25,225        13,546
Cash surrender value of life insurance .............          863           758
Other assets (Note 7) ..............................        2,810         2,578
                                                         --------      --------
Total Assets .......................................     $ 86,746      $ 66,571
                                                         ========      ========

Liabilities & Stockholders' Equity
----------------------------------
Current liabilities:
     Notes payable and current portion of
          long-term obligations (Note 3) ...........     $  3,910      $  1,792
     Accounts payable ..............................        2,391         2,489
     Income taxes payable (Note 6) .................          354         1,049
     Other current liabilities (Note 8) ............       16,424         9,481
                                                         --------      --------
         Total current liabilities .................       23,079        14,811

Long-term obligations, excluding current
     portion (Note 3) ..............................          267         1,516
Deferred income tax liability (Note 6) .............          981           563
Deferred rent (Note 11) ............................          658           598
Other long-term liabilities ........................          192            27
                                                         --------      --------
         Total liabilities .........................       25,177        17,515
Commitments and contingencies (Note 11) ............         --            --
                                                         --------      --------
Stockholders' equity (Note 10):
     Preferred stock without par value,
          2,000,000 shares authorized, no
          shares issued ............................         --            --
     Common stock, $.01 par value,
          15,000,000 shares authorized;
          issued and outstanding 7,683,825
          shares in 1998 and 7,327,331
          shares in 1997 ...........................           77            73
     Additional paid-in capital ....................       33,220        26,646
     Retained earnings .............................       29,517        23,635
     Treasury stock at cost - 185,000
          shares in 1998 and 1997 ..................       (1,298)       (1,298)
     Accumulated other comprehensive income ........           53          --
                                                         --------      --------
         Total stockholders' equity ................       61,569        49,056
                                                         --------      --------
Total Liabilities & Stockholders' Equity ...........     $ 86,746      $ 66,571
                                                         ========      ========

           See accompanying notes to consolidated financial statements

                                      F-3
<PAGE>

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                  New Horizons Worldwide, Inc. and Subsidiaries

     Years ended December 31, 1998, December 31, 1997, and December 28, 1996
                    (Dollars in thousands, except per share)

                                                    1998       1997       1996
                                                    ----       ----       ----
Revenues
     Franchising
         Franchise fees ......................   $  1,704   $  1,255   $  1,270
          Royalties ...........................    16,189     11,887      8,340
         Other ...............................      2,191        799        234
                                                 --------   --------   --------
         Total franchising revenues ..........     20,084     13,941      9,844
     Company-owned training centers ..........     52,545     38,692     31,425
                                                 --------   --------   --------
         Total revenues ......................     72,629     52,633     41,269

Cost of revenues .............................     32,749     26,814     20,599

Selling, general and administrative expenses .     31,354     23,368     19,063
                                                 --------   --------   --------
Operating income .............................      8,526      2,451      1,607

Interest income (expense), net ...............      1,169        832       (140)

Gain from release of certain franchise
     obligations .............................       --        2,600       --
                                                 --------   --------   --------
Income from continuing operations before
     income taxes ............................      9,695      5,883      1,467

Provision for income taxes (Note 6) ..........      3,813      2,269        669
                                                 --------   --------   --------
Income from continuing operations ............      5,882      3,614        798

Discontinued operations (Note 14):
     Income (loss) from discontinued
          operations net of applicable income
          taxes of $0 and $85 for 1997 and
          1996, respectively .................       --          349       (130)

     Loss on disposal of discontinued
          operations .........................       --         --       (7,303)
                                                 --------   --------   --------
     Income(loss) from discontinued operations       --          349     (7,433)
                                                 --------   --------   --------
Net income (loss) ............................   $  5,882   $  3,963   $ (6,635)
                                                 ========   ========   ======== 

Basic Earnings Per Share
------------------------
Income per share from continuing operations ..   $   0.80   $   0.51   $   0.12
Income (loss) per share from discontinued
     operations ..............................       --         0.05      (1.08)
                                                 --------   --------   --------
Net income (loss) per share ..................   $   0.80   $   0.56   $  (0.96)
                                                 ========   ========   ======== 

Diluted Earnings Per Share
--------------------------
Income per share from continuing operations ..   $   0.77   $   0.50   $   0.12
Income (loss) per share from discontinued
     operations ..............................       --         0.05      (1.08)
                                                 --------   --------   --------
Net income (loss) per share ..................   $   0.77   $   0.55   $  (0.96)
                                                 ========   ========   ======== 

           See accompanying notes to consolidated financial statements

                                      F-4
<PAGE>

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                  New Horizons Worldwide, Inc. and Subsidiaries

     Years ended December 31, 1998, December 31, 1997, and December 28, 1996
                             (Dollars in thousands)




                                                  1998        1997        1996
                                                  ----        ----        ----

Net Income (loss) .........................     $ 5,882     $ 3,963     $(6,635)
                                                -------     -------     ------- 

Other comprehensive income,
before tax:
     Unrealized holding gains on
     available for sale securities
     arising during year ..................          53        --          --

     Income tax liability related to
     other comprehensive income ...........        --          --          --
                                                -------     -------     ------- 
Other comprehensive income,
     net of tax ...........................          53        --          --
                                                -------     -------     ------- 
Comprehensive income (loss) ...............     $ 5,935     $ 3,963     $(6,635)
                                                =======     =======     ======= 




                                      F-5

<PAGE>
<TABLE>
<CAPTION>

                                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                               New Horizons Worldwide, Inc. and Subsidiaries

                                  Years ended December 31, 1998, December 31, 1997, and December 28, 1996
                                                                (In thousands)



                                                                                                              Accumulated
                                                                           Additional                             other      Stock-
                                                          Common Stock       paid-in    Retained    Treasury  comprehensive holders'
                                                        Shares    Amount     capital    earnings      stock       income     equity
                                                        ------    ------     -------    --------      -----       ------    --------
<S>                                                      <C>     <C>        <C>         <C>         <C>         <C>        <C>

Balance at January 1, 1996 ........................      7,050   $     70   $ 24,350    $ 26,306    $ (1,298)   $   --     $ 49,428

Issuance of common stock from exercise
     of stock options .............................        113          1        742        --          --          --          743

Income tax benefit from the exercise of
     stock options ................................       --         --          224        --          --          --          224

Registration expense for warrants issued
     in 1994 ......................................       --         --           (4)       --          --          --           (4)

Net loss ..........................................       --         --         --        (6,635)       --          --       (6,635)
                                                         -----   --------   --------    --------    --------    --------   --------
Balance at December 28, 1996 ......................      7,163         71     25,312      19,671      (1,298)       --       43,756


Issuance of common stock from exercise of
     stock options ................................        164          2      1,036        --          --          --        1,038

Income tax benefit from the exercise of
     stock options ................................       --         --          298        --          --          --          298

Net income ........................................       --         --         --         3,964        --          --        3,964
                                                         -----   --------   --------    --------    --------    --------   --------
Balance at December 31, 1997 ......................      7,327         73     26,646      23,635      (1,298)       --       49,056


Issuance of common stock from exercise of
     stock options and warrants ...................         60          1        396        --          --          --          397

Income tax benefit from the exercise of
     stock options and warrants ...................       --         --          180        --          --          --          180

Issuance of common stock for acquisitions .........        297          3      5,451        --          --          --        5,454

Unrealized gain on investments ....................       --         --         --          --          --            53         53

Recognize valuation of stock options and
     warrants as deferred compensation ............       --         --          547        --          --          --          547

Net income ........................................       --         --         --         5,882        --          --        5,882
                                                         -----   --------   --------    --------    --------    --------   --------
Balance at December 31, 1998 ......................      7,684   $     77   $ 33,220    $ 29,517    $ (1,298)   $     53   $ 61,569
                                                         =====   ========   ========    ========    ========    ========   ========
<FN>

                                      See accompanying notes to consolidated financial statements
</FN>
</TABLE>

                                                                     F-6
<PAGE>
<TABLE>
<CAPTION>
                                                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                    New Horizons Worldwide, Inc. and Subsidiaries

                                      Years ended December 31, 1998, December 31, 1997, and December 28, 1996
                                                            (Dollars in thousands)


                                                                                          1998              1997              1996
                                                                                          ----              ----              ----
<S>                                                                                    <C>               <C>               <C>
Cash flows from operating activities
------------------------------------
     Net income (loss) .......................................................         $  5,882          $  3,963          $ (6,635)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities (net of acquisitions):
     Depreciation and amortization ...........................................            4,006             3,786             2,863
     Deferred  income taxes ..................................................             (355)             (839)               17
     Deferred  compensation ..................................................              547              --                --
     Cash provided (used) from the change in:
         Accounts receivable .................................................           (3,270)            5,816            (1,547)
         Inventories .........................................................              133              (114)             (237)
         Prepaid expenses and other current assets ...........................             (192)            3,954              (430)
         Other  assets .......................................................             (195)           (1,578)             (390)
         Accounts payable ....................................................             (477)              187             3,460
         Other current liabilities ...........................................            4,861                 4             2,555
         Income taxes payable ................................................             (515)            1,251               740
         Deferred rent .......................................................               60               363                29
         Non-cash charges and working capital changes
            from discontinued operations .....................................             --                (349)            7,768
                                                                                       --------          --------          -------- 
              Net cash provided  by operating activities .....................           10,485            16,444             8,193
                                                                                       --------          --------          -------- 
Cash flows from investing activities
------------------------------------
     Purchase of marketable securities .......................................          (21,810)          (22,758)             --
     Redemption of marketable securities .....................................           29,100              --               2,475
     Cash surrender value of life insurance ..................................             (105)              (84)             --
     Cash received on redemption of preferred stock ..........................             --               2,000              --
     Additions to property, plant and equipment:
         Continuing operations ...............................................           (8,444)           (4,450)           (4,899)
         Discontinued operations .............................................             --                --              (1,010)
     Cash paid for acquired companies, net of cash acquired ..................           (3,688)             --                 (57)
                                                                                       --------          --------          -------- 
         Net cash used by investing activities ...............................           (4,947)          (25,292)           (3,491)
                                                                                       --------          --------          -------- 
Cash flows from financing activities
------------------------------------
     Proceeds from issuance of common stock ..................................              397             1,038               743
     Proceeds from debt obligations ..........................................              181             1,264             3,384
     Principal payments on debt obligations ..................................           (2,372)           (1,736)           (1,068)
     Other ...................................................................             --                --                  (3)
                                                                                       --------          --------          -------- 
         Net cash provided (used) by financing activities ....................           (1,794)              566             3,056
                                                                                       --------          --------          -------- 
Net increase (decrease) in cash and  cash equivalents ........................            3,744            (8,282)            7,758

Cash and cash equivalents at beginning of year ...............................            3,129            11,411             3,653
                                                                                       --------          --------          -------- 
Cash and cash equivalents at end of  year ....................................         $  6,873          $  3,129          $ 11,411
                                                                                       ========          ========          ========

Supplemental disclosure of cash flow information
     Cash was paid for:
         Interest ............................................................         $    180          $    323          $    351
                                                                                       ========          ========          ========
         Income taxes ........................................................         $  4,303          $  1,530          $    287
                                                                                       ========          ========          ========
<FN>

                                      See accompanying notes to consolidated financial statement

                                                                     F-7
</FN>
</TABLE>


<PAGE>


                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                  New Horizons Worldwide, Inc. and Subsidiaries

     Years ended December 31, 1998, December 31, 1997, and December 28, 1996
                             (Dollars in thousands)


Supplemental Disclosure of Noncash Transactions

                                                     1998        1997       1996
                                                     ----        ----       ----
Noncash investing and financing activities:
     Income tax benefit from exercise of stock
       options and warrants ..................   $    180    $    298   $    224
                                                 ========    ========   ========

     Unrealized gain on investments ..........   $     53    $   --     $   --
                                                 ========    ========   ========


The Company completed three acquisitions
     summarized as follows (Note 12):               1998
     ------------------------------------           ----

     Fair value of assets acquired ...........   $ 14,833

     Short term debt and other obligations
     incurred ................................     (3,559)

     Value of stock issued ...................     (5,454)

     Cash paid, net of cash acquired .........     (3,688)
                                                 -------- 

     Liabilities assumed .....................   $  2,132
                                                 ========



                                       F-8
<PAGE>

                  NEW HORIZONS WORLDWIDE, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

           December 31, 1998, December 31, 1997, and December 28, 1996
                  (Dollars in thousands, except per share data)

1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
--------------------
New Horizons  Worldwide,  Inc. (New Horizons or the Company) owns and franchises
computer training centers.  The Company's  training centers provide  application
software and technical certification training to a wide range of individuals and
employer-sponsored  individuals  from  national  and  international  public  and
private  corporations,  service  organizations  and government  agencies.  As of
December  31, 1998,  the Company and its  franchisees  delivered  training in 11
company-owned and 194 franchised locations in 30 countries around the world.

On  December  27,  1996,  the  Company  completed  a  transaction  to  sell  its
environmental business (Note 14) and simultaneously changed its name from Handex
Corporation to New Horizons  Worldwide,  Inc. to more closely  identify with its
continuing  educational training business.  As a result of the transaction,  the
Company's educational business is its sole business. New Horizons, the surviving
company, remains a public company, trading under the symbol "NEWH" on The Nasdaq
Stock Market.

Basis of Accounting and Principles of Consolidation
---------------------------------------------------
The  consolidated  financial  statements  include the  accounts of New  Horizons
Worldwide,  Inc.  and its  subsidiaries,  all of  which  are  wholly-owned.  All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

Franchise Sales
---------------
The  terms of a typical  franchise  agreement  allow for the sale of  individual
franchises  to  operators  of computer  learning  centers for an initial fee. On
October 1, 1998,  the initial fees were  increased  from $20, $40 or $60 to $25,
$50 or $75  depending on the  estimated  number of personal  computers  within a
given territory.  Operators of existing  computer training centers receive a 20%
reduction  in  the  initial  fee  as  a  conversion   allowance.   Additionally,
franchisees are assessed the following fees, among other fees, as defined by the
franchise agreement:

a.   Continuing Monthly Royalty

     The fee  amount is equal to the  greater of 3% to 6% of gross  revenues  or
     certain minimums as defined depending on the size of the territory. Amounts
     commence accruing on the effective date of the franchise  agreement for new
     operators and in the sixth month after the effective  date of the franchise
     agreement for operators  converting their existing computer learning center
     to a New Horizons.

b.   Course Material and Computer-based Training Royalty

     The fee amount is equal to 9% of gross  revenues from course  materials and
     proprietary computer-based training products sold to third parties.

c.   Marketing and Advertising Fee

     The fee  amount is equal to 1% of gross  revenues  for  franchisees  in the
     United  States  and  Canada.  Amounts  commence  accruing  on the  date the
     franchise commences operation of the franchise business.

On February 28,  1997,  the Company  received  cash  consideration  of $2,600 in
return for releasing the franchise  obligations of an owner of four New Horizons
training  centers  in the  state  of  New  York.  The  Company  is  aggressively
attempting to re-franchise  the territories that became available as a result of
this  transaction.  As of December 31, 1998,  two of the  territories  have been
resold.

                                       F-9
<PAGE>


Revenue Recognition
-------------------
Revenues for training  services and  franchise  royalty fees are  recognized  as
earned.  Initial  franchise  fees are  recognized  when the Company has supplied
substantially  all of the services and met all of the  conditions of the sale of
the franchise rights.  Master franchise fees are earned ratably over the opening
of sub-franchises.

Investments
-----------
The  Company  accounts  for  investments  pursuant  to  Statement  of  Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." At December 31, 1998 and 1997, the Company's investments
have been  categorized as "available  for sale" and, as a result,  are stated at
fair  value.  Accordingly,  any  unrealized  holding  gains and losses are to be
included as a component of accumulated other  comprehensive  income, net of tax,
until realized.  Investments at December 31, 1998, consist principally of $8,551
in municipal bond funds,  $4,600 in short-term  closed end funds,  and $2,670 in
tax-exempt  government  notes and bonds.  The bond funds have  various  maturity
dates ranging from January 1999 to July 2002.

There were net unrealized  gains of $53 recorded as of December 31, 1998.  There
were no  unrealized  gains or  losses  as of  December  31,  1997 as fair  value
approximated cost.

Inventories
-----------
Inventories  are  stated at the  lower of cost or  market.  Inventory  costs are
determined using the first-in, first-out (FIFO) method.

Property, Plant and Equipment
-----------------------------
Property,  plant and equipment are stated at cost. Depreciation is provided over
the estimated  useful lives of the  respective  assets,  using the straight line
method as follows:

        Equipment                          3 to 5 years
        Furniture and fixtures             5 to 10 years
        Leasehold improvements             Term of lease

Income Taxes
------------
The Company  accounts for income taxes under the asset and  liability  method in
accordance with SFAS No. 109,  "Accounting for Income Taxes." Under this method,
deferred tax assets and liabilities are recognized for the estimated  future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to  apply  to  taxable  income  in  the  years  when  those  temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets and  liabilities  of a change in tax rates is recognized in income in the
period that includes the enactment date.

When options granted under the Company's  stock option plans are exercised,  the
Company  receives a tax deduction  related to the difference  between the market
value of its common  stock at the date of exercise  and the sum of the  exercise
price and any compensation  expense recognized for financial reporting purposes.
The tax benefit  resulting from this tax deduction is reflected as a decrease in
the  Company's  income tax  liability  and an  increase  to  additional  paid-in
capital.

Intangibles and Other Long-Lived Assets
---------------------------------------
The  excess  of  cost  over  net  assets   acquired  is  being  amortized  on  a
straight-line  basis  over  periods  ranging  from 25 to 40 years.  The  Company
assesses the  recoverability of its long-lived assets whenever events or changes
in  circumstances  indicate  that the  carrying  amount  of an asset  may not be
recoverable.


                                      F-10
<PAGE>
Cash and Cash Equivalents
-------------------------
For purposes of the statements of cash flows,  the Company  considers all highly
liquid debt instruments  with original  maturities of three months or less to be
cash equivalents.

Concentration of Credit Risk
----------------------------
The  Company's  credit  risk on trade  receivables  is  diversified  over a wide
geographic area and many  customers.  Ongoing  customer  credit  evaluations are
performed  with respect to the Company's  trade  receivables,  and collateral is
generally not required to be provided by the customer.

Earnings Per Share
------------------
As of December 31,  1997,  the Company  adopted  (SFAS) No. 128,  "Earnings  Per
Share" (EPS).  SFAS No. 128 requires the Company to report Basic EPS, as defined
therein, which assumes no dilution from outstanding options, and Diluted EPS, as
defined therein, which assumes dilution from the outstanding options.

The  computation of Basic EPS is based on the weighted  average number of shares
outstanding  during each year. The  computation of Diluted EPS is based upon the
weighted  average  number of shares  outstanding,  plus the shares that would be
outstanding  assuming  the  exercise of all  outstanding  options and  warrants,
computed using the treasury stock method.  Dilutive options and warrants are not
considered in the calculation of net loss per share.

The weighted average number of shares  outstanding used in determining Basic EPS
was 7,331,767 in 1998,  7,070,831 in 1997,  and 6,881,604 in 1996.  The weighted
average  number  of  shares  outstanding  used in  determining  Diluted  EPS was
7,681,421 in 1998,  7,294,269 in 1997,  and  6,981,894 in 1996.  The  difference
between the shares used for calculating  Basic and Diluted EPS relates to common
stock equivalents  consisting of stock options and warrants  outstanding  during
the respective periods.

Stock Based Compensation
------------------------
In  1997  the  Company  adopted  SFAS  No.  123,   "Accounting  for  Stock-Based
Compensation." The Company adopted the pro forma disclosure requirements of SFAS
No. 123, which requires  presentation  of the pro forma effect of the fair-value
based method on net income and net income per share in the  financial  statement
footnotes. (See Note 10)

Use of Estimates
----------------
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

New Accounting Pronouncements
-----------------------------
In June 1997 the FASB issued SFAS No. 130, "Reporting  Comprehensive Income" and
SFAS  No.  131,  "Disclosures  About  Segments  of  an  Enterprise  and  Related
Information."  SFAS No.  130 and  SFAS  No.  131  were  adopted  by the  Company
beginning with 1998. An additional  statement that reports  comprehensive income
and an expanded  disclosure  regarding the  Company's  operations on a segmented
basis are reported.

In June 1998 the FASB issued  SFAS No.  133,  "Accounting  for  Derivatives  and
Hedging  Activities."  SFAS No. 133 must be  implemented  by the Company for the
year ended  December  31,  2000.  The  effects of SFAS No. 133 on the  Company's
financial statements are not expected to be significant.


                                      F-11
<PAGE>
Reclassification
----------------
Certain items on the 1997 and 1996  consolidated  balance sheets,  statements of
operations,  and cash  flows  have  been  reclassified  to  conform  to the 1998
presentation.

2.   ALLOWANCE FOR DOUBTFUL ACCOUNTS

     Allowance for doubtful accounts includes the following:


                Years ended December 31         1998       1997
                -----------------------         ----       ----

                Balance, beginning of year   $ 1,693    $ 1,611

                Provisions ...............       156        670

                Deductions ...............      (922)      (588)
                                             -------    -------
                Balance, end of year .....   $   927    $ 1,693
                                             =======    =======


3.   NOTES PAYABLE AND LONG-TERM OBLIGATIONS

     The Company's debt and capital lease obligations are as follows:
<TABLE>
<CAPTION>
                                                                                                          1998               1997
<S>                                                                                                     <C>                <C>
                                                                                                          ----               ----
     Note  payable to a former  franchisee  at 5% interest  rate due
          January 1999 ......................................................................           $ 3,000            $  --

     Amounts due under capital leases with effective  interest rates
     ranging from 8.5% to 14.6% per annum (Note 11) .........................................             1,013              2,350

     Notes payable to bank with  effective  interest rates of 7.4%
          and 7.6%, payable  in  monthly principal and interest installments
          of $7 collateralized  by certain  assets of the Company due from
          July 2000 to August 2001 ..........................................................               164               --

     Notes payable to bank at 9.5% interest rate, paid February 1998 ........................              --                  901

     Notes payable to bank at 9.0% interest rate, paid June 1998 ............................              --                   57
                                                                                                        -------            -------
                                                                                                          4,177              3,308

     Less: Current portion of notes payable and long-term obligations .......................            (3,910)            (1,792)
                                                                                                        -------            -------
                                                                                                        $   267            $ 1,516
                                                                                                        =======            =======
</TABLE>


                                      F-12
<PAGE>

     The  following  is a summary of future  payments  required  under the above
     obligations:

         1999                 $     3,910
         2000                         214
         2001                          50
         2002                           3
                              -----------
                              $     4,177
                              ===========

     The Company has a credit  facility  with a  commercial  bank that  provides
     borrowings up to $3,750  bearing  interest at a variable rate equal to 1.0%
     under the bank's  prime rate (7.75% at December 31,  1998).  As of December
     31, 1998, there was no amount  outstanding under this facility.  On October
     30, 1998, as part of the acquisition of the Hartford franchise, the Company
     issued a promissory  note for $3,000 due January 1999.  The note is secured
     by an  irrevocable  standby  letter  of  credit  issued  by  the  Company's
     commercial  bank.  The issuance of the standby letter of credit reduced the
     availability under the credit facility to $750.

4.   PROPERTY, PLANT AND EQUIPMENT
 
     The components of property, plant and equipment are summarized below:
                                                          1998            1997
                                                          ----            ----

     Land .....................................        $  5,099        $   --
     Leasehold improvements ...................           2,046           1,748
     Equipment and software ...................          14,432          11,088
     Furniture and fixtures ...................           2,984           2,366
                                                       --------        --------
                                                         24,561          15,202
     Less accumulated depreciation and
          amortization ........................         (10,743)         (7,354)
                                                       --------        --------
                                                       $ 13,818        $  7,848
                                                       ========        ========

     On October 2, 1998, the Company  purchased 8.3 acres of undeveloped land in
     Santa Ana,  California for approximately $5.1 million.  The Company intends
     to  construct  a  building  on the  land  that  will  serve  as  the  world
     headquarters for its franchising company and the main training facility for
     its Orange County company-owned training center.

     Included  in  the  Company's  property  and  equipment  are  equipment  and
     leasehold  improvements  under capital leases  amounting to $974 (1998) and
     $2,257 (1997), net of accumulated  depreciation of $3,863 (1998) and $2,551
     (1997).

5.   CHANGE IN FISCAL YEAR

     Beginning in the year 1997 the Company changed its accounting period from a
     52-53 week year ending on the  Saturday  nearest  December 31 to a calendar
     year.
 
6.   INCOME TAXES

     Income tax expense for the periods below differs from the amounts  computed
     by applying the U.S. federal income tax rate of 35% to the pretax income as
     a result of the following:


                                      F-13
<PAGE>

                                                1998         1997          1996
                                                ----         ----          ----

     Computed "expected" tax expense ...      $ 3,393      $ 2,059      $   513
     Amortization of excess of cost over
          net assets acquired ..........           15           15           15
     State and local tax expense, net of
          federal income tax effect ....          578          345           89
     Foreign income tax ................         --            201          129
     Interest income from tax-free
          investments ..................         (319)        (284)         (72)
     Other .............................          146          (67)          (5)
                                              -------      -------      -------
     Income tax expense ................      $ 3,813      $ 2,269      $   669
                                              =======      =======      =======

     Effective rates ...................        39.3%        38.6%        45.6%
                                              =======      =======      =======

     Income tax expense consists of:
          Federal
            Current ....................      $ 2,843      $ 1,755      $   389
            Deferred ...................         (355)        (313)          17
          State and local ..............          952          523          135
          Foreign ......................          373          304          128
                                              -------      -------      -------
                                              $ 3,813      $ 2,269      $   669
                                              =======      =======      =======

 
     The tax  effects of  temporary  differences  that give rise to  significant
     portions of the  deferred tax assets and  liabilities  at December 31, 1998
     and 1997, are presented below:

                                                               1998         1997
                                                               ----         ----
     Deferred tax assets:
          Accounts receivable, principally due
               to allowance for doubtful accounts ....      $   509      $   392
          Reserve for uninsured losses and litigation           308          688
          Accrued expenses ...........................        1,013          425
          Property, plant and equipment, principally
               due to differences in depreciation ....          221          183
          Foreign Tax Credit carryforward ............          262         --
          Deferred revenue ...........................          197         --
                                                            -------      -------
                                                              2,510        1,688
                                                            -------      -------

     Deferred tax liabilities:
          Excess of cost over net assets of acquired
                company ..............................        1,224          736
          Loss on joint venture ......................          (22)          10
          Other ......................................           87           76
                                                            -------      -------
                                                              1,289          822
                                                            -------      -------

     Net deferred income taxes .......................      $ 1,221      $   866
                                                            =======      =======


                                      F-14
<PAGE>

7.   OTHER ASSETS

     a.   Notes Receivable from Officer

          Included in other assets are notes  receivable  from an officer of the
          Company  in the  aggregate  amount of $625 which  bear  interest  at a
          weighted  average rate of 7.3%. The notes  receivable are demand notes
          collateralized  by the proceeds from certain life insurance  policies.
          The Company does not intend to demand  repayment of these notes during
          fiscal 1999.

     b.   Non-cash Proceeds of Sale of Environmental Business

          Other assets also  includes a $3,700 note  receivable  from ECB,  Inc.
          bearing an  interest  rate of 6% with a  valuation  reserve of $2,960.
          Terms of the  note  receivable  provided  for  interest  in 1997 to be
          accrued and added to the principal balance.  Effective March 31, 1998,
          interest is paid quarterly in arrears.  Annual principal  payments are
          scheduled  to  commence  in  April  1999  with the  minimum  principal
          payments  being  $250,  $500,  and  $750,  for 1999,  2000,  and 2001,
          respectively, with the balance due April 30, 2002.

     Other assets consist of:
                                                         1998             1997
                                                         ----             ----
          Notes receivable from ECB Inc. .....         $ 3,931          $ 3,934
          Valuation reserve for ECB, Inc. ....          (2,960)          (2,960)
          Notes receivable from officer ......             625              625
          Other ..............................           1,214              979
                                                       -------          -------
                                                       $ 2,810          $ 2,578
                                                       =======          =======

8.   OTHER CURRENT LIABILITIES

     Other current liabilities consist of:
                                                               1998        1997
                                                               ----        ----

     Deferred revenues ................................      $ 5,084     $ 2,490
     Accounts payable to franchisees ..................        3,497       1,960
     Salaries, wages and commissions  payable .........        2,813       1,103
     Unexpended advertising fund ......................          737         986
     Accrued expenses in connection with the
          disposition of the environmental segment ....        1,078       1,744
     Accrued operating expenses and other liabilities .        3,215       1,198
                                                             -------     -------
                                                             $16,424     $ 9,481
                                                             =======     =======

9.   EMPLOYEE SAVINGS PLAN

     The Company  established  a 401(k)  Profit  Sharing Trust and Plan in which
     employees not currently  covered by a collective  bargaining  agreement are
     eligible to  participate.  None of the  Company's  employees  is  currently
     covered by a collective bargaining  agreement.  The plan was established in
     1995 and through December 31, 1998, was non-contributory. Effective January
     1, 1999,  the Board of  Directors  elected  to match 25% of the  employees'
     contributions.

10.  STOCK OPTION PLAN

     The Company  maintains  a Key  Employees  Stock  Option Plan and an Omnibus
     Equity  Plan which  provide  for the  issuance  of  non-qualified  options,
     incentive  stock  options,  and  stock  appreciation  rights.  These  plans
     currently  provide for the  granting of options to purchase up to 2,200,000
     shares of common stock.  Incentive  stock options are exercisable for up to
     ten years, at an option price of not less than the fair market value on the
     date the  option is granted or at a price of not less than 110% of the fair
     market price in the case of an option granted to an individual  who, at the
     time  of  grant,  owns  more  than  10%  of  the  Company's  common  stock.
     Non-qualified  stock  options may be issued at such  exercise  price and on
     such other terms and conditions as the Compensation  Committee of the Board
     of  Directors   may   determine.   Optionees  may  also  be  granted  stock
     appreciation  rights under which they may, in lieu of exercising an option,
     elect to receive cash or common stock, or a combination  thereof,  equal to
     the excess of the fair  market  value of the  common  stock over the option
     price. All options were granted at fair market value at dates of grant.

                                      F-15
<PAGE>

     In January  1998 the  Company  granted to certain  officers  of the Company
     options  to  purchase  up to a maximum  of 41,500  shares of the  Company's
     common stock. The options have an exercise price of $12.78 per share, which
     was the fair market  value of a share of common stock on the date of grant.
     The  number of  options  was  dependent  on the  officers  meeting  certain
     performance  criteria.  As of December  31,  1998,  the  officers  had been
     granted  options to purchase  39,553 shares of common  stock.  For the year
     ended  December  31, 1998,  the Company  recorded,  under the  provision of
     Accounting  Principles  Board  Opinion  25,  $410 in  compensation  expense
     associated with the options.

     The stock option plans for  directors  who are not employees of the Company
     provide for the issuance of up to 375,000 shares of common stock and may be
     issued at such price per share and on such other  terms and  conditions  as
     the Compensation Committee may determine.  All options were granted at fair
     market value at dates of grant.

     Changes in shares under option for 1998,  1997 and 1996 are  summarized  as
     follows:

<TABLE>
<CAPTION>
                                                           1998                         1997                        1996
                                               -------------------------     ------------------------      -----------------------
                                                                Weighted                     Weighted                     Weighted
                                                                 Average                      Average                      Average
                                                Shares            Price       Shares           Price        Shares          Price
                                                ------          --------      ------         --------       ------        --------

<S>                                            <C>            <C>            <C>            <C>            <C>            <C>     
     Outstanding, beginning of year ......     672,250        $    9.08      619,641        $    7.70      738,489        $   7.53
         Granted .........................     250,053            15.36      200,000            14.52         --              --
         Exercised .......................     (35,000)            6.50     (134,441)            7.84     (113,448)           6.55
         Canceled ........................      (5,000)           12.78      (12,950)            8.86       (5,400)           7.53
                                               -------                       -------                       -------                
     Outstanding, end of year ............     882,303            10.94      672,250             9.08      619,641            7.70
                                               =======                       =======                       =======                

     Options exercisable, end of year ....     535,250        $    9.15      414,250        $    7.13      454,651        $   7.66
                                               =======                       =======                       =======                

     Weighted average fair value of
      options granted during the year ....   $    7.89                     $    7.71                       $  --
                                             =========                     =========                       =======
</TABLE>

     Outstanding stock options at December 31, 1998 consist of the following:

                              Options Outstanding            Options Exercisable
                          -------------------------------    -------------------
                                    Weighted
           Range of                  Average     Weighted               Weighted
           Exercise                 Remaining     Average                Average
            Prices        Shares      Life        Price       Shares     Price
                                     (Years)
     -----------------    -------   ---------    --------     -------    -------
     $  6.00 - $  8.81    475,000      5.0       $   7.79     431,000    $  7.77
       11.06 -   13.38    239,803      4.5          12.87      29,250      12.92
       15.56 -   19.75    167,500      4.6          17.12      75,000      15.63
                          -------                             -------           
     $  6.00 - $ 19.75    882,303      4.8        $ 10.94     535,250    $  9.15
                          =======                             =======           

     The fair  value of each  option  grant was  estimated  as of the grant date
     using the Black-Scholes  option-pricing model assuming a risk-free interest
     rate of 6.5%,  volatility of 55%, and zero dividend  yield for 1998,  and a
     risk-free interest rate of 5.5%,  volatility of 43% and zero dividend yield
     for 1997,  with expected  lives of six years for both periods.  The Company
     applies Accounting Principles Board Opinion 25 and related  interpretations
     in accounting for its plans. If compensation  expense was determined  based
     on the  fair  value  method  under  the  provisions  of SFAS No.  123,  the
     Company's  net income and net income per share  would have been  reduced to
     the pro forma amounts indicated below:

                                      F-16
<PAGE>

                                                            1998           1997
                                                            ----           ----

          Net income ...................  As reported    $  5,882      $   3,963
                                          Pro forma         5,581          3,827

          Basic earnings per share .....  As reported    $   0.80      $    0.56
                                          Pro forma          0.76           0.54

          Diluted earnings per share ...  As reported    $   0.77      $    0.55
                                          Pro forma          0.73           0.53

     SFAS No. 123 had no impact on the financial  statements  for the year ended
     December 28, 1996.

     As of December 31, 1998,  there were 1,014,058 shares of common stock under
     the Stock Option Plans that were available for future grant.

     On December 31, 1997, the Company granted warrants to purchase up to 35,000
     shares of its common  stock at a price of $12.50 per share to a  consultant
     to  the  Company.   The  Company  will  record   compensation   expense  of
     approximately  $275  ratably  over  the  two  year  vesting  period  of the
     warrants, of which $137 was recorded for the year ended December 31, 1998.

11.  COMMITMENTS AND CONTINGENCIES

     Leases
     ------
     The Company leases its offices, training facilities,  and certain equipment
     under operating and capitalized lease obligations.  Operating leases expire
     on various  dates through 2008.  The Company  recognizes  rent expense on a
     straight  line basis and  records  deferred  rent  based on the  difference
     between  cash paid and  straight  line  expense.  Rent  expense was $3,331,
     $2,741, and $1,761 for 1998, 1997, and 1996, respectively.

     Under the terms of the leases,  future minimum  commitments at December 31,
     1998 are as follows:

     Year ending December 31               Capital Leases       Operating Leases
     -----------------------               --------------       ----------------
          1999                             $           908      $          2,745
          2000                                         145                 2,875
          2001                                          34                 2,917
          2002                                           2                 2,564
          2003                                          --                 1,964
          2004 & after                                  --                 4,963
                                           ---------------      ----------------
                                           $         1,089      $         18,028
                                                                ================
     Less: Amount representing interest                (76)
                                           --------------- 
                                           $         1,013 
                                           =============== 

     Litigation
     ----------
     The Company is involved in various claims and legal actions  arising in the
     ordinary  course of business.  In the opinion of  management,  the ultimate
     disposition of these matters will not have a material adverse effect on the
     Company's consolidated financial position or results of operations.


                                      F-17
<PAGE>

12.  ACQUISITIONS

     (a)  Memphis and Nashville, Tennessee franchises

          On April 30,1998,  the Company  purchased the assets of its franchises
          in Memphis and Nashville,  Tennessee for total consideration of $3,787
          in cash,  net of cash  acquired,  and 248,252  shares of the Company's
          common stock.  Based upon the closing price of the New Horizons  stock
          as of April 30, 1998 ($18.00 per share) the  acquisition  is valued at
          approximately  $8.3  million.  The selling  shareholders  will receive
          additional  consideration,  in cash and stock, if certain  performance
          targets are achieved.  The  acquisition  has been  recorded  using the
          purchase  method of  accounting  and the  operating  results have been
          included  in the  Company's  financial  statements  from  the  date of
          acquisition.  The acquisition  resulted in goodwill of $8,236 which is
          being amortized over 25 years.

     (b)  Hartford, Connecticut franchise

          On October 30, 1998, the Company purchased the assets of its franchise
          in Hartford,  Connecticut  for 48,242 shares of the  Company's  common
          stock,  the Company's  $3,000  promissory note bearing  interest at 5%
          (Note 3) and cash  acquired of $99,  net of cash paid.  Based upon the
          closing price of the New Horizons stock as of October 30, 1998 ($18.50
          per share) the  acquisition is valued at  approximately  $4.5 million.
          The selling  shareholders will receive  additional  consideration,  in
          cash and stock,  if certain  performance  targets  are  achieved.  The
          acquisition  has been recorded using the purchase method of accounting
          and  the  operating  results  have  been  included  in  the  Company's
          financial  statements  from the date of  acquisition.  The acquisition
          resulted in goodwill of $4,045 which is being amortized over 25 years.

     If the results from the acquired locations had been included in the results
     of the  operations  for the full years of 1998 and 1997 the  Company's  pro
     forma revenue, net income and earnings per share from continuing operations
     would have been as follows:

                                                   1998                 1997
                                                   ----                 ----

           Revenue                           $    79,682          $    64,653

           Net income                        $     6,327         $      4,601

           Basic earnings per share          $      0.83         $       0.62

           Diluted earnings per share        $      0.79         $       0.61



                                      F-18
<PAGE>

13.  QUARTERLY FINANCIAL DATA (UNAUDITED)

     Summarized quarterly financial data for continuing  operations for 1998 and
     1997 is as follows:

                                         First     Second      Third     Fourth
                                        Quarter    Quarter    Quarter    Quarter
                                        -------    -------    -------    -------
     Year ended December 31, 1998
     ----------------------------
     Revenues .....................     $14,685    $17,810    $19,659    $20,475
     Operating income .............       1,073      2,267      2,827      2,359
     Net income ...................         811      1,637      1,869      1,565
     Basic earnings per share .....        0.11       0.22       0.25       0.21
     Diluted earnings per share ...        0.11       0.21       0.24       0.20

                                        First     Second      Third     Fourth
                                        Quarter    Quarter    Quarter    Quarter
                                        -------    -------    -------    -------
     Year ended December 31, 1997
     ----------------------------
     Revenues .....................     $11,969    $13,062    $13,786    $13,816
     Operating income .............          72        463        949        967
     Gain from release of certain
         franchise obligations ....       2,600       --         --         --
     Net income ...................       1,732        454        747      1,030
     Basic earnings per share .....        0.25       0.06       0.11       0.15
     Diluted earnings per share ...        0.24       0.06       0.10       0.14

14.  DISCONTINUED OPERATIONS

     On November 4, 1996, the Company signed a definitive  agreement to sell its
     environmental  business.  The sale was  authorized at a special  meeting of
     stockholders held on December 20, 1996, and was consummated on December 27,
     1996. Under the agreement,  the Company sold the stock of its environmental
     segment which had a net asset value of $10,300 for $4,600 in cash and other
     consideration,  including  a  promissory  note and  preferred  stock in the
     amount of $3,700 and $2,000, respectively.  In addition,  immediately prior
     to  the  closing,  the  Company  received  a  dividend  of  cash,  accounts
     receivable and other assets owned by the environmental  subsidiaries having
     a book value of $11,654 at December 27, 1996.  The Company  incurred a loss
     of $7,303 on the disposal of the segment, consisting primarily of valuation
     reserves on the promissory  note and preferred  stock of $2,960 and $1,600,
     respectively,  goodwill  write-off  of  $1,800,  and  transaction  costs of
     approximately $966. There is no expected tax benefit from this loss.

     The net assets and results of operations of Handex Environmental, Inc. have
     been reflected as discontinued operations in the accompanying  consolidated
     financial statements.

                                                   1998        1997       1996
                                                   ----        ----       ----

          Net operating revenues ............   $    --     $   --     $ 44,281
                                                =========   ========   ========

          Income (loss) before income taxes .   $    --     $    349   $ (7,348)
          Income taxes ......................        --         --           85
                                                ---------   --------   --------
          Net income (loss) .................   $    --     $    349   $ (7,433)
                                                =========   ========   ========


                                      F-19
<PAGE>

     In December 1997 the Company  received  $2,000 from ECB, Inc. in redemption
     of the 2,000 shares of Series A Preferred Stock which had a stated value of
     $1,000 per share. In 1996 the Company had  established a valuation  reserve
     of $1,600 against the face amount of the Preferred  Stock which it reversed
     upon the receipt of the redemption  proceeds.  Upon further analysis of the
     remaining assets and liabilities of the environmental business, the Company
     recorded  an  additional  provision  of  $1,251  to  reflect  the  expected
     realization  value of those  assets  and  liabilities.  As a result  of the
     redemption  of the Series A Preferred  Stock,  ECB,  Inc.  was also able to
     redeem,  at no cost, the six-year  warrant to acquire 300,000 common shares
     of ECB at a price of $1.32 per share and the  six-year  warrant  to acquire
     85,000 common shares of ECB at a price of $1.60 per share. The Company,  in
     1996,  ascribed no value to the warrants so the  redemption  in 1997 had no
     effect on its financial results.

15.  SUBSEQUENT EVENT

     On March 1, 1999,  the Company  purchased  the assets of its  franchise  in
     Albuquerque,  New Mexico.  The consideration  paid included $2,762 in cash,
     net of cash  acquired,  and 38,953  shares of the  Company's  common stock.
     Based upon the closing price of the New Horizons  stock as of March 1, 1999
     ($21.13 per share) the acquisition is valued at  approximately  $4 million.
     The selling shareholders will receive additional consideration, in cash and
     stock, if certain performance targets are achieved.


16.  SEGMENT REPORTING

     The Company  operates in two  business  segments -- company-owned  training
     centers and franchising  operations.  The  company-owned  training  centers
     segment  operates  wholly-owned  computer  training  centers  in the United
     States and  derives  its  revenues  from the  operating  revenues  of those
     centers.  The franchising  segment  franchises  computer  training  centers
     domestically  and  internationally  and supplies systems of instruction and
     sales and management  concepts  concerning computer training to independent
     franchisees.   The  franchising  segment  revenues  are  from  the  initial
     franchise  fees and  royalties  from the  franchise  operations  and  other
     revenue  such as from the Major  Accounts  Program.  The two  segments  are
     managed separately because of the differences in the source of revenues and
     the services offered. Information on the Company's segments is as follows:



                                      F-20
<PAGE>
<TABLE>
<CAPTION>
                                                        Company-owned                     Executive      Discontinued
                                                           Centers        Franchising       Office        Operations    Consolidated
                                                        -------------     -----------     ---------      ------------   ------------
<S>                                                         <C>             <C>            <C>             <C>             <C>
For the year ended December 31, 1998
------------------------------------
Revenues from external customers ....................       $ 52,545        $ 20,084       $   --          $   --          $ 72,629
Investment income ...................................             49             101          1,274            --             1,424
Interest expense ....................................            229              26           --              --               255
Depreciation and amortization expense ...............          3,442             545             19            --             4,006
Income tax expense (benefit) ........................          1,740           2,670           (597)           --             3,813
Net income (loss) from continuing operations ........          2,595           3,383            (96)           --             5,582

Net deferred tax asset ..............................            249             972           --              --             1,221
Total assets ........................................         45,194          21,631         19,921            --            86,746
Additions to property, plant and equipment ..........          2,470           5,974           --              --             8,444

For the year ended December 31, 1997
------------------------------------
Revenues from external customers ....................       $ 38,692        $ 13,941       $   --          $   --          $ 52,633
Gain from release of certain franchise obligations ..           --             2,600           --              --             2,600
Investment income ...................................             19             130          1,152            --             1,301
Interest expense ....................................            421              48           --              --               469
Depreciation and amortization expense ...............          3,377             409           --              --             3,786
Income tax expense (benefit) ........................            169           2,392           (292)           --             2,269
Net income from continuing operations ...............            272           3,122            220            --             3,614
Income from discontinued operations, net of
     applicable income taxes ........................           --              --             --               349             349

Net deferred tax asset ..............................            655             211           --              --               866
Total assets ........................................         26,821          13,437         26,313            --            66,571
Additions to property, plant and equipment ..........          2,536           1,914           --              --             4,450

For the year ended December 28, 1996
------------------------------------
Revenues from external customers ....................       $ 31,425        $  9,844       $   --          $   --          $ 41,269
Investment income ...................................           --              --              212            --               212
Interest expense ....................................            317              35           --              --               352
Depreciation and amortization expense ...............          2,620             243           --              --             2,863
Income tax expense (benefit) ........................            181             844           (356)           --               669
Net income (loss) from continuing operations ........            336             979           (517)           --               798
Loss from discontinued operations, net of
     applicable income taxes ........................           --              --             --            (7,433)         (7,433)

Net deferred tax asset ..............................            (53)             80           --              --                27
Total assets ........................................         25,555           7,766         27,151            --            60,472
Additions to property, plant and equipment ..........          3,853           1,046           --              --             4,899
</TABLE>


                                      F-21
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

The  information  required by this Item 10 as to the Directors of the Company is
incorporated  herein by reference to the information set forth under the caption
"Election of  Directors"  in the Company's  definitive  Proxy  Statement for the
Annual  Meeting  of  Stockholders  to be held on May 4,  1999,  since such Proxy
Statement will be filed with the  Securities  and Exchange  Commission not later
than 120 days after the end of the Company's  fiscal year pursuant to Regulation
14A.

EXECUTIVE OFFICERS OF THE REGISTRANT*

The following is a list of the executive officers of the Company.  The executive
officers  are  elected  each  year and  serve at the  pleasure  of the  Board of
Directors.

         NAME                        AGE   POSITION
         ----                        ---   --------
         Curtis Lee Smith, Jr.       71    Chairman of the Board and Chief
                                           Executive Officer

         Thomas J. Bresnan           46    President and Chief Operating Officer

         Stuart O. Smith             66    Vice Chairman of the Board and
                                           Secretary

         Robert S. McMillan          47    Vice President, Treasurer and Chief
                                           Financial Officer

         Charles G. Kinch            45    President and Chief Operating Officer
                                           - New Horizons Computer Learning
                                           Centers, Inc.

         Kenneth M. Hagerstrom       40    President - Company-owned Center
                                           Division
 
* The  description  of  executive  officers  called for in this Item is included
pursuant to Instruction 3 to Section (b) of Item 401 of Regulation S-K.

Set forth below is a brief  description  of the  background  of those  executive
officers of the Company who are not Directors of the Company.  Information  with
respect to the background of those executive  officers who are also Directors of
the Company is  incorporated  herein by reference as set forth under the caption
"Election of  Directors"  in the Company's  definitive  Proxy  Statement for the
Annual Meeting of Stockholders to be held on May 4, 1999.


                                       19
<PAGE>

CHARLES G. KINCH was named President and Chief Operating Officer of New Horizons
Computer  Learning  Centers,  Inc.,  a subsidiary  of the Company,  in May 1995.
Before then, from 1992 to 1995, he was President of Paragon  Retailers  Systems,
Boca Raton,  Florida. From 1989 to 1992, he was Vice President for Marketing and
Operations, Tandem Source Company, Tandem Computers, Cupertino, California. From
1983  to  1989,  he  was  with  ComputerLand  Corporation,  Hayward  California,
beginning  as Vice  President of  Products,  and then being  promoted to General
Manager of  ComputerLand  Operated  Stores,  Inc., and President of ComputerLand
Franchise Holding Corp., both based in Hayward, California.

ROBERT S.  MCMILLAN  was named Vice  President,  Treasurer  and Chief  Financial
Officer of the Company in August 1997. He served as Chief  Financial  Officer of
New Horizons  Computer  Learning  Centers,  Inc.  beginning in 1995 and became a
Senior Vice President in January 1997. From 1992 to 1995, Mr. McMillan was Chief
Financial Officer of ZNYX Corporation, Fremont California. From 1990 to 1992, he
was Chairman, Chief Executive Officer and Chief Financial Officer of Omnivar, in
Burbank, California.

KENNETH  HAGERSTROM was named President of the Company-owned  Center Division of
New Horizons in November 1997. From June 1997 until November 1997 Mr. Hagerstrom
was the Director of Field Support for New Horizons  Computer  Learning  Centers,
Inc. From October 1995 to June 1997 he was General Manager of the  Company-owned
center in New York, NY. He originally joined New Horizons network in 1994 at the
Boston,  MA franchise as an Account  Executive and was promoted in 1995 to Sales
Manager.  Before then,  from 1982 to 1994,  Mr.  Hagerstrom was President of KMS
Enterprises of Boston, MA.

ITEM 11. EXECUTIVE COMPENSATION

The  information  required by this Item 11 is  incorporated  by reference to the
information set forth under the caption "Compensation of Directors and Executive
Officers" in the Company's  definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on May 4, 1999, since such Proxy Statement will be filed
with the  Securities  and Exchange  Commission not later than 120 days after the
end of the Company's fiscal year pursuant to Regulation 14A.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this Item 12 is  incorporated  by reference to the
information  set forth under the caption "Share  Ownership of Principal  Holders
and  Management"  in the  Company's  definitive  Proxy  Statement for the Annual
Meeting of  Stockholders  to be held on May 4, 1999,  since such Proxy Statement
will be filed with the  Securities  and Exchange  Commission  not later than 120
days after the end of the Company's fiscal year pursuant to Regulation 14A.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required by this Item 13 is  incorporated  by reference to the
information set forth under the caption "Certain  Transactions" in the Company's
definitive  Proxy Statement for the Annual Meeting of Stockholders to be held on
May 4, 1999,  since such Proxy  Statement  will be filed with the Securities and
Exchange  Commission  not later  than 120 days  after  the end of the  Company's
fiscal year pursuant to Regulation 14A.


                                       20
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K

         (a)  (1) Financial Statements

         The following  Consolidated Financial Statements of the Registrant and
         its subsidiaries are included in Part II, Item 8:

                                                                         Page
                                                                         ----

         Reports of Independent Auditors .........................   F-1 to F-2
         Consolidated Balance Sheets .............................       F-3
         Consolidated Statements of Operations ...................       F-4
         Consolidated Statements of Comprehensive Income .........       F-5
         Consolidated Statements of Stockholders' Equity .........       F-6
         Consolidated Statements of Cash Flows ...................   F-7 to F-8
         Notes to Consolidated Financial Statements ..............   F-9 to F-21

         (a)  (2)  All  other  schedules  for  which  provision  is made  in the
         applicable   accounting  regulation  of  the  Securities  and  Exchange
         Commission  are  not  required  under  the related  instructions or are
         inapplicable and, therefore, have been omitted.

         (a)  (3) Exhibits

         Reference is made to the Exhibit Index at sequential page 23 hereof.


                                       21
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934,  the Registrant has caused this Report to be signed on its
behalf by the undersigned,  thereunto duly authorized at Morganville, New Jersey
this 30th day of March, 1999.

                                                    NEW HORIZONS WORLDWIDE, INC.


                                               By:      /s/Curtis Lee Smith, Jr.
                                               Curtis Lee Smith, Jr., Chairman
                                               and Chief Executive Officer


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

Signature                     Title                               Date
---------                     -----                               ----

/s/Curtis Lee Smith, Jr.     Chairman, and                   )
Curtis Lee Smith, Jr.        Chief Executive Officer         )
                             (Principal Executive Officer)   )
                                                             )
                                                             )
/s/Robert S. McMillan        Vice President, Treasurer and   )
Robert S. McMillan           Chief Financial Officer         )
                             (Principal Financial and        )
                             Accounting Officer)             )
                                                             )
                                                             )
/s/Stuart O. Smith           Director                        )
Stuart O. Smith                                              )
                                                             )
                                                             )    March 31, 1999
/s/Thomas J. Bresnan         Director                        )
Thomas J. Bresnan                                            )
                                                             )
                                                             )
/s/David A. Goldfinger       Director                        )
David A. Goldfinger                                          )
                                                             )
                                                             )
/s/Richard L. Osborne        Director                        )
Richard L. Osborne                                           )
                                                             )
                                                             )
/s/Scott R. Wilson           Director                        )
Scott R. Wilson                                              )
                                                             )
                                                             )
/s/William H. Heller         Director                        )
William H. Heller                                            )
                                                             )
                                                             )


                                       22
<PAGE>

Reports on Form 8-K
-------------------
During the quarter ended  December 31, 1998,  the Company filed a Current Report
on Form 8-K dated October 30, 1998, to report the Company's acquisition, through
its indirect wholly-owned  subsidiary,  New Horizons Computer Learning Center of
Hartford Inc., a Delaware  corporation,  of substantially all of the assets used
in the computer training business  conducted by Daniels  Enterprises,  L.L.C., a
Connecticut limited liability company.


                                  EXHIBIT INDEX

Exhibit  Exhibit
Number   Description
------   -----------

 3.1     Amended Certificate of Incorporation of the Registrant (1)

 3.2     By-laws of the Registrant (1)

 3.3     Amendment to Certificate of Incorporation of the Registrant (5)

 4.1     Specimen Certificate for Share of Common Stock,  $.01 par value, of the
         Registrant *

 4.2     Secured Straight Line of Credit, guaranteed by the Registrant (8)

10.1**   Omnibus Equity Plan of the Registrant (2)

10.2**   Key Employees Stock Option Plan of the Registrant (1)

10.3**   Amendment  No.  1  to  the  Key  Employees  Stock  Option  Plan  of the
         Registrant *

10.4**   Stock Option Agreement dated August 6, 1992, between the Registrant and
         Thomas J. Bresnan *

10.5**   Stock Option Agreement dated  January 22, 1998, between  Registrant and
         Charles G. Kinch (7)

10.6**   Stock Option  Agreement dated January 22, 1998,  between the Registrant
         and Kenneth Hagerstrom (7)

10.7**   Stock Option  Agreement dated January 22, 1998,  between the Registrant
         and Robert S. McMillan (7)

10.8**   Outside Directors Stock Option Plan of the Registrant (1)

10.9**   Amendment  No. 1 to  the Outside  Directors  Stock Option  Plan  of the
         Registrant *

10.10**  1997 Outside Directors Elective Stock Option Plan of the Registrant (2)

10.11**  Form of  Option Agreement executed  by recipients of options under 1997
         Outside Directors Elective Stock Option Plan (2)

10.12**  Stock Option Agreement dated September 19, 1996, between the Registrant
         and David A. Goldfinger (2)


                                       23
<PAGE>

10.13**  Stock Option Agreement dated September 19, 1996, between the Registrant
         and William Heller (2)

10.14**  Stock Option Agreement dated September 19, 1996, between the Registrant
         and Richard L. Osborne (2)

10.15**  Stock Option Agreement dated September 19, 1996, between the Registrant
         and Scott R. Wilson (2)

10.16    Form  of  Indemnity  Agreement  with  Directors  and  Officers  of  the
         Registrant *

10.17**  New Horizons Education Corporation 401(k) Profit Sharing Trust and Plan
         (3)

10.18**  Amendment  No. 1  New  Horizons  Education  Corporation  401(k)  Profit
         Sharing Trust and Plan (5)

10.19**  Amendment  No. 2  New Horizons  Education   Corporation  401(k)  Profit
         Sharing Trust and Plan (5)

10.20**  Amendment  No. 3  New  Horizons  Education  Corporation  401(k)  Profit
         Sharing Trust and Plan (5)

10.21**  Amendment  No. 4  New  Horizons  Education  Corporation  401(k)  Profit
         Sharing Trust and Plan (8)

10.22**  New Horizons Worldwide 401(k) Profit Sharing Trust and Plan *

10.23    Warrants for the purchase  of 35,000  shares of Common Stock,  $.01 par
         value per share, of the Registrant  issued to  The Nassau Group, Inc. -
         December 31, 1997  (6)

10.24    Stock Purchase Agreement dated November 4, 1996, between the Registrant
         and ECB, Inc. and certain exhibits thereto (4)

21.1     Subsidiaries of the Registrant*

27.0     Financial Data Schedule*


(1)  Incorporated  herein  by  reference  to  the  appropriate  exhibits  to the
     Registrant's Registration Statement on Form S-1 (File No. 33-28798).

(2)  Incorporated  herein  by  reference  to  the  appropriate  Exhibits  to the
     Registrant's Registration Statement on Form S-8 (Reg. No. 333-56585

(3)  Incorporated  herein  by  reference  to  the  appropriate  exhibit  to  the
     Registrant's  Annual  Report on Form 10-K for the year ended  December  30,
     1995.

(4)  Incorporated  herein  by  reference  to  the  appropriate  exhibit  to  the
     Registrant's  Quarterly  Report on Form 10-Q for the period ended September
     28, 1996.

(5)  Incorporated  herein  by  reference  to  the  appropriate  exhibit  to  the
     Registrant's  Annual  Report on Form 10-K for the year ended  December  28,
     1996.

(6)  Incorporated  herein  by  reference  to  the  appropriate  exhibit  to  the
     Registrant's  Annual  Report on Form 10-K for the year ended  December  31,
     1997.

(7)  Incorporated  herein  by  reference  to  the  appropriate  exhibit  to  the
     Registrant's  Quarterly  Report on Form 10-Q for the year  ended  March 31,
     1998.

(8)  Incorporated  herein  by  reference  to  the  appropriate  exhibit  to  the
     Registrant's  Quarterly  Report  on Form 10-Q for the year  ended  June 30,
     1998.

*    Filed herewith

**   Compensatory plan or arrangement

                                       24

<PAGE>
Exhibit 4.1

SHARES
NUMBER                         New Horizons                              SHARES
 2225                         ---------------                           SPECIMEN
                              Worldwide, Inc.

              Incorporated under the laws of the State of Delaware

THIS CERTIFICATE         NEW HORIZONS WORLDWIDE, INC.
IS TRANSFERABLE
EITHER IN CHICAGO, IL
OR IN NEW YORK, NY                                             CUSIP 645526 10 4


THIS CERTIFIES THAT                SPECIMEN                 IS THE OWNER OF


            FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF
                       $0.01 EACH OF THE COMMON STOCK OF

                          NEW HORIZONS WORLDWIDE, INC.

     Transferable  only on the books of the  Corporation by the holder hereof in
     person or by duly  authorized  attorney upon surrender of this  certificate
     properly endorsed.  This certificate is not  valid unless countersigned and
     registered by the Transfer Agent and Registrar.

     Witness  the  seal  of the  Corporation  and  the  signatures  of its  duly
     authorized officers.

DATED


                          NEW HORIZONS WORLDWIDE, INC.
                                   CORPORATE
/s/ Stuart O. Smith                   SEAL                  /s/ Curtis Lee Smith
          Secretary                 DELAWARE                            Chairman


                                             SEE REVERSE FOR CERTAIN DEFINITIONS

                                   COUNTERSIGNED AND REGISTERED
                                   HARRIS TRUST AND SAVINGS BANK

                                   BY               TRANSFER AGENT AND REGISTRAR


                                                            AUTHORIZED SIGNATURE
<PAGE>
     The following  abbreviations,  when used in the  inscription on the face of
this  certificate,  shall be  construed  as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S>            <C>
TEN COM  - as tenants in common               UNIF GIFT MIN ACT - __________Custodian________________
TEN ENT  - as tenants by the entireties                             (Cust)                (Minor)
JT TEN   - as joint tenants with right of                         under Uniform Gifts to Minors
           survivorship and not as tenants                        Act _______________________________
           in common                                                           (State)
COM PROP - as community property              UNIF TRF MIN ACT -  __________Custodian (until age ____)
                                                                    (Cust)
                                                                  ____________under Uniform Transfers
                                                                    (Minor)
                                                                  to Minors Act _____________________
</TABLE>

    Additional abbreviations may also be used though not in the above list.
                                -----------------

FOR VALUE RECEIVED, ______________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASIGNEE

______________________________________

________________________________________________________________________________
               (PLEASE PRINT OR TYPE NAME AND ADDRESS OF ASIGNEE)

________________________________________________________________________________


________________________________________________________________________________


__________________________________________________________________________shares
of the  capital  stock  represented  by the  within  Certificate,  and do hereby
irrevocably constitute and appoint

________________________________________attorney-in  fact to  transfer  the said
stock  on the  books  of  the  within  named  Corporation  with  full  power  of
substitution in the premises.


Dated __________________________
                                        ________________________________________
                                        NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
                                        MUST CORRESPOND WITH THE NAME AS WRITTEN
                                        UPON  THE  FACE OF  THE  CERTIFICATE  IN
                                        EVERY PARTICULAR, WITHOUT ALTERATION  OR
                                        ENLARGEMENT OR ANY CHANGE WHATSOEVER.

Signature Guaranteed


________________________________________________
THE  SIGNATURE(S)  MUST  BE   GUARANTEED  BY  AN
ELIGIBLE    GUARANTOR     INSTITUTION,   (BANKS,
STOCKBROKERS,  SAVINGS  AND  LOAN   ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE>

Exhibit 10.3

                                 AMENDMENT NO. 1

                                       TO

                       HANDEX ENVIRONMENTAL RECOVERY, INC.

                         KEY EMPLOYEES STOCK OPTION PLAN


     This  Amendment  No.  1 to the  Handex  Environmental  Recovery,  Inc.  Key
Employees  Stock  Option  Plan  (the  "Plan")  is  adopted  February  12,  1993.
Capitalized  terms not otherwise  defined  herein shall have the meanings  given
them in Plan.

                              W I T N E S S E T H:

     WHEREAS,  the  number of shares of Common  Stock for which  options  may be
granted under the Plan is 607,500, of which only 15,950 remain for further grant
by the Committee.

     WHEREAS,  the Company  desires to  increase  the number of shares of Common
Stock for which options may be granted under the Plan;

     NOW,  THEREFORE,  the Plan is amended by  deleting  the first  sentence  of
Section 6 of the Plan and substituting the following therefore:

     "Subject  to the  provisions  of  Section 9  concerning  payment  for stock
     appreciation  rights  in  shares  of  Common  Stock,  and  subject  to  the
     provisions  of the  next  succeeding  paragraph  of  this  Section  6,  the
     aggregate number of shares of Common Stock for which options may be granted
     under the Plan shall be One Million Two Hundred Thousand (1,200,000) shares
     of Common Stock."

     This  Amendment No. 1 to the Plan shall be effective as of the date hereof,
subject to approval by holders of a majority of the outstanding shares of Common
Stock of the Company. In the event this Amendment No. 1 is not so approved on or
before  December 31, 1993, all options granted under the Plan in excess of those
permitted without giving effect hereto shall be null and void.

     IN  WITNESS  WHEREOF,  Handex  Environmental  Recovery,  Inc.,  by its duly
authorized  officer,  has executed  this  Amendment  No. 1, as of the date first
above written.


                                            HANDEX ENVIRONMENTAL RECOVERY, INC.


                                            BY_________________________________

                                            ITS________________________________







091\18746CAB.60A
<PAGE>
Exhibit 10.5

STOCK OPTION AGREEMENT

     THIS  AGREEMENT,  entered  into as of the 6th day of August,  1992,  by and
between  Handex   Environmental   Recovery,   Inc.,  Delaware  corporation  (the
"Company"), and Thomas J. Bresnan (the "Optionee").

WITNESSETH:

     WHEREAS, the Board of Directors of the Company has appointed a Compensation
Committee (the  "Committee")  to serve as the Committee to administer the Handex
Environmental Recovery, Inc. Key Employees Stock Option Plan (the "Plan"); and

     WHEREAS the Committee has determined  that the Optionee,  as a Key Employee
(as such term is defined in the Plan),  should be granted a stock  option  under
the Plan upon the terms and conditions set forth in this Agreement,  and for the
number of shares of the $.01 par value  common  stock of the  Company  set forth
hereinbelow (the "Shares");

     NOW,  THEREFORE,  the Company  and the  Optionee  hereby  agree as follows:
Definitions.  The  following  terms  shall  have the  meanings  set forth  below
whenever used in this instrument:

(a)  The word  "Affiliate"  shall  mean any  corporation  which is,  within  the
     meaning of  Section-1563(a)  of the Code, a member of a controlled group of
     corporations which includes the Company.

(b)  The word "Agreement" shall mean this instrument.

(c)  The word "Board" shall mean the Board of Directors of the Company.

(d)  The word  "Code"  shall  mean  the  United  States  Internal  Revenue  Code
     (Title-26 of the United States Code).

(e)  The word "Committee" shall mean the Compensation Committee appointed by the
     Board.

(f)  The word  "Company"  shall mean  Handex  Environmental  Recovery,  Inc.,  a
     Delaware  corporation  and any successor  thereto which shall  maintain the
     Plan.

(g)  The word "Disability" shall mean the Optionee's inability,  due to a mental
     or physical  condition,  to perform services for the Company  substantially
     consistent with past practice,  as determined by the Committee  pursuant to
     written  certification of such condition from a physician acceptable to the
     Committee.

(h)  The word "Employee"  shall mean any person who is an employee of either the
     Company or any Subsidiary.

(i)  The words "Incentive Stock Option" shall mean any Option which qualifies as
     an Incentive Stock Option under terms of Section-422A of the Code.

(j)  The word  "Option"  shall  mean the right and  option  of the  Optionee  to
     purchase Shares pursuant to the terms of this Agreement.

(k)  The  words  "Option  Price"  shall  mean the price at which  Shares  may be
     acquired upon the exercise of any option.

(l)  The word  "Optionee"  shall  mean the  person  to whom an  Option  has been
     granted pursuant to this Agreement.

(m)  The words "Personal  Representative"  shall mean,  following the Optionee's
     death,  the  person  who  shall  have  acquired,  by Will or by the laws of
     descent and distribution, the right to exercise any option.

(n)  The word "Plan"  shall mean the Handex  Environmental  Recovery,  Inc.  Key
     Employees  Stock Option Plan,  as it was  originally  adopted and as it may
     later be amended.

(o)  The words "Reporting  Company" shall mean any entity with a class of equity
     securities which is registered under Section-12 of the Securities  Exchange
     Act of-1934, as amended.

(p)  The word  "Shares"  shall mean shares of the $.01 par value common stock of
     the Company.

(q)  The word "Subsidiary" shall mean any corporation at least 50% of the common
     stock of which is owned directly or indirectly by the Company.

Grant of Option.  Effective as of the date of this Agreement, the Company grants
to the Optionee, upon the terms and conditions set forth hereinafter,  the right
and option to purchase  all or any lesser  whole  number of an  aggregate of one
hundred thirty thousand (130,000) Shares at an Option Price of $7.875 per Share.
All of such Shares are subject to a  nonqualified  stock option and none of such
Shares are subject to an Incentive Stock Option.

Term of Option.  Except as  otherwise  provided  herein,  the term of the option
shall be for a period of ten (10)  years  from the date  hereof,  and the Option
shall expire at the close of regular  business hours at the Company's  principal
office at 500-Campus Drive, Morganville,  New Jersey--07751,  on the last day of
the term of the  option,  or, if  earlier,  on the  applicable  expiration  date
provided for in Sections-5, 6 and 7 hereof.

Exercise  Dates.  Except as otherwise  provided  herein,  the Optionee  shall be
entitled to exercise the Option with  respect to the number of Shares  indicated
below on or after the date indicated opposite such number below:

<TABLE>
<CAPTION>
Initial and Additional Number of
Shares with Respect to which the             Total Shares with Respect to which                Date Beginning on Which Option May be
Option May be Exercised                          the Option May be Exercised                                  Exercised
--------------------------------             ----------------------------------                -------------------------------------
<S>       <C>                                             <C>                                               <C>    
          65,000                                           65,000                                           August-6, 1992
          13,000                                           78,000                                           August-6, 1993
          13,000                                           91,000                                           August-6, 1994
          13,000                                          104,000                                           August-6, 1995
          13,000                                          117,000                                           August-6, 1996
          13,000                                          130,000                                           August-6, 1997
</TABLE>

Except as provided in Sections-5  and 6 hereof,  the Option may not be exercised
at any time unless the Optionee shall be an Employee at such time.

Termination of Employment,  Etc. So long as the Optionee shall continue to be an
Employee, the Option shall not be affected by (a) any temporary leave of absence
approved  in  writing  by  the  Company  or  a  Subsidiary   and   described  in
Section-1.421-7(h) of the Federal Income Tax Regulations or any lawful successor
regulations thereto, or (b) any change of duties or position (including transfer
to or from a  Subsidiary).  If the  Optionee  ceases to be an  Employee  for any
reason other than death or  Disability,  the option may be exercised only to the
extent of the purchase  rights,  if any,  which,  pursuant to Section-4  hereof,
existed as of the date the Optionee  ceases to be an Employee and which have not
theretofore  been exercised;  provided,  however,  that the Committee may in its
absolute  discretion  determine  (but  shall  not be  under  any  obligation  to
determine)  that such  purchase  rights  shall be deemed to  include  additional
Shares  which are subject to the  option.  Upon an  Optionee's  ceasing to be an
Employee,  such purchase rights shall in any event terminate upon the earlier of
either  (a) three  (3)  months  (one (1) year if the  Optionee  ceased  to be an
Employee  because of death or Disability)  after the date the Optionee ceased to
be an Employee,  or (b) the last day of the term of the Option.  Notwithstanding
the preceding provisions of this Section-5, unless the Committee shall otherwise
determine,  upon  (a) the  Optionee's  ceasing to be an Employee by reason of an
involuntary  termination  of such status for good cause,  as  determined  by the
Committee,  or (b) the  Optionee's  voluntary  termination with the intention of
rendering  services to a competitor of the Company or any of its Subsidiaries or
otherwise entering into competition with the Company or any of its Subsidiaries,
directly or  indirectly,  or (c) the  commission  by the  Optionee of a material
broach of his  obligations  under any  agreement  with the Company or any of its
Subsidiaries,  the Optionee's  right to purchase Shares pursuant to the exercise
of the Option shall  terminate.  Nothing in this Agreement shall confer upon any
Optionee any right to continue in the employ of the Company or a Subsidiary,  or
to serve as a member,  of the Board of Directors of the Company or a Subsidiary,
or to interfere  with or limit either the right of the Company or  Subsidiary to
terminate  his  employment at any time or the right of the  shareholders  of the
Company to remove him as a member of the Board of  Directors of the Company or a
Subsidiary with or without cause.

Optionee's Death or Disability. If, while the Optionee is an Employee, or within
three (3) months of the Optionee's  having ceased to be an Employee  (other than
under circumstances which resulted in the termination of the Optionee's right to
purchase  Shares  pursuant to the exercise of the Option),  the Optionee dies or
becomes Disabled,  the Optionee or the Optionee's  Personal  Representative  may
immediately,  exercise the Option with  respect to all of the shares  subject to
the Option  regardless  of whether the  Optionee  had the right under  Section-4
hereof to exercise the option at the time of his death or Disability. The Option
shall in any event  terminate  upon the earlier of either  (a) the  first annual
anniversary of the date the Optionee  ceased to be an Employee;  or (b) the last
day of the term of the option.

Change of Control, Dissolution, Liquidation and Certain Mergers. Notwithstanding
the provisions of Section-4 hereof, upon the occurrence of a "change of control"
(as defined herein), or immediately prior to a dissolution or liquidation of the
Company  (but only if the  distributee  of  substantially  all of the  Company's
assets upon the  liquidation  of the Company was not,  immediately  prior to the
liquidation,  an Affiliate) or a merger or consolidation in which the Company is
not  the  surviving  corporation  (but  only  if the  corporation  which  is the
surviving corporation in such merger or consolidation was not, immediately prior
to the merger or  consolidation,  an  Affiliate),  the  Optionee  shall have the
immediate and  non-forfeitable  right to exercise the Option with respect to all
Shares covered by the Option,  and any such exercise shall be  irrevocable.  The
Optionee shall be entitled to exercise the Option as provided in the immediately
preceding  sentence  regardless  of whether the other  corporation  which is the
surviving  corporation in a merger or consolidation shall adopt and maintain the
Plan. In the event the Option becomes  exercisable  pursuant to this  Section-7,
the Company  shall notify the Optionee of his right to exercise the Option.  The
term  "change  of  control"  shall  mean the  acquisition  (other  than from the
Company)   by  any   person,   entity  or  "group"   (within   the   meaning  of
Section-13(d)(3)  or  14(d)(2)  of the  Securities  Exchange  Act  of-1934  (the
"Exchange Act")) but excluding for this purpose the Company or any Subsidiary or
any  employee  benefit  plan of the  Company or any  Subsidiary  which  acquires
beneficial  ownership  (within the meaning of Rule-13d-3  promulgated  under the
Exchange Act) of voting securities of the Company of 50% or more (35% or more if
the Company is a Reporting Company) of either the then outstanding Shares or the
combined  voting  power of the  Company's  then  outstanding  voting  securities
entitled  to vote  generally  in the  election  of  Directors.  Upon  either the
dissolution  or  liquidation  of the  Company  (but only if the  distributee  of
substantially  all of the Company's  assets upon the  liquidation of the Company
was  not,  immediately  prior  to the  liquidation,  an  Affiliate)  or upon the
occurrence  of a  merger  or  consolidation  in  which  the  Company  is not the
surviving  corporation  (but  only if the  corporation  which  is the  surviving
corporation in such merger or consolidation  was not,  immediately  prior to the
merger or  consolidation,  an Affiliate)  and  immediately  following  which the
surviving  corporation  fails to maintain the Plan,  the Option shall  terminate
unless the surviving corporation assumes the option.

Adjustment of Number of Shares, Etc. In the event that subsequent to the date of
this Agreement,  the outstanding Shares are, as a result of a stock split, stock
dividend,  combination  or exchange of shares,  exchange  for other  securities,
reclassification,    reorganization,   redesignation,   merger,   consolidation,
recapitalization,   spin-off,   split-off  or  split-up  or  other  such  change
(including,  without limitation,  any transaction described in Section-425(a) of
the  Code),  or a  special  dividend  or  other  distribution  to the  Company's
shareholders,  increased  or  decreased  or  changed  into  or  exchanged  for a
different  number or kind of shares of stock or other securities of the Company,
then (i) there shall  automatically be substituted for each Share subject to the
option  the number  and kind of shares of stock or other  securities  into which
each  outstanding  Share shall be exchanged,  (ii) the option price per Share or
unit of securities shall be increased or decreased  proportionately  so that the
aggregate  purchase price for the securities  subject to the Option shall remain
the same as immediately  prior to such event, and (iii) the Committee shall make
such  other  adjustments  to the  securities  subject  to the  option  as may be
appropriate,  equitable and in compliance with the provisions of  Section-425(a)
of the Code to the extent  applicable  and any such  adjustment  shall be final,
binding and conclusive as to the Optionee. Any such adjustment shall provide for
the elimination of fractional shares if the Committee shall so direct.  Exercise
of Option.  The Option may be exercised  by  delivering  to the Chief  Financial
Officer of the Company at its principal office,  500-Campus Drive,  Morganville,
New Jersey--07751, a completed Notice of Exercise of Option (obtainable from the
Chief Financial  Officer of the Company) setting forth the number of Shares with
respect to which the Option is being exercised. Such Notice shall be accompanied
by payment in full for the Shares, unless other arrangements satisfactory to the
Company for prompt  payment of such amount are made.  Payments  shall be made by
such type of check or other  means of funds  transfer  as is  acceptable  to the
Company in the amount of the aggregate  purchase  price for such Shares or, with
the consent of the Committee,  payment may be made in whole or in part in Shares
having a fair  market  value on the date the Option is  exercised  equal to that
portion of the purchase  price for which payment in cash is not made;  provided,
however,  that payment in Shares held by the Optionee less than one (1) year may
be made only with the consent of the Committee.

Issuance of Share Certificates. Subject to the last sentence of this Section 10,
upon  receipt  by the  Company  prior  to  expiration  of the  Option  of a duly
completed Notice of Exercise of Option to either exercise the option accompanied
by full  payment for the Shares  being  purchased  pursuant to such Notice (and,
with respect to any Option  exercised  pursuant to Section-11  hereof by someone
other than the Optionee,  accompanied in addition by proof  satisfactory  to the
Committee of the right of such person to exercise the Option), the Company shall
cause to be made or otherwise delivered to the Optionee, within thirty (30) days
of such  receipt,  a  certificate  for the  number of Shares so  purchased.  The
Optionee  shall not have any of the rights of a shareholder  with respect to the
Shares  which  are  subject  to  the  Option  unless  and  until  a  certificate
representing  such Shares is issued to the  Optionee.  The Company  shall not be
required to issue any  certificates  for Shares it on the exercise of the Option
prior to  (i) obtaining  any  approval  from any  governmental  agency which the
Committee shall, in its sole discretion, determine to be necessary or advisable,
and/or (ii) the  admission of such Shares to listing on any national  securities
exchange  on which the  Shares  may be listed,  and/or  (iii) completion  of any
registration or other qualification of the Shares under any state or federal law
or ruling or regulations of any governmental  body which the Committee shall, in
its  sole   discretion,   determine  to  be  necessary  or  advisable,   or  the
determination by the Committee, in its sole discretion, that any registration or
other  qualification of the Shares is not necessary or advisable.  Successors in
Interest,  Etc. This Agreement shall be binding upon and inure to the benefit of
any successor of the Company and the heirs, estate, and Personal  Representative
of the Optionee.  The Option shall not be transferable other than by Will or the
laws of descent and  distribution,  and the option may be  exercised  during the
lifetime of the Optionee only by the Optionee  provided that a guardian or other
legal  representative who has been duly appointed for such Optionee may exercise
the  option  on  behalf  of  the  Optionee.   A  deceased   Optionee's  Personal
Representative  shall act in the place and stead of the deceased  Optionee  with
respect to  exercising  an option or taking any other  action  pursuant  to this
Agreement.

Provisions  of Plan  Control.  This  Agreement  is  subject to all of the terms,
conditions,  and  provisions  of the Plan and to such  rules,  regulations,  and
interpretations  relating to the Plan as may be adopted by the  Committee and as
may be in effect  from time to time.  A copy of the Plan is  attached  hereto as
Exhibit "All and is  incorporated  herein by reference.  In the event and to the
extent  that  this  Agreement  conflicts  or is  inconsistent  with  the  terms,
conditions,  and  provisions  of the  Plan,  the Plan  shall  control,  and this
Agreement shall be deemed to be modified accordingly.

No Liability  Upon  Distribution  of Shares.  The liability of the Company under
this Agreement and any  distribution  of Shares made hereunder is limited to the
obligations  set forth herein with respect to such  distribution  and no term or
provision of this  Agreement  shall be construed to impose any  liability on the
Company or the  Committee in favor of any person with respect to any loss,  cost
or expense which the person may incur in  connection  with or arising out of any
transaction in connection with this Agreement.  Withholding. The Optionee agrees
that the Company may make appropriate provision for tax withholding with respect
to the transactions contemplated by this Agreement.

Captions.  The captions and section  numbers  appearing  in this  Agreement  are
inserted only as a matter of convenience. They do not define, limit, construe or
describe the scope or intent of the provisions of this Agreement.

Number.  The use of the singular or plural herein shall not be restrictive as to
number and shall be interpreted in all cases as the context shall require.

Gender.  The use of the  feminine,  masculine  or  neuter  pronoun  shall not be
restrictive  as to gender and shall be  interpreted  in all cases as the context
may require.

Investment  Representation.  Optionee  hereby  represents  and warrants that any
Shares  which he may acquire by virtue of the  exercise  of the Option  shall be
acquired for  investment  purposes only and not with a view to  distribution  or
resale; provided, however, that this restriction shall become inoperative in the
event the Shares which are subject to the Option shall be  registered  under the
Federal Securities Act of-1933,  as amended,  or in the event there is presented
to the Company evidence satisfactory to the Company to the effect that the offer
or sale of the  Shares  which  were  acquired  upon  exercise  of the Option may
lawfully be made without  registration under the Federal Securities Act of-1933,
as amended.

Governing Law. This  Agreement  shall be governed by and construed in accordance
with the laws of the State of Delaware and any applicable federal law.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer, and the Optionee has hereunto set his
hand, all as of the day and year first above written.

                                                 THOMAS J. BRESNAN /s/ 
                                            Thomas J. Bresnan, ("Optionee")

                                            HANDEX ENVIRONMENTAL RECOVERY, INC.
                                            ("Company")

                                            By:  CURTIS L. SMITH, JR. /s/ 
                                                         Curtis L. Smith, Jr.
                                                         Chairman of the Board

<PAGE>
Exhibit 10.10

                                 AMENDMENT NO. 1

                                       TO

                       HANDEX ENVIRONMENTAL RECOVERY, INC.

                       OUTSIDE DIRECTORS STOCK OPTION PLAN



     This Amendment No. 1 to the Handex  Environmental  Recovery,  Inc.  Outside
Directors  Stock  Option  Plan  (the  "Plan")  is  adopted  February  12,  1993.
Capitalized  terms not otherwise  defined  herein shall have the meanings  given
them in Plan.

                               W I T N E S S E T H:

     WHEREAS,  the  number of shares of Common  Stock for which  options  may be
granted  under the Plan is 37,500,  of which only 8,750 remain for further grant
by the Committee.

     WHEREAS,  the Company  desires to  increase  the number of shares of Common
Stock for which options may be granted under the Plan;

     NOW,  THEREFORE,  the Plan is amended by  deleting  the first  sentence  of
Section 6 of the Plan and substituting the following therefore:

     "Subject  to the  provisions  of  Section 9  concerning  payment  for stock
     appreciation  rights  in  shares  of  Common  Stock,  and  subject  to  the
     provisions  of the  next  succeeding  paragraph  of  this  Section  6,  the
     aggregate number of shares of Common Stock for which options may be granted
     under the Plan shall be  Seventy-Five  Thousand  (75,000)  shares of Common
     Stock."

     This  Amendment No. 1 to the Plan shall be effective as of the date hereof,
subject to approval by holders of a majority of the outstanding shares of Common
Stock of the Company. In the event this Amendment No. 1 is not so approved on or
before  December 31, 1993, all options granted under the Plan in excess of those
permitted without giving effect hereto shall be null and void.


     IN  WITNESS  WHEREOF,  Handex  Environmental  Recovery,  Inc.,  by its duly
authorized  officer,  has executed  this  Amendment  No. 1, as of the date first
above written.

                       HANDEX ENVIRONMENTAL RECOVERY, INC.


                                             BY_________________________________

                                             ITS________________________________



<PAGE>
Exhibit 10.18

                          NEW HORIZONS WORLDWIDE, INC.

                               INDEMNITY AGREEMENT


     THIS AGREEMENT is made and entered into effective as of  _________________,
by and  between  NEW  HORIZONS  WORLDWIDE,  INC.,  a Delaware  corporation  (the
"Corporation"), and _______________ ("Indemnitee"), a Director or Officer of the
Corporation.

     WHEREAS,  it is  essential  to the  Corporation  to retain  and  attract as
Directors and Officers the most capable persons available; and

     WHEREAS,   the  substantial   increase  in  corporate  litigation  subjects
directors and officers to expensive  litigation  risks at the same time that the
availability of directors' and officers'  liability  insurance has been severely
limited; and

     WHEREAS,  it is now the express policy of the  Corporation to indemnify its
Directors  and  Officers  so  as to  provide  them  with  the  maximum  possible
protection permitted by law; and

     WHEREAS, in addition,  because the statutory indemnification  provisions of
the  Delaware   General   Corporation  Law  expressly   provide  that  they  are
non-exclusive,  it is the policy of the  Corporation to indemnify  Directors and
Officers of the  Corporation  who have entered into  settlements  of  derivative
suits  provided  they have not breached  the  applicable  statutory  standard of
conduct; and

     WHEREAS,  Indemnitee  does not regard the  protection  available  under the
Corporation's By-Laws and insurance,  if any, as totally adequate in the present
circumstances,  and  considers  it necessary  and  desirable to his service as a
Director or Officer to have  maximum  protection,  and the  Corporation  desires
Indemnitee to serve in such capacity; and

     WHEREAS, the Delaware General Corporation Law and the Corporation's By-Laws
provides that  indemnification  of the Directors and Officers of the Corporation
may be authorized by agreement,  and thereby contemplates that contracts of this
nature may be entered into between the  Corporation  and Indemnitee with respect
to indemnification of Indemnitee as a Director or Officer of the Corporation.

     NOW, THEREFORE,  for good and valuable  consideration,  the sufficiency and
adequacy of which is hereby  acknowledged,  the  Corporation  and  Indemnitee do
hereby agree as follows:

1.   Agreement  to Serve.  Indemnitee  agrees to serve or continue to serve as a
     Director  and/or  Officer  of the  Corporation  for so  long  as he is duly
     elected or  appointed or until such time as he tenders his  resignation  in
     writing or is otherwise terminated or properly removed from office.

2.   Definitions. As used in this Agreement:

     (a)  The term  "Proceeding"  shall  include  any  threatened,  pending,  or
          completed  action,  suit or proceeding,  whether  brought by or in the
          right  of  the  Corporation  or  otherwise  and  whether  of a  civil,
          criminal,  administrative or investigative nature, in which Indemnitee
          may be or may have been involved as a party or otherwise, by reason of
          the fact  that  Indemnitee  is or was a  Director  or  Officer  of the
          Corporation,  by reason of any action  taken by him or of any inaction
          on his part while  acting as such a Director or Officer,  or by reason
          of  the  fact  that  he is or  was  serving  at  the  request  of  the
          Corporation  as a director,  officer,  partner,  trustee,  employee or
          agent of the Corporation or of another corporation, partnership, joint
          venture, trust or other enterprise;  in each case whether or not he is
          acting or serving in any such  capacity at the time any  liability  or
          expense is incurred for which  indemnification or reimbursement can be
          provided under this Agreement.

     (b)  The term "Expenses"  shall include,  without  limitation,  expenses of
          investigations,  judicial or  administrative  proceedings  or appeals,
          attorneys' fees and  disbursements  and any expenses of establishing a
          right to  indemnification  under  Paragraph-8 of this  Agreement,  but
          shall not include the amount of judgments,  fines or penalties against
          or settlements paid by Indemnitee.

     (c)  References to "other  enterprise" shall include,  without  limitation,
          employee benefit plans;  references to "fines" shall include,  without
          limitation,  any  excise tax  assessed  with  respect to any  employee
          benefit   plan;   references   to  "serving  at  the  request  of  the
          Corporation"  shall  include,  without  limitation,  any  service as a
          Director or Officer of the  Corporation  which  imposes  duties on, or
          involves  services  by, such  Director or Officer  with  respect to an
          employee benefit plan, its participants or beneficiaries; and a person
          who acted in good faith and in a manner he  reasonably  believed to be
          in the best  interests of the  participants  and  beneficiaries  of an
          employee  benefit  plan shall be deemed to have acted in a manner "not
          opposed to the best  interests of the  Corporation"  as referred to in
          this Agreement.

3.   Indemnity in  Third-Party  Proceedings.  The  Corporation  shall  indemnify
     Indemnitee  in  accordance  with  the  provisions  of this  Paragraph-3  if
     Indemnitee  is a party to or  threatened to be made a party to or otherwise
     involved in any  Proceeding  (other than a Proceeding by or in the right of
     the  Corporation  to procure a judgment in its favor) by reason of the fact
     that Indemnitee is or was a Director or Officer of the  Corporation,  or is
     or was serving at the request of the  Corporation  as a director,  officer,
     partner,  trustee,  employee or agent of another corporation,  partnership,
     joint venture, trust or other enterprise,  against all Expenses, judgments,
     settlements,  fines and  penalties,  actually  and  reasonably  incurred by
     Indemnitee in connection with the defense or settlement of such Proceeding,
     but  only if  Indemnitee  acted  in good  faith  and in a  manner  which he
     reasonably  believed to be in or not opposed to the best  interests  of the
     Corporation  and, in the case of a criminal  proceeding,  had no reasonable
     cause to believe that his conduct was unlawful. The termination of any such
     Proceeding by judgment,  order of court,  settlement,  conviction or upon a
     plea of nolo contendere, or its equivalent,  shall not, of itself, create a
     presumption that Indemnitee did not act in good faith and in a manner which
     he reasonably believed to be in or not opposed to the best interests of the
     Corporation,  and with respect to any criminal proceeding, that such person
     had reasonable cause to believe that his conduct was unlawful.

4.   Indemnity  for  Expenses  in   Proceedings  By  Or  In  the  Right  of  the
     Corporation.  The Corporation shall indemnify Indemnitee in accordance with
     the  provisions  of  this  Paragraph-4  if  Indemnitee  is a  party  to  or
     threatened to be made a party to or otherwise involved in any Proceeding by
     or in the right of the  Corporation  to procure a judgment  in its favor by
     reason of the fact that  Indemnitee  is or was a Director or Officer of the
     Corporation,  or is or was serving at the request of the  Corporation  as a
     director,   officer,  partner,  trustee,  employee,  or  agent  of  another
     corporation, partnership, joint venture, trust or other enterprise, against
     all Expenses  actually and reasonably  incurred by Indemnitee in connection
     with the defense or settlement of such Proceeding,  but only if he acted in
     good faith and in a manner  which he  reasonably  believed  to be in or not
     opposed  to  the  best  interests  of  the  Corporation,   except  that  no
     indemnification  for  Expenses  shall be made  under  this  Paragraph-4  in
     respect of any  claim,  issue or matter as to which  Indemnitee  shall have
     been  adjudged  to be liable  to the  Corporation,  unless  and only to the
     extent that any court in which such  Proceeding was brought shall determine
     upon application that, despite the adjudication of liability but in view of
     all the  circumstances  of the case,  Indemnitee  is fairly and  reasonably
     entitled to indemnity for such expenses as such court shall deem proper.

5.   Indemnity for Amounts Paid in Settlement in  Proceedings By Or In the Right
     of  the  Corporation.   The  Corporation  shall  indemnify   Indemnitee  in
     accordance with the provisions of this Paragraph-5 if Indemnitee is a party
     to or threatened to be made a party to any Proceeding by or in the right of
     the  Corporation  to procure a judgment  in its favor by reason of the fact
     that Indemnitee is or was a Director or Officer of the  Corporation,  or is
     or was serving at the request of the  Corporation  as a director,  officer,
     partner, trustee,  employee, or agent of another corporation,  partnership,
     joint venture, trust or other enterprise,  against all amounts actually and
     reasonably  paid in settlement  by  Indemnitee in connection  with any such
     Proceeding,  but only if he acted in good  faith  and in a manner  which he
     reasonably  believed to be in or not opposed to the best  interests  of the
     Corporation.

6.   Indemnification of Expenses of Successful Party.  Notwithstanding any other
     provision  of this  Agreement,  to the  extent  that  Indemnitee  has  been
     successful  on the merits or otherwise in defense of any  Proceeding  or in
     defense of any claim, issue or matter therein,  including dismissal without
     prejudice, Indemnitee shall be indemnified against all Expenses incurred in
     connection therewith.

7.   Advances of Expenses.  Any Expenses  incurred by or on behalf of Indemnitee
     pursuant  to  Paragraphs-3  or-4  in any  Proceeding  shall  be paid by the
     Corporation in advance upon the written request of Indemnitee if Indemnitee
     shall  undertake  to  (a) repay  such  amount  to  the  extent  that  it is
     ultimately  determined that  Indemnitee is not entitled to  indemnification
     hereunder, and (b) reasonably cooperate with the Corporation concerning the
     action, suit or proceeding giving rise to the Expenses.

8.   Right of Indemnitee to  Indemnification  Upon  Application;  Procedure Upon
     Application.  Any indemnification  under Paragraphs-3,  4, 5 and 6 shall be
     made no later than thirty (30) days after receipt by the Corporation of the
     written  request of Indemnitee  therefor,  unless a  determination  is made
     within  said  thirty  (30) day period by (a) the  Board of  Directors  by a
     majority  vote of a quorum  consisting of Directors who were not parties to
     such  Proceeding,  or  (b) independent  legal  counsel,  agreed  to by  the
     Corporation, in a written opinion (which counsel shall be appointed if such
     a quorum is not  obtainable),  that the Indemnitee has not met the relevant
     standards for  indemnification  set forth in  Paragraphs-3,  4, 5 or 6. The
     right to indemnification or advances as provided by this Agreement shall be
     enforceable  by  Indemnitee in any court of competent  jurisdiction.  There
     shall exist in such action a rebuttable presumption that Indemnitee has met
     the  applicable  standard(s)  of  conduct  and  is  therefore  entitled  to
     indemnification  pursuant to this Agreement, and the burden of proving that
     the  relevant  standards  have not been met by  Indemnitee  shall be on the
     Corporation. Neither the failure of the Corporation (including its Board of
     Directors or independent  legal counsel) prior to the  commencement of such
     action to have made a determination  that  indemnification is proper in the
     circumstances  because  Indemnitee  has  met  the  applicable  standard  of
     conduct,  nor an actual  determination  by the  Corporation  (including its
     Board of Directors or independent  legal  counsel) that  Indemnitee has not
     met such applicable standard of conduct,  shall (a) constitute a defense to
     the  action,  (b) create  a  presumption  that  Indemnitee  has not met the
     applicable  standard of conduct,  or (c) otherwise alter the presumption in
     favor of  Indemnitee  referred to in the preceding  sentence.  Indemnitee's
     Expenses reasonably  incurred in connection with successfully  establishing
     his right to indemnification, in whole or in part, in any such action shall
     also be indemnified by the Corporation.

9.   Allowance for Compliance  with SEC  Requirements.  Indemnitee  acknowledges
     that the  Securities  and Exchange  Commission  ("SEC") has  expressed  the
     opinion that  indemnification  of directors and officers  from  liabilities
     under the  Securities  Act of 1933  ("Act")  is  against  public  policy as
     expressed in the Act and, is therefore,  unenforceable.  Indemnitee  hereby
     agrees that it will not be a breach of this  Agreement for the  Corporation
     to undertake with the Commission in connection  with the  registration  for
     sale of any stock or other  securities of the Corporation from time to time
     that,  in the event a claim for  indemnification  against such  liabilities
     (other than the payment by the Corporation of expenses  incurred or paid by
     a Director or Officer of the  Corporation in the successful  defense of any
     action,  suit or proceeding)  is asserted in connection  with such stock or
     other  securities being  registered,  the Corporation  will,  unless in the
     opinion  of  its  counsel  the  matter  has  been  settled  by  controlling
     precedent,  submit to a court of  competent  jurisdiction  the  question of
     whether  or not such  indemnification  by it is  against  public  policy as
     expressed in the Act and will be governed by the final adjudication of such
     issue.  Indemnitee  further  agrees  that  such  submission  to a court  of
     competent jurisdiction shall not be a breach of this Agreement.

10.  Indemnification  Hereunder Not Exclusive.  The indemnification  provided by
     this Agreement  shall not be deemed  exclusive of any other rights to which
     Indemnitee may be entitled under the  Certificate of  Incorporation  or the
     By-Laws of the  Corporation,  any agreement,  any vote of  stockholders  or
     disinterested  Directors,  the  General  Corporation  Law of the  State  of
     Delaware,  or otherwise,  both as to action in his official capacity and as
     to action in another capacity while holding such office.

     The  indemnification  under this Agreement  shall continue as to Indemnitee
     even  though he may have  ceased to be a  Director  or  Officer  so long as
     Indemnitee shall be subject to any proceedings,  by reason of the fact that
     Indemnitee was a director,  officer,  employee, or agent of the Corporation
     or serving in any capacity described in paragraph-5, and shall inure to the
     benefit of the heirs, executors and personal representatives of Indemnitee.

11.  Partial  Indemnification.  If Indemnitee is entitled under any provision of
     this  Agreement  to  indemnification  by the  Corporation  for some claims,
     issues or matters,  but not as to other claims,  issues or matters,  or for
     some or a portion of the Expenses,  judgments,  fines or penalties actually
     and reasonably  incurred by him or amounts  actually and reasonably paid in
     settlement by him in the  investigation,  defense,  appeal or settlement of
     any Proceeding, but not for the total amount thereof, the Corporation shall
     nevertheless indemnify Indemnitee for the portion of such claims, issues or
     matters  or  Expenses,  judgments,  fines,  penalties  or  amounts  paid in
     settlement to which Indemnitee is entitled.

12.  Reimbursement  to Corporation by Indemnitee;  Limitation on Amounts Paid by
     Corporation.   To  the  extent  Indemnitee  has  been  indemnified  by  the
     Corporation  hereunder  and  later  receives  payments  from any  insurance
     maintained by the Company  covering the same  Expenses,  judgments,  fines,
     penalties or amounts paid in settlement so indemnified  by the  Corporation
     hereunder, Indemnitee shall immediately reimburse the Corporation hereunder
     for all such amounts  received from the insurer.  Notwithstanding  anything
     contained  herein to the  contrary,  Indemnitee  shall not be  entitled  to
     recover  amounts under this  Agreement  which,  when added to the amount of
     indemnification  payments made to, or on behalf of,  Indemnitee,  under the
     Certificate  of  Incorporation  or  By-Laws  of  the  Corporation,  in  the
     aggregate exceed the Expenses, judgments, fines, penalties and amounts paid
     in  settlement  actually and  reasonably  incurred by  Indemnitee  ("Excess
     Amounts").  To the  extent  the  Corporation  has paid  Excess  Amounts  to
     Indemnitee,  Indemnitee  shall be obligated to  immediately  reimburse  the
     Corporation for such Excess Amounts.

13.  Continuation of Rights and  Obligations.  All rights and obligations of the
     Corporation  and  Indemnitee  hereunder  shall  continue  in full force and
     effect   despite  the   subsequent   amendment  or   modification   of  the
     Corporation's  Certificate  of  Incorporation  or  By-Laws,  as such are in
     effect on the date  hereof,  and such rights and  obligations  shall not be
     affected by any such amendment or modification, any resolution of Directors
     or stockholders of the Corporation,  or by any other corporate action which
     conflicts with or purports to amend,  modify, limit or eliminate any of the
     rights or obligations of the Corporation and/or Indemnitee hereunder.

14.  Amendment and Modification. This Agreement may only be amended, modified or
     supplemented by the written agreement of the Corporation and Indemnitee.

15.  Assignment.  This  Agreement  shall not be assigned by the  Corporation  or
     Indemnitee  without the prior written  consent of the other party  thereto,
     except that the  Corporation  may freely assign its rights and  obligations
     under this Agreement to any subsidiary for whom  Indemnitee is serving as a
     director,  officer, partner, trustee, employee or agent thereof;  provided,
     however,  that no permitted  assignment shall release the assignor from its
     obligations hereunder.  Subject to the foregoing, this Agreement and all of
     the provisions hereof shall be binding upon and inure to the benefit of the
     parties  hereto  and their  respective  heirs,  executors,  successors  and
     assigns, including, without limitation, any successor to the Corporation by
     way of merger, consolidation,  other forms of reorganization and/or sale or
     disposition  of  all or  substantially  all of  the  capital  stock  of the
     Corporation.

16.  Saving  Clause.   If  this  Agreement  or  any  portion  thereof  shall  be
     invalidated  on any  ground by any  court of  competent  jurisdiction,  the
     Corporation  shall  nevertheless   indemnify  Indemnitee  as  to  Expenses,
     judgments,  fines, penalties and amounts paid in settlement with respect to
     any Proceeding to the full extent  permitted by any  applicable  portion of
     this  Agreement  that  shall  not have  been  invalidated  or by any  other
     applicable law.

17.  Counterparts.  This  Agreement  may be  executed  in two or more  fully  or
     partially  executed  counterparts each of which shall be deemed an original
     binding the signer  thereof  against  the other  signing  parties,  but all
     counterparts  together  shall  constitute  one  and  the  same  instrument.
     Executed  signature  pages may be removed from  counterpart  agreements and
     attached to one or more fully executed copies of this Agreement.

18.  Notice.  Indemnitee  shall,  as a  condition  precedent  to his right to be
     indemnified under this Agreement, give to the Corporation notice in writing
     as soon as  practicable  of any claim made against him for which  indemnity
     will or could be sought  under this  Agreement.  Notice to the  Corporation
     shall be directed to the  Corporation  at its  headquarters  located at 500
     Campus Drive, Morganville, New Jersey--07751,  Attention: Chairman (or such
     other address as the Corporation shall designate in writing to Indemnitee).
     Notice shall be deemed  received  three days after the date  postmarked  if
     sent by prepaid mail, properly addressed.

19.  Applicable  Law.  All matters with  respect to this  Agreement,  including,
     without  limitation,   matters  of  validity,   construction,   effect  and
     performance shall be governed by the internal laws of the State of Delaware
     applicable  to  contracts  made and to be  performed  therein  between  the
     residents  thereof   (regardless  of  the  laws  that  might  otherwise  be
     applicable under principles of conflicts of law).

     IN WITNESS  WHEREOF,  the parties  hereby have caused this  Agreement to be
duly executed and signed effective as of the day and year first above written.

                                    NEW HORIZONS WORLDWIDE, INC.


                                               By_______________________________

                                             Its:_______________________________



                                                 _______________________________



SRW0228.DOC;1

<PAGE>
Exhibit 10.24
                                  MERRILL LYNCH

                                     SPECIAL

                                PROTOTYPE DEFINED

                                CONTRIBUTION PLAN

                               ADOPTION AGREEMENT


                                   401(k) PLAN

                              EMPLOYEE THRIFT PLAN

                               PROFIT-SHARING PLAN

                         Letter Serial Number: D359287b
                      National Office Letter Date: 6/29/93

This Prototype Plan and Adoption  Agreement are important legal instruments with
legal and tax implications for which the Sponsor,  Merrill Lynch, Pierce, Fenner
& Smith, Incorporated, does not assume responsibility.  The Employer is urged to
consult with its own  attorney  with regard to the adoption of this Plan and its
suitability to its circumstances.

<PAGE>
[GRAPHIC OMITTED]

              Addendum to the New Horizons Worldwide, Inc. 401 (k)
      Profit Sharing Trust and Plan pursuant to Section 11.1.2 of the Plan


IRC  Section  411(d)(6)  Protected  Benefits  Attachment  to  the  New  Horizons
Worldwide, Inc. 401 (k) Profit Sharing Trust and Plan

Pursuant to Section  11.1.2 of the Base Plan  Document  #03,  Thomas J. Bresnan,
Gary  T.  Gann  and  John  T.  St.  James,  former  Participants  of the  Handex
Environmental,  Inc., 401 (k) Profit Sharing Trust and Plan (the "Handex Plan"),
shall be  deemed to retain  the  right to elect a lump sum  distribution,  fifty
percent (50%)  annuity,  one hundred  percent  (100%)  annuity,  life annuity or
nearly equal installment payments as an optional form of benefit with respect to
his Handex Plan cash option  account and his Handex Plan  employer  contribution
account,  if  applicable.  Such  distribution  options  shall be  subject to the
qualified  joint and  survivor  rules  described  in Article VI of the Base Plan
Document #03.


<PAGE>
Adoption of Plan

The Employer named below hereby  establishes or restates a  profit-sharing  plan
that includes a X 401 (k), X profit-sharing  and/or ___ thrift plan feature (the
"Plan") by adopting the Merrill Lynch  Special  Prototype  Defined  Contribution
Plan and  Trust  as  modified  by the  terms  and  provisions  of this  Adoption
Agreement.

     Employer and Plan Information

     Employer Name:* New Horizons Worldwide, Inc.

     Business Address: 1231 East Dyer Road, Suite 110

     Santa Ana, CA 92705

     Telephone Number: (714) 432-7600

     Employer Taxpayer ID Number: 22-2941704

     Employer Taxable Year ends on: December 31st

     Plan Name: New Horizons Worldwide 401(k) Profit Sharing Trust and Plan

     Plan Number: 001

                                            401(k)    Profit Sharing      Thrift
                                            ------    --------------      ------

         Effective Date of Adoption
              or Restatement:               1/1/99       1/1/99

         Original Effective Date:           1/1/95       1/1/95

     If this Plan is a continuation or an amendment of a prior plan, an optional
     forms of benefits  provided  in the prior plan must be provided  under this
     Plan to any Participant who had an account balance,  whether or not vested,
     in the prior plan.

     *    If there are any Participating Affiliates in this Plan, list below the
          proper name of each Participating Affiliate.

          New Horizons  Education  Corporation;  New Horizons  Computer Learning
          Centers,  Inc.; New Horizons  Computer  Learning  Center of Santa Ana,
          Inc.; New  Horizons  Computer  Learning Centers of Chicago,  Inc.; New
          Horizons  Computer Learning Center of Metropolitan New York, Inc.; New
          Horizons  Computer  Learning  Center  of Cleveland,  LTD; New Horizons
          Computer  Learning  Center of Memphis,  Inc.;  New  Horizons  Computer
          Learning  Center of Nashville,  Inc.; New Horizons  Computer  Learning
          Center of Hartford, Inc.


                                        2

<PAGE>

                   ARTICLE I. Definitions

A.   "Compensation

     (1)With respect to each Participant, except as provided below, Compensation
     shall mean the (select all those applicable for each column):

     401(k) and/     Profit
     or Thrift       Sharing
     ---------       -------
                              (a)  amount reported in the "Wages Tips and Other
                                   Compensation" Box on Form W-2 for the
                                   applicable  period selected in Item 5 below.

                              (b)  compensation for Code Section 415 safe-harbor
                                   purposes (as defined in Section 3.9.1 (H)(i)
                                   of basic plan document #03)for the applicable
                                   period selected in Item 5 below.
 
          X              X    (c)  amount  reported  pursuant to Code Section
                                   3401 (a) for the applicable  period  selected
                                   in Item 5 below.
          X              X    (d)  all amounts  received (under options (a) (b) 
                                   or (c) above) for personal  services rendered
                                   to the Employer but excluding (select one):

                                        overtime
                                   X    bonuses
                                        commissions
                                        amounts in excess of $ ____
                                        other (specify) _____.

     (2)  Treatment of Elective Contributions (select one):

          X    (a)  For purposes of  contributions,  Compensation  shall include
                    Elective  Deferrals  and amounts  excludable  from the gross
                    income of the Employee  under Code Section 125, Code Section
                    402(e)(3),  Code  Section  402(h)  or  Code  Section  403(b)
                    ("elective contributions").

               (b)  For  purposes  of  contributions,   Compensation  shall  not
                    include "elective contributions."

     (3)  CODA Compensation (select one):

          X    (a)  For  purposes of the ADP and ACP Tests,  Compensation  shall
                    include "elective contributions."

               (b)  For  purposes of the ADP and ACP Tests,  Compensation  shall
                    not include "elective contributions."



                                                               3
<PAGE>
     (4)  With respect to  Contributions to an Employer  Contributions  Account,
          Compensation shall include all Compensation (select one):

               (a)  during  the Plan Year in which the  Participant  enters  the
                    Plan.

          X    (b)  after the Participant's Entry Date.

     (5)  The applicable  period for determining  Compensation  shall be (select
          one):

               (a)  the Plan Year

               (b)  the Limitation Year.

               (c)  the consecutive 12-month period ending on ___.

B.   "Disability"

(1)  Definition

     Disability  shall  mean a  condition  which  results  in the  Participant's
     (select one):


          (a)  inability to engage in any substantial gainful activity by reason
               of any medically  determinable physical or mental impairment that
               can be  expected to result in death or which has lasted or can be
               expected  to last for a  continuous  period  of not less  than 12
               months.


      X   (b)  total and  permanent  inability to meet the  requirements  of the
               Participant's  customary employment which can be expected to last
               for a continuous period of not less than 12 months.


          (c)  qualification for Social Security disability benefits.


          (d)  qualification   for  benefits  under  the  Employer's   long-term
               disability plan.

(2)  Contributions Due to Disability (select one):

     X    (a)  No  contributions  to an Employer  Contributions  Account will be
               made on behalf of a Participant due to his or her Disability.

          (b)  Contributions to an Employer  Contributions  Account will be made
               on behalf of a Participant due to his or her Disability  provided
               that:  the  Employer  elected  option  (a)  or (c)  above  as the
               definition of Disability, contributions are not made on behalf of
               a Highly Compensated  Employee,  the contribution is based on the
               Compensation  each such  Participant  would have received for the
               Limitation  Year if the  Participant had been paid at the rate of
               Compensation paid immediately  before his or her Disability,  and
               contributions   made  on  behalf  of  such  Participant  will  be
               nonforfeitable when made.

                                        4
<PAGE>
C.   "Early Retirement" is (select one):

     X    (1)  not  permitted.

          (2)  permitted if a Participant  terminates  Employment  before Normal
               Retirement Age and has (select one):

                    (a)  attained age___.
                    (b)  attained age ___ and completed ___ Years of Service.
                    (c)  attained age ___ and  completed ___ Years of Service as
                         a Participant.

D.   "Eligible Employees" (select one):

          (1)  All Employees are eligible to participate in the Plan.

     X    (2)  The following  Employees are not eligible to  participate  in the
               Plan (select all those applicable):

               X    (a) Employees  included in a unit of Employees  covered by a
                    collective  bargaining  agreement  between the Employer or a
                    Participating  Affiliate  and the  Employee  representatives
                    (not  including  any  organization  more  than half of whose
                    members  are   Employees  who  are  owners,   officers,   or
                    executives  of the Employer or  Participating  Affiliate) in
                    the  negotiation  of  which  retirement  benefits  were  the
                    subject of good  faith  bargaining,  unless  the  bargaining
                    agreement provides for participation in the Plan.

               X    (b)  non-resident  aliens who received no earned income from
                    the Employer or a Participating  Affiliate which constitutes
                    income from sources within the United States.  (c) Employees
                    of an Affiliate

               X    (d)  Employees  employed  in or by the  following  specified
                    division,   plant,   location,   job   category   or   other
                    identifiable  individual  or group of  Employees:  Temporary
                    Employees,  which  is  defined  as  an  individual  who,  by
                    agreement with the Employer,  is Employed by the Employer on
                    a  temporary  basis  for six  months  or less and who is not
                    offered  regular,  full4ime  employment with the Employer at
                    the end of such  temporary  period of  employment;  Contract
                    Employees, which is defined as an individual who is employed
                    by the  Employer  in  accordance  with an  oral  or  written
                    employment,  consulting or other arrangement,  the terms and
                    conditions of which preclude the employee's participation in
                    the Plan.


                                                                5
<PAGE>
E.   "Entry Date" Entry Date shall mean (select as  applicable):

401(k)    Profit
and/or    Sharing
Thrift

                    1)   If the initial  Plan Year is less than  twelve  months,
                         the day of ___ and ___thereafter:

                    (2)  the first day of the Plan Year  following  the date the
                         Employee  meets the  eligibility  requirements.  If the
                         Employer elects this option (2)  establishing  only one
                         Entry  Date,   the   eligibility   "age  and   service"
                         requirements elected in Article 11 must be no more than
                         age 20-1/2 and 6 months of service.

                    (3)  the  first  day of the  month  following  the  date the
                         Employee meets the eligibility requirements.

                    (4)  the first day of the Plan Year and the first day of the
                         seventh  month of the Plan Year  following the date the
                         Employee meets the eligibility requirements.

     X         X    (5)  the  first day of the Plan  Year,  the first day of the
                         fourth  month of the Plan  Year,  the  first day of the
                         seventh  month of the Plan  Year,  and the first day of
                         the tenth month of the Plan Year following the date the
                         Employee meets the eligibility requirements.

                    (6)  other:  provided that the Entry Date or Dates  selected
                         are no later than any of the options above.

F.   "Hours of Service"

Hours of  Service  for the  purpose of  determining  a  Participant's  Period of
Severance  and Year of Service  shall be  determined  on the basis of the method
specified below:

(1)  Eligibility  Service: For purposes of determining whether a Participant has
     satisfied the eligibility requirements,  the following method shall be used
     (select one):

401(k)    Profit
and/or    Sharing
Thrift

    X         X     (a)  elapsed time method
                    (b)  hourly records method



                                        6
<PAGE>
(2)  Vesting  Service:   A  Participant's   nonforfeitable   interest  shall  be
     determined on the basis of the method specified below (select one):

          (a)  elapsed time method

     X    (b)  hourly records method

          (c)  If  this  item  (c)  is  checked,  the  Plan  only  provides  for
               contributions  that are always 100% vested and this item (2) will
               not apply.

(3)  Hourly Records:  For the purpose of determining  Hours of Service under the
     hourly record method (select one):

     X    (a)  only  actual  hours for which an  Employee is paid or entitled to
               payment shall be counted.

          (b)  an Employee  shall be  credited  with 45 Hours of Service if such
               Employee would be credited with
                                at least 1 Hour of Service during the week.

G.   "Integration Level"

     X    (1)  This Plan is not integrated with Social Security.

          (2)  This Plan is integrated  with Social  Security.  The  Integration
               Level shall be (select one):

                    (a)  the Taxable Wage Base.
                    (b)  $____ (a  dollar  amount  less  than the  Taxable  Wage
                         Base).
                    (c)  ____% of the Taxable Wage Base (not to exceed 100%).
                    (d)  the greater of $10,000 or 20% of the Taxable Wage Base.


H.   "Limitation Compensation"

For purposes of Code Section 415, Limitation  Compensation shall be compensation
as determined for purposes of (select one):

          (1)  Code Section 415  Safe-Harbor  as defined in Section 3.9.1 (H)(i)
               of basic plan document #03.

     X    (2)  the "Wages, Tips and Other Compensation" Box on Form W-2.

          (3)  Code Section 3401 (a) Federal Income Tax Withholding.

I.   "Limitation Year"

For purposes of Code Section 415, the Limitation Year shall be (select one):

          (1)  the Plan Year.

          (2)  the twelve  consecutive month period ending on the ___ day of the
               month of ___.


                                        7
<PAGE>
J.   "Net Profits" are (select one):

     X    (1)  not necessary for any contribution.

          (2)  necessary for (select all those applicable):

                    (a)  Profit-Sharing Contributions.
                    (b)  Matching 401 (k) Contributions
                    (c)  Matching Thrift Contributions.

K.   "Normal Retirement Age"

Normal Retirement Age shall be (select one):

     X    (1)  attainment of age 65 (not more than 65) by the Participant.

          (2)  attainment of age_ (not more than 65) by the  Participant  or the
               anniversary  (not more than the 5th) of the first day of the Plan
               Year  in  which  the  Eligible  Employee  became  a  Participant,
               whichever is later.

          (3)  attainment of age _ (not more than 65) by the  Participant or the
               anniversary (not more than the 5th) of the first day on which the
               Eligible  Employee  performed  an Hour of Service,  whichever  is
               later.

L.   "Participant Directed Assets" are:

401(k) and/    Profit
 or Thrift     Sharing

     X            X        (1) permitted.

                           (2) not permitted.

M.   "Plan Year"

The Plan Year shall end on the 31st day of December.

N.   "Predecessor Service"

Predecessor service will be credited (select one):

          (1)  only as required by the Plan.


     X    (2)  to include,  in addition to the Plan  requirements and subject to
               the  limitations  set forth  below,  service  with the  following
               predecessor  employer(s)  determined as if such predecessors were
               the Employer: New Horizons Computer Learning Center of Nashville,
               Inc.; New Horizons Computer Learning Center of Memphis, Inc.; New
               Horizons Learning Center of Hartford, Inc.; Handex Corporation.


                                        8
<PAGE>
Service with such predecessor employer applies [select either or both (a) and/or
(b); (c) is only available in addition to (a) and/or (b)]:

               X     (a)  for purposes of eligibility to participate;
               X     (b)  for purposes of vesting;
                     (c)  except for the following service:

0.   "Valuation Date"

Valuation Date shall mean (select one for each column, as applicable):

401(k) and/    Profit
 or Thrift     Sharing

                         (1)  the last business day of each month.
 
                         (2)  the last business day of each quarter within the
                              Plan Year.
 
                         (3)  the last business day of each semi-annual period 
                              within the Plan Year.
 
                         (4)  the last business day of the Plan Year
 
     X            X      (5)  other: daily basis.


                            ARTICLE II Participation

Participation Requirements
--------------------------

An  Eligible  Employee  must  meet  the  following   requirements  to  become  a
Participant (select one or more for each column, as applicable):

401(k) and/    Profit
 or Thrift     Sharing

                         (1)  Performance of one Hour of Service.

                         (2)  Attainment of age _(maximum 20 1/2) and completion
                              of _ (not more than 1/2) Years of Service. If this
                              item is  selected, no Hours  of Service  shall be
                              counted.

     X            X      (3)  Attainment of age 21 (maximum 21) and  completion
                              of 1/2 Year(s) of Service. If more  than one Year
                              of Service is selected, the immediate 100% vesting
                              schedule must  be selected in Article VII of this
                              Adoption Agreement.


                                        9
<PAGE>
401(k) and/    Profit
 or Thrift     Sharing

                         (4)  Attainment of age ____ (maximum 21) and completion
                              of ___Year(s) of Service. If more than one Year of
                              Service  is selected,  the immediate  100% vesting
                              schedule must be  selected in Article VII  of this
                              Adoption Agreement.

                         (5)  Each Employee who is an Eligible Employee on _____
                              will be deemed to have satisfied the participation
                              requirements on the  effective date without regard
                              to  such Eligible  Employee's  actual  age  and/or
                              service.


            ARTICLE 111. 401(k) Contributions and Account Allocation

A.   Elective Deferrals

If  selected  below,  a  Participant's  Elective  Deferrals  will be (select all
applicable):

     X    (1)  a dollar amount or a percentage of Compensation,  as specified by
               the  Participant on his or her 401 (k) Election  form,  which may
               not exceed 15% of his or her Compensation.

          (2)  with  respect to bonuses,  such dollar  amount or  percentage  as
               specified by the  Participant on his or her 401 (k) Election form
               with respect to such bonus.

B.   Matching 401 (k) Contributions

If selected below, the Employer may make Matching 401 (k) Contributions for each
Plan Year (select one):

     X    (1)  Discretionary Formula:

               Discretionary  Matching  401  (k)  Contribution  equal  to such a
               dollar amount or percentage of Elective Deferrals,  as determined
               by the Employer, which shall be allocated (select one):

               (a)  based on the ratio of each  Participant's  Elective Deferral
                    for the Plan Year to the  total  Elective  Deferrals  of all
                    Participants for the Plan Year. If inserted, Matching 401(k)
                    Contributions  shall be  subject  to a  maximum  amount of $
                    ___for  each  Participant  or  ___%  of  each  Participant's
                    Compensation.


                                       10
<PAGE>
          X    (b)  in an amount not to exceed 100% of each Participant's  first
                    6% of Compensation contributed as Elective Deferrals for the
                    Plan Year. If any Matching 401 (k) Contribution  remains, it
                    is  allocated to each such  Participant  in an amount not to
                    exceed   ___%  of  the  next  ___%  of  each   Participant's
                    Compensation  contributed as Elective Deferrals for the Plan
                    Year.

          Any remaining Matching 401 (k) Contribution shall be allocated to each
          such  Participant  in  the  ratio  that  such  Participant's  Elective
          Deferral  for the Plan Year bears to the total  Elective  Deferrals of
          all such Participants for the Plan Year. If inserted,  Matching 401(k)
          Contributions  shall be subject to a maximum  amount of $ ___ for each
          Participant or ___% of each Participant's Compensation.


          (2)  Non-discretionary Formula:

               A  non-discretionary  Matching 401 (k) Contribution for each Plan
               Year equal to (select one):

               (a)  __%  of  each  Participant's   Compensation  contributed  as
                    Elective   Deferrals.    If   inserted,    Matching   401(k)
                    Contributions  shall be subject to a maximum amount of $ ___
                    for  each  Participant  or  ___  %  of  each   Participant's
                    Compensation.

               (b)  ___%  of the  first___%  of the  Participant's  Compensation
                    contributed as Elective  Deferrals and ___% of the next ___%
                    of the  Participant's  Compensation  contributed as Elective
                    Deferrals. If inserted,  Matching 401(k) Contributions shall
                    be subject to a maximum amount of $ ___for each  Participant
                    or ___% of each Participant's Compensation.

C.   Participants Eligible for Matching 401 (k) Contribution Allocation

The following Participants shall be eligible for an allocation to their Matching
401 (k) Contributions Account (select all those applicable):

     X    (1)  Any Participant who makes Elective Deferrals.

          (2)  Any Participant who satisfies those  requirements  elected by the
               Employer for an allocation  to his or her Employer  Contributions
               Account as provided in Article IV Section C.

          (3)  Solely  with  respect  to  a  Plan  in  which  Matching  401  (k)
               Contributions  are  made  quarterly  (or  on  any  other  regular
               interval  that is more frequent  than  annually) any  Participant
               whose  401 (k)  Election  is in  effect  throughout  such  entire
               quarter  (or  other   interval).   ___  (quarterly,   monthly  or
               semi-annual)


                                       11
<PAGE>
D.   Qualified Matching Contributions

If selected below, the Employer may make Qualified  Matching  Contributions  for
each Plan Year (select all those applicable):

     (1)  In  its   discretion,   the  Employer  may  make  Qualified   Matching
          Contributions, on behalf of (select one):

          X    (a)  all  Participants  who make Elective  Deferrals in that Plan
                    Year.

               (b)  only  those  Participants  who  are  Non-highly  Compensated
                    Employees and who make Elective Deferrals
                           for that Plan Year.

     (2)  Qualified Matching  Contributions will be contributed and allocated to
          each Participant in an amount equal to (select one):

               (a)  ___%  of  the  Participant's   Compensation  contributed  as
                    Elective   Deferrals.   If  inserted,   Qualified   Matching
                    Contributions  shall  not  exceed  %  of  the  Participant's
                    Compensation.

          X    (b)  Such an amount,  determined by the Employer, which is needed
                    to meet the ACP Test.

     (3)  In its discretion, the Employer may elect to designate all or any part
          of Matching 401 (k) Contributions as Qualified Matching  Contributions
          that are taken into  account as Elective  Deferrals -- included in the
          ADP Test and excluded from the ACP Test -on behalf of (select one):

               (a)  all Participants  who make Elective  Deferrals for that Plan
                    Year.

          X    (b)  Only Participants who are Non-highly  Compensated  Employees
                    who make Elective Deferrals for that Plan Year.

E.   Qualified Nonelective Contributions

If selected below, the Employer may make Qualified Nonelective Contributions for
each Plan Year (select all those applicable):

     (1)  In  its  discretion,  the  Employer  may  make  Qualified  Nonelective
          Contributions on behalf of (select one):

               (a)  all Eligible Participants.

          X    (b)  only Eligible Participants  who are  Non-highly  Compensated
                    Employees.


                                       12
<PAGE>
     (2)  Qualified Nonelective  Contributions will be contributed and allocated
          to each Eligible Participant in an amount equal to (select one):

               (a)  ___% (no more than 15%) of the Compensation of each Eligible
                    Participant eligible to share in the allocation.

          X    (b)  Such an amount  determined by the Employer,  which is needed
                    to meet either the ADP Test or ACP Test.

     (3)  At the discretion of the Employer, as needed and taken into account as
          Elective Deferrals included in the ADP Test on behalf of (select one):

               (a)  all Eligible Participants.

               (b)  only  those   Eligible  Participants   who  are   Non-highly
                    Compensated Employees.

F.   Elective Deferrals used in ACP Test (select one):

     (1)  At the discretion of the Employer,  Elective  Deferrals may be used to
          satisfy the ACP Test.

     (2)  Elective Deferrals may not be used to satisfy the ACP Test.

G.   Making and Modifying a 401 (k) Election

An Eligible  Employee  shall be entitled to increase,  decrease or resume his or
her Elective  Deferral  percentage with the following  frequency during the Plan
Year (select one):

          (1)  annually.

          (2)  semi-annually.

          (3)  quarterly

     X    (4)  monthly

          (5)  other (specify): _____.

     Any such  increase,  decrease or  resumption  shall be  effective as of the
     first payroll  period  coincident  with or next  following the first day of
     each period set forth  above.  A  Participant  may  completely  discontinue
     making  Elective  Deferrals at any time  effective  for the payroll  period
     after written notice is provided to the Administrator.


                                       13
<PAGE>
         ARTICLE IV. Profit-Sharing Contributions and Account Allocation
     
A.   Profit-Sharing Contributions

If selected below, the following contributions for each Plan Year will be made:

     Contributions to Employer Contributions Accounts (select one):

     X    (a)  Such an amount,  if any, as determined by the Employer.

          (b)  ___% of each Participant's Compensation.

B.   Allocation of  Contributions  to Employer  Contributions  Accounts  (select
     one):

     X    (1)  Non-Integrated Allocation

               The Employer  Contributions  Account of each Participant eligible
               to share in the allocation for a Plan Year shall be credited with
               a  portion  of  the   contribution,   plus  any   forfeitures  if
               forfeitures are reallocated to  Participants,  equal to the ratio
               that the  Participant's  Compensation  for the Plan Year bears to
               the Compensation for that Plan Year of all Participants  entitled
               to share in the contribution.

          (2)  Integrated Allocation

               Contributions to Employer  Contributions Accounts with respect to
               a Plan Year,  plus any forfeitures if forfeitures are reallocated
               to Participants, shall be allocated to the Employer Contributions
               Account of each eligible Participant as follows:

               (a)  First,  in the ratio that each such  eligible  Participant's
                    Compensation for the Plan Year bears to the Compensation for
                    that  Plan  Year  of all  eligible  Participants  but not in
                    excess of 3% of each Participant's Compensation.

               (b)  Second, any remaining  contributions and forfeitures will be
                    allocated  in the  ratio  that each  eligible  Participant's
                    Compensation  for the Plan Year in excess of the Integration
                    Level bears to all such  Participants'  excess  Compensation
                    for the Plan Year but not in excess of 3%.



                                       14
<PAGE>
               (c)  Third, any remaining  contributions  and forfeitures will be
                    allocated  in the ratio  that the sum of each  Participant's
                    Compensation  and  Compensation in excess of the Integration
                    Level bears to the sum of all Participants' Compensation and
                    Compensation in excess of the Integration  Level, but not in
                    excess of the Maximum Profit-Sharing Disparity Rate (defined
                    below).

               (d)  Fourth,  any remaining  contributions or forfeitures will be
                    allocated in the ratio that each Participant's  Compensation
                    for that year bears to all  Participants'  Compensation  for
                    that year.

               The Maximum Profit-Sharing  Disparity Rate is equal to the lesser
               of:

               (a)  2.7% or

               (b)  The applicable  percentage determined in accordance with the
                    following table:

          If the Integration Level is
          (as a % of the Taxable Wage
                Base ("TWB")                    The applicable percentage is:
          ---------------------------           ----------------------------

          20% (or $10,000 if greater)
          or less of the TWB                                2.7%

          More than 20% (but not less
          than $10,001 but not more than
          80% of the TWB                                    1.3%

          More than 80% but not less than
          100% of the TWB                                   2.4%

          100% of the TW13                                  2.7%


                                       15

<PAGE>
C.   Participants Eligible for Employer Contribution Allocation
     
The following Participants shall be eligible for an allocation to their Employer
Contributions Account (select all those applicable): (1) Any Participant who was
employed during the Plan Year.

          (2)  in  the  case  of a Plan  using  the  hourly  record  method  for
               determining  Vesting  Service,  any  Participant who was credited
               with a Year of Service during the Plan Year.

          (3)  Any  Participant  who was  employed  on the  last day of the Plan
               Year.

          (4)  Any  Participant who was on a leave of absence on the last day of
               the Plan Year.

     X    (5)  Any  Participant who during the Plan Year died or became Disabled
               while an Employee or terminated employment after attaining Normal
               Retirement Age.
 
          (6)  Any  Participant  who was  credited  with at least  501  Hours of
               Service whether or not employed on the last day of the Plan Year.

     X    (7)  Any  Participant  who was  credited  with at least 1,000 Hours of
               Service and was employed on the last day of the Plan Year.



                         ARTICLE V. Thrift Contributions

A.   Employee Thrift Contributions

If  selected  below,  Employee  Thrift  Contributions,  which are  required  for
Matching Thrift  Contributions,  may be made by a Participant in an amount equal
to (select one):

          (1)  A dollar amount or a percentage of the Participant's Compensation
               which may not be less than ___% nor may not  exceed___% of his or
               her Compensation.

          (2)  An  amount  not less  than ___% of and not more than ___% of each
               Participant's Compensation.


                                       16

<PAGE>
B.   Making and Modifying an Employee Thrift Contribution Election

A  Participant  shall be  entitled  to  increase,  decrease or resume his or her
Employee Thrift Contribution  percentage with the following frequency during the
Plan Year (select one):

          (1)  annually

          (2)  semi-annually

          (3)  quarterly

          (4)  monthly

          (5)  other(specify): _____.

Any such  increase,  decrease or  resumption  shall be effective as of the first
payroll  period  coincident  with or next following the first day of each period
set forth above. A Participant may completely discontinue making Employee Thrift
Contributions  at any time effective for the payroll period after written notice
is provided to the Administrator.

C.   Thrift Matching Contributions

If selected below, the Employer will make Matching Thrift Contributions for each
Plan Year (select one):

     (1)  Discretionary Formula:

     A discretionary  Matching Thrift Contribution equal to such a dollar amount
     or  percentage  as  determined  by the  Employer,  which shall be allocated
     (select one):

          (a)  based  on  the  ratio  of  each  Participant's   Employee  Thrift
               Contribution  for the  Plan  Year to the  total  Employee  Thrift
               Contributions of all Participants for the Plan Year. If inserted,
               Matching  Thrift  Contributions  shall be  subject  to a  maximum
               amount of $ ___for each Participant or ___% of each Participant's
               Compensation.

          (b)  in an amount not to exceed ___% of each Participant's  first ___%
               of Compensation  contributed as Employee Thrift Contributions for
               the Plan Year. If any Matching Thrift Contribution remains, it is
               allocated  to each such  Participant  in an amount  not to exceed
               ___%  of  the  next  ___%  of  each  Participant's   Compensation
               contributed as Employee Thrift Contributions for the Plan Year.

     Any remaining Matching Thrift  Contribution shall be allocated to each such
     Participant  in  the  ratio  that  such   Participant's   Employee   Thrift
     Contributions  for  the  Plan  Year  bears  to the  total  Employee  Thrift
     Contributions  of all such  Participants  for the Plan Year.  If  inserted,
     Matching Thrift Contributions shall be subject to a maximum amount of $ for
     each Participant or ___% of each Participant's Compensation.


                                       17
<PAGE>
     (2)  Nondiscretionary Formula:

     A nondiscretionary Matching Thrift Contribution for each Plan Year equal to
     (select  one):

          (a)  _% of each  Participant's  Compensation  contributed  as Employee
               Thrift Contributions.  If inserted, Matching Thrift Contributions
               shall be subject to a maximum amount of $ ___for each Participant
               or ___% of each Participant's Compensation.

          (b)  _%  of  the  first   ___%  of  the   Participant's   Compensation
               contributed as Employee Thrift Contributions and ___% of the next
               ___% of the  Participant's  Compensation  contributed as Employee
               Thrift Contributions.  If inserted, Matching Thrift Contributions
               shall be subject to a maximum amount of $ ___for each Participant
               or % of each Participant's Compensation.

D.   Qualified Matching Contributions

If selected below, the Employer may make Qualified  Matching  Contributions  for
each Plan Year (select all those applicable):

     (1)  In  its   discretion,   the  Employer  may  make  Qualified   Matching
          Contributions on behalf of (select one):

               (a)  all Participants who make Employee Thrift Contributions.

               (b)  only  those  Participants  who  are  Non-highly  Compensated
                    Employees and who make Employee Thrift Contributions.

     (2)  Qualified Matching  Contributions will be contributed and allocated to
          each Participant in an amount equal to:

          (a)  __%  of  the  Participant's  Employee  Thrift  Contributions.  If
               inserted,  Qualified Matching Contributions shall not exceed ___%
               of the Participant's Compensation.

          (b)  such an amount,  determined by the  Employer,  which is needed to
               meet the ACP Test.


                      ARTICLE VI. Participant Contributions

Participant Voluntary Nondeductible Contributions
-------------------------------------------------

Participant Voluntary Nondeductible Contributions are (select one):

     X    (a)  permitted

          (b)  not permitted.


                                       18
<PAGE>
                              ARTICLE VIII. Vesting

A.   Employer Contribution Accounts

(1)  A Participant shall have a vested  percentage in his or her  Profit-Sharing
     Contributions,  Matching  401  (k)  Contributions  and/or  Matching  Thrift
     Contributions,  if applicable,  in accordance  with the following  schedule
     (Select one):

Matching 401(k)
and/or Matching
    Thrift        Profit-Sharing
Contributions     Contributions

                                   (a)  100% vesting immediately upon
                                        participation.

                                   (b)  100% after ___(not more than 5) years of
                                        Vesting Service.

      X                   X        (c)  Graded vesting schedule:

     20%                 20%            after 1 year of Vesting Service;

     40%                 40%            after 2 years of Vesting Service;

     60%                 60%            (not less than 20%) after 3 years of
                                        Vesting Service;

     80%                 80%            (not less than 40%) after 4 years of
                                        Vesting Service;

    100%                100%            (not less than 60%) after 5 years of
                                        Vesting Service;

    100%                100%            (not less than 80%) after 6 years of
                                        Vesting Service;


                     100% after 7 years of Vesting Service.




                                       19
<PAGE>
(2)  Top Heavy Plan

Matching 401(k)
and/or Matching
    Thrift        Profit-Sharing
Contributions     Contributions


Vesting Schedule (Select one):
                                   (a) 100% vesting immediately upon
                                       participation.

                                   (b) 100% after (not more than 3) years of
                                       Vesting Service.

    X                 X            (c) Graded vesting schedule:

   20%               20%               after 1 year of Vesting Service;

   40%               40%              (not less than 20%) after 2 years of
                                      Vesting Service

   60%               60%              (not less than 40%) after 3 years of
                                      Vesting Service

   80%               80%              (not less than 60%) after 4 years of
                                      Vesting Service

  100%              100%              (not less than 80%) after 5 years of
                                      Vesting Service

                     100% after 6 years of Vesting Service.

     Top Heavy Ratio:

     (a)  If the adopting Employer  maintains or has ever maintained a qualified
          defined  benefit plan, for purposes of  establishing  present value to
          compute the top-heavy  ratio, any benefit shall be discounted only for
          mortality and interest based on the following:

               Interest Rate: 8 %
               Mortality Table: UP'84

     (b)  For purposes of computing the  top-heavy  ratio,  the  valuation  date
          shall be the last business day of each Plan Year.


                                       20
<PAGE>
B.   Allocation of Forfeitures

Forfeitures shall be (select one from each applicable column):

Matching 401(k)
and/or Matching
    Thrift        Profit-Sharing
Contributions     Contributions


      X                X          (1) used to reduce Employer contributions for
                                      succeeding Plan Year.

                                  (2) allocated in the succeeding Plan Year in
                                      the ratio which the Compensation of each
                                      Participant for the Plan Year bears to 
                                      the total Compensation of all Participants
                                      entitled to share in the Contributions. If
                                      the Plan is integrated with Social
                                      Security,forfeitures shall be allocated in
                                      accordance with the formula elected by the
                                      Employer.

C.   Vesting Service

For purposes of determining  Years of Service for Vesting Service [select (1) or
(2) and/or (3)]:

     X    (1)  All Years of Service shall be included.

          (2)  Years of Service before the Participant  attained age 18 shall be
               excluded.

          (3)  Service with the Employer prior to the effective date of the Plan
               shall be excluded.


                ARTICLE VIII. Deferral of Benefit Distributions,
                        In-Service Withdrawals and Loans

A.   Deferral of Benefit Distributions

401(k) and/     Profit
 or Thrift      Sharing

                         If this item is checked, a Participant's vested benefit
                         in his or her  Employer  Accounts  shall be  payable as
                         soon as practicable after the earlier of: (1) the  date
                         the Participant terminates Employment due to Disability
                         or (2) the end of the Plan Year in which  a  terminated
                         Participant attains Early Retirement Age, if applicable
                         or Normal Retirement Age.


                                       21
<PAGE>
B.   In-Service Distributions

     X    (1)  In-service   distributions   may  be   made   from   any  of  the
               Participant's  vested  Accounts,  at any time  upon or after  the
               occurrence of the following events (select all applicable):

               X    (a)  a Participant's attainment of age 59-1/2.

               X    (b)  due to hardships as defined in Section 5.9 of the Plan.

          (2)  In-service distributions are not permitted.

C.   Loans are:

401 (k) and/    Profit
 or Thrift      Sharing

      X            X      (1)  permitted.
                          (2)  not permitted.


                             ARTICLE IX. Group Trust

If this  item is  checked,  the  Employer  elects  to  establish  a Group  Trust
consisting of such Plan assets as shall from time to time be  transferred to the
Trustee pursuant to Article X of the Plan. The Trust Fund shall be a Group Trust
consisting  of assets of this Plan  plus  assets of the  following  plans of the
Employer or of an Affiliate: _____.


                            ARTICLE X. Miscellaneous

A.   Identification of Sponsor

The address and telephone number of the Sponsors  authorized  representative  is
800 Scudders Mill Road,  Plainsboro,  New Jersey  08536;  (609)  282-2272.  This
authorized  representative  can answer  inquiries  regarding the adoption of the
Plan, the intended meaning of any Plan provisions, and the effect of the opinion
letter.

The Sponsor will inform the adopting Employer of any amendments made to the Plan
or the discontinuance or abandonment of the Plan.


                                       22

<PAGE>
B.   Plan Registration

     1.   Initial Registration

          This Plan must be registered with the Sponsor,  Merrill Lynch, Pierce,
          Fenner & Smith  Incorporated,  in order to be  considered  a Prototype
          Plan by the Sponsor.  Registration  is required so that the Sponsor is
          able  to  provide  the   Administrator   with  documents,   forms  and
          announcements relating to the administration of the Plan and with Plan
          amendments and other  documents,  all of which relate to administering
          the Plan in accordance with applicable law and maintaining  compliance
          of the Plan with the law.

          The  Employer  must  complete and sign the  Adoption  Agreement.  Upon
          receipt of the Adoption  Agreement,  the Plan will be  registered as a
          Prototype Plan of Merrill Lynch, Pierce,  Fenner & Smith Incorporated.
          The  Adoption   Agreement  will  be  countersigned  by  an  authorized
          representative and a copy of the countersigned Adoption Agreement will
          be returned to the Employer.

     2.   Registration Renewal

          Annual  registration  renewal is required in order for the Employer to
          continue to receive any and all necessary updating documents. There is
          an annual  registration  renewal  fee in the amount set forth with the
          initial  registration   material.  The  adopting  Employer  authorizes
          Merrill  Lynch,  Pierce,  Fenner & Smith  Incorporated,  to debit  the
          account  established  for the Plan for  payment of agreed  upon annual
          fee;  provided,  however,  if the  assets of an account  are  invested
          solely in  Participant-Directed  Assets,  a notice for this annual fee
          will be sent to the Employer annually.  The Sponsor reserves the right
          to change this fee from time to time and will provide  written  notice
          in advance of any change.

C.   Prototype Replacement Plan

This  Adoption  Agreement is a  replacement  prototype  plan for the (1) Merrill
Lynch  Special  Prototype  Defined  Contribution  Plan and  Trust - 401 (k) Plan
#03-004 and (2) Merrill Lynch Asset Management,  Inc., Special Prototype Defined
Contribution Plan and Trust - 401 (k) Plan Adoption Agreement #03-004.

D.   Reliance

The adopting  Employer may not rely on the opinion letter issued by the National
Office of the Internal  Revenue  Service as evidence that this Plan is qualified
under Code Section 401. In order to obtain reliance,  the Employer must apply to
the  appropriate  Key District  Director of the Internal  Revenue  Service for a
determination letter with respect to the Plan.


                                       23
<PAGE>

                              EMPLOYER'S SIGNATURE


  Name of Employer:  New Horizons Worldwide, Inc.                         
                     ----------------------------------------------------
                By:                                                       
                     ----------------------------------------------------
                                 Authorized Signature

         Print Name  Robert S. McMillan                                   
                     ----------------------------------------------------

              Title  Vice President, Treasurer, CFO                        
                     ----------------------------------------------------

             Dated:  December 30, 1998                                    
                     ----------------------------------------------------




TO BE COMPLETED BY MERRILL LYNCH:

Sponsor Acceptance:

Subject to the terms and  conditions  of the  Prototype  Plan and this  Adoption
Agreement,  this Adoption Agreement is accepted by Merrill Lynch, Pierce, Fenner
& Smith Incorporated as the Prototype Sponsor.

Authorized Signature:________________________________________




                                       24
<PAGE>
                              TRUSTEE(S) SIGNATURE

This Trustee  Acceptance is to be completed only if the Employer appoints one or
more Trustees and does not appoint a Merrill Lynch Trust Company as Trustee.

The undersigned hereby accept all of the terms,  conditions,  and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement,  the undersigned  Trustee(s) shall be the Trustee(s)
of the Group Trust.


                                   AS TRUSTEE:




  ------------------------------- ----------------------------------------------
  (Signature)                     (print or Type name)                          

  ------------------------------- ----------------------------------------------
  (Signature)                     (print or Type name)                        

  ------------------------------- ----------------------------------------------
  (Signature)                     (print or Type name)                          

  ------------------------------- ----------------------------------------------
  (Signature)                     (print or Type name)

  ------------------------------- ----------------------------------------------
  (Signature)                     (print or Type name)





  Dated:                                           , 19__   




                                       25
<PAGE>
                  THE MERRILL LYNCH TRUST COMPANIES AS TRUSTEE

This Trustee  Acceptance  and  designation  of  Investment  Committee  are to be
completed only when a Merrill Lynch Trust Company is appointed as Trustee.

To be completed by the Employer:

                       Designation Of Investment Committee

The Investment Committee for the Plan is (print or type names):

        Name:      Robert S. McMillan

        Name:      Thomas J. Bresnan

        Name:

        Name:

        Name:

        Name:

To be completed by Merrill Lynch Trust Company:

                             Acceptance By Trustee:

The undersigned hereby accept all of the terms,  conditions,  and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement,  the undersigned  Trustee(s) shall be the Trustee(s)
of the Group Trust.


        SEAL

                                         MERRILL LYNCH TRUST COMPANY[_______]

                                                     By:

        Dated:  _1/13____1999



                                       26
<PAGE>
            THE MERRILL LYNCH TRUST COMPANIES AS ONE OF THE TRUSTEES

This Trustee  Acceptance  is to be  completed  only if, in addition to a Merrill
Lynch Trust Companies as Trustee, the Employer appoints an additional Trustee of
a second trust fund.

The undersigned hereby accept all of the terms,  conditions,  and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement,  the undersigned  Trustee(s) shall be the Trustee(s)
of the Group Trust.

                                                           as TRUSTEE

            (Signature)                                   (print or type name)

       Dated: _______,19__I

       SEAL                             MERRILL LYNCH TRUST COMPANY  [_________]



       Dated: _____, 19__

                                                     By:

       DESIGNATION OF INVESTMENT COMMITTEE

       The Investment Committee for the Plan is (print or type names):


Name:
       ----------------------------------------------------------------

Name:
       ----------------------------------------------------------------

Name:
       ----------------------------------------------------------------

Name:
       ----------------------------------------------------------------



                                       27
<PAGE>


Exhibit 21.1


                          New Horizons Worldwide, Inc.

                                  Subsidiaries:

                       New Horizons Education Corporation

                  New Horizons Computer Learning Centers, Inc.

              New Horizons Computer Learning Centers APAC, L.L.C.

              New Horizons Computer Learning Centers EMEA, L.L.C.

             New Horizons Computer Learning Center of Chicago, Inc.

      New Horizons Computer Learning Center of Metropolitan New York, Inc.

            New Horizons Computer Learning Center of Santa Ana, Inc.

        New Horizons Computer Learning Center of Cleveland, Ltd., L.L.C.

             New Horizons Computer Learning Center of Memphis, Inc.

            New Horizons Computer Learning Center of Nashville, Inc.

             New Horizons Computer Learning Center of Hartford, Inc.

           New Horizons Computer Learning Center of Albuquerque, Inc.

                               Nova Vista, L.L.C.


<PAGE>
Exhibit 27.0