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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                           --------------------------

                                   FORM 10-K
                                ---------------

(MARK ONE)

<TABLE>
<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                 FOR THE FISCAL YEAR ENDED: SEPTEMBER 30, 2000

                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                FOR THE TRANSITION PERIOD FROM ______ TO ______

                        COMMISSION FILE NUMBER: 0-20735

                            ------------------------

                                 WEBHIRE, INC.
             (Exact name of Registrant as specified in its charter)

                           --------------------------

<TABLE>
<S>                                              <C>
                   DELAWARE                                        04-2935271
        (State or other jurisdiction of                 (IRS Employer Identification No.)
        incorporation or organization)

              91 HARTWELL AVENUE
                 LEXINGTON, MA                                        02421
   (Address of principal executive offices)                        (zip code)
</TABLE>

                                 (781) 869-5000
              (Registrant's telephone number, including area code)

                           --------------------------

    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 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 the 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 voting stock held by non-affiliates of the
registrant, based upon the closing price of the common stock on January 9, 2001,
as reported on The Nasdaq National Market was approximately $9,188,000. Shares
of common stock held by each executive officer and director and by each person
who owned 5% or more of the outstanding common stock as of such date have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.

    The number of shares of the registrant's common stock, par value $0.01 per
share, outstanding on January 9, 2001 was 22,527,034.

    Part III incorporates by reference information from the definitive Proxy
Statement for the 2000 Annual Meeting of Stockholders to be filed by the Company
with the Commission pursuant to Regulation 14A not later than 120 days after the
end of the fiscal year covered by this Form 10-K.

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<PAGE>
                                 WEBHIRE, INC.
                                   FORM 10-K
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
        ITEM                                                                            PAGE
---------------------                                                                 --------
<S>                     <C>                                                           <C>
                                       PART I
 1.                     Business....................................................      2
 2.                     Properties..................................................     12
 3.                     Legal Proceedings...........................................     12
 4.                     Submission of Matters to a Vote of Securities Holders.......     12

                                      PART II
 5.                     Market for Registrant's Common Stock and Related Stockholder
                        Matters.....................................................     13
 6.                     Selected Consolidated Financial Data........................     14
 7.                     Management's Discussion and Analysis of Financial Condition
                        and Results of Operations...................................     15
 7A.                    Quantitative and Qualitative Disclosures About Market
                        Risk........................................................     27
 8.                     Financial Statements and Supplementary Data.................     27
 9.                     Changes in and Disagreements with Accountants on Accounting
                        and Financial Disclosure....................................     27

                                      PART III
 10.                    Directors and Executive Officers of the Registrant..........     27
 11.                    Executive Compensation......................................     27
 12.                    Security Ownership of Certain Beneficial Owners and
                        Management..................................................     27
 13.                    Certain Relationships and Related Transactions..............     27

                                      PART IV
 14.                    Exhibits, Financial Statement Schedules, and Reports on Form
                        8-K.........................................................     28
</TABLE>

                                       1
<PAGE>
                                     PART I

    STATEMENTS MADE OR INCORPORATED IN THIS FORM 10-K INCLUDE A NUMBER OF
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934.
FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS CONTAINING
THE WORDS "ANTICIPATES", "BELIEVES", "EXPECTS", "INTENDS", "FUTURE", AND WORDS
OF SIMILAR IMPORT WHICH EXPRESS MANAGEMENT'S BELIEFS, EXPECTATIONS OR INTENTIONS
REGARDING THE COMPANY'S FUTURE PERFORMANCE. THE COMPANY'S ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS.
CERTAIN FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE ARE DISCUSSED IN THE SECTION
ENTITLED "FACTORS AFFECTING FUTURE OPERATING RESULTS" WHICH BEGINS ON PAGE 20 OF
THIS FORM 10-K.

ITEM 1.  BUSINESS

OVERVIEW

    Webhire, Inc. ("Webhire" or the "Company") designs, develops, markets,
implements and supports Internet- and Intranet-based recruiting solutions to
automate candidate sourcing, Internet job posting, and recruitment management at
corporations, organizations, Internet portals, and online career sites. The
Company's solutions enable organizations to strategically manage their
recruiting and staffing activities online and streamline their Internet
recruiting process. The Company markets these services to corporations that are
experiencing rapid growth, a shortage of skilled labor and an urgent need to
complete staffing initiatives.

    In July 2000, the Company entered into a new alliance with Yahoo!, Inc. (see
Note 4 of Notes to Consolidated Financial Statements). Through this alliance,
the Company develops, markets, and supports Yahoo! Careers Resume Database,
which is a subscription-based online service that corporate recruiters and
hiring managers use to search the resumes contained in the Yahoo! Careers Resume
Database. The Company's solutions are the exclusive means for corporations to
gain access to the online candidates within the Yahoo! Careers Resume Database.
The Company shares revenues from this subscription service with Yahoo!.

    The Company delivers the following products and services: WEBHIRE RECRUITER,
a complete end-to-end Internet recruiting solution; WEBHIRE ENTERPRISE, a
complete, integrated recruiting suite designed to meet the needs of large
organizations; WEBHIRE AGENT, an automated search agent that finds resumes and
candidates on the web; WEBHIRE JOB SITE HOSTING, which lists a company's own job
listings as part of its corporate web site; and WEBHIRE JOB POST, an automated
solution for posting corporate jobs to more than 2000 job boards and career
sites.

    The Company delivers its Internet solutions to customers using a web
services model, selling the services on a subscription basis, for direct access
by subscribers over the Internet via a standard web browser. The Company's
solution for large organizations, WEBHIRE ENTERPRISE, is sold through both the
application service provider (ASP) model and also as traditionally licensed
software.

    The Company's principal offerings are online recruiting services. These
services are implemented using standard Internet industry protocols, such as
TCP/IP, HTTP and XML. Our service-based approach provides our customers with a
robust set of product features and a high performance end user experience
without requiring them to install any software. Our service infrastructure is
based on leading edge technologies from a number of vendors, including
Microsoft, Oracle and Sun. The infrastructure is designed for high performance,
scalability and high availability.

                                       2
<PAGE>
    The Company was incorporated in 1982 as a Massachusetts corporation and was
reincorporated as a Delaware corporation in 1994. As of June 1, 1999 the Company
effected a name change to Webhire, Inc. Restrac Securities Corporation, a
wholly-owned subsidiary of Webhire, Inc., was incorporated in September 1996 as
a Massachusetts securities corporation for the purpose of holding and managing
certain of the Company's cash and investments.

    In July 1999, the Company purchased Hireworks, Inc, a developer of
innovative resume searching technology that automatically searches the entire
Internet for resumes, matching them against customer specified criteria (see
Note 6 of the Notes to Consolidated Financial Statements). This technology has
been enhanced and is today marketed as the WEBHIRE AGENT service.

    In December 1999, the Company acquired the technology assets of HR Sites
International, a developer of an Internet job posting platform that provided
automated connections to online job boards and career sites (see Note 6 of the
Notes to Consolidated Financial Statements). This technology has been enhanced
and is today integrated with both WEBHIRE RECRUITER and WEBHIRE JOB POST.

INDUSTRY BACKGROUND

    Recruiting has emerged as one of the most strategic and competitive
initiatives for corporations. Hiring and retaining outstanding employees is
critical to corporate success. U.S. employment, as reported by the U.S.
Department of Labor, has reached historically high levels. In general, there is
an unprecedented shortage of candidates available to fill an increasing number
of jobs. In fact, today there is a "job gap"--according to some industry
analysts there are over 2 million jobs that remain open because there are no
qualified candidates in the labor market to fill them. This is not a temporary
phenomenon. U.S. Census data indicate that the population of 30 - 45 year olds,
the primary labor pool for middle managers across U.S. corporations, peaked in
1997 and is actually declining in real terms. Today's candidate shortage
represents the norm for the future labor market.

    Traditional recruiting methods, such as print advertisements and
professional recruiters (or "headhunters"), lose their effectiveness in a market
where there is a shortage of candidates. During the past three years, the
Internet has evolved into a sophisticated and ubiquitous communications
infrastructure. The Internet has emerged as the critical medium for recruiting
because it brings candidates and employers together in a directly connected
marketplace. On the Internet, an employer has access to literally millions of
resumes, can post job openings on thousands of online job boards, and can
communicate with candidates in seconds.

    Internet recruiting has become a central staffing strategy for today's
corporation. How effectively a company utilizes the Internet for recruiting is
rapidly becoming a synonym for how effectively a company recruits.

WEBHIRE INTERNET RECRUITING SOLUTIONS

    The Company's Internet recruiting services enable organizations to recruit
more efficiently in today's tight labor market. The Company's services enable
corporations to reduce the time and effort required to source candidates on the
Internet, provide tools that help corporate recruiters and hiring managers
identify the best possible talent for open positions and enable the management
of the entire staffing process online. Because the Company's primary solutions
are provided to employers over the Internet, start-up times and extensive IT
infrastructure requirements are eliminated.

    DIRECT INTERNET SOURCING.  The Company provides several services that enable
corporate recruiters to directly source candidates from the Internet. The
Company, as a result of its business ventures with Yahoo!, Inc. and other
partners, manages and maintains large pools of candidate resumes on the
Internet. As of December 2000, there are approximately 600,000 resumes
accessible for targeted searching through the Company's proprietary recruiting
solutions. The Company, as a result of its

                                       3
<PAGE>
acquisition of HireWorks, Inc., also offers an automated intelligent search
agent that conducts resume searching and ranking across the entire Internet. It
is estimated that approximately 6 million resumes are accessible through the
Company's agent technology.

    INTEGRATED INTERNET JOB POSTING.  There are now hundreds of career sites and
thousands of use.net discussion groups on the web, each with its own specific
job posting format and protocol. A successful corporate recruiting strategy
includes job posting to use multiple destinations that reach national, regional
and special interest audiences. The Company provides integrated job posting
solutions that enable jobs to be posted to multiple job boards in one simple
operation. Currently there are over 2000 job boards available for customers to
utilize.

    RESUME PROCESSING.  The creation of a private online electronic database of
resumes is central to the Company's candidate management solutions. The Company
processes paper resumes and faxed resumes using the latest optical character
recognition technologies and processes resumes sent via email or directly over
the web with its own proprietary resume processing software. The Company
processed approximately 2.5 million resumes during 2000. The processed resumes
are stored online in secure databases that are accessible only to customers. The
resulting electronic resume pool is a knowledge asset that can be shared
throughout an organization. Manual input is virtually eliminated, allowing
organizations to collect and store skills and experience data on hundreds of
thousands of candidates. The Company's services provide a shared, re-useable
pool of candidates, limiting the need for organizations to use employment
agencies and advertising to source candidates.

    SOPHISTICATED SKILLS MANAGEMENT AND SELECTION.  The Company's software uses
a sophisticated search process to rapidly identify and rank qualified candidates
based on skills criteria determined by the user. User searches are enhanced by
the Company's integrated skills library, which translates high-level job
requirements into the words and synonyms commonly used by candidates on resumes.

    CANDIDATE MANAGEMENT PROCESS.  The Company's solutions incorporate a
user-friendly, process-oriented graphical user interface (GUI) designed to
simplify the administration of the candidate management process including job
requisition creation and editing, candidate tracking, and integrated reporting
on the hiring process and sourcing effectiveness. These capabilities reduce
delays typical to the staffing process and eliminate redundancies.

    By providing an easily-accessible, shared, re-useable pool of candidates,
the Company's software allows organizations to significantly reduce recruitment
advertising costs and employment agency fees. In addition, the Company's
software is designed to increase recruiter productivity through the elimination
of manual entry of resume information and by increasing the efficiency of the
hiring process.

STRATEGY

    The Company believes that it is currently the market leader in the Internet
recruiting marketplace and the Company's objective is to extend this market
leader position to become the standard solution for corporate Internet
recruiting. The Company has developed a pyramid of subscription-based Internet
recruiting services that offer many different entry points into the Company's
solution set. As customers' Internet recruiting needs mature and grow, the
Company provides additional service offerings that extend the features and
capabilities of its solutions. Taken individually, the Company's services meet
the needs of virtually the entire corporate recruiting marketplace. Today, the
Company's solutions are used by companies with less than 100 employees, are
being adopted regularly by companies in the broad middle market, and continue to
be the recruiting standard at hundreds of Fortune 1000 companies. The Company
estimates that there are approximately 250,000 corporations in its target
audience.

    The Company's solutions range in price from less than one thousand dollars
per month for entry-level Internet sourcing tools, to tens of thousands of
dollars a month for complete enterprise recruiting

                                       4
<PAGE>
solutions. At the top of the Company's solution pyramid, a customer has an
option to purchase and install the Company's solution as a traditionally
licensed software application. The Company believes that the solution pyramid
approach will yield larger subscription contracts through the placements of
additional services at existing accounts.

PRODUCTS

    The Company has developed a wide-ranging suite of service offerings that
span many aspects of Internet recruiting. The offerings that are sold primarily
to small and mid-sized corporations include WEBHIRE RECRUITER (introduced in
November 1997, upgraded in 1998, 1999 and in December 2000), YAHOO! RESUMES
(introduced in December 1999), WEBHIRE AGENT (introduced in November 1999),
WEBHIRE JOB POST (introduced in November 1998) and WEBHIRE JOB SITE HOSTING
(introduced in April 2000). The Company also delivers WEBHIRE ENTERPRISE,
released in June 1998 as a comprehensive recruiting automation suite designed
specifically to meet the needs of large organizations.

    WEBHIRE RECRUITER, is a complete, end-to-end solution for Internet
recruiting automation. Corporate recruiters use Webhire Recruiter to manage
requisitions online, post jobs, search for candidates at Yahoo! Careers and
within other Webhire-managed online candidate pools, track hiring status and
report on staffing activities. The service offering includes complete resume
processing and management, enabling corporations to save money and resources by
moving their entire recruiting process online. Webhire Recruiter is available in
Canada with access to the Workopolis resume database.

    YAHOO! RESUMES, powered by Webhire, provides customers with direct access to
the candidate resumes at Yahoo! Careers. Using the service's sophisticated
searching screens; customers can create skills based searches that are targeted
geographically, by job function or by industry. The resulting ranked list of the
best fitting resumes for a job puts talent in front of a recruiter or hiring
manager in seconds, without the need for advertising campaigns and external
recruiters.

    WEBHIRE AGENT is an intelligent search agent that mines the entire Internet
for resumes, evaluating and scoring found resumes against customer-defined
skills requirements for a job opening. Webhire Agent returns a relevance ranked
list of the best qualified resumes it discovered on the Internet. Optionally,
Webhire Agent can initiate an e-mail correspondence with candidates who meet or
exceed a user-specific scoring threshold.

    WEBHIRE JOB POST is an automated job publishing service that customers use
to publish open jobs to career sites across the Internet. A customer subscribing
to Webhire Job Post can publish each of their open jobs to one or more
destinations by selecting from more than 2000 job boards.

    WEBHIRE JOB SITE HOSTING is a hosting service designed so customers can post
jobs and administer the careers section of their corporate web site. Candidates
coming to the career section of a corporate web site can search open jobs by
keyword, location, department/division and/or job title or browse the lists of
open jobs by location, department or other categories. Customers create, edit,
update and remove jobs from their careers section from within Webhire Recruiter.
Webhire Job Site Hosting also features an online Employee Referral Program as
well as options to list internal-only job listings on a corporate intranet.

    WEBHIRE ENTERPRISE is a complete, integrated recruiting automation suite
designed specifically for large organizations. The technology can be delivered
to customers as an ASP service or as traditionally licensed software. Webhire
Enterprise incorporates requisition management, resume processing, candidate
ranking, staffing workflow automation, and customizable reporting features.
Through the service's Manager's Workbench option, customers can connect hiring
managers across their organization enabling hiring managers to directly initiate
job requisitions, review resumes online, manage team interviews and initiate a
job offer. New hire information contained in the Webhire Enterprise database is
easily integrated with Peoplesoft and SAP Human Resource Information Solutions.

                                       5
<PAGE>
CUSTOMER SERVICES

    The Company believes that superior customer service and support are critical
to customer satisfaction. As of September 30, 2000, the Company's customer
service organization included 69 employees, providing Professional Services,
Technical Support and Outsourced Services.

    PROFESSIONAL SERVICES.  The Professional Services Group manages system
implementation, provides additional services such as process design and system
tailoring and provides basic and advanced training both on-line, on-site during
system implementation and at the Company's Corporate Training Centers throughout
the year.

    TECHNICAL SUPPORT.  The Technical Support Group provides daily assistance to
customers with maintenance agreements through the Company's support help line.
The Company provides support Monday through Friday from 8:30 a.m.-8:00 p.m.
Eastern Time.

    OUTSOURCED SERVICES.  Outsourced Services were introduced by the Company in
July 1996 and consist of scanning services, provided principally through
third-party arrangements, and correspondence generation.

TECHNOLOGY

WEBHIRE RECRUITER

    Webhire Recruiter, the Company's Internet-based service offering, is based
on open, extensible Internet development tools. It makes wide use of standard
technologies. This adherence to standard technologies ensures that Webhire
Recruiter can be scaled as demand for the service increases. Client access to
the Webhire system is provided through either Microsoft or Netscape web
browsers.

WEBHIRE ENTERPRISE

    Webhire Enterprise is a Microsoft Windows-based application which operates
over a standard TCP/IP intranet connection. The application server component of
the product utilizes Microsoft Windows NT Server and Microsoft Internet
Information Server. Client access is provided via both a Windows application and
a browser interface which is compatible with Microsoft Windows 95/98 or
Microsoft Windows NT. This architecture combines the functionality of a
traditional client/server application with the easy deployability of an intranet
application.

PRODUCT DEVELOPMENT

    The Company believes that its future success will depend upon its ability to
enhance its existing software and develop and introduce new products and
functions that keep pace with rapid changes in the marketplace. The Company has
increased its investments in its engineering and quality groups to broaden its
product and service offerings, enhance product functionality, improve
performance and expand the ability of its software to interoperate with
third-party software. Research and development expenses totaled (in thousands)
$12,191, $7,798 and $5,588 for fiscal years 2000, 1999, and 1998, respectively.
While the Company expects that certain of its new products and functions will be
developed internally, the Company may, based on timing and cost considerations,
expand its product offerings through acquisitions or strategic relationships.
Software products as complex as those currently under development by the Company
are subject to frequent delays and there can be no assurance that the Company
will not encounter difficulties that could delay or prevent the successful and
timely development, introduction and marketing of these potential new products.

                                       6
<PAGE>
SALES AND MARKETING

    The Company markets its Internet-based services through telesales
representatives and sales personnel located in Lexington, Massachusetts, Foster
City, California, Chicago, Illinois, Dallas, Texas and Los Angeles, California.
The average sales cycle for this service, typically 3 months, is substantially
shorter than that experienced for the Company's enterprise products.

    The Company markets its enterprise products and services through a direct
sales force in North America. The Company supports its sales force through
comprehensive marketing programs which include public relations, direct mail,
advertising, seminars, trade shows, ongoing customer communication programs and
strategic relationships. While the sales cycle varies from customer to customer,
it typically spans from four to nine months from generation of a lead from one
of these sources to execution of a license agreement. The Company's direct sales
force is structured regionally and is managed through sales and service offices
in Lexington, Massachusetts, and Foster City, California, and through sales
personnel located in Baltimore, Maryland, Chicago, Illinois, Dallas, Texas and
Pleasant Prairie, Wisconsin.

CUSTOMERS

    The following is a partial listing of the Company's customers as of
September 30, 2000:

<TABLE>
<CAPTION>
BANKING/FINANCIAL SERVICES        HEALTHCARE/PHARMACEUTICALS                  CONSUMER
<S>                               <C>                                         <C>
American Express                  Abbott Laboratories                         Levi Strauss
Bank of America                   Bio-Rad Laboratories                        Liz Claiborne, Inc.
Hibernia National Bank            Boston Scientific                           Nabisco
M&T Bank                          Johnson & Johnson                           Starbucks
National City Corporation         Memorial Sloan Kettering
Wachovia Corporation              Pfizer Pharmaceuticals

PUBLISHING/ENTERTAINMENT          INSURANCE                                   E-COMMERCE
Blockbuster Entertainment         John Hancock                                Akamai Technologies
Gannett                           New York Life Benefit Services, Inc         CMGI
                                                                              iCopyright.com
ENGINEERING/CONSULTING            TECHNOLOGY/COMMUNICATIONS                   Morningstar, Inc.
CH2M Hill                         The Boeing Company                          Oasis Technology
                                  EMC                                         One to One Interactive
                                  Genetech                                    Open Market, Inc.
                                  Lockheed                                    Open Text Corporation
                                  Microsoft                                   PC Connection
</TABLE>

STRATEGIC RELATIONSHIPS

    The Company has established a number of relationships both to leverage
marketing channels and complementary technologies and to meet customer demands
for open, integrated, multi-vendor solutions. Strategic partners are categorized
into four groups: Technology Partners, who provide the Company with innovative
technologies that are integrated into the Company's products; Applications
Partners, who provide the Company's customers with value-added software,
consulting or other services that are complementary to the Company's software
and services and that enable the Company's customers to better utilize the
Company's software; Service and Implementation Partners, who extend the
Company's support, implementation and service offerings by delivering the
specialized services our customers need; and Internet/Information Partners, who
provide the Company's customers with the

                                       7
<PAGE>
ability to access and distribute crucial staffing information, including job
postings, candidate information, and resumes, often via the Internet. Examples
of the Company's strategic partners include:

YAHOO!, INC.

    In July 2000, the Company extended its alliance with Yahoo!, Inc. Through
this alliance, the Company develops, markets, and supports the Yahoo! Careers
Resume Database a subscription-based online service that corporate recruiters
and hiring managers use to search the resumes contained in the Yahoo! Careers
Resume Database. The Company's solutions are the exclusive means for
corporations to gain access to the online candidates within the Yahoo! Careers
Resume Database. The Company shares revenues from this service with Yahoo!.

VERITY, INC.

    The Company's software incorporates the text search software tools developed
by Verity, Inc., a technology partner, which allow Webhire clients to search
through vast amounts of candidate and job data, delivering only the most
relevant information directly to the desktop.

SAZTEC INTERNATIONAL.

    SAZTEC International, a leading provider of information management services,
is a certified Webhire scanning partner. SAZTEC provides the Company with a
variety of resume processing services, including resume scanning, clean-up and
verification, contact information extraction, and acknowledgement card shipping.
SAZTEC processes hard copy, fax and e-mailed resumes.

INTERNET JOB POSTING PARTNERS

    The Company's Internet job posting services provide customers with access to
over 2,000 online job posting destinations. These destinations include major
national career sites, regional career sites, and special interest or affinity
sites. The following is a representative list of the Company's job posting
partners:

<TABLE>
<CAPTION>

<S>                                    <C>
Yahoo! Careers                         BlackVoices.com
Monster.com                            workopolis.com
America's Job Bank                     Careermag.com
Excite@Home Careers Network            HeadHunter.net
</TABLE>

COMPETITION

    The marketplace for staffing solutions is intensely competitive and is
rapidly changing. Traditional Client/Server providers have been eclipsed by
providers of Internet recruiting services. The growth in the marketplace is
coming from smaller and mid-sized corporations who are demanding online
solutions that leverage the new online marketplace for candidates.

    Across the many market segments where the Company provides recruiting
solutions, the Company has distinct competitors. No single company competes with
the Company across all of its markets.

    The Company's chief direct competitors in the Internet recruiting business
services marketplace are BrassRing Systems and ISearch, both privately-held
developers of online staffing automation solutions. The Company also competes
against other recruiting automation services providers and job posting services.

    The Company believes that the principal competitive factors affecting its
market include product functionality, breadth, ease of use, scaleability and
flexibility, integration and interoperability with standard platforms and
operating systems and other software products, price, product reputation,

                                       8
<PAGE>
customer service and support, sales and marketing effectiveness and company
reputation. Although the Company believes it competes favorably with respect to
such factors, there can be no assurance that the Company can maintain this
position against current and potential competitors.

INTELLECTUAL PROPERTY

    The Company relies on a combination of copyright and trade secret laws,
employee and third-party non-disclosure agreements and other methods to protect
its proprietary rights. The Company believes that, due to the rapid pace of
technological innovation within its industry, the Company's ability to establish
and maintain a position of technology leadership in the industry is dependent
more upon the skills of its development personnel and its existing skills
library than upon the legal protections afforded its existing technology.

    The Company's success is dependent in part upon its proprietary software.
There can be no assurance that the Company's agreements with employees,
consultants and others who participate in the development of its software will
not be breached, that the Company will have adequate remedies for any breach, or
that the Company's trade secrets will not otherwise become known. Furthermore,
there can be no assurance that the measures taken by the Company to protect its
proprietary rights will be adequate to prevent misappropriation of its
technology or independent development by others of similar technology.

    The Company is not aware of any patent infringement charge or any violation
of other proprietary rights claimed by any third party relating to the Company
or the Company's products. However, the computer technology market is
characterized by frequent and substantial intellectual property litigation.
Intellectual property litigation is complex and expensive, and the outcome of
such litigation is difficult to predict.

    The Company relies on certain technology which it licenses from third
parties. The Company's success will depend in part on its continued ability to
obtain and use licensed technology that is important to the functionality of its
products. An inability to continue to procure or use such technology would
likely have a material adverse effect on the Company's business, financial
condition and operating results.

EMPLOYEES

    As of September 30, 2000, the Company had 238 full time employees consisting
of 72 in sales and marketing, 54 in product development, 69 in client services
and 43 in corporate operations. The Company's employees are not represented by
any collective bargaining organizations, and the Company has never experienced
any work stoppages. The Company considers its relations with its employees to be
good.

                                       9
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS

<TABLE>
<CAPTION>
                   NAME                       AGE                       POSITION
                   ----                     --------                    --------
<S>                                         <C>        <C>
Lars D. Perkins...........................   41        Chairman of the Board
Martin J. Fahey...........................   46        President, Chief Executive Officer and
                                                       Director
Stephen D. Allison........................   55        Chief Financial Officer, Vice President of
                                                       Finance, and Treasurer
Timothy J. McManus........................   47        Chief Marketing Officer
Robert J. Lederman, Jr....................   43        Vice President, Sales
Thomas F. Brady...........................   48        Vice President of Services and Operations
Edward F. Murray..........................   45        Chief Technology Officer
Elise J. Sargent..........................   47        Vice President, Engineering
Ronald M. Visocchi........................   51        Vice President, General Manager of
                                                       Enterprise Division
Robert J. Perry...........................   43        Vice President of Marketing
Russell J. Campanello.....................   44        Director
J. Paul Costello..........................   61        Director
Charles R. Lax............................   41        Director
Peter L. Dunn.............................   55        Director
</TABLE>

    LARS D. PERKINS, co-founder of the Company, has served as Chairman of the
Board of the Company since 1986. Mr. Perkins served as President of the Company
from 1986 to 1997 and as Chief Executive Officer from 1986 to 1999.

    MARTIN J. FAHEY, was named Chief Executive Officer in July 1999. Mr. Fahey
was elected President of the Company and as a member of the Board of Directors
in July 1997. Mr. Fahey joined the Company as Vice President and Chief Operating
Officer in May 1996. From January 1995 to May 1996, Mr. Fahey was an independent
consultant for a variety of software companies. From July 1991 to
December 1994, he was Chief Executive Officer of Vertigo Development, a
multimedia company which Mr. Fahey co-founded. Mr. Fahey was employed by Lotus
Development Corporation, a software company, from January 1983 to June 1991,
most recently as the Director of Spreadsheet Marketing.

    STEPHEN D. ALLISON joined the Company as Chief Financial Officer, Vice
President of Finance and Treasurer in February 2000. From May 1997 to
January 2000, Mr. Allison was Chief Financial Officer for PRI Automation, the
leading global supplier of advanced factory automation systems and software for
semiconductor and OEM process tool manufacturers. Prior to joining PRI
Automation, Mr. Allison was employed at Helix Technology Corporation, the
leading manufacturer of cryogenic vacuum systems serving the global electronics
marketplace, as Vice President and Chief Financial Officer from April 1995 to
April 1997.

    TIMOTHY J. MCMANUS was named Chief Marketing Officer in July 2000. From
November 1998 to June 2000 Mr. McManus served as Vice President of Strategic
Alliances. Mr. McManus joined the Company as Vice President of Internet Products
in November 1997. From January 1997 to October 1997, Mr. McManus was the founder
of Calendarcast, Inc., a development stage company evaluating applications of
Internet-based push technologies. From March 1996 to January 1997, Mr. McManus
was Vice President of Product Management and Development at Corechange LLC, a
spin-off of Cambridge Technology Partners, Inc. From October 1987 to
March 1996, Mr. McManus was employed at Lotus Development Corporation where he
managed a number of key product and business development functions within both
the Communications Products Division and the Desktop Products Organization.

    ROBERT J. LEDERMAN, JR. was named Vice President of Sales in July 2000. From
June 1999 to June 2000, Mr. Lederman served as Vice President of Internet Sales.
Mr. Lederman joined the

                                       10
<PAGE>
Company as Vice President of Human Resources in January 1997. From June 1994 to
January 1997, Mr. Lederman was employed by Fidelity Investments as the Director
of Human Resources. From June 1992 to June 1994, Mr. Lederman was Director of
Employment and Employee Relations for Clean Harbors Environmental Services
Company.

    THOMAS F. BRADY was named Vice President of Services and Operations in
November 1998. Mr. Brady joined the Company as Vice President of Client Services
in October 1997. From May 1995 to October 1997, he served as Vice President of
Services of Kronos, Inc., a leading provider of labor management software. Prior
to joining Kronos, Inc., Mr. Brady was employed at Digital Corporation from 1977
to 1995 in various operations and business development management positions.

    EDWARD F. MURRAY was named Chief Technology Officer in May 2000. Mr. Murray
joined the Company as Vice President of Development for Electronic Commerce in
November 1998. From September 1996 to November 1998, Mr. Murray was Vice
President and Chief Technologist of the Product Development division of The
Instream Corporation. From October 1989 to October 1995, Mr. Murray was employed
by Lotus Development Corporation where he was responsible for the development of
several product lines including Lotus Works and Lotus Forms.

    ELISE J. SARGENT joined the Company as Vice President, Engineering in
January 2000. From February 1997 to December 1999, Ms. Sargent was employed by
Infinium Software, most recently as Vice President of NT Development for the
Infinium suite of business applications. Ms. Sargent had previously served as
Infinium's Director of Development for HR applications. From December 1995 to
January 1997, Ms. Sargent was employed by Intersolv, Inc. as Director, Analysis
and Design Development.

    RONALD M. VISOCCHI was elected Vice President, General Manager of the
Enterprise Division in April 1999. Mr. Visocchi joined the Company in
February 1998 as Director of Sales. From March 1995 to January 1998,
Mr. Visocchi was President of the Holos Corporation, a start-up company. From
June 1985 to March 1992, Mr. Visocchi was Vice President, General Manager of an
Atex Publishing Systems Business Unit of Eastman Kodak. Mr. Visocchi began his
career with 13 years in marketing and sales management at Xerox Corporation.
Mr. Visocchi resigned from his position effective September 30, 2000.

    ROBERT J. PERRY assumed operational responsibility for the marketing
organization in November 1996 and was elected to the office of Vice President,
Marketing effective as of January 1, 1997. Mr. Perry joined the Company in
May 1996 as Director of Product Management. From November 1995 through
May 1996, Mr. Perry was an independent marketing and product management
consultant. From October 1983 to November 1995, Mr. Perry was employed by Lotus
Development Corporation and served most recently as Director of Advanced
Corporate Technology Liaisons. He had previously served as Director of Product
Management for Notes, Director of Product Management for Graphical Spreadsheets
and Group Product Manager for Spreadsheets. Mr. Perry resigned from his position
effective September 30, 2000.

    RUSSELL J. CAMPANELLO was elected as a director of the Company in
October 1994. Since July 2000, Mr. Campanello has served as Chief People Officer
at NerveWire, a business-to-business Internet professional services firm. From
February 1998 to June 2000, Mr. Campanello served as Senior Vice President,
Human Resources at Genzyme Corporation. From March 1996 to February 1998,
Mr. Campanello was Vice President of Nets Incorporated, an Internet-based
marketing company. From June 1987 to February 1996, Mr. Campanello served as
Vice President of Human Resources of Lotus Development Corporation.

    J. PAUL COSTELLO was a co-founder of the Company and a member of the Board
of Directors of the Company since its founding in 1982. Mr. Costello has served
as President of J. Paul Costello Associates, Inc., a consulting company, since
1969 and President of Costello & Company, Inc., a

                                       11
<PAGE>
contract recruiting company, since 1979. In December 1992, he also was named
President of Corporate Staffing Center, Inc., a provider of outsourced staffing
services to large corporate clients. Mr. Costello has been a human resource
management consultant for over thirty years.

    CHARLES R. LAX was elected as a director of the Company in September 1999.
Mr. Lax is a general partner of SOFTBANK Capital Partners, a firm he co-founded
in July 1999. Mr. Lax is also managing director of SOFTBANK Venture Capital,
which he co-founded in November 1997. Since 1996, Mr. Lax has been a Vice
President of SOFTBANK Holdings Inc. Mr. Lax is also a Director of SOFTBANK
Investment America Corporation. Mr. Lax co-founded GrandBanks Capital, a venture
capital partnership, sponsored by SOFTBANK Venture Capital in November 2000. He
is its Managing General Partner and its Chief Investment Officer. Prior to
joining SOFTBANK, Mr. Lax was previously a venture partner at VIMAC Partners
LLC, a venture capital firm specializing in investments in the information
technology and Internet-related industries from June 1993 to July 1996. Mr. Lax
also serves on the public boards of 1-800-Flowers.com, Inc. (FLWS), Art
Technology Group (ARTG), an infrastructure software company; Global Sports
Interactive (GSPT), a sports equipment company and Interliant, Inc. (INIT), an
Internet hosting service company. Mr. Lax also serves on the board of a number
of private companies, including Clearcross, Inc., Third Age Media, Inc.,
LIMITrader Securities, Inc. and Reciprocal, Inc. Mr. Lax is a MAGNA CUM LAUDE
GRADUATE of Boston University where he earned a Bachelor of Science.

    PETER L. DUNN was elected as a director of the Company in August 2000.
Mr. Dunn is Vice Chair and a member of the Office of the Chief Executive of
Korn/Ferry International. Mr. Dunn is also Chairman of Futurestep, a subsidiary
of Korn/Ferry International. Mr. Dunn has been a Director of Korn/Ferry
International since 1992 and serves as its General Counsel and Corporate
Secretary.

ITEM 2.  PROPERTIES

    The Company's corporate headquarters are located in Lexington,
Massachusetts, where it occupies approximately 43,000 square feet of office
space under a lease expiring in December 2003. In addition, the Company has a
regional sales and service office in Foster City, California under a lease
expiring in January 2002. The Company also leases office space in Chicago,
Illinois.

ITEM 3.  LEGAL PROCEEDINGS

    The Company is not involved in any pending legal proceedings other than
those arising in the ordinary course of the Company's business. Management
believes that the resolution of these matters will not materially affect the
Company's business or the financial condition of the Company.

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

    None

                                       12
<PAGE>
                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

MARKET PRICE OF COMMON STOCK

    The Company's common stock (Nasdaq symbol: HIRE) began trading publicly in
the over-the-counter market through the NASDAQ National Market System on
July 23, 1996. The following table sets forth, for the period indicated, the
high and low closing prices of the common stock as reported on The Nasdaq
National Market. These prices do not include retail markups, markdowns, or
commissions.

                               COMMON STOCK PRICE

<TABLE>
<CAPTION>
PERIOD                                                          HIGH       LOW
------                                                        --------   --------
<S>                                                           <C>        <C>
October 1, 1998--December 31, 1998..........................   $ 7.69     $2.25
January 1, 1999--March 31, 1999.............................   $ 6.00     $4.25
April 1, 1999--June 30, 1999................................   $ 5.63     $4.13
July 1, 1999--September 30, 1999............................   $14.13     $4.75
October 1, 1999--December 31, 1999..........................   $17.75     $8.00
January 1, 2000--March 31, 2000.............................   $16.88     $8.63
April 1, 2000--June 30, 2000................................   $15.50     $2.03
July 1, 2000--September 30, 2000............................   $ 5.38     $2.13
</TABLE>

    The closing sale price of the Common Stock on September 30, 2000 was $3.50.
On January 9, 2001 the closing price reported on the NASDAQ National Market
System for the Common Stock was $1.00.

    The market price of the Company's Common Stock has fluctuated significantly
and is subject to significant fluctuations in the future.

HOLDERS OF COMMON STOCK

    As of January 9, 2001, there were approximately 67 shareholders of record of
the Company's Common Stock and 22,527,034 shares of common stock outstanding.

DIVIDEND POLICY

    The Company has never paid any cash dividends on the Common Stock and does
not anticipate paying dividends in the foreseeable future. The Company intends
to retain any future earnings for use in the Company's business. The payment of
any future dividends will be determined by the Board of Directors in light of
conditions then existing, including the Company's financial condition and
requirements, future prospects, restrictions in financing agreements, business
conditions and other factors deemed relevant by the Board of Directors.

RECENT SALES OF UNREGISTERED SECURITIES

    On August 10, 2000, the Company completed the sale of an aggregate of
6,808,512 shares of common stock, at a price per share of $2.35, to Korn/Ferry
International, SOFTBANK Capital Partners LP, GMN Investors II, L.P., Aventine
International Fund and Bricoleur Partners II, L.P., for an aggregate purchase
price of approximately $16 million. The Company sold the shares of common stock
to these five accredited investors under the exemption from registration
provided by Rule 506 promulgated under the Securities Act of 1933. The proceeds
from the sale of these shares of common stock are being used for general working
capital purposes.

                                       13
<PAGE>
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

    The selected financial data set forth below with respect to the Company's
statements of operations for the three fiscal years ended September 30, 2000,
1999, and 1998 and the balance sheets at September 30, 2000 and 1999 are derived
from the consolidated financial statements of the Company included elsewhere in
this Form 10-K. The selected financial data set forth below with respect to the
years ended September 30, 1997 and 1996 are derived from the consolidated
financial statements of the Company previously released on December 22, 1997.
The data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and Notes thereto included elsewhere in
this Form 10-K.

<TABLE>
<CAPTION>
                                                  FISCAL YEAR ENDED SEPTEMBER 30,
                                        ----------------------------------------------------
                                          2000       1999       1998       1997       1996
                                        --------   --------   --------   --------   --------
                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                     <C>        <C>        <C>        <C>        <C>
Statement of Operations Data:
  Product revenue.....................  $  4,110   $  7,755   $16,826    $10,783    $13,265
  Services revenue--Enterprise........    10,764     12,484    11,912     10,454      8,327
  Services revenue--Internet..........     9,930      5,056     2,117        811         --
  Cost of revenue--Enterprise.........     5,552      6,286     6,978      6,543      6,312
  Cost of revenue--Internet...........    19,570     10,710     2,023        518         --
  Research and development............    12,191      7,798     5,588      5,446      2,341
  Sales and marketing.................    13,066     11,446    10,613      8,703      8,004
  General and administrative..........     8,256      6,297     4,322      3,541      2,610
  Non-cash write-off of other
    assets............................     1,000         --        --         --         --
  Amortization of intangible assets...     1,748         --        --         --         --
                                        --------   --------   -------    -------    -------
  (Loss) income from operations.......   (36,579)   (17,242)    1,331     (2,703)     2,325
  Other income, net...................       545        455       593        671        326
                                        --------   --------   -------    -------    -------
  (Loss) income before provision
    (benefit) for income taxes........   (36,034)   (16,787)    1,924     (2,032)     2,651
  Provision (benefit) for income
    taxes.............................     1,165       (568)      577       (752)     1,167
                                        --------   --------   -------    -------    -------
  Net (loss) income...................  $(37,199)  $(16,219)  $ 1,347    $(1,280)   $ 1,484
  Diluted net (loss) income per common
    share.............................  $  (2.39)  $  (1.62)  $   .16    $  (.16)   $   .21
  Diluted weighted average number of
    common shares outstanding.........    15,541     10,005     8,518      8,056      7,222
</TABLE>

<TABLE>
<CAPTION>
                                                           SEPTEMBER 30,
                                        ----------------------------------------------------
                                          2000       1999       1998       1997       1996
                                        --------   --------   --------   --------   --------
                                                           (IN THOUSANDS)
<S>                                     <C>        <C>        <C>        <C>        <C>
Balance Sheet Data:
  Cash, cash equivalents and short
    term investments..................  $ 14,545   $ 20,126   $16,436    $15,155    $20,368
  Working capital.....................  $  3,171   $ 16,848   $15,304    $14,684    $17,418
  Total assets........................  $ 34,303   $ 45,358   $31,431    $27,053    $26,310
  Total liabilities...................  $ 18,006   $ 11,342   $11,108    $ 8,513    $ 7,337
  Stockholders' equity................  $ 16,297   $ 34,016   $20,323    $18,540    $18,973
</TABLE>

                                       14
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

    THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE STATEMENTS CONTAINED IN THIS REPORT THAT ARE NOT PURELY
HISTORICAL ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED. FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT
LIMITATION, STATEMENTS CONTAINING THE WORDS "ANTICIPATES", "BELIEVES",
"EXPECTS", "INTENDS", "FUTURE", AND WORDS OF SIMILAR IMPORT WHICH EXPRESS
MANAGEMENT'S BELIEF, EXPECTATIONS OR INTENTIONS REGARDING THE COMPANY'S FUTURE
PERFORMANCE. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS REPORT ARE BASED ON
INFORMATION AVAILABLE TO THE COMPANY ON THE DATE HEREOF, AND THE COMPANY HAS NO
OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY'S ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM ITS HISTORICAL OPERATING RESULTS AND FROM
THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN
FACTORS, INCLUDING, WITHOUT LIMITATION, THOSE SET FORTH BELOW UNDER "FACTORS
AFFECTING FUTURE OPERATING RESULTS" AND ELSEWHERE IN THIS REPORT.

OVERVIEW

    The Company's products and services and the markets it serves have evolved
and expanded in concert with the rapid advancements in technology and the
elevated focus on human resource management. From its inception in 1982 through
the first half of fiscal year 1993, the Company's product revenue consisted
primarily of DOS-based applicant tracking and succession planning systems. In
June 1993, the Company introduced a Windows-based, client/server staffing
solution, which incorporated high-volume resume-scanning, skills management and
search capabilities. In November 1997, the Company broadened its offerings with
the introduction of WEBHIRE RECRUITER, a service that provides candidate
management functions via the Internet and the World Wide Web. In June 1998, the
Company released WEBHIRE ENTERPRISE, the next-generation enterprise-level
automated recruitment solution designed specifically for corporate intranets.
The new product and service releases in fiscal year 1998 enhanced the Company's
enterprise software operating segment and solidified its emerging Internet and
transaction-based solutions segment. WEBHIRE JOBPOST was added to the Internet
service offerings with the completion of the Junglee transaction in
November 1998. During fiscal 2000, several new Internet service offerings were
added including WEBHIRE AGENT, YAHOO! RESUMES, OUTSOURCED WEBHIRE ENTERPRISE and
WEBHIRE JOB SITE HOSTING.

    Total revenue consists of product revenue and services revenue. Product
revenue is generated in the enterprise software operating segment and is derived
from perpetual end-user licenses to use the Company's products. Product revenue
is recognized upon delivery, provided there are no significant Company
obligations remaining and collectibility of the revenue is probable. Services
revenue from customer maintenance fees for postcontract support is recognized
ratably over the maintenance term, which is typically 12 months. Other services
revenue from training, installation, consulting, outsourced services (e.g.,
scanning, acknowledgement mailings) and WEBHIRE JUMPSTART is recognized as the
related services are performed. Services revenue from WEBHIRE RECRUITER, WEBHIRE
JOBPOST, WEBHIRE JOB CANOPY, WEBHIRE AGENT, YAHOO! RESUMES, OUTSOURCED WEBHIRE
ENTERPRISE and WEBHIRE JOB SITE HOSTING is recognized ratably over the service
term. All customer maintenance fees for postcontract support and other services
revenue for training, installation and consulting related to enterprise software
licensed is attributed to the enterprise software operating segment. Services
revenue for WEBHIRE RECRUITER, WEBHIRE JOBPOST, WEBHIRE JOB CANOPY, WEBHIRE
AGENT, YAHOO! RESUMES, OUTSOURCED WEBHIRE ENTERPRISE, WEBHIRE JOB SITE HOSTING
and outsourced services is attributed to the Internet and transaction-based
solutions segment.

                                       15
<PAGE>
RESULTS OF OPERATIONS

($ EXPRESSED IN THOUSANDS)

    The following table sets forth, for the periods indicated, the percentage of
total revenue represented by each item reflected in the Company's Consolidated
Statements of Operations.

<TABLE>
<CAPTION>
                                                                     FISCAL YEAR ENDED
                                                            ------------------------------------
                                                                       SEPTEMBER 30,
                                                            ------------------------------------
AS A PERCENTAGE OF TOTAL REVENUE:                             2000          1999          1998
---------------------------------                           --------      --------      --------
<S>                                                         <C>           <C>           <C>
Revenue:
  Product revenue.....................................          17%           31%           55%
  Services revenue--Enterprise........................          43            49            38
  Services revenue--Internet..........................          40            20             7
                                                              ----          ----          ----
      Total revenue...................................         100           100           100
                                                              ----          ----          ----
Cost of revenue:
  Product revenue.....................................           4             3             2
  Services revenue--Enterprise........................          17            22            21
  Services revenue--Internet..........................          42            16             6
  Non-cash write-off of other assets..................           1            --            --
  Amortization of acquired technologies...............          37            26            --
                                                              ----          ----          ----
      Total cost of revenue...........................         101            67            29
                                                              ----          ----          ----
Gross profit..........................................          (1)           33            71
                                                              ----          ----          ----
Operating expenses:
  Research and development............................          49            31            18
  Sales and marketing.................................          53            45            35
  General and administrative..........................          33            25            14
  Non-cash write-off of other assets..................           4            --            --
  Amortization of intangible assets...................           7            --            --
                                                              ----          ----          ----
      Total operating expenses........................         146           101            67
                                                              ----          ----          ----
(Loss) income from operations.........................        (147)          (68)            4
Other income, net.....................................           2             2             2
                                                              ----          ----          ----
(Loss) income before provision (benefit) for income
  taxes...............................................        (145)          (66)            6
Provision (benefit) for income taxes..................           5            (2)            2
                                                              ----          ----          ----
Net (loss) income.....................................        (150)%         (64)%           4%
                                                              ====          ====          ====
</TABLE>

    REVENUE

    PRODUCT REVENUE.  Product revenue was $4,110, $7,755 and $16,826 in fiscal
2000, 1999 and 1998, respectively, representing a decrease of 47% from fiscal
1999 to fiscal 2000 and a decrease of 54% from fiscal 1998 to fiscal 1999,
respectively. Protracted sales cycles resulting from the transition to an
Internet/intranet product line, the introduction in the market of competitive
Internet-based and outsourced solutions, a general stagnation in sales of
client-server software solutions, as well as Year 2000 and other information
technology constraints were the primary contributors to these decreases.

    SERVICES REVENUE.  Services revenue--Enterprise was $10,764, $12,484 and
$11,912 in fiscal 2000, 1999 and 1998, respectively, representing a decrease of
14% from fiscal 1999 to fiscal 2000 and an increase of 5% from fiscal 1998 to
fiscal 1999. Services revenue--Internet increased 96% to $9,930 for fiscal 2000
from $5,056 for fiscal 1999, and increased 139% to $5,056 for fiscal 1999 from
$2,117 for fiscal 1998. Continued growth of the WEBHIRE RECRUITER customer base
in the Internet segment and the

                                       16
<PAGE>
additional revenue stream introduced with WEBHIRE AGENT, YAHOO! RESUMES,
OUTSOURCED WEBHIRE ENTERPRISE and WEBHIRE JOB SITE HOSTING account for the
increases realized. There were 522 WEBHIRE RECRUITER customers as of
September 30, 2000 compared to 251 and 47 at September 30, 1999 and 1998,
respectively. At September 30, 2000 there were a combined 724 active Internet
customers: 522 WEBHIRE RECRUITER customers, 187 sourcing customers and 15
OUTSOURCED ENTERPRISE customers.

    COST OF REVENUE

    COST OF PRODUCT REVENUE.  Cost of product revenue includes royalty payments
for third-party software embedded in the Company's products and costs of
documentation and shipping. Cost of product revenue was 25%, 9%, and 4% of
product revenue in fiscal 2000, 1999 and 1998, respectively. The percentage
increase for both periods is attributed primarily to increased royalties due
under third-party licensing arrangements for the WEBHIRE ENTERPRISE product and,
for the fiscal 2000 period, increased royalties due under a third-party
licensing arrangement which expired in the fourth fiscal quarter.

    COST OF SERVICES REVENUE.  Cost of services revenue includes all costs of
maintaining the client services organization and the Internet and
transaction-based solutions segment operations, including salaries and
personnel-related expenses, travel, outside consulting services, facilities cost
and, to a lesser extent, third-party scanning services and royalty payments for
software maintenance.

    Cost of services revenue--Enterprise decreased 24% to $4,235 for fiscal 2000
from $5,580 for fiscal 1999. Cost of services revenue--Enterprise decreased 12%
to $5,580 for fiscal 1999 from $6,347 for fiscal 1998. The reduction for both
fiscal periods is due to management's cost containment measures which has also
improved gross margins from 47% in fiscal 1998 to 55% in fiscal 1999 and 61% in
fiscal 2000.

    Cost of services revenue--Internet increased 153% to $10,303 for fiscal 2000
from $4,068 for fiscal 1999. Cost of services revenue--Internet increased 101%
to $4,068 for fiscal 1999 from $2,023 for fiscal 1998. The increase in absolute
dollars for both periods are principally attributable to costs associated with
supporting the expanding WEBHIRE RECRUITER customer base and, for the fiscal
2000 period, the introduction of WEBHIRE AGENT, YAHOO! RESUMES, OUTSOURCED
WEBHIRE ENTERPRISE and WEBHIRE JOB SITE HOSTING.

    NON-CASH WRITE-OFF OF OTHER ASSETS.  The Company recorded a non-cash
write-off of other assets during fiscal 2000 of $284 relating to the impairment
of prepaid software licenses from a company that had suspended operations during
the third fiscal quarter for which there is no alternative use.

    AMORTIZATION OF ACQUIRED TECHNOLOGIES.  Amortization of acquired
technologies was $9,267, $6,642 and $0 in fiscal year 2000, 1999 and 1998,
respectively. In connection with the acquisition of HR Sites during fiscal 2000
the Company recorded acquired technology which is being amortized over a
three-year estimated life. In connection with an asset purchase from Amazon.com
and the acquisition of HireWorks, Inc., during fiscal 1999 the Company recorded
acquired technologies which are being amortized over a two-year estimated life
from the respective transaction dates.

    OPERATING EXPENSES

    RESEARCH AND DEVELOPMENT.  Research and development expenses include all
costs associated with the product engineering and quality functions, including
salaries and personnel-related expenses, travel, outside consulting services and
facilities costs. Research and development expenses were $12,191 or 49% of total
revenue for fiscal 2000 as compared to $7,798 or 31% of total revenue for fiscal
1999 and $5,588 or 18% of total revenue for fiscal 1998. The increases in
absolute dollars and as percentage of revenues for the years presented are
primarily due to increases in both personnel and consulting expenses in support
of the Company's new and existing product development initiatives and its
quality

                                       17
<PAGE>
assurance programs. The Internet and transaction-based solutions segment
accounted for 80%, 51% and 29% of total research and development expenses in
fiscal 2000, 1999 and 1998, respectively. Research and development expenses will
vary from period to period as a percentage of total revenue dependent upon the
stage in product development and the requisite investment funding of ongoing
projects. The Company considers continued investment in research and development
to be integral to its future success. All of the Company's research and
development costs have been expensed as incurred.

    SALES AND MARKETING.  Sales and marketing expenses include promotional costs
and trade shows and costs associated with personnel involved in sales and
marketing functions, including salaries, commissions and other personnel-related
expenses, travel, outside consulting services and facilities costs. Sales and
marketing expenses were $13,066 or 53% of total revenue for fiscal 2000 as
compared to $11,446 or 45% of total revenue for fiscal 1999 and $10,613 or 35%
of total revenue for fiscal 1998. The Internet and transaction-based solutions
segment accounted for 72%, 41% and 11% of total sales and marketing expenses in
fiscal 2000, 1999 and 1998, respectively. The increases in absolute dollars and
as a percentage of revenues for the years presented are primarily due to the
increase in sales costs associated with the ramping up of the Internet sales
organization. There were 43 employees in the Internet sales organization as of
September 30, 2000 as compared to 26 and 5 at September 30, 1999 and 1998,
respectively. The Company expects that sales and marketing expenses may vary
from year to year as a percentage of total revenue.

    GENERAL AND ADMINISTRATIVE.  General and administrative expenses consist
primarily of costs for corporate operations personnel (executive, finance and
accounting, human resources, legal and administrative), professional fees and
other general corporate expenses. General and administrative expenses were
$8,256 or 33% of total revenue for fiscal 2000 as compared to $6,297 or 25% of
total revenue for fiscal 1999 and $4,322 or 14% of total revenue for fiscal
1998. The increase in absolute dollars and as a percentage of revenue for the
fiscal 2000 period is primarily the result of increased accounts receivable
reserves due to the impending discontinuation of support of one of the Company's
existing products, increased professional fees due to increased activity in
potential domestic and international investment opportunities and increased
audit fees due to a change in external independent accountants. The absolute
dollar increase for the fiscal 1999 period is primarily the result of personnel
increases and investments in systems in support of the Internet operations.

    NON-CASH WRITE-OFF OF OTHER ASSETS.  The Company recorded a non-cash
write-off of other assets of $1,000 during fiscal 2000, relating to the
impairment of prepaid royalties for software not currently sold, from a company
that has suspended operations during the third fiscal quarter.

    AMORTIZATION OF INTANGIBLE ASSETS.  In connection with the acquisition of HR
Sites during fiscal 2000 the Company recorded intangible assets totaling $6,551
including non-compete agreements, a customer base and excess purchase price over
identifiable assets which are being amortized over estimated lives of between
three to five years.

    OTHER INCOME, NET

    Other income consists primarily of interest earned on investments, and for
fiscal 2000, the offset of accrued interest on Convertible Notes Payable. Other
income was $545, $455 and $593 in fiscal 2000, 1999 and 1998, respectively. The
variances from period to period are primarily due to fluctuations in the average
combined cash and cash equivalents and short- and long-term investment balances.
The Company expects to continue to yield investment income on its average
balance of combined cash and cash equivalents and short- and long-term
investments at an average rate comparable to that experienced for fiscal 2000.

                                       18
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    PROVISION FOR INCOME TAXES

    For the fiscal year 2000 the Company recorded an additional $1.2 million
valuation allowance to reserve for the full amount of its net deferred tax
assets since, based on the weight of available evidence, management has
concluded that it is more likely than not that these future benefits will not be
realized.

RECENT ACCOUNTING PRONOUNCEMENTS

    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES. This statement establishes accounting and
reporting standards for derivative instruments, including some derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. The Company will adopt SFAS 133 in
Fiscal 2001, in accordance with SFAS 137, which deferred the effective date of
SFAS 133. The adoption of this standard in Fiscal 2001 is not expected to have a
material impact on the Company's consolidated financial statements.

    In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin No. 101 ("SAB 101"), REVENUE RECOGNITION IN FINANCIAL
STATEMENTS. This bulletin summarizes some of the Staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. The Staff is providing this guidance due, in part, to the large
number of revenue recognition issues that registrants encounter. SAB 101 was
delayed by the issuance of SAB 101A on March 27, 2000 and SAB 101B on June 26,
2000; it must be adopted by the fourth quarter of the fiscal year beginning
after December 15, 1999. The Company will adopt SAB 101 in Fiscal 2001 and does
not expect its adoption to have a material impact on the Company's consolidated
financial statements.

    In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44 ("FIN 44"), ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING
STOCK COMPENSATION--AN INTERPRETATION OF APB OPINION NO. 25. FIN 44 clarifies
the application of APB No. 25 to certain issues including: the definition of an
employee for purposes of applying APB Opinion No. 25; the criteria for
determining whether a plan qualifies as a noncompensatory plan; the accounting
consequences of various modifications to the terms of previously fixed stock
options or awards; and the accounting for the exchange of stock compensation
awards in a business combination. FIN 44 became effective on July 1, 2000, but
certain conclusions in FIN 44 are applicable retroactively to specific events
occurring after either December 15, 1998 or January 12, 2000. The Company does
not expect the application of FIN 44 to have a material impact on the Company's
financial position or results of operations.

LIQUIDITY AND CAPITAL RESOURCES

    At September 30, 2000, the Company had cash and cash equivalents and
short-term investments of $14,545, a decrease of $5,581 from $20,126 at
September 30, 1999.

    Cash used in operating activities was $17,198 during the year ended
September 30, 2000. Cash used in operating activities consisted mainly of the
net loss for the 2000 fiscal year of $37,199 partially offset by the effects of
depreciation and amortization of $13,687, a provision for doubtful accounts of
$1,453, a non-cash write-off of other assets of $1,284, a full valuation
allowance on deferred tax assets of $1,068 and fluctuations in certain assets
and liabilities.

    Cash used in investing activities was $6,174 during the year ended
September 30, 2000. Cash used in investing activities consisted primarily of
purchases of short-term investments of $2,410, purchases of property and
equipment of $2,328 (primarily computer equipment) and the acquisition of HR
Sites of $1,570.

                                       19
<PAGE>
    Net cash provided by financing activities for the year ended September 30,
2000 was $15,381, consisting primarily of the net proceeds from the private
placement of the Company's common stock of $14,879, which was consummated in
September 2000.

    To date, the Company has not invested in derivative securities or any other
financial instruments that involve a high level of complexity or risk. Cash has
been, and the Company contemplates that it will continue to be, invested in
interest-bearing, investment grade securities.

    From time to time, the Company may evaluate potential acquisitions of
products, businesses and technologies that may complement or expand the
Company's business. Any such transactions consummated may use a portion of the
Company's working capital and/or require the issuance of equity or debt.

    The Company believes that its current cash and cash equivalent balance will
be sufficient to meet its working capital expenditure requirements through
fiscal 2001.

    On December 14, 2000 the Company repaid $2,500 plus accrued interest of $143
on a promissory note to Human Resources Sites, International, Inc. (see Note 6
of Notes to Consolidated Financial Statements). The remaining note of $925
matures on March 14, 2001.

FACTORS AFFECTING FUTURE OPERATING RESULTS

    An investment in our common stock involves various risks. Before investing
in our common stock, you should carefully consider the following risk factors.
These risk factors are not exhaustive and should be read together with the other
reports and documents that we file with the Securities and Exchange Commission,
which may include additional or more current information that should be
considered in making an investment in us.

IF WE ARE UNABLE TO OBTAIN ADDITIONAL CAPITAL AS NEEDED IN THE FUTURE, OUR
BUSINESS MAY BE ADVERSELY AFFECTED.

    We currently anticipate that our available cash will be sufficient to meet
our anticipated working capital and capital expenditure requirements through
fiscal 2001. However, we may need to raise additional capital to meet our needs
in the longer term to fund more rapid expansion to develop new services and to
enhance existing services in response to competitive pressures, and to acquire
complementary services, businesses or technologies. In the event our operations
are not profitable or do not generate sufficient cash to fund the business, or
if we fail to receive money to meet our obligations, we may have to
substantially cut back our level of operations. These reductions could, in turn,
affect our relationships with our strategic partners and customers and threaten
our ability to continue as an ongoing concern. If we raise additional funds
through further issuance of equity or convertible debt securities, the
percentage of ownership of our current stockholders will be reduced and such
securities may have rights, preferences and privileges senior to those of our
current stockholders. In addition, we may not be able to obtain such financing
on terms favorable to us, if at all. If adequate funds are not available or are
not available on terms favorable to us, our business, results of operations and
financial condition could be materially and adversely affected.

TO COMPETE EFFECTIVELY, WE MUST ADAPT QUICKLY TO ADVANCES IN TECHNOLOGY AND
CHANGES IN CUSTOMER REQUIREMENTS.

    The market for automated recruiting products and services is undergoing
rapid changes including continuing advances in technology and changes in
customer requirements and preferences. These market dynamics have been amplified
by the emergence of the Internet as a tool for recruiting solutions. Our future
success will depend in significant part on our ability to continually improve
the performance, features and reliability of our software and services in
response to the evolving demands

                                       20
<PAGE>
of the marketplace and competitive product offerings. Any failure on our part to
quickly develop products and services that address changes in technology or
customer demands will likely result in loss of market share to a competitor.

OUR BUSINESS IS DEPENDENT ON THE DEVELOPMENT AND MAINTENANCE OF THE INTERNET
INFRASTRUCTURE.

    Our success will depend, in large part, upon the development and maintenance
of the Internet infrastructure as a reliable network backbone with the necessary
speed, data capacity and security, and timely development of enabling products,
such as high-speed modems, for providing reliable Internet access and services.
We cannot assure you that the Internet infrastructure will continue to
effectively support the demands placed on it as the Internet continues to
experience increased numbers of users, greater frequency of use or increased
bandwidth requirements of users. Even if the necessary infrastructure or
technologies are developed, we may have to spend considerable resources to adapt
our offerings accordingly. Furthermore, in the past, the Internet has
experienced a variety of outages and other delays. Any future outages or delays
could affect the Internet sites on which our customers' job advertisements are
posted and the willingness of employers and job seekers to use our online
recruitment offerings. If any of these events occur, our business, results of
operations and financial condition could be materially and adversely affected.

WE HAVE RECENTLY EXPANDED OUR TECHNOLOGY INTO SEVERAL NEW BUSINESS AREAS AND
CANNOT BE CERTAIN THAT OUR EXPANSION WILL BE SUCCESSFUL.

    We have recently expanded our technology into products and services that can
be offered over the Internet to foster long-term growth. These areas are
relatively new to our product development, sales and marketing personnel. We
cannot be assured that the markets for these products and services will develop
or that it will be able to compete effectively or will generate significant
revenues in these new areas making our success in this area difficult to
predict.

    The success of Internet computing and, in particular, our current Internet
computing software products and services is difficult to predict because
Internet computing represents a method of computing that is new. The success of
Internet computing will depend in large measure on (i) the lower cost of
ownership of Internet computing relative to client/server architecture,
(ii) the ease of use and administration relative to client/server architecture,
and (iii) how hardware and software vendors choose to compete in this market.
There can be no assurances that sufficient numbers of vendors will undertake
this commitment, that the market will accept Internet computing or that Internet
computing will generate significant revenues for us.

OUR BUSINESS MODEL IS UNPROVEN.

    We began offering online subscriptions for WEBHIRE RECRUITER in fiscal 1998.
Product revenue from software sales are expected over a relatively short period
of time to become a much smaller component of our revenue. Maintenance revenue
associated with product sales will also decrease over time. Our long-term
business model and profit potential are unproven. To be successful, we must
develop and market online recruitment offerings that achieve broad market
acceptance by employers, job seekers and interactive media companies.

    It is possible that we will be required to further adapt our business model
in response to additional changes in the online recruitment market or if our
current business model is not successful. If we are not able to anticipate
changes in the online recruitment market or if our business model is not
successful, our business, results of operations and financial condition will be
materially and adversely affected.

                                       21
<PAGE>
WE MAY BE UNABLE TO CONTINUE TO BUILD CUSTOMER AWARENESS.

    We believe that continuing to build brand recognition is critical to
achieving widespread acceptance of our online recruitment offerings. Brand
recognition is a key differentiating factor among providers of online
recruitment offerings and we believe it could become more important as
competition in the online recruitment market increases. We may find it necessary
to accelerate expenditures on our sales and marketing efforts or otherwise
increase our financial commitment to creating and maintaining brand awareness
among potential customers. If we fail to successfully promote and maintain our
brand or incur significant expenses in promoting our brand, our business,
results of operations and financial condition could be materially and adversely
affected.

THE GROWTH IN DEMAND FOR AUTOMATED RECRUITING SOFTWARE AND SERVICES AND THE USE
OF THE INTERNET AS A RECRUITING MEDIUM ARE UNCERTAIN.

    Our future success substantially depends on broader recognition of the
potential benefits of automated recruiting software and services and the growth
in demand for these products and services. It is difficult to assess the size of
the market that will develop and the rate at which it will develop. If the
market does not develop as we anticipate, or if it develops more slowly than we
expect, our business, operating results and financial condition will be
materially and adversely affected.

    Our future is highly dependent on a significant increase in the use of the
Internet as a recruiting medium. The online recruitment market is new and
rapidly evolving, and we cannot yet gauge its effectiveness as compared to
traditional recruiting methods. As a result, demand and market acceptance of
online recruitment offerings are uncertain. The adoption of online recruiting,
particularly by those entities that have historically relied upon traditional
methods of recruiting, requires the acceptance of a new way of conducting
business, exchanging information and advertising for jobs. We cannot assure you
that the online recruitment market will continue to emerge or become
sustainable. If the online recruitment market fails to develop or develops more
slowly than we expect, our business, results of operations and financial
condition will be materially and adversely affected.

OUR COMPUTER SYSTEMS COULD FAIL OR OVERLOAD.

    The success of our online recruitment offerings depends highly on the
efficient and uninterrupted operation of our computer and communications
systems. Power loss, telecommunications failures, computer viruses, electronic
break-ins or other similar disruptive problems could damage or cause
interruptions in these systems. If our systems are affected by any of these
occurrences, our business, results of operations and financial condition could
be materially and adversely affected. Our insurance policies may not cover, or
if covered, may not adequately compensate us for, any losses that may occur due
to any failures or interruptions in our systems. We do not presently have any
secondary "off-site" systems or a formal disaster recovery plan.

    In addition, we must accommodate a high volume of traffic and deliver
frequently updated information. Our websites have in the past and may in the
future experience slower response times or decreased traffic for a variety of
reasons. In addition, our users depend on Internet service providers and other
internet site operators for access to our websites. Many of the Internet service
providers have experienced significant outages in the past, and could experience
outages, delays and other difficulties due to system failures unrelated to our
systems.

    If we experience any of these problems, our business, results of operations
and financial condition could be materially and adversely affected.

                                       22
<PAGE>
OUR NEW PRODUCT INTRODUCTIONS MAY HAVE DEFECTS WHICH COULD RESULT IN ADVERSE
PUBLICITY OR HAVE OTHER NEGATIVE EFFECTS.

    As the marketplace for recruiting solutions continues to evolve, we plan to
develop and introduce new products and services to enable us to effectively meet
the changing needs of the market. Products as complex as those we offer may
contain undetected errors when first introduced or when new versions are
released. In the past, despite prior testing, we have discovered software errors
in some of our products after their introduction. Product defects may result in
adverse publicity, loss of or delay in market acceptance, injury to our
reputation and brand awareness, or claims against us, any one of which could
have a material adverse effect on our business, results of operations and
financial condition.

WE HAVE SIGNIFICANT COMPETITION FROM A VARIETY OF SOURCES.

    The market for recruitment solutions is intensely competitive and highly
fragmented. Although few companies directly compete with us, there are a large
number of job boards, search firms, and portal sites that are vying for their
share of the overall corporate recruiting budget. Although we do not compete
with companies that offer a single database "job board" solution, such as
Monster.com and Career Mosaic, these companies compete with Yahoo!, our major
partner. We expect to face additional competition as other established and
emerging companies, including print media companies and employee recruiting
agencies with established brands, enter the online recruitment market.

    Many of our current and potential competitors have significantly greater
financial, technical, marketing and other resources than we do. In addition,
current and potential competitors may make strategic acquisitions or establish
cooperative relationships to expand their offerings and to offer more
comprehensive solutions.

    We believe that there will be rapid business consolidation in the online
recruitment industry. Accordingly, new competitors may emerge and rapidly
acquire significant market share. In addition, new technologies will likely
increase the competitive pressures that we face. The development of competing
technologies by market participants or the emergence of new industry standards
may adversely affect our competitive position. An increase in competition could
result in price reductions, limitations of access to key content on the web,
render our existing software and services obsolete or unmarketable and/or result
in loss of market share.

WE MUST MANAGE OUR GROWTH IN ORDER TO ACHIEVE DESIRED RESULTS.

    The evolution of our business and the expansion of our customer base have
resulted in substantial growth in the number of our employees and the scope of
our operations of the last few years. Our future results of operations will
depend in part on the ability of our officers and other key employees to
continue to implement our operational, customer support and financial control
systems and to expand, train, and manage our employee base.

THE SUCCESSFUL OPERATION OF OUR BUSINESS DEPENDS IN LARGE PART ON OUR
RELATIONSHIPS WITH THIRD PARTIES.

    A key element of our business strategy is to develop relationships with
leading industry organizations in order to increase our market presence, expand
distribution channels and broaden our product line. We believe that our
continued success depends in large part on our ability to maintain such
relationships and cultivate additional relationships. There can be no assurance
that our existing strategic partners will not discontinue their relationships
with us, or that we will be able to develop successfully additional strategic
relationships.

    In addition, certain technology incorporated in our software is licensed
from third parties on a nonexclusive basis. The termination of any of these
licenses, or the failure of the third-party licensors

                                       23
<PAGE>
to maintain adequately or update their products, could result in delay in our
ability to ship certain of our products while we seek to implement technology
offered by alternative sources. In addition, any required replacement licenses
could prove more costly than our current license relationships and might not
provide technology as powerful and functional as the third-party technology we
currently license. Also, any such delay, to the extent it becomes extended or
occurs at or near the end of a fiscal quarter, could have a material adverse
effect on our results of operations for that quarter. While it may be necessary
or desirable in the future to obtain other licenses relating to one or more of
our products or relating to current or future technologies, we may not be able
to do so on commercially reasonable terms or at all.

OUR OPERATING RESULTS MAY BE SUBJECT TO SIGNIFICANT QUARTERLY FLUCTUATIONS.

    Our results of operations have been, and may in the future be, subject to
significant quarterly fluctuations. Such fluctuations could be due to a variety
of factors, including the following:

    - the fact that our product revenue consists of a relatively small number of
      large dollar transactions and, as a result, may fluctuate significantly
      from one quarter to another if the number of transactions completed varies
      slightly;

    - the introduction of new products by us or our competitors;

    - the capital spending patterns of our customers;

    - our sales incentive strategy which is based in part on annual sales
      targets;

    - the fact that a substantial portion of our product revenue often occurs
      during the last few weeks of each quarter and, as a result, any delays in
      orders or shipments are more likely to result in revenue not being
      recognized until the following quarter; and

    - our current expense levels are based in part on our expectations of future
      revenue and, as a result, net income for a given period could be
      disproportionately affected by any reduction in revenue.

    To the extent our level of revenue in the future decreases from past levels
or in some future quarter our revenue or operating results are below the
expectations of stock market securities analysts and investors, our
profitability and the price of our common stock is likely to be materially and
adversely affected.

ONE LARGE STOCKHOLDER BENEFICIALLY OWNS APPROXIMATELY 33% OF OUR OUTSTANDING
STOCK, IS REPRESENTED ON OUR BOARD OF DIRECTORS AND HAS RIGHTS TO PARTICIPATE IN
CERTAIN OF OUR TRANSACTIONS. SUCH STOCKHOLDER'S INTERESTS COULD CONFLICT WITH
YOURS AND SIGNIFICANT SALES OF STOCK HELD BY IT COULD HAVE A NEGATIVE EFFECT ON
OUR STOCK PRICE.

    As of September 30, 2000, SOFTBANK beneficially owned approximately 33% of
our outstanding common stock. In addition, SOFTBANK's affiliate Yahoo! Inc., of
which SOFTBANK owns approximately 22%, owned approximately 1% of our outstanding
common stock. As a result of their stock ownership, SOFTBANK and its affiliate
have significant control over all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions, and their interests could conflict with those of other
stockholders. Such concentration of ownership may also have the effect of
delaying or preventing a change in control of Webhire. In addition, sales of
significant amounts of shares held by these entities, or the prospect of these
sales, could adversely affect the market price of our common stock.

    SOFTBANK has the right to nominate two members of our Board of Directors,
which currently consists of 6 members (one of whom is a SOFTBANK
representative), and so long as it continues to hold at least 10% of our
outstanding common stock, it is entitled to nominate one director each time a

                                       24
<PAGE>
class of directors in which one of its representatives serves is subject to
election. Furthermore, one of SOFTBANK's directors is entitled to serve as a
member of the Board's audit and compensation committees. As a result of
SOFTBANK's board representation, it has significant influence on all matters
requiring Board approval.

    In addition, in the event we propose to enter into a joint venture for
operations in the United Kingdom, continental Europe or Japan, or a business
transaction with any competitor of SOFTBANK's affiliate ZDNet, we are required
by the terms of the stock purchase agreement pursuant to which SOFTBANK acquired
our common stock to offer SOFTBANK or one of its affiliates the opportunity to
participate in the transaction on mutually acceptable terms and conditions. As a
result of these requirements, potential third parties may be reluctant to
negotiate joint ventures or business transactions with us because they know
SOFTBANK and its affiliates will be given the opportunity to participate in such
transactions.

WE DEPEND ON KEY PERSONNEL WHO MAY NOT CONTINUE TO WORK FOR US.

    Our future success depends to a significant extent on our senior management
and other key employees, many of whom have acquired specialized knowledge and
skills with respect to our operations. As a result, if any of these individuals
were to leave Webhire, we could face substantial difficulty in hiring qualified
successors and could experience a loss of productivity while any such successor
obtains the necessary training and experience. We also believe that our future
success will depend in large part on our ability to attract and retain
additional key employees. Competition for qualified personnel in the high tech
industry is intense. If we do not succeed in attracting new personnel, or
retaining and motivating existing personnel, our business will be adversely
affected.

OUR STOCK PRICE MAY EXPERIENCE EXTREME PRICE AND VOLUME FLUCTUATIONS AND OUR
STOCKHOLDERS MAY NOT BE ABLE TO RESELL THEIR SHARES AT OR ABOVE THEIR PURCHASE
PRICE.

    We cannot predict the extent to which investors' interest in us will lead to
a stable trading market or how liquid the market might become. The stock market
in general and the market prices of shares in technology companies, particularly
those such as ours that offer Internet-based products and services, have been
extremely volatile and have experienced fluctuations that have often been
unrelated or disproportionate to the operating performance of such companies.
The market price of our common stock could be highly volatile and subject to
wide fluctuations in response to many factors, including the following:

    - quarterly variations in our results of operations;

    - adverse business developments impacting Webhire;

    - changes in financial estimates by securities analysts;

    - investor perception of Webhire and online recruitment services in general;

    - announcements by our competitors of new products and services; and

    - fluctuations in our common stock price, which may affect our visibility
      and credibility in the online recruitment market.

    In the event of broad fluctuations in the market price of our common stock,
purchasers of our common stock may be unable to resell their shares at or above
their purchase price.

                                       25
<PAGE>
IT IS DIFFICULT TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS.

    We regard our intellectual property rights as critical to our success and
rely on a combination of copyright and trade secret laws, employee and
third-party non-disclosure agreements and other methods to protect these rights.
We cannot be assured that the measures we have taken to protect our proprietary
rights will be adequate to prevent misappropriation of our technology or
independent development by others of similar technology. Our inability to
protect our proprietary rights would have a material adverse effect on our
business, results of operations and financial condition.

WE MAY BE SUBJECT TO COSTLY INTELLECTUAL INFRINGEMENT CLAIMS.

    As the number of products and services in our industry increases and these
solutions further overlap, the likelihood that our current or future products
may become subject to infringement claims increases. Although we are not
currently the subject of any intellectual property litigation, there has been
substantial litigation regarding copyright, patent and other intellectual
property rights involving computer software companies. Any claims or litigation,
with or without merit, could be costly and could result in a diversion of
management's attention, which could have a material adverse effect on our
business, results of operations and financial condition. Adverse determinations
in such claims or litigation may require us to obtain a license and/or pay
damages, which could also have a material adverse effect on our business,
results of operations and financial condition.

WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS.

    Although we have not experienced any product liability claims to date, the
sale and support of our products and the incorporation of products from other
companies may entail the risk of product liability claims. Our license
agreements with our customers typically contain provisions intended to limit our
exposure to such claims. For example, we limit our contractual warranties on
"Year 2000" compliance to objective performance standards that we have tested,
and we do not make any warranties for nonconformance if our software products
are combined with other software or data that is not conducive to accurately
calculating, comparing or sequencing date and time data between the twentieth
and twenty-first centuries. There can be no guarantee, however, that such
provisions will be effective in limiting our exposure. A successful product
liability action brought against us could adversely affect our business, results
of operations and financial condition.

ANTI-TAKEOVER PROVISIONS COULD MAKE IT MORE DIFFICULT FOR A THIRD PARTY TO
ACQUIRE US.

    Our Board of Directors has the authority to issue up to 5,000,000 shares of
preferred stock and to determine the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further vote
or action by the stockholders. The rights of the holders of common stock may be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The issuance of preferred
stock may have the effect of delaying, deferring or preventing a change of
control without further action by the stockholders and may adversely affect the
voting and other rights of the holders of common stock. We have no present plans
to issue shares of preferred stock. Further, certain provisions of our charter
documents, including provisions eliminating the ability of stockholders to take
action by written consent, providing for a staggered board of directors and
limiting the ability of stockholders to raise matters at a meeting of
stockholders without giving advance notice, may have the effect of delaying or
preventing changes in control or management, which could have an adverse effect
on the market price of our stock.

                                       26
<PAGE>
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company owns financial instruments that are sensitive to market risks as
part of its investment portfolio. The investment portfolio is used to preserve
the Company's capital until it is required to fund operations. All of these
market-risk sensitive instruments are classified as available-for-sale. The
Company does not own derivative financial instruments in its investment
portfolio. The investment portfolio contains instruments that are subject to the
risk of a decline in interest rates.

    Interest Rate Risk--The Company's investment portfolio includes investment
grade debt instruments. These bonds are subject to interest rate risk, and could
decline in value if interest rates fluctuate. Due to the short duration and
conservative nature of these instruments, the Company does not believe that it
has a material exposure to interest rate risk.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The information required by this item is incorporated by reference from the
Consolidated Financial Statements and Supplementary Data of the Company set
forth on pages F-1 through F-23 hereof.

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

    Reference is made to the Company's report on Form 8-K filed with the
Securities and Exchange Commission on July 18, 2000, which is incorporated by
reference into this Item 9.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information required by this Item 10 is hereby incorporated by reference
to the text appearing under Part I, Item 1--Business under the caption
"Executive Officers and Directors" in this Form 10-K, and by reference to the
information included under the headings "Information Regarding Directors",
"Executive Officers" and "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's definitive Proxy Statement for the 2000 Annual
Meeting of Stockholders to be filed by the Company within 120 days after the
close of its fiscal year.

ITEM 11.  EXECUTIVE COMPENSATION

    The information required by this Item 11 is hereby incorporated by reference
to the information under the heading "Executive Compensation" in the Company's
definitive Proxy Statement for the 2000 Annual Meeting of Stockholders to be
filed by the Company within 120 days after the close of its fiscal year.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information required by this Item 12 is hereby incorporated by reference
to the information under the heading "Principal And Management Stockholders" in
the Company's definitive Proxy Statement for the 2000 Annual Meeting of
Stockholders to be filed by the Company within 120 days after the close of its
fiscal year.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by this Item 13 is hereby incorporated by reference
to the information under the heading "Certain Relationships and Related
Transactions", if any, in the Company's definitive Proxy Statement for the 2000
Annual Meeting of Stockholders to be filed by the Company within 120 days after
the close of its fiscal year.

                                       27
<PAGE>
                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A)(1)   FINANCIAL STATEMENTS

    1.  Report of PricewaterhouseCoopers LLP dated October 30, 2000 (See Page
       F-2 hereof).

    2.  Report of Arthur Andersen LLP dated October 21, 1999 (See Page F-3
       hereof).

    3.  Consolidated Balance Sheets as of September 30, 2000 and 1999. (See Page
       F-4 hereof).

    4.  Consolidated Statements of Operations for the years ended September 30,
       2000, 1999 and 1998 (See Page F-5 hereof).

    5.  Consolidated Statements of Stockholders' Equity for the years ended
       September 30, 2000, 1999 and 1998. (See Page F-6 hereof).

    6.  Consolidated Statements of Cash Flows for the years ended September 30,
       2000, 1999 and 1998. (See Page F-7 hereof).

    7.  Notes to Consolidated Financial Statements. (See pages F-8 through F-23
       hereof).

(A)(2)   FINANCIAL STATEMENT SCHEDULES

    1.  Report of PricewaterhouseCoopers LLP dated October 30, 2000

    2.  Schedule II: Valuation and Qualifying Accounts

    Other schedules are not provided because of the absence of conditions under
which they are required or because the required information is given in the
financial statements or notes thereto.

(A)(3)   EXHIBITS

    (a) Exhibits. The following is a complete list of Exhibits filed as part of
       this Form 10-K.

<TABLE>
<CAPTION>
EXHIBIT NO.                                     DESCRIPTION
-----------             ------------------------------------------------------------
<S>                     <C>
   2.1                  Agreement and Plan of Merger, dated as of July 9, 1999, by
                        and among Webhire, Inc., HWK Acquisition Corp., Hireworks,
                        Inc. and the stockholders of Hireworks, Inc. (Incorporated
                        by reference to the relevant exhibit to the Company's
                        Quarterly Report on Form 10-Q, filed with the Commission on
                        August 16, 1999)

   3.1                  Third Amended and Restated Certificate of Incorporation of
                        the Company (Incorporated by reference to the relevant
                        exhibit to the Company's (f/k/a Restrac, Inc.) registration
                        statement on Form S-1, as amended (File No. 333-03521),
                        originally filed with the Commission on May 10, 1996)

   3.2                  Amended and Restated By-laws of the Company (Incorporated by
                        reference to the relevant exhibit to the Company's (f/k/a
                        Restrac, Inc.) registration statement on Form S-1, as
                        amended (File No. 333-03521), originally filed with the
                        Commission on May 10, 1996)

   4.1                  Specimen certificate for shares of Common Stock, $.01 par
                        value, of the Company (Incorporated by reference to the
                        relevant exhibit to the Company's (f/k/a Restrac, Inc.)
                        registration statement on Form S-1, as amended (File No.
                        333-03521), originally filed with the Commission on May 10,
                        1996)

  10.1                  Stock Purchase Agreement dated January 5, 1994, as amended,
                        by and between the Company and the Purchasers identified
                        therein (Incorporated by reference to the relevant exhibit
                        to the Company's (f/k/a Restrac, Inc.) registration
                        statement on Form S-1, as amended (File No. 333-03521),
                        originally filed with the Commission on May 10, 1996)
</TABLE>

                                       28
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.                                     DESCRIPTION
-----------             ------------------------------------------------------------
<S>                     <C>
  10.1                  Stock Purchase Agreement dated July 19, 1999, between
                        Webhire, Inc. and SOFTBANK Capital Partners, LP
                        (Incorporated by reference to the relevant exhibit to the
                        Company's Quarterly Report on Form 10-Q, filed with the
                        Commission on August 16, 1999)

  10.2                  Stock Redemption Agreement dated January 5, 1994 between the
                        Company and J. Paul Costello, Lars D. Perkins and John P.
                        Jopling (Incorporated by reference to the relevant exhibit
                        to the Company's (f/k/a Restrac, Inc.) registration
                        statement on Form S-1, as amended (File No. 333-03521),
                        originally filed with the Commission on May 10, 1996)

 +10.2                  Yahoo! Inc. and Webhire, Inc. Services Agreement dated as of
                        June 3, 1999, by and between Yahoo! Inc. and Webhire, Inc.
                        (Incorporated by reference to the relevant exhibit to the
                        Company's Quarterly Report on Form 10-Q, filed with the
                        Commission on August 16, 1999)

  10.3                  Registration Rights Agreement dated January 5, 1994 between
                        the Company and Lars D. Perkins, J. Paul Costello and
                        John P. Jopling (Incorporated by reference to the relevant
                        exhibit to the Company's (f/k/a Restrac, Inc.) registration
                        statement on Form S-1, as amended (File No. 333-03521),
                        originally filed with the Commission on May 10, 1996)

 +10.3                  Amendment No. 1 to Yahoo! Inc. and Webhire, Inc. Services
                        Agreement dated July 27, 1999, by and between Yahoo! Inc.
                        and Webhire, Inc. (Incorporated by reference to the relevant
                        exhibit to the Company's Quarterly Report on Form 10-Q,
                        filed with the Commission on August 16, 1999)

  10.4                  Restrac, Inc. 1994 Stock Option Plan (Incorporated by
                        reference to the relevant exhibit to the Company's (f/k/a
                        Restrac, Inc.) registration statement on Form S-1, as
                        amended (File No. 333-03521), originally filed with the
                        Commission on May 10, 1996)

  10.5                  Restrac, Inc. 1996 Stock Option and Grant Plan (Incorporated
                        by reference to the relevant exhibit to the Company's (f/k/a
                        Restrac, Inc.) registration statement on Form S-1, as
                        amended (File No. 333-03521), originally filed with the
                        Commission on May 10, 1996)

  10.6                  Restrac, Inc. 1996 Employee Stock Purchase Plan
                        (Incorporated by reference to the relevant exhibit to the
                        Company's (f/k/a Restrac, Inc.) Quarterly Report on
                        Form 10-K, filed with the Commission on December 27, 1997)

  10.7                  Paid-up Software License dated as of January 1, 1993 by and
                        between the Company and Costello and Company, Inc.
                        (Incorporated by reference to the relevant exhibit to the
                        Company's (f/k/a Restrac, Inc.) registration statement on
                        Form S-1, as amended (File No. 333-03521), originally filed
                        with the Commission on May 10, 1996)

 +10.8                  VAR Agreement dated November 27, 1991 between the Company
                        and Verity, Inc. and amendments #1 and #2 thereto
                        (Incorporated by reference to the relevant exhibit to the
                        Company's (f/k/a Restrac, Inc.) registration statement on
                        Form S-1, as amended (File No. 333-03521), originally filed
                        with the Commission on May 10, 1996)

 +10.9                  Value Added Reseller License Agreement dated August 31, 1992
                        by and between The Analytic Sciences Corporation and the
                        Company and all amendments thereto (Incorporated by
                        reference to the relevant exhibit to the Company's (f/k/a
                        Restrac, Inc.) registration statement on Form S-1, as
                        amended (File No. 333-03521), originally filed with the
                        Commission on May 10, 1996)

  10.10                 Stock Purchase Agreement dated July 10, 2000 by and among
                        the Company, Korn/Ferry International, SOFTBANK Capital
                        Partners LP, GMN Investors II, L.P., Aventine International
                        Fund and Bricoleur Partners II, L.P. (Incorporated by
                        reference to the relevant exhibit to the Company's
                        registration statement on Form S-3, as amended (File
                        No. 333-88995), originally filed with the Commission on
                        October 14, 1999)
</TABLE>

                                       29
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.                                     DESCRIPTION
-----------             ------------------------------------------------------------
<S>                     <C>
  10.12                 Form of Director's Indemnification Agreements (Incorporated
                        by reference to the relevant exhibit to the Company's (f/k/a
                        Restrac, Inc.) registration statement on Form S-1, as
                        amended (File No. 333-03521), originally filed with the
                        Commission on May 10, 1996)

  10.13                 Form of Employment Agreement with Senior Management
                        (Incorporated by reference to the relevant exhibit to the
                        Company's (f/k/a Restrac, Inc.) registration statement on
                        Form S-1, as amended (File No. 333-03521), originally filed
                        with the Commission on May 10, 1996)

  10.14                 Form of Addendum to Employment Agreement with Senior
                        Management (Incorporated by reference to the relevant
                        exhibit to the Company's (f/k/a Restrac, Inc.) registration
                        statement on Form S-1, as amended (File No. 333-03521),
                        originally filed with the Commission on May 10, 1996)

  10.15                 Agreement Pertaining to the Election of Directors dated
                        January 5, 1994 by Lars D. Perkins, J. Paul Costello and
                        the Purchasers identified therein (Incorporated by reference
                        to the relevant exhibit to the Company's (f/k/a Restrac,
                        Inc.) registration statement on Form S-1, as amended (File
                        No. 333-03521), originally filed with the Commission on
                        May 10, 1996)

  10.16                 Shareholder Agreement dated January 5, 1994 by and among the
                        Company and the Shareholders identified therein
                        (Incorporated by reference to the relevant exhibit to the
                        Company's (f/k/a Restrac, Inc.) registration statement on
                        Form S-1, as amended (File No. 333-03521), originally filed
                        with the Commission on May 10, 1996)

  10.17                 Agreement Pertaining to Certain Activities dated January 5,
                        1994 by and between Lars D. Perkins and the Company
                        (Incorporated by reference to the relevant exhibit to the
                        Company's (f/k/a Restrac, Inc.) registration statement on
                        Form S-1, as amended (File No. 333-03521), originally filed
                        with the Commission on May 10, 1996)

  10.18                 Termination Agreement dated September 30, 1995 by and among
                        the Company and Borwick International, Inc. and Irving P.
                        Borwick (Incorporated by reference to the relevant exhibit
                        to the Company's (f/k/a Restrac, Inc.) registration
                        statement on Form S-1, as amended (File No. 333-03521),
                        originally filed with the Commission on May 10, 1996)

  10.19                 Finder's Fee and Non-Competition Agreement dated
                        September 30, 1995 between the Company and Irving P. Borwick
                        (Incorporated by reference to the relevant exhibit to the
                        Company's (f/k/a Restrac, Inc.) registration statement on
                        Form S-1, as amended (File No. 333-03521), originally filed
                        with the Commission on May 10, 1996)

  10.22                 Lease agreement dated November 12, 1996 between Boston
                        Properties, Inc. and the Company (Incorporated by reference
                        to the relevant exhibit to the Company's (f/k/a Restrac,
                        Inc.) Quarterly Report on Form 10-K, filed with the
                        Commission on December 27, 1997)

 +10.24                 Amendment #3 to VAR Agreement dated November 27, 1991,
                        between the Company and Verity, Inc. (Incorporated by
                        reference to the relevant exhibit to the Company's (f/k/a
                        Restrac, Inc.) Quarterly Report on Form 10-K, filed with the
                        Commission on December 27, 1996)

 +10.25                 Amendment #4 to VAR Agreement dated November 27, 1991,
                        between the Company and Verity, Inc. (Incorporated by
                        reference to the relevant exhibit to the Company's (f/k/a
                        Restrac, Inc.) Quarterly Report on Form 10-K, filed with the
                        Commission on December 29, 1998)
</TABLE>

                                       30
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.                                     DESCRIPTION
-----------             ------------------------------------------------------------
<S>                     <C>
 +10.26                 VAR Agreement dated June 25, 1998, between the Company and
                        Prime Recognition Corporation (Incorporated by reference to
                        the relevant exhibit to the Company's (f/k/a Restrac, Inc.)
                        Quarterly Report on Form 10-K, filed with the Commission on
                        December 29, 1998)

 +10.27                 Software and Trademark License Agreement dated November 18,
                        1998 between the Company, Amazon.com, Inc. and Junglee
                        Corporation (Incorporated by reference to the relevant
                        exhibit to the Company's (f/k/a Restrac, Inc.) Quarterly
                        Report on Form 10-Q, filed with the Commission on
                        February 16, 1999)

  10.28                 Amended and Restated Restrac, Inc. 1996 Stock Option and
                        Grant Plan (Incorporated by reference to the relevant
                        exhibit to the Company's (f/k/a Restrac, Inc.) Proxy
                        Statement, filed with the Commission on January 7, 1998)

  10.29                 Amended and Restated Restrac, Inc. 1996 Employee Stock
                        Purchase Plan (Incorporated by reference to the relevant
                        exhibit to the Company's (f/k/a Restrac, Inc.) Proxy
                        Statement, filed with the Commission on January 7, 1998)

  10.30                 Asset purchase agreement dated December 13, 1999 by and
                        among the Company, Human Resources Sites International, Inc.
                        and the Stockholders (Incorporated by reference to the
                        relevant exhibit to the Company's Quarterly Report on
                        Form 10-Q as amended, originally filed with the Commission
                        on February 11, 2000)

  10.31                 Amended and Restated Restrac, Inc. 1996 Stock Option and
                        Grant Plan (Incorporated by reference to the relevant
                        exhibit to the Company's Proxy Statement, filed with the
                        Commission on January 24, 2000)

  21.1                  Subsidiaries of registrant (Incorporated by reference to the
                        relevant exhibit to the Company's (f/k/a Restrac, Inc.)
                        Quarterly Report on Form 10-Q, filed with the Commission on
                        December 27, 1997)

  23.1                  Consent of PricewaterhouseCoopers LLP

  23.2                  Consent of Arthur Andersen LLP

  27.1                  Financial Data Schedule.
</TABLE>

    + Confidential treatment requested as to portions of this document.

    (b) Report on Form 8-K.

    On July 18, 2000 the Company filed a Form 8-K to report under item 4 changes
in the registrant's certifying accountant.

                                       31
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on this 12th day of
January 2001.

<TABLE>
<S>                                                    <C>  <C>
                                                       WEBHIRE, INC.

                                                       By:             /s/ MARTIN J. FAHEY
                                                            -----------------------------------------
                                                                         Martin J. Fahey
                                                              PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

    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.

<TABLE>
<CAPTION>
                   SIGNATURE                                    TITLE                       DATE
                   ---------                                    -----                       ----
<C>                                               <S>                                 <C>
              /s/ MARTIN J. FAHEY                 Director, President and Chief
     --------------------------------------         Executive Officer                 January 12, 2001
                Martin J. Fahey                     (Principal Executive Officer)

             /s/ STEPHEN D. ALLISON               Chief Financial Officer (Principal
     --------------------------------------         Financial Officer and Principal   January 12, 2001
               Stephen D. Allison                   Accounting Officer)

              /s/ LARS D. PERKINS
     --------------------------------------       Chairman of the Board               January 12, 2001
                Lars D. Perkins

           /s/ RUSSELL J. CAMPANELLO
     --------------------------------------       Director                            January 12, 2001
             Russell J. Campanello

              /s/ J. PAUL COSTELLO
     --------------------------------------       Director                            January 12, 2001
                J. Paul Costello

               /s/ CHARLES R. LAX
     --------------------------------------       Director                            January 12, 2001
                 Charles R. Lax

               /s/ PETER L. DUNN
     --------------------------------------       Director                            January 12, 2001
                 Peter L. Dunn
</TABLE>

                                       32
<PAGE>
                                 WEBHIRE, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Report of Independent Public Accountants....................    F-2

Report of Independent Public Accountants....................    F-3

Consolidated Balance Sheets as of September 30, 2000 and
  1999......................................................    F-4

Consolidated Statements of Operations for the Years Ended
  September 30, 2000, 1999 and 1998.........................    F-5

Consolidated Statements of Stockholders' Equity for the
  Years Ended September 30, 2000, 1999 and 1998.............    F-6

Consolidated Statements of Cash Flows for the Years Ended
  September 30, 2000, 1999 and 1998.........................    F-7

Notes to Consolidated Financial Statements..................    F-8
</TABLE>

                                      F-1
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of Webhire, Inc.:

    In our opinion, the accompanying consolidated balance sheet as of
September 30, 2000 and the related consolidated statements of operations,
stockholders' equity and of cash flows present fairly, in all material respects,
the financial position of Webhire, Inc. and its subsidiaries at September 30,
2000, and the results of their operations and their cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America. 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 audit. We conducted our audit of these
statements in accordance with auditing standards generally accepted in the
United States of America, which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

/s/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
October 30, 2000, except for the information presented in
paragraph one and two of Note 15 for which the dates are
December 29, 2000 and January 11, 2001, respectively

                                      F-2
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of Webhire, Inc.:

    We have audited the accompanying consolidated balance sheets of
Webhire, Inc., as of September 30, 1999, and the related consolidated statements
of operations, stockholders' equity and cash flows for each of the two years in
the period ended September 30, 1999. These consolidated financial statements and
schedule referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and schedule 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, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Webhire, Inc. as of September 30, 1999, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
September 30, 1999, in conformity with generally accepted accounting principles.

    Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. Schedule II is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole for each of the two years in the period
ended December 31, 1999 and 1998.

/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 21, 1999

                                      F-3
<PAGE>
                                 WEBHIRE, INC.
                          CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
                           ASSETS
Current Assets:
  Cash and cash equivalents.................................  $12,135    $20,126
  Short-term investments....................................    2,410         --
  Accounts and installments receivable, less allowance for
    doubtful accounts of $1,587 and $700 at September 30,
    2000 and 1999, respectively.............................    4,772      4,693
  Other current assets......................................    1,684      2,321
  Refundable income taxes...................................       --        700
                                                              -------    -------
      Total current assets..................................   21,001     27,840
                                                              -------    -------
  Long-term installments receivable.........................      153        444
  Property and equipment, net...............................    4,248      4,593
  Acquired technologies, net of accumulated amortization of
    $15,909 and $6,642 at September 30, 2000 and 1999,
    respectively............................................    3,589     10,770
  Intangible assets and goodwill, net of accumulated
    amortization of $1,748 and $0 at September 30, 2000 and
    1999, respectively......................................    4,803         --
  Deferred income taxes.....................................       --      1,068
  Other assets, net.........................................      509        643
                                                              -------    -------
      TOTAL ASSETS..........................................  $34,303    $45,358
                                                              =======    =======

            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of capital lease obligations..............  $   254    $   578
  Convertible notes payable.................................    3,425         --
  Accounts payable..........................................    1,504      1,922
  Accrued expenses..........................................    4,502      3,150
  Deferred revenue..........................................    8,145      5,342
                                                              -------    -------
      Total current liabilities.............................   17,830     10,992
                                                              -------    -------
Deferred rent...............................................      176        228
                                                              -------    -------
Capital lease obligations...................................       --        122
                                                              -------    -------
Commitments
Stockholders' Equity:
  Preferred stock, $.01 par value--Authorized--5,000,000
    shares, Issued and outstanding--none at September 30,
    2000 and 1999...........................................       --         --
  Common stock, $.01 par value--Authorized--30,000,000
    shares, Issued--22,109,971 and 15,089,067 shares at
    September 30, 2000 and 1999, respectively,
    outstanding--21,423,071 and 14,402,167 shares at
    September, 30, 2000 and 1999, respectively..............      221        151
  Additional paid-in capital................................   68,763     49,353
  Treasury stock, at cost--686,900 shares at September 30,
    2000 and 1999...........................................     (831)      (831)
  Accumulated deficit.......................................  (51,856)   (14,657)
                                                              -------    -------
      Total stockholders' equity............................   16,297     34,016
                                                              -------    -------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............  $34,303    $45,358
                                                              =======    =======
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.

                                      F-4
<PAGE>
                                 WEBHIRE, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                               YEARS ENDED SEPTEMBER 30,
                                                         --------------------------------------
                                                            2000          1999          1998
                                                         -----------   -----------   ----------
<S>                                                      <C>           <C>           <C>
Revenue:
  Product revenue......................................  $     4,110   $     7,755   $   16,826
  Services revenue--Enterprise.........................       10,764        12,484       11,912
  Services revenue--Internet...........................        9,930         5,056        2,117
                                                         -----------   -----------   ----------
      Total revenue....................................       24,804        25,295       30,855
                                                         -----------   -----------   ----------
Cost of Revenue:
  Product revenue......................................        1,033           706          631
  Services revenue--Enterprise.........................        4,235         5,580        6,347
  Services revenue--Internet...........................       10,303         4,068        2,023
  Non-cash write-off of other assets...................          284            --           --
  Amortization of acquired technologies................        9,267         6,642           --
                                                         -----------   -----------   ----------
      Total cost of revenue............................       25,122        16,996        9,001
                                                         -----------   -----------   ----------
Gross profit...........................................         (318)        8,299       21,854
                                                         -----------   -----------   ----------
Operating Expenses:
  Research and development.............................       12,191         7,798        5,588
  Sales and marketing..................................       13,066        11,446       10,613
  General and administrative...........................        8,256         6,297        4,322
  Non-cash write-off of other assets...................        1,000            --           --
  Amortization of intangible assets....................        1,748            --           --
                                                         -----------   -----------   ----------
      Total operating expenses.........................       36,261        25,541       20,523
                                                         -----------   -----------   ----------
(Loss) income from operations..........................      (36,579)      (17,242)       1,331
Other income, net......................................          545           455          593
                                                         -----------   -----------   ----------
(Loss) income before provision (benefit) for income
  taxes................................................      (36,034)      (16,787)       1,924
Provision (benefit) for income taxes...................        1,165          (568)         577
                                                         -----------   -----------   ----------
Net (loss) income......................................  $   (37,199)  $   (16,219)  $    1,347
                                                         ===========   ===========   ==========

Basic and diluted net (loss) income per common share...  $     (2.39)  $     (1.62)  $      .16
                                                         ===========   ===========   ==========
Basic weighted average number of common shares
  outstanding..........................................   15,540,721    10,004,662    8,273,177
                                                         ===========   ===========   ==========
Diluted weighted average number of common shares
  outstanding..........................................   15,540,721    10,004,662    8,517,770
                                                         ===========   ===========   ==========
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.

                                      F-5
<PAGE>
                                 WEBHIRE, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                              COMMON STOCK                       TREASURY STOCK      (ACCUMULATED
                                          --------------------   ADDITIONAL   --------------------     DEFICIT)         TOTAL
                                           NUMBER     $.01 PAR    PAID-IN      NUMBER                  RETAINED     STOCKHOLDERS'
                                          OF SHARES    VALUE      CAPITAL     OF SHARES     COST       EARNINGS        EQUITY
                                          ---------   --------   ----------   ---------   --------   ------------   -------------
<S>                                       <C>         <C>        <C>          <C>         <C>        <C>            <C>
Balance, September 30, 1997.............    8,852       $ 89      $19,067        687       $(831)      $    215       $ 18,540
Exercise of common stock options........      122          1          254         --          --             --            255
Employee stock purchase plan stock
  issuance..............................       49         --          181         --          --             --            181
Net income..............................       --         --           --         --          --          1,347          1,347
                                           ------       ----      -------        ---       -----       --------       --------
Balance, September 30, 1998.............    9,023         90       19,502        687        (831)         1,562         20,323
Exercise of common stock options........       90          1          356         --          --             --            357
Employee stock purchase plan stock
  issuance..............................       34         --          104         --          --             --            104
Compensation expense on stock options...       --         --           49         --          --             --             49
Issuance of common stock in connection
  with acquired technologies............    1,982         20       10,226         --          --             --         10,246
Issuance of common stock in connection
  with private placement, net of
  issuance costs of $1,017..............    3,960         40       18,943         --          --             --         18,983
Stock-based consideration...............       --         --          173         --          --             --            173
Net loss................................       --         --           --         --          --        (16,219)       (16,219)
                                           ------       ----      -------        ---       -----       --------       --------
Balance, September 30, 1999.............   15,089        151       49,353        687        (831)       (14,657)        34,016
Exercise of common stock options........      183          2          773         --          --             --            775
Employee stock purchase plan stock
  issuance..............................       30         --          174         --          --             --            174
Acquisition of technologies and
  intangible assets.....................       --         --        3,641         --          --             --          3,641
Issuance of common stock in connection
  with private placement, net of
  issuance costs of $1,121..............    6,808         68       14,811         --          --             --         14,879
Stock-based consideration...............       --         --           11         --          --             --             11
Net loss................................       --         --           --         --          --        (37,199)       (37,199)
                                           ------       ----      -------        ---       -----       --------       --------
Balance, September 30, 2000.............   22,110       $221      $68,763        687       $(831)      $(51,856)      $ 16,297
                                           ======       ====      =======        ===       =====       ========       ========
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.

                                      F-6
<PAGE>
                                 WEBHIRE, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                YEARS ENDED SEPTEMBER 30,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Cash Flows from Operating Activities:
  Net (loss) income.........................................  $(37,199)  $(16,219)  $ 1,347
Adjustments to reconcile net (loss) income to net cash (used
  in) provided by operating activities--
  Depreciation and amortization.............................    13,687      8,754     1,694
  Amortization of stock-based consideration.................        11        173        --
  Provision for doubtful accounts...........................     1,453        802       495
  Non-cash write-off of other assets........................     1,284         --        --
  Deferred income taxes, net................................     1,068       (187)       --
  Deferred rent.............................................       (52)        33        23
  Compensation expense on stock options and warrant
    grants..................................................        --         49        --
  Changes in assets and liabilities--
    Accounts and installments receivable....................    (1,531)     1,787    (2,647)
    Other current assets....................................      (647)      (602)     (665)
    Refundable income taxes.................................       700       (565)      813
    Long-term installments receivable.......................       291        137      (581)
    Accounts payable........................................      (418)       123       340
    Accrued expenses........................................     1,352       (122)      749
    Deferred revenue........................................     2,803       (139)    1,397
    Accrued income taxes....................................        --       (211)      211
                                                              --------   --------   -------
      Net cash (used in) provided by operating activities...   (17,198)    (6,187)    3,176
                                                              --------   --------   -------
Cash Flows from Investing Activities:
  Purchases of acquired technologies........................    (1,570)    (7,167)       --
  Purchases of property and equipment.......................    (2,328)    (3,191)   (1,278)
  Maturities and purchases of short-term investments, net...    (2,410)     6,664     2,746
  Maturities and purchases of long-term investments, net....        --        893      (893)
  Change in other assets....................................       134        149       (16)
                                                              --------   --------   -------
      Net cash (used in) provided by investing activities...    (6,174)    (2,652)      559
                                                              --------   --------   -------
Cash Flows from Financing Activities:
  Payments of capital lease obligations.....................      (446)      (251)     (144)
  Proceeds from exercise of common stock options............       774        357       255
  Proceeds from employee stock purchase plan stock
    issuance................................................       174        104       181
  Proceeds from issuance of common stock in connection with
    private placement, net of issuance costs................    14,879     18,983        --
                                                              --------   --------   -------
      Net cash provided by financing activities.............    15,381     19,193       292
                                                              --------   --------   -------
Net (decrease) increase in Cash and Cash Equivalents........    (7,991)    10,354     4,027
Cash and Cash Equivalents, beginning of period..............    20,126      9,772     5,745
                                                              --------   --------   -------
Cash and Cash Equivalents, end of period....................  $ 12,135   $ 20,126   $ 9,772
                                                              ========   ========   =======

Supplemental Disclosure of Cash Flow Information:
  Cash paid during the period for
    Interest................................................  $     15   $     13   $    19
                                                              --------   --------   -------
    Income taxes............................................  $      9   $    395   $   379
                                                              --------   --------   -------

Supplemental Disclosure of Noncash Investing Activities:
  Acquisition of equipment under capital lease
    obligations.............................................  $     --   $    546   $    --
                                                              --------   --------   -------

Supplemental Disclosure of Noncash Financing Activities:
  Issuance of common stock in connection with Junglee
    Investment..............................................  $     --   $  8,529   $    --
                                                              --------   --------   -------
  Issuance of common stock in connection with HireWorks
    acquisition.............................................  $     --   $  1,717   $    --
                                                              --------   --------   -------
  Issuance of convertible notes and beneficial conversion
    feature in connection with HR Sites acquisition.........  $  7,066   $     --   $    --
                                                              --------   --------   -------
  Issuance of common stock warrants.........................  $     11   $    173   $    --
                                                              ========   ========   =======
</TABLE>

  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                  STATEMENTS.

                                      F-7
<PAGE>
                                 WEBHIRE, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(1) DESCRIPTION OF BUSINESS

    The Company designs, develops, markets, implements and supports human
resource staffing software and services to automate the recruitment, selection
and placement of an organization's workforce. The Company's staffing software
enables organizations to strategically manage their human capital by reducing
hiring and placement costs, decreasing time to fill positions and providing more
effective skills management and worker deployment. The Company's products
provide human resource departments with solutions to quickly and efficiently
build and search comprehensive "pools" of resumes to find the workers they need,
while also managing the workflow of the staffing process.

    Effective June 1, 1999, the Company effected a name change from
Restrac, Inc. to Webhire, Inc.

    The Company currently anticipates that its available cash will be sufficient
to meet its anticipated working capital and capital expenditure requirements
through fiscal 2001. However, the Company may need to raise additional capital
to meet its needs in the longer term to fund more rapid expansion to develop new
services and to enhance existing services in response to competitive pressures,
and to acquire complementary services, businesses or technologies. In the event
its operations are not profitable or do not generate sufficient cash to fund the
business, or if the Company fails to receive money to meet its obligations, the
Company may have to substantially cut back its level of operations. These
reductions could, in turn, affect its relationships with its strategic partners
and customers and threaten its ability to continue as an ongoing concern. If the
Company raises additional funds through further issuance of equity or
convertible debt securities, the percentage of ownership of its current
stockholders will be reduced and such securities may have rights, preferences
and privileges senior to those of its current stockholders. In addition, the
Company may not be able to obtain such financing on terms favorable to it, if at
all. If adequate funds are not available or are not available on terms favorable
to the Company, its business, results of operations and financial condition
could be materially and adversely affected.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (A)  BASIS OF PRESENTATION

    The accompanying consolidated financial statements include the accounts of
Webhire, Inc. and its wholly-owned subsidiaries (collectively, "the Company").
All significant intercompany transactions and balances have been eliminated.
Certain amounts in the prior period's financial statements have been
reclassified to conform to the current period presentation.

    (B)  USE OF ESTIMATES

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities at the balance sheet date and the reported amounts of
revenues and expenses during the year. Actual results could differ from those
estimates.

                                      F-8
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (C)  REVENUE RECOGNITION

    Product revenue includes software license fees. Services revenue--Enterprise
includes customer maintenance fees and fees for training, installation and
consulting. Services revenue--Internet includes fees for scanning, job posting
services, recruiter training, WEBHIRE JUMPSTART, WEBHIRE RECRUITER, WEBHIRE JOB
POST, WEBHIRE JOB CANOPY, WEBHIRE AGENT (introduced in November 1999), YAHOO!
RESUMES (introduced in December 1999), OUTSOURCED WEBHIRE ENTERPRISE (introduced
in January 2000) and WEBHIRE JOB SITE HOSTING (introduced in April 2000).

    Product revenue from software license fees is recognized upon delivery,
provided there are no significant Company obligations remaining and
collectibility of the revenue is probable. If an acceptance period is allowed,
revenue is recognized upon the earlier of the acceptance or the expiration of
the acceptance period, as defined in the applicable software license agreement.

    Installments receivable represent the present value of future payments
related to the financing of noncancelable term license agreements that provide
for payment in installments over a five-year period. A portion of each
installment is recognized as interest income in the accompanying consolidated
statements of operations.

    Services revenue from customer maintenance fees for post contract support is
recognized ratably over the maintenance term, which is typically twelve months.
Services revenue from training, installation, consulting, resume scanning,
recruiter training and WEBHIRE JUMPSTART is recognized as the related services
are performed. Services revenue from WEBHIRE RECRUITER, WEBHIRE JOBPOST, WEBHIRE
JOB CANOPY, WEBHIRE AGENT, YAHOO! RESUMES, OUTSOURCED WEBHIRE ENTERPRISE and
WEBHIRE JOB SITE HOSTING is recognized ratably over the service term.

    Deferred revenue represents payments received by the Company in advance of
product delivery or service performance.

    (D)  RESEARCH AND SOFTWARE DEVELOPMENT COSTS

    Research and software development costs are generally charged to operations
as incurred. Statement of Financial Accounting Standards (SFAS) No. 86,
ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED OR OTHERWISE
MARKETED, requires capitalization of certain software development costs
subsequent to the establishment of technological feasibility. Based on the
Company's product development process, technological feasibility is established
upon completion of a working model. Costs incurred by the Company between
completion of the working model and the point at which the product is ready for
general release have not been material.

                                      F-9
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (E)  CASH AND CASH EQUIVALENTS

    Cash equivalents are recorded at amortized cost and consist of highly liquid
investments with remaining maturities at date of purchase of three months or
less. At September 30, 2000 and 1999, cash and cash equivalents consisted of the
following:

<TABLE>
<CAPTION>
                                                               SEPTEMBER 30,
                                                            -------------------
                                                              2000       1999
                                                            --------   --------
<S>                                                         <C>        <C>
Cash and money market funds...............................  $   577    $20,126
Commercial paper..........................................   11,558         --
                                                            -------    -------
                                                            $12,135    $20,126
                                                            =======    =======
</TABLE>

    (F)  SHORT-TERM INVESTMENTS

    The Company classifies its short-term investments as available-for-sale. At
September 30, 2000 and 1999, the Company had short-term investments of $2,410
and $0, respectively. Realized and unrealized gains and losses for the periods
presented were not material.

    (G)  OTHER CURRENT ASSETS

    Other current assets primarily consist of prepaid operating expenses. The
Company capitalizes prepaid expenses and amortizes them over the applicable
period of their use. Prepaid expenses amounted to $1,638 and $2,286 at
September 30, 2000 and 1999, respectively.

    (H)  PROPERTY AND EQUIPMENT

    The Company records property and equipment at cost and provides for
depreciation on a straight-line basis over the estimated useful lives of the
assets, as follows:

<TABLE>
<CAPTION>
                                                                                SEPTEMBER 30,
                                                       ESTIMATED             -------------------
ASSET CLASSIFICATION                                  USEFUL LIFE              2000       1999
--------------------                          ----------------------------   --------   --------
<S>                                           <C>                            <C>        <C>
Computer and office equipment...............          3 -- 5 Years           $10,195     $8,308
Software....................................            3 Years                1,803      1,499
Furniture and fixtures......................          3 -- 7 Years               641        636
Leasehold improvements......................         Life of Lease               458        348
Equipment under capital lease...............            3 Years                  568        546
                                                                             -------     ------
                                                                              13,665     11,337
Accumulated depreciation....................                                  (9,417)    (6,744)
                                                                             -------     ------
                                                                             $ 4,248     $4,593
                                                                             =======     ======
</TABLE>

    Depreciation expense for the years ended September 30, 2000, 1999 and 1998
amounted to approximately $2,673, $2,112 and $1,694, respectively.

                                      F-10
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (I)  INTANGIBLE ASSETS

    Intangible assets are stated at cost and amortized using the straight-line
method over the assets' estimated useful lives, which range from two to five
years. The carrying amount of long-lived and intangible assets are periodically
reviewed by management to determine if facts and circumstances suggest that such
amount may be impaired.

    (J)  INCOME TAXES

    The Company accounts for income taxes in accordance with SFAS No. 109,
ACCOUNTING FOR INCOME TAXES. Under SFAS No. 109, a deferred tax asset or
liability is measured by the currently enacted tax rates applied to the
differences between the financial statement and tax bases of assets and
liabilities.

    (K)  CONCENTRATION OF CREDIT RISK

    The Company has no significant off-balance-sheet concentration of credit
risk such as foreign exchange contracts, option contracts or other foreign
hedging arrangements. The Company places its cash, cash equivalents and short-
and long-term investments in highly rated institutions or securities. The
Company's accounts receivable credit risk is not concentrated within any
geographical area and no single customer accounts for greater than 10% of total
revenue.

    (L)  NET (LOSS) INCOME PER SHARE

    SFAS No. 128, EARNINGS PER SHARE, establishes standards for computing and
presenting earnings per share and applies to entities with publicly held common
stock or potential common stock. In accordance with SFAS No. 128, basic net
(loss) income per share for 2000, 1999 and 1998 is calculated by dividing net
(loss) income by the weighted average number of common shares outstanding for
those periods. Diluted net (loss) income per share is calculated by dividing net
(loss) income by the diluted weighted average number of common shares
outstanding for all periods presented. The following table reconciles the
weighted average common shares outstanding to the shares used in computation of
diluted weighted average common shares outstanding:

<TABLE>
<CAPTION>
                                                         YEARS ENDED SEPTEMBER 30,
                                                    -----------------------------------
                                                       2000         1999        1998
                                                    ----------   ----------   ---------
<S>                                                 <C>          <C>          <C>
Weighted average common shares outstanding........  15,540,721   10,004,662   8,273,177
Dilutive effect of options, using the treasury
  stock method....................................          --           --     244,593
                                                    ----------   ----------   ---------
Diluted weighted average common shares
  outstanding.....................................  15,540,721   10,004,662   8,517,770
</TABLE>

    As of September 30, 2000, 1999 and 1998, 2,534,141, 1,621,130 and 356,250
potential common shares were outstanding, respectively, but not included in the
above calculation, as their effect would have been antidilutive.

                                      F-11
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (M)  STOCK-BASED COMPENSATION

    SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, requires the
measurement of the fair value of stock options granted to employees to be
included in the statement of operations or disclosed in the notes to the
consolidated financial statements. The Company determined that it will continue
to account for employee stock-based compensation under Accounting Principles
Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES and related
interpretations, and elect the disclosure only alternative under SFAS No. 123.
The Company accounts for options granted to non-employees at fair value as
prescribed in SFAS No. 123.

    (N)  RECENT ACCOUNTING STANDARDS

    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No.133 ("SFAS 133"), ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES. This statement establishes accounting and
reporting standards for derivative instruments, including some derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. The Company will adopt SFAS 133 in
Fiscal 2001, in accordance with SFAS 137, which deferred the effective date of
SFAS 133. The adoption of this standard in Fiscal 2001 is not expected to have a
material impact on the Company's consolidated financial statements.

    In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin No. 101 ("SAB 101"), REVENUE RECOGNITION IN FINANCIAL
STATEMENTS. This bulletin summarizes some of the Staff's views in applying
generally accepted accounting principles to revenue recognition in financial
statements. The Staff is providing this guidance due, in part, to the large
number of revenue recognition issues that registrants encounter. SAB 101 was
delayed by the issuance of SAB 101A on March 27, 2000 and SAB 101B on June 26,
2000; it must be adopted by the fourth quarter of the fiscal year beginning
after December 15, 1999. The Company will adopt SAB 101 in Fiscal 2001 and does
not expect its adoption to have a material impact on the Company's consolidated
financial statements.

    In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44 ("FIN 44"), ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING
STOCK COMPENSATION--AN INTERPRETATION OF APB OPINION NO. 25. FIN 44 clarifies
the application of APB No. 25 to certain issues including: the definition of an
employee for purposes of applying APB Opinion No. 25; the criteria for
determining whether a plan qualifies as a noncompensatory plan; the accounting
consequences of various modifications to the terms of previously fixed stock
options or awards; and the accounting for the exchange of stock compensation
awards in a business combination. FIN 44 is effective July 1, 2000, but certain
conclusions in FIN 44 are applicable retroactively to specific events occurring
after either December 15, 1998 or January 12, 2000. The Company does not expect
the application of FIN 44 to have a material impact on the Company's financial
position or results of operations.

                                      F-12
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (O)  FINANCIAL INSTRUMENTS

    The estimated fair value of the Company's financial instruments, which
include cash equivalents, short- and long-term investments, accounts and
installments receivable, accounts payable and debt, approximates their carrying
value.

(3) PRIVATE PLACEMENT OF COMMON STOCK

    On July 19, 1999, the Company entered into a stock purchase agreement with
SOFTBANK Capital Partners LP and its affiliates (collectively, "SOFTBANK"),
pursuant to which SOFTBANK agreed to purchase in a private placement (the
"Private Placement") 3,960,396 shares of common stock at a price per share of
$5.05, for an aggregate purchase price of $20 million. The purchase price of
$5.05 per share represented the average closing price of the common stock for
the twenty trading days immediately preceding the date the parties entered into
the stock purchase agreement. The Private Placement was consummated on
September 24, 1999 upon the approval of the stockholders of the Company.

    Also on July 19, 1999, SOFTBANK entered into a separate stock purchase
agreement with Amazon.com, Inc. ("Amazon") to purchase 1,670,273 shares of the
common stock of Webhire held by Amazon.

    On July 10, 2000, the Company entered into a stock purchase agreement with
Korn/Ferry International, SOFTBANK, GMN Investors II, L.P., Aventine
International Fund and Bricoleur Partners II, L.P. whereby the Company agreed to
issue in a private placement an aggregate of 6,808,512 shares of Common Stock at
a price per share of $2.35, for an aggregate purchase price of approximately
$14.9 million net of issuance costs of approximately $1.1 million. The private
placement was consummated between August 2, 2000 and August 24, 2000 upon
receipt of the funds.

(4)  YAHOO! INVESTMENT AND SERVICE AGREEMENT

    Yahoo! Inc., a SOFTBANK affiliate ("Yahoo!"), agreed to participate in the
Private Placement with the purchase of 274,726 of the Private Placement shares
of common stock of Webhire.

    Additionally, Webhire and Yahoo! have entered into a service agreement
whereby, among other things, Webhire provided resume management technology and
services to Yahoo! to create an online resume database.

    In connection with this service agreement, the Company granted to Yahoo!
warrants to purchase 199,218 shares of common stock at $4.95 per share. The
warrants were accounted for under the variable method of accounting. The
warrants fully vested on June 3, 2000. At June 3, 2000 and September 30, 1999,
the fair value of the warrants was estimated at approximately $184 and $1,381,
respectively, using the Black-Scholes option pricing model. The Company
recognized the expense related to the warrants over the vesting period. For
Fiscal 2000 and 1999 the Company recorded a charge of $11 and $173,
respectively, in sales and marketing costs in the accompanying consolidated
statement of operations.

                                      F-13
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(5)  EQUITY INVESTMENTS

    The Company holds a 43% ownership interest in refer.com, inc. ("Refer")
accounted for under the equity method. During fiscal 2000 the Company recorded a
loss of $5 in other income, net which represents its investment to date in
Refer. Refer is an online job and networking service that pays cash rewards to
people who help their friends and business contacts find new jobs. The Company
and idealab!, a creator and operator of Internet businesses, are the principal
stockholders in Refer.

    On June 12, 2000, the Company entered into a joint venture agreement with
@viso to form Webhire Europe B.V. which will operate an Internet based workforce
recruiting services business in Europe. The Company holds a 51% ownership
interest and has committed to a net $500 cash investment in Webhire Europe B.V.
The balance sheet and statement of operation accounts which are consolidated in
the Company's financial statements along with the related minority interest in
Webhire Europe B.V. are immaterial.

(6)  ACQUIRED TECHNOLOGIES

    On November 18, 1998, the Company acquired certain assets and assumed
certain obligations of the Junglee Employment Services business of Amazon.com.
In exchange for cash of $6 million and 1,670,273 shares of Webhire common stock
valued at $8.5 million, Webhire received exclusive rights to Junglee's online
recruitment technologies. Webhire also acquired Junglee's Internet production
sites and assumed management and development of the employer and career site
business relationships established by Junglee Corp. ("Junglee"). Webhire did not
retain any Junglee personnel in connection with the transaction. The investment
is being amortized over two years.

    On July 9, 1999, the Company acquired 100% of the outstanding capital stock
of HireWorks, Inc. in exchange for cash of $385 and 312,072 shares of common
stock of Webhire valued at approximately $1.8 million. HireWorks, Inc. is the
developer of an Internet-based candidate search agent now called WEBHIRE AGENT.
The acquisition was accounted for as a purchase and accordingly the results of
operations from the date of acquisition are included in the Company's
consolidated statement of operations. The purchase price was allocated to the
technology acquired and will be amortized over two years. HireWorks Inc.'s
assets, liabilities and operations were not significant to the Company.

    On December 13, 1999, the Company acquired certain assets of Human Resources
Sites International, Inc. ("HR Sites") in exchange for $1,500 in cash plus
junior subordinated convertible promissory notes ("Notes") with a face amount
totaling $3,425. HR Sites was the developer of an Internet job-posting platform
that provided online job posting connections to more than 2,000 career sites and
Internet news groups. The Notes contain a beneficial conversion feature enabling
the holder to convert the principal and any accrued interest into the Company's
common stock one day prior to the scheduled maturities, or one day prior to
redemption by the Company, at a price of $9.68 per share. The Company may redeem
the Notes at any time on or after January 1, 2000 at their sole discretion. The
Notes are also convertible upon a change in control, as defined. The Company's
common stock price on the dates the Notes were executed at December 13, 1999 was
$17.75. The conversion price is subject to adjustment upon certain anti-dilution
events. The Notes contain the same terms other than differing maturities. The
interest rate on both Notes is 5.6% per annum. The Notes consist of principal
amounts of $2,500 and $925 maturing on December 14, 2000 and March 14, 2001,
respectively. The Company recorded the value ascribed to the beneficial
conversion feature as the

                                      F-14
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(6)  ACQUIRED TECHNOLOGIES (CONTINUED)

difference between the fair value of the Notes of $7,066 and the face amount of
the Notes of $3,425 in additional-paid-in-capital during Fiscal 2000. The total
acquisition consideration amounted to $8,640 including the cash paid of $1,500.
The purchase price was allocated to the following identifiable assets with the
following estimated lives:

<TABLE>
<CAPTION>
                                                          AMOUNT    ESTIMATED LIFE
                                                         --------   --------------
<S>                                                      <C>        <C>
Acquired technology....................................   $2,069    3 years
Non-compete agreements.................................      157    3 years
Customer base..........................................       24    5 years
Fixed Assets...........................................       20    1 year
Excess purchase price over identifiable assets.........    6,370    3 years
                                                          ------
                                                          $8,640
                                                          ======
</TABLE>

(7)  COMMITMENTS AND CONTINGENCIES

    The Company's corporate headquarters are located in Lexington,
Massachusetts, where it currently occupies approximately 43,000 square feet of
office space under a lease expiring in December 2003. The Company also has a
regional sales and service office in Foster City, California, where it occupies
approximately 6,000 square feet, under a lease expiring in January 2002.

    Capital lease obligations consist of amounts due under a software lease
agreement expiring in March 2001. At September 30, 2000, the cost and
accumulated depreciation of the related software was $568 and $237,
respectively.

    Future minimum rental payments as of September 30, 2000 under both the
operating and capital leases, are shown in the following table:

<TABLE>
<CAPTION>
                                                     CAPITAL    OPERATING
                                                      LEASES     LEASES
                                                     --------   ---------
<S>                                                  <C>        <C>
2001...............................................    $260      $1,325
2002...............................................      --       1,122
2003...............................................      --       1,077
2004...............................................      --         449
                                                       ----      ------
                                                        260      $3,973
                                                                 ======
  Less--amounts representing interest..............      (6)
                                                       ----
  Present value of minimum lease payments..........    $254
                                                       ====
</TABLE>

    Aggregate net rental expense included in the accompanying statements of
operations for the fiscal years ended September 30, 2000, 1999 and 1998 is
approximately $1,908, $1,633 and $1,713, respectively.

                                      F-15
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(7)  COMMITMENTS AND CONTINGENCIES (CONTINUED)

    Leases with escalating rents or free rent periods are expensed on a
straight-line basis over the fixed term of the lease. Deferred rent of
approximately $176 and $228 is included in the accompanying consolidated balance
sheets at September 30, 2000 and 1999, respectively.

    The Company is not involved in any pending legal proceedings other than
those arising in the ordinary course of the Company's business. Management
believes that the resolution of these matters will not materially affect the
Company's business or the financial condition of the Company.

(8)  STOCKHOLDERS' EQUITY

    (A)  EMPLOYEE STOCK PURCHASE PLAN

    On May 8, 1996, the Board of Directors authorized the 1996 Employee Stock
Purchase Plan (the Employee Plan). Under the Employee Plan, the Company may
issue up to an aggregate of 400,000 shares of common stock to employees at 85%
of the lower of the fair market value of the common stock on the first or last
day of each six-month purchase period. During fiscal 2000, 1999 and 1998,
29,638, 33,918 and 48,956 shares, respectively, were issued pursuant to the
Employee Plan. On October 2, 2000, 16,463 shares of common stock were issued
pursuant to the Employee Plan.

    (B)  STOCK OPTION PLANS

    The Company has two stock option plans, the 1994 Stock Option Plan (the 1994
Plan) and the 1996 Stock Option and Grant Plan (the 1996 Plan). The 1994 and
1996 Plans enable the Company's Board of Directors to grant nonqualified and
incentive stock options (ISOs) and shares of Common Stock. ISOs are granted at
the then fair market value. Under the terms of the 1994 and 1996 Plans, options
generally vest over four years and expire ten years after the date of grant.

                                      F-16
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(8)  STOCKHOLDERS' EQUITY (CONTINUED)

    The 1994 and 1996 Plans are administered by the Compensation Committee as
appointed by the Board of Directors from time to time. On December 3, 1999, the
Company amended the 1996 Plan to increase the number of shares available for
grant to 3,500,000 shares of common stock. A total of 641,844 shares of common
stock are reserved for issuance under the 1994 Plan as amended.

    Stock option activity for the 1994 and 1996 Plans is as follows:

<TABLE>
<CAPTION>
                                                                              WEIGHTED
                                              NUMBER OF    OPTION PRICE        AVERAGE
                                               SHARES       PER SHARE      PRICE PER SHARE
                                              ---------   --------------   ---------------
<S>                                           <C>         <C>              <C>
Outstanding, September 30, 1997.............  1,003,123    0.44 -  17.00         3.87
  Granted...................................    363,700    5.63 -   8.25         6.15
  Exercised.................................   (121,415)   0.44 -   4.67         2.10
  Canceled..................................   (152,157)   0.44 -   8.25         4.05
                                              ---------   --------------        -----
Outstanding, September 30, 1998.............  1,093,251    0.44 -  17.00         4.80
                                              ---------   --------------        -----
  Granted...................................    732,150    3.63 -  11.13         4.88
  Exercised.................................    (89,734)   0.44 -   6.38         3.98
  Canceled..................................   (313,755)   2.00 -   8.25         4.83
                                              ---------   --------------        -----
Outstanding, September 30, 1999.............  1,421,912    0.44 -  17.00         4.89
                                              ---------   --------------        -----
  Granted...................................  1,569,716    2.34 -  12.50         6.70
  Exercised.................................   (182,754)   0.44 -   9.00         4.24
  Canceled..................................   (473,951)   2.00 -  17.00         6.23
                                              ---------   --------------        -----
Outstanding, September 30, 2000.............  2,334,923   $0.44 - $17.00         5.88
                                              =========   ==============        =====
Available for grant, September 30, 2000.....  1,139,124
                                              =========
</TABLE>

    At September 30, 2000, 1999 and 1998 options exercisable were 641,963,
501,544 and 295,473, respectively.

    The weighted-average fair value per share of the options granted was $5.35,
$4.52 and $4.60 for the years ended September 30, 2000, 1999 and 1998,
respectively.

                                      F-17
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(8)  STOCKHOLDERS' EQUITY (CONTINUED)

    The following table summarizes significant ranges of outstanding and
exercisable options at September 30, 2000.

<TABLE>
<CAPTION>
                     OPTIONS OUTSTANDING                                              OPTIONS EXERCISABLE
--------------------------------------------------------------       -----------------------------------------------------
                                                  WEIGHTED
                                                  AVERAGE               WEIGHTED                               WEIGHTED
      RANGES OF               NUMBER             REMAINING              AVERAGE             NUMBER             AVERAGE
   EXERCISE PRICES          OUTSTANDING       CONTRACTUAL LIFE       EXERCISE PRICE       EXERCISABLE       EXERCISE PRICE
---------------------       -----------       ----------------       --------------       -----------       --------------
<S>                         <C>               <C>                    <C>                  <C>               <C>
       $0.44 - $ 1.97           11,250               4.1                 $ 0.44              11,250             $ 0.44
        1.98 -   3.95        1,078,145               7.8                   3.01             274,940               3.74
        3.96 -   5.92          354,291               6.5                   4.96             220,072               4.92
        5.93 -   7.90          132,956               5.6                   6.33              80,099               6.28
        7.91 -   9.87          290,681               8.3                   9.15              40,216               8.93
        9.88 -  11.85          312,600               8.7                  10.44              10,700              11.08
       11.86 -  13.83          150,000               9.4                  12.50                  --                 --
       15.80 -  17.78            5,000               6.0                  17.00               4,686              17.00
                             ---------                                   ------             -------             ------
                             2,334,923                                   $ 5.88             641,963             $ 4.95
                             =========                                   ======             =======             ======
</TABLE>

    The fair value of the stock awards, including the options granted under the
1994 Plan and the 1996 Plan, was estimated using the Black-Scholes model with
the following weighted average assumptions:

<TABLE>
<CAPTION>
                                                      2000       1999       1998
                                                    --------   --------   --------
<S>                                                 <C>        <C>        <C>
Expected life.....................................  4 years    7 years    7 years
Risk free interest rate...........................     5.82%      5.63%      5.59%
Volatility........................................    113.4%     129.6%      80.0%
Dividend yield....................................      0.0%       0.0%       0.0%
</TABLE>

    The pro forma effect of applying SFAS No. 123 would be as follows:

<TABLE>
<CAPTION>
                                                   2000       1999       1998
                                                 --------   --------   --------
<S>                                              <C>        <C>        <C>
Net (loss) income as reported..................  $(37,199)  $(16,219)  $  1,347
                                                 ========   ========   ========
Pro forma net (loss) income as adjusted........  $(38,861)  $(17,557)  $    320
                                                 ========   ========   ========
Basic and diluted net (loss) income per share
  as reported..................................  $  (2.39)  $  (1.62)  $    .16
                                                 ========   ========   ========
Basic and diluted pro forma net (loss) income
  per share as adjusted........................  $  (2.50)  $  (1.75)  $    .04
                                                 ========   ========   ========
</TABLE>

                                      F-18
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(9)  INCOME TAXES

    The provision (benefit) for income taxes in the accompanying consolidated
statements of operations consists of the following for the fiscal years ended
September 30, 2000, 1999 and 1998:

<TABLE>
<CAPTION>
                                                         2000       1999       1998
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Current--
  Federal............................................   $1,165     $ (400)     $557
  State..............................................       --         --        20
                                                        ------     ------      ----
                                                         1,165       (400)      577
                                                        ------     ------      ----

Deferred--
  Federal............................................       --       (168)       --
  State..............................................       --         --        --
                                                        ------     ------      ----
                                                            --       (168)       --
                                                        ------     ------      ----
      Total provision (benefit)......................   $1,165     $ (568)     $577
                                                        ======     ======      ====
</TABLE>

    The deferred tax amounts as of September 30, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                               2000       1999
                                                             --------   --------
<S>                                                          <C>        <C>
Deferred tax asset--
  Net operating loss carry forward.........................  $14,973     $3,605
  Acquired technology and intangible assets................    5,595      2,302
  Nondeductible reserves...................................      949        750
  Deferred revenue.........................................       --         86
  Buyout of distribution rights............................      133        146
  Fixed assets.............................................      251         --
  Credit carryforwards.....................................      773         --
                                                             -------     ------
      Total gross deferred tax asset.......................   22,674      6,889
Less--Valuation allowance..................................  (22,674)    (5,821)
                                                             -------     ------
  Net deferred tax asset...................................  $    --     $1,068
                                                             =======     ======
Deferred tax liability.....................................  $    --     $   --
                                                             =======     ======
</TABLE>

    As of September 30, 2000, the Company had federal net operating loss ("NOL")
and tax credit carryforwards of approximately $37,239 and $391, respectively,
which can be used to offset future federal and state income tax liabilities and
expire at various dates through 2020. As required by Statement of Accounting
Standards No. 109, management of the Company evaluated positive and negative
evidence bearing upon the realizability of its deferred tax assets, which
comprised principally of net operating loss and deferred revenue carryforwards.
Management has determined that it is more likely than not that the Company will
not recognize the benefits of federal and state deferred tax assets

                                      F-19
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(9)  INCOME TAXES (CONTINUED)

and, as a result, a valuation allowance of approximately $22,674 has been
established at September 30, 2000.

    Of the $37,239 NOL carryforward approximately $1,419 relating to deductions
for exercises of non-qualified stock options and disqualifying dispositions of
incentive stock options will be credited to paid-in capital, if realized.

    Ownership changes, as defined in the Internal Revenue Code, may have limited
the amount of net operating loss carryforwards that can be utilized annually to
offset future taxable income. Subsequent ownership changes could further affect
the limitation in future years.

    The provision (benefit) for income taxes differs from the amount computed by
applying the statutory federal income tax rate as follows:

<TABLE>
<CAPTION>
                                                                   2000          1999          1998
                                                                 --------      --------      --------
<S>                                                              <C>           <C>           <C>
Provision (benefit) at federal statutory rate..............        (34.0)%       (34.0)%       34.0%
Effect of change in valuation allowance....................         41.6          36.9           --
Amortization of intangible assets and other permanent
  items....................................................          1.1            --           --
State income taxes, net of federal benefit.................         (5.5)         (6.3)         6.3
Tax exempt interest income.................................           --            --         (8.3)
Other, net.................................................           --            --         (2.0)
                                                                  ------        ------        -----
      Effective tax rate...................................          3.2%         (3.4)%       30.0%
                                                                  ======        ======        =====
</TABLE>

(10)  EMPLOYEE BENEFIT PLAN

    The Company maintains an employee benefit plan (the Benefit Plan) under
Section 401(k) of the Internal Revenue Code. The Benefit Plan is available to
all full-time U.S. employees. The Benefit Plan allows for employees to make
contributions up to a specified percentage of their compensation. Under the
Benefit Plan, the Company makes discretionary contributions to match 50% of the
employees' contributions up to a maximum annual match of 3% of each employee's
salary. The Company contributed approximately $85, $144 and $154 during the
fiscal years ended September 30, 2000, 1999 and 1998, respectively.

(11)  ACCRUED EXPENSES

    Accrued expenses at September 30, 2000 and 1999 consist of the following:

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Payroll and payroll-related costs...........................   $2,399     $1,979
Other accrued expenses......................................    2,103      1,171
                                                               ------     ------
                                                               $4,502     $3,150
                                                               ======     ======
</TABLE>

                                      F-20
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(12)  OTHER INCOME

    Other income consists of the following:

<TABLE>
<CAPTION>
                                                            2000       1999       1998
                                                          --------   --------   --------
<S>                                                       <C>        <C>        <C>
Interest income.........................................   $ 730       $493       $651
Interest expense........................................    (172)       (13)       (19)
Other...................................................     (13)       (25)       (39)
                                                           -----       ----       ----
                                                           $ 545       $455       $593
                                                           =====       ====       ====
</TABLE>

(13)  BUSINESS SEGMENT INFORMATION

    Effective for the year ended September 30, 1998, the Company adopted SFAS
No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION,
which requires disclosure of financial and descriptive information about the
Company's reportable operating segments. The operating segments reported below
are the segments for which separate financial information is available and for
which operating profit and loss amounts are evaluated regularly by senior
management in deciding how to allocate resources and in assessing performance.

    The Company has two reportable segments: Enterprise software solutions and
Internet and transaction-based solutions, the latter of which started to emerge
in fiscal 1997 with the offering of outsourced services (e.g., resume scanning,
acknowledgement letters) and the research and development activities undertaken
for this segment. The Internet and transaction-based solutions segment provides
outsourced management of private candidate pools via WEBHIRE RECRUITER,
subscription services to public resume pools and job-posting sites, the
job--posting services initiated with the Junglee transaction, resume scanning,
reference checking and other fee-based staffing functions. The enterprise
software solutions segment provides perpetual licenses to the Company's software
products and the related maintenance, training, implementation and consulting
services in support of such licenses.

    The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. Expenses related to general
corporate functions such as Finance and Human Resources and general and
administrative costs such as depreciation, rent and utilities are allocated to
the reportable segments based on relative headcount as a basis of relative
usage. The Company has no intersegment sales and transfers, and does not
allocate assets to the operating segments.

                                      F-21
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(13)  BUSINESS SEGMENT INFORMATION (CONTINUED)

    The Company's reportable segments are strategic business units that offer
different solutions tailored to a customer's needs. They are managed separately
because each business requires different technology and sales and marketing
strategies.

<TABLE>
<CAPTION>
                                                     YEAR ENDED SEPTEMBER 30, 2000:
                                               ------------------------------------
                                               INTERNET AND   ENTERPRISE    TOTAL
                                               TRANSACTIONS    SOFTWARE    COMPANY
                                               ------------   ----------   --------
<S>                                            <C>            <C>          <C>
Revenue......................................    $  9,930       $14,874    $ 24,804
Gross (losses) profits.......................      (9,640)        9,322        (318)
Loss from operations.........................     (36,046)         (533)    (36,579)
Other income, net............................                                   545
                                                                           --------
Loss before income taxes.....................                              $(36,034)
                                                                           ========
</TABLE>

<TABLE>
<CAPTION>
                                                     YEAR ENDED SEPTEMBER 30, 1999:
                                               ------------------------------------
                                               INTERNET AND   ENTERPRISE    TOTAL
                                               TRANSACTIONS    SOFTWARE    COMPANY
                                               ------------   ----------   --------
<S>                                            <C>            <C>          <C>
Revenue......................................    $  5,056       $20,239    $ 25,295
Gross (losses) profits.......................      (5,654)       13,953       8,299
Loss from operations.........................     (16,928)         (314)    (17,242)
Other income, net............................                                   455
                                                                           --------
Loss before income taxes.....................                              $(16,787)
                                                                           ========
</TABLE>

<TABLE>
<CAPTION>
                                                     YEAR ENDED SEPTEMBER 30, 1998:
                                               ------------------------------------
                                               INTERNET AND   ENTERPRISE    TOTAL
                                               TRANSACTIONS    SOFTWARE    COMPANY
                                               ------------   ----------   --------
<S>                                            <C>            <C>          <C>
Revenue......................................    $  2,117       $28,738    $ 30,855
Gross profits................................          94        21,760      21,854
(Loss) income from operations................      (3,196)        4,527       1,331
Other income, net............................                                   593
                                                                           --------
Income before income taxes...................                              $  1,924
                                                                           ========
</TABLE>

                                      F-22
<PAGE>
                                 WEBHIRE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               SEPTEMBER 30, 2000

               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(14)  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                         Q1 2000       Q2 2000       Q3 2000
                                       AS RESTATED   AS RESTATED   AS RESTATED   Q4 2000
                                       -----------   -----------   -----------   --------
<S>                                    <C>           <C>           <C>           <C>
Revenue..............................    $ 6,494       $ 6,283       $ 5,788     $ 6,239
Gross profit (loss)..................        848            95        (1,018)       (243)
Net loss.............................     (8,381)       (9,431)       (9,916)     (9,471)
Net loss per share...................    $  (.58)      $  (.65)      $  (.68)    $  (.51)
</TABLE>

<TABLE>
<CAPTION>
                                           Q1 1999    Q2 1999    Q3 1999    Q4 1999
                                           --------   --------   --------   --------
<S>                                        <C>        <C>        <C>        <C>
Revenue..................................  $ 6,402    $ 6,423    $ 6,146    $ 6,324
Gross profit.............................    3,391      1,970      1,271      1,667
Net loss.................................   (1,850)    (3,890)    (4,950)    (5,529)
Net loss per share.......................  $  (.20)   $  (.39)   $  (.49)   $  (.51)
</TABLE>

(15)  SUBSEQUENT EVENT

    On December 29, 2000, the Company entered into a stock purchase agreement
with @viso Limited ("@viso"), pursuant to which @viso agreed to purchase
1,087,500 shares of common stock for issuance to @viso or its designated
investors at a price per share of $0.92, for an aggregate purchase price of
approximately $1 million. The purchase price of $0.92 per share represents the
average closing price of the common stock for the twenty days ending with the
closing date of this agreement.

    On January 11, 2001, a major investor in the Company, which is a related
party, provided the Company with a written commitment to support the Company's
cash liquidity requirements through September of 2001, up to a maximum of
$5 million, if necessary. In consideration of such commitment, the Company
intends to issue warrants to the investor to purchase 500,000 shares of the
Company's common stock at a price of $1.25 per share.

                                      F-23
<PAGE>
     REPORT OF INDEPENDENT ACCOUNTANTS ON THE FINANCIAL STATEMENT SCHEDULE

To the Board of Directors of Webhire, Inc.:

    Our audit of the consolidated financial statements referred to in our report
dated October 30, 2000 except for the information presented in paragraph one and
two of Note 15, for which the dates are December 29, 2000 and January 11, 2001,
respectively, also included an audit of the financial statement schedule listed
in Item 14 (a)(2) of this Form 10-K. In our opinion, this financial statement
schedule as of and for the year ended September 30, 2000, presents fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

October 30, 2000
<PAGE>
                                                                     SCHEDULE II

                                 WEBHIRE, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
                 YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                      BALANCE,
                                                    BEGINNING OF    CHARGED                   BALANCE,
ALLOWANCE FOR DOUBTFUL ACCOUNTS                         YEAR       TO EXPENSE   WRITE-OFFS   END OF YEAR
-------------------------------                     ------------   ----------   ----------   -----------
<S>                                                 <C>            <C>          <C>          <C>
Year ended September 30, 2000.....................      $700         $1,453        $566         $1,587
Year ended September 30, 1999.....................      $400         $  802        $502         $  700
Year ended September 30, 1998.....................      $320         $  495        $415         $  400
</TABLE>