<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 2, 1998
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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STAFFMARK, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 71-0788538
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 EAST MILLSAP ROAD
FAYETTEVILLE, ARKANSAS 72703
(501) 973-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------------------
GORDON Y. ALLISON, ESQ.
EXECUTIVE VICE PRESIDENT - GENERAL COUNSEL
STAFFMARK, INC.
302 EAST MILLSAP ROAD
FAYETTEVILLE, ARKANSAS 72703
(501) 973-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after this Registration Statement becomes effective on dates, at times and
on terms not currently determined.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plan, check the following box.[x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO PROPOSED PROPOSED AMOUNT OF
TO BE REGISTERED BE REGISTERED MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION FEE
PRICE PER SHARE OFFERING PRICE
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,305,915(1) Shares $17.375(1) $22,690,273.12(1) $6,694(1)
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</TABLE>
(1)Estimated solely for purposes of calculating the registration fee pursuant to
Rule 457(c) based on the average of the high and low prices of the Common Stock
as reported on the Nasdaq National Market on October 1, 1998.
================================================================================
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
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The information in this Prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
- --------------------------------------------------------------------------------
PROSPECTUS SUBJECT TO COMPLETION,
October 1, 1998
1,305,915 SHARES
STAFFMARK, INC. COMMON STOCK
----------------------------
The selling stockholders may sell shares of common stock of StaffMark,
Inc. from time to time on the Nasdaq National Market or in private, negotiated
transactions. The shares will be sold at prices determined by the selling
stockholders. The shares to be sold under this Prospectus were issued by
StaffMark in connection with the acquisition by StaffMark of various businesses
owned by the selling stockholders. We will not receive any of the proceeds from
the sale of the shares by the selling stockholders. We will pay the expenses of
registration of the sale of the shares (except for brokers' commissions and fees
and expenses of advisors to the selling stockholders).
On October 1, 1998, StaffMark had 22,227,238 shares of its common stock
outstanding. The common stock is traded on the Nasdaq National Market under the
symbol "STAF." On October 1, 1998, the last reported sale price of the common
stock on the Nasdaq National Market was $17.00 per share.
Beginning on PAGE 5, we have listed several "RISK FACTORS" which you
should consider. You should read the entire Prospectus carefully before you make
your investment decision.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is October __, 1998.
<PAGE> 3
ADDITIONAL INFORMATION
We file annual, quarterly, and current reports, proxy statements, and
other documents with the SEC. You may read and copy any document we file at the
SEC's public reference room at Judiciary Plaza Building, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the public reference room. The SEC maintains an internet site at
http://www.sec.gov where certain information regarding issuers (including
StaffMark) may be found.
This Prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
Prospectus regarding StaffMark and its common stock, including certain exhibits
and schedules. You can get a copy of the registration statement from the SEC at
the address listed above or from its internet site.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this Prospectus information we
file with it in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information may include documents filed after the date of this
Prospectus which update and supersede the information you read in this
Prospectus. We incorporate by reference the documents listed below, except to
the extent information in those documents is different from the information
contained in this Prospectus, and all future documents filed with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
we terminate the offering of these shares.
<TABLE>
<CAPTION>
SEC Filing
(File No. 0-20971) Period/Filing Date
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<S> <C>
Annual Report on Form 10-K Year ended December 31, 1997
Quarterly Reports on Form 10-Q Quarter ended March 31, 1998
Quarter ended June 30, 1998
Current Reports on Form 8-K Filed on August 18, 1998
Filed on June 19, 1998
Filed on February 23, 1998
Filed on January 23, 1998
Amendments to Form 8-K on Form 8-K/A Filed on January 16, 1998 and related to
November 21, 1997 Form 8-K
Filed on March 16, 1998 and related to
January 23, 1998 Form 8-K
Proxy Statement on Schedule 14A Filed on September 25, 1998
Registration Statement on Form 8-A Filed on September 17, 1996, as amended,
describing the common stock
</TABLE>
You may request a copy of these documents, at no cost, by writing to:
StaffMark, Inc.
302 East Millsap Road
Fayetteville, Arkansas 72703
Attention: Gordon Y. Allison, Executive Vice President-General Counsel
Telephone: (501) 973-6000.
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<PAGE> 4
DESCRIPTION OF STAFFMARK
GENERAL
StaffMark provides diversified staffing, professional, consulting and
solutions services to businesses, professional and service organizations and
governmental agencies. We believe that we are a leading provider of such
services based upon our 1997 revenues (which placed us as the 15th largest
United States public staffing company) and 1997 and 1998 revenue growth. Since
our initial public offering in October 1996, we have grown both internally and
through the acquisition of over 30 staffing and professional service companies.
We believe that a balance of internal growth and selective acquisitions will
best allow us to capitalize on our growth opportunities. StaffMark operates over
220 branches located in 30 states and in Canada, as well as representative
offices in the United Kingdom, Thailand and South Africa. Our principal
executive offices are located at 302 E. Millsap Road, Fayetteville, Arkansas
72703, telephone (501) 973-6000.
StaffMark's principal operations are organized into two
divisions, Professional/Informational Technology and Commercial Staffing
Services. The information technology platform in the Professional/IT division
operates under the IntelliMark(TM) brand name, providing information technology
("IT") business solutions, including staffing, help desk and distributed
services, network services development, systems integration, training, and
enterprise resource planning. The professional platform in the Professional/IT
division provides lawyers and legal support under the brand name "Strategic
Legal Resources" in addition to providing accountants and clinical trial support
services. The Professional/IT division generated approximately 27.3% and 39.2 %
of StaffMark's revenues for the year ended December 31, 1997 and for the six
months ended June 30, 1998, respectively. The Commercial division provides both
office and light industrial staffing. This division generated approximately
72.7% and 60.8% of StaffMark's revenues for the year ended December 31, 1997 and
for the six months ended June 30, 1998, respectively.
BUSINESS STRATEGY
StaffMark's overall business strategy is to increase its revenue and
enhance its profitability by providing the timely delivery of quality services
to its customers, in conjunction with providing opportunities to its employees,
temporary associates, professionals and consultants. We implement this overall
business strategy through a combination of strategies, which can be divided into
three categories: (1) operating strategy; (2) internal growth strategy; and (3)
acquisition and integration strategy.
Operating Strategy. Our operating strategy involves six key areas:
o develop long-term relationships with our customers as their
primary provider of staffing and professional services;
o adopt on a company-wide basis the best practices, policies and
procedures of our existing operations and newly acquired
companies;
o increase operating efficiencies of StaffMark and our acquired
companies by combining general and administrative functions and
reducing or eliminating redundant functions;
o maintain a decentralized, entrepreneurial environment that rewards
performance and attracts and retains self-motivated,
achievement-oriented individuals;
o establish service platforms and brand name identification; and
o utilize available capital resources, including equity, debt, and a
combination thereof, in the most efficient manner.
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Internal Growth Strategy. Our internal growth strategy consists of
three key components:
o focusing on further penetration in existing geographic markets by
enhancing and expanding new services and opening new branches;
o expanding and cross-developing the Professional/IT services and
increasing the percentage of revenues and gross profits derived
from this division; and
o increasing Vendor-on Premises relationships which we believe
provide a more stable source of revenues and attractive operating
profits.
Acquisition and Integration Strategy. In our acquisition and
integration strategy, we pursue acquisitions that would provide one or
more of the following benefits:
o expand the geographic scope of our operations;
o increase our penetration of existing markets;
o increase the scope of our operations into complementary or new
service offerings;
o include strong management, profitable operating results, or strong
local and regional presence; and/or
o expand the percentage of revenues generated by the Professional/IT
division.
RECENT EVENT
On August 18, 1998, StaffMark entered into an agreement to merge with
Robert Walters plc, a corporation registered under the Companies Act 1985 of
Great Britain. Robert Walters plc is a London-based international recruitment
consultancy, operating from 14 cities in 10 countries. They specialize in
placing accounting, finance, and IT professionals with clients on a contract,
temporary, and permanent basis. The merger with Robert Walters plc is consistent
with our overall business strategy and complements our existing business lines.
It provides us with a value-added, high margin international professional
services component with a significant presence in the United Kingdom. If the
acquisition is approved by the stockholders of both StaffMark and Robert Walters
plc and if other conditions relating to this transaction are satisfied or
waived, Robert Walters plc would become a wholly-owned subsidiary of StaffMark.
As consideration for the acquisition, StaffMark would issue approximately 6.69
million shares of StaffMark common stock to the stockholders of Robert Walters.
If the acquisition is approved, the issuance of such shares could adversely
affect the market price of the common stock and will immediately dilute the
voting power of the shares offered by this Prospectus. StaffMark filed with the
SEC a proxy statement on September 25, 1998 which describes the acquisition and
additional risks related to it. The "Risk Factors" section, beginning on page 5
of this Prospectus, lists potential detriments and risks associated with the
proposed merger. You should consider these potential risks and detriments before
making your investment decision. We incorporate by reference the information
contained in the proxy statement. You may request a copy of the proxy statement,
at no cost to you, by writing to:
StaffMark, Inc.
302 East Millsap Road
Fayetteville, Arkansas 72703
Attention: Gordon Y. Allison, Executive Vice President - General Counsel
(501) 973-6000
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RISK FACTORS
An investment in the shares offered by this Prospectus involves a high
degree of risk. In addition to the other information contained in this
Prospectus, you should carefully consider the following factors before
purchasing any of the shares of common stock.
ABILITY TO ACHIEVE AND MANAGE GROWTH; ACQUISITION RISKS.
StaffMark has experienced significant growth, mainly through
acquisitions, internal growth and opening new offices. There can be no
assurance that we will be able to expand our market presence in our
current locations or successfully enter other markets through
acquisitions or the opening of new offices. Our ability to continue
growth and profitability will depend on a number of factors, including
those described later in this section of the Prospectus. Acquisitions
also involve special risks, including unanticipated problems,
liabilities and contingencies, diversion of management attention, and
possible adverse effects on earnings resulting from increased goodwill
amortization, increased interest costs, the issuance of additional
securities and difficulties related to the integration of the acquired
business. Once an acquired company is integrated with StaffMark, that
company may not achieve the same levels of revenue, profitability, or
productivity as before the acquisition or otherwise perform as we
expected. Furthermore, we are unable to predict whether or when a
prospective acquisition candidate will be available or the likelihood
that any acquisition will be completed.
EFFECT OF FLUCTUATIONS IN THE GENERAL ECONOMY.
The general level of economic activity and unemployment in the United
States significantly affects demand for our staffing services. When
economic activity increases, temporary employees are often added before
full-time employees are hired. However, as economic activity slows, many
companies reduce their utilization of temporary employees before
undertaking layoffs of full-time employees. In addition, we may
experience more competitive pricing pressure during periods of economic
downturn. Therefore, any significant economic downturn could have a
material adverse effect on our business, financial condition and results
of operations.
FLUCTUATIONS IN OPERATING RESULTS; FLUCTUATIONS IN QUARTERLY RESULTS.
StaffMark's operating results have fluctuated in the past and will
fluctuate in the future based on many factors. Due to such factors, our
operating results will likely be less than the expectations of public
market analysts and investors in any particular quarter. This would
likely result in a material adverse affect on the price of the common
stock. In view of StaffMark's recent significant growth, we believe that
period-to-period comparisons of our financial results are not
necessarily meaningful, and you should not rely upon such comparisons as
an indication of our future performance. Because StaffMark only derives
revenue when its temporary associates, consultants, and professionals
are actually working, our operating results are adversely affected when
client facilities close due to holidays or inclement weather. We
generally experience lower revenues, operating income, and net income
during the first and fourth quarters due to certain holidays, weather
conditions, and seasonal vacation patterns.
DEPENDENCE ON AVAILABILITY OF QUALIFIED TEMPORARY PERSONNEL.
StaffMark depends on its ability to attract, train, and retain personnel
who possess the skills and experience necessary to meet the staffing
requirements of its clients. Competition for individuals with proven
skills in certain areas, particularly in professional, information
technology, and other specialty fields, is intense. We operate in
several areas in which unemployment is relatively low thereby increasing
competition for employees. We must continually evaluate, train, and
upgrade our base of available personnel to keep pace
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with clients' needs. We cannot assure you that qualified personnel will
continue to be available in sufficient numbers and on acceptable terms
of employment. The inability to attract and retain qualified personnel
could have a material adverse effect on our business, financial
condition, and results of operations.
COMPETITIVE MARKET.
The temporary staffing industry is highly competitive, with limited
barriers to entry. We compete for employees and clients in national,
regional and local markets with full-service and specialized temporary
staffing service businesses. A significant number of competitors have
greater marketing, financial, and other resources and more established
operations than StaffMark. Price competition in the staffing industry is
intense, particularly for the provision of commercial personnel, and
pricing pressures from competitors and customers are increasing. We
expect that the level of competition will remain high in the future,
which could limit our ability to maintain or increase our market share
or maintain or increase gross margins, either of which could have a
material adverse effect on our business, financial condition, and
results of operations.
INCREASED EMPLOYEE COSTS.
StaffMark pays unemployment insurance premiums and workers' compensation
for its temporary employees. Unemployment insurance premiums may
increase as a result of, among other things, increased levels of
unemployment and the lengthening periods for which unemployment benefits
are available. Workers' compensation costs may increase as a result of
changes in our experience rating or in applicable laws. Although
management believes that workers' compensation coverage amounts are
adequate, we cannot assure you that actual future workers' compensation
claims will not exceed the coverage amounts. Our workers' compensation
insurance premiums are subject to retroactive increases based upon
audits of StaffMark's employee classification practices and other data
provided to the insurance carrier. We have retained the services of an
independent third-party administrator and an independent actuary to
assist in establishing appropriate reserves for the uninsured portion of
claims (up to the deductible amount), but such reserves are only
estimates and are based upon limited prior experience. Although we
believe our recorded reserve is adequate, actual future workers'
compensation obligations may exceed the amount of the workers'
compensation reserve. Higher than anticipated losses from known claims
or an increase in the number and severity of new claims are two factors
that could cause greater workers' compensation costs.
INTANGIBLE ASSETS.
On June 30, 1998, approximately $304.6 million, or 74% of StaffMark's
total assets were intangible assets. These intangible assets primarily
represent amounts attributable to goodwill recorded in connection with
our acquisitions. Any impairment in the value of such assets could have
a material adverse effect on our financial condition and results of
operations.
RISK OF GOVERNMENT REGULATIONS AND LEGISLATIVE PROPOSALS.
Recent federal and certain state legislative proposals have included
provisions extending health insurance benefits to employees not
presently receiving such benefits. Due to the wide variety of national
and state proposals currently under consideration, we cannot predict the
impact of such proposals. Any material changes in government regulations
could result in increased costs for StaffMark. We cannot assure you that
we will be able to increase the fees charged to our clients in a timely
manner and sufficient amount to cover such increased costs. We cannot
predict whether other legislation or regulations affecting our
operations will be proposed or enacted at the federal or state level.
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GOVERNMENT REGULATION OF IMMIGRATION.
Certain Professional/IT consultants are foreign nationals working in the
United States under H-1B permits. Accordingly, both StaffMark and these
foreign nationals must comply with United States immigration laws. Our
inability to obtain H-1B permits for certain employees in sufficient
quantities or at a sufficient rate could materially and adversely effect
our business, financial condition, and results of operations.
Furthermore, Congress and administrative agencies with jurisdiction over
immigration matters have periodically expressed concerns over the levels
of legal and illegal immigration into the U.S. These concerns have often
resulted in proposed legislation, rules and regulations aimed at
reducing the number of work permits that may be issued. Any changes in
such laws making it more difficult to hire foreign nationals or limiting
our ability to retain foreign employees could require us to incur
additional unexpected labor costs and expenses. Any such restrictions or
limitations on our hiring practices could have a material adverse effect
on our business, operating results, and financial condition.
INDUSTRY RISKS.
As a provider of temporary staffing services, we place our employees in
the workplace of other businesses. Like all employers, our employees can
commit acts that would subject us to negative publicity, injunctive
orders, or the imposition of fines or damages. Such acts include
discrimination, harassment, personal injury, and other similar claims.
In addition, by providing professional services, such as clinical trials
and legal services, we are subject to claims for professional
malpractice. We have adopted policies and guidelines to reduce these
risks, and StaffMark maintains insurance coverage that we believe is
adequate as to both risks and amounts. If an employee fails to follow
these policies or if our insurance is inadequate, such actions could
materially and adversely affect StaffMark's business, financial
condition, and results of operations.
RISKS RELATED TO ACQUISITION FINANCING.
StaffMark currently finances acquisitions with shares of StaffMark
common stock used for all or a portion of the consideration to be paid.
If our common stock does not maintain a sufficient market value, or if
potential acquisition candidates are unwilling to accept the common
stock as part of the consideration for their businesses, we may be
required to use cash to initiate and maintain our acquisition strategy.
If StaffMark does not have sufficient cash resources and we are unable
to obtain additional financing, our growth could be limited. Although we
have established a $250 million credit facility, we cannot assure you
that such resources are all of the financing we will need in the future.
Our inability to acquire additional financing, if needed, could have a
material adverse effect on StaffMark's business, financial condition,
and results of operations.
RELIANCE ON KEY PERSONNEL.
StaffMark is highly dependent on its management. We believe that our
success depends significantly upon the efforts and abilities of key
executives. Furthermore, we will likely depend on the senior management
of companies that we acquire in the future. If any of these individuals
cannot continue in their position with StaffMark, or if we cannot
attract and retain other skilled employees, our business, financial
condition, and results of operation could be adversely affected.
DIVIDEND POLICY; RESTRICTIONS ON PAYMENT.
For the foreseeable future, we anticipate retaining our earnings for the
operation and expansion of our business, and we do not anticipate paying
cash dividends. In addition, StaffMark's credit facility limits the
payment of cash dividends without the lenders' consent.
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ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS.
The Board of Directors of StaffMark can issue preferred stock in one or
more series without stockholder action. The existence of this
"blank-check" preferred stock provision could render more difficult or
discourage an attempt to obtain control of StaffMark by means of a
tender offer, merger, proxy contest, or otherwise. Certain provisions of
the Delaware General Corporation Law may also discourage takeover
attempts that have not been approved by the Board of Directors.
CERTAIN RISKS ASSOCIATED WITH THE PENDING MERGER WITH ROBERT WALTERS PLC
You should read the following risk factors in conjunction with the
description of the pending merger with Robert Walters plc contained in
the section titled "Recent Event" on page 4 of this Prospectus.
Integration and Operation of the Merged Companies.
We expect certain benefits from the merger which will depend
in part on when and how effectively we can integrate the
businesses of StaffMark and Robert Walters plc. Although we
have successfully integrated a significant number of past
acquisitions, the merger with Robert Walters plc is
substantially larger than any acquisition that we have
previously completed. This merger involves substantial
non-U.S. operations and accounting/finance professional
staffing operations, which we have not encountered in past
acquisitions. These aspects of the merger could present
relatively novel integration considerations. Such
considerations may require increased management time,
attention, and resources to successfully integrate the two
businesses. We cannot assure you that a successful combination
will occur, that a combination will occur in the time period
anticipated, or that our anticipated benefits will be
achieved.
Shares Eligible for Future Sale.
Sales of substantial amounts of our common stock in the public
market could adversely affect its market price. If we
consummate the merger with Robert Walters plc, approximately
6.69 million shares of common stock will be issued as
consideration for the merger. (You should refer to the section
titled "Recent Events" for a description of the merger with
Robert Walters plc.) Because the recipients of a majority of
these shares of common stock are United Kingdom institutions,
a number of which cannot or will not hold shares of a United
States public company, a substantial amount of common stock
may be sold in the market after completion of the merger.
Dilution of Voting Interests.
After consummation of the merger with Robert Walters plc,
existing holders of our common stock will own in the aggregate
approximately 76.8% of the voting power of all outstanding
shares. Accordingly, all existing owners of our common stock
will experience an immediate dilution in their voting power as
a result of the merger.
Anticipated Accounting Treatment.
We expect that the merger with Robert Walters plc will be
accounted for under the pooling-of-interests method of
accounting. Under this method, the assets, liabilities, and
stockholders' equity accounts of StaffMark and Robert Walters
plc would be carried forward to StaffMark at their historical
amounts; our net income would include net income for Robert
Walters plc for the entire fiscal year. This accounting
treatment is a condition to the obligations of both StaffMark
and Robert Walters plc to consummate the merger. We cannot
assure you that we or Robert Walters plc
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would waive this condition if not satisfied. If the
pooling-of-interests method is not available, the purchase
method of accounting would apply. Under the purchase method of
accounting, we would record the assets and liabilities of
Robert Walters plc at their fair value and capitalize and
amortize the amount of the purchase price exceeding the fair
value of the assets. The use of the purchase method of
accounting would materially and adversely affect our earnings.
Risks Associated with Foreign Operations.
Completion of the merger with Robert Walters plc will subject
StaffMark to the usual risks associated with conducting
business outside of the United States, such as currency
fluctuations, restrictions on transfer of funds, labor unrest,
political instability, and United States restrictions on
foreign business operations.
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
We make statements in this Prospectus and in the documents we
incorporate by reference that are considered "forward-looking statements" within
the meaning of the Securities Act of 1933 and the Securities Exchange Act of
1934. Sometimes these statements contain words such as "may," "believe,"
"expect," "continue," "intend," or other similar words. These statements are not
guarantees of our future performance and are subject to risks, uncertainties,
and other factors that could cause our actual performance or achievements to be
materially different from those we project. The following factors, among others,
could cause materially different results from those anticipated or projected:
o heightened competition;
o problems integrating acquired companies;
o failure to identify, acquire, or profitably manage additional
businesses;
o failure to obtain new customers or retain existing customers;
o inability to carry out marketing and sales plans;
o inability to obtain capital for future growth;
o loss of key executives;
o general economic and business conditions; and
o changes in industry trends.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by
the selling stockholders.
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SELLING STOCKHOLDERS
The following table contains certain information about the selling
stockholders and the shares of common stock that they are offering pursuant to
this Prospectus. Such information has been provided to us by the selling
stockholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
SELLING STOCKHOLDER: PRIOR TO THE OFFERING SHARES OFFERED HEREBY AFTER THE OFFERING
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<S> <C> <C> <C>
William P. Brady (1) 340,951 340,951 -0-
Ronald G. Martin or Lucille 3,410 3,410 -0-
E. Martin, as Trustee of
the Martin Trust (1)
Wendell O. and Carolyn 489,709 489,709 -0-
Maness, Co-Trustees of the
Wendell O. Maness
Intervivos Trust (2)
Billy J. and Susan G. 401,749 401,749 -0-
Owens, Co-Trustees of the
Billy J. Owens Intervivos
Trust (2)
Scott C. Palmer (2) 54,624 54,624 -0-
Michael J. Sommers (2) 15,472 15,472 -0-
</TABLE>
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(1) Mr. Brady and the Martin Trust received their shares of common stock offered
hereby in connection with the acquisition by StaffMark of Brady & Company,
Inc. in July, 1998.
(2) The Wendell O. Maness Intervivos Trust, the Billy J. Owens Intervivos Trust,
and Messrs. Palmer and Sommers received their shares of common stock offered
hereby in connection with the acquisition by StaffMark of Enterprise Systems
Associates, Inc. in August, 1998.
PLAN OF DISTRIBUTION
We are registering the sale of the shares of common stock on behalf of
the selling stockholders, but they may not sell any of the shares until certain
financial information of StaffMark has been publicly reported. Mr. Brady and the
Martin Trust have agreed not to sell their shares until financial results
covering at least thirty (30) days of StaffMark's and Brady & Company, Inc.'s
combined operations have been publicly reported. The Wendell O. Maness
Intervivos Trust, the Billy J. Owens Intervivos Trust, and Messrs. Palmer and
Sommers have agreed not to sell their shares until financial results covering at
least thirty (30) days of StaffMark's and Enterprise Systems Associates, Inc.'s
combined operations have been publicly reported.
StaffMark will pay all costs, expenses and fees related to the
registration of the sale of the
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shares. The selling stockholders will pay all brokerage commissions and similar
selling expenses incurred with the sale of the shares. The selling stockholders
or their donees or pledgees, may sell their shares from time to time in one or
more types of transactions on the Nasdaq National Market or in private,
negotiated transactions. The selling stockholders will determine the prices at
which they sell the shares. Such transactions may or may not involve brokers or
dealers. The selling stockholders have advised StaffMark that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their shares, and there is
no underwriter or coordinating broker acting in connection with their proposed
sale of the shares.
If the selling stockholders use a broker-dealer to complete their sale
of the shares, such broker-dealer may receive compensation in the form of
discounts, concessions, or commissions from the selling stockholders and/or from
you, as purchaser (which compensation might exceed customary commissions). The
Company has agreed to indemnify each selling stockholder against certain
liabilities, including liabilities arising under the Securities Act of 1933. The
selling stockholders may indemnify any agent, dealer or broker-dealer that
participates in sales of the shares against similar liabilities.
The selling stockholders also may sell their shares in open market
transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided they meet the criteria and conform to the requirements of such rule.
When we are notified that a selling stockholder has entered into a
material arrangement with a broker-dealer for the sale of his shares, or if we
receive notice that a donee or pledgee intends to sell more than 500 shares, we
will file a supplement to this Prospectus.
DESCRIPTION OF CAPITAL STOCK
StaffMark's authorized capital stock consists of 200,000,000 shares of
common stock and 10,000,000 shares of preferred stock. On October 1, 1998, we
had 22,227,238 shares of common stock outstanding and no shares of preferred
stock outstanding.
LEGAL MATTERS
Gordon Y. Allison, Executive Vice President - General Counsel of
StaffMark, has passed upon the validity of the issuance of the shares of common
stock offered by this Prospectus for StaffMark. Mr. Allison is a full-time
employee of StaffMark and holds options to purchase 45,000 shares of the common
stock.
EXPERTS
Arthur Andersen LLP, independent public accountants, audited our annual
consolidated financial statements for the year ended December 31, 1997, which
are incorporated by reference in this Prospectus and elsewhere in the
registration statement. These documents are incorporated herein by reference in
reliance upon the authority of Arthur Andersen LLP as experts in accounting and
auditing.
11
<PAGE> 13
<TABLE>
<CAPTION>
================================================================= =================================================================
<S> <C> <C>
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS 1,305,915 SHARES
OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY STAFFMARK, INC.
ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE
IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES CREATE ANY COMMON STOCK
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS $.01 PAR VALUE
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------
TABLE OF CONTENTS
PAGE ---------------
---- PROSPECTUS
---------------
Additional Information..............................2
Incorporation of Documents by Reference.............2
Description of StaffMark............................3
Recent Event........................................4
Risk Factors........................................5
Special Note About Forward-Looking
Statements......................................9
Use of Proceeds.....................................9
Selling Stockholders...............................10
Plan of Distribution...............................10
Description of Capital Stock.......................11
Legal Matters......................................11
Experts............................................11
October __, 1998
================================================================= =================================================================
</TABLE>
<PAGE> 14
PART II
ALL CAPITALIZED TERMS USED AND NOT DEFINED IN PART II OF THIS
REGISTRATION STATEMENT SHALL HAVE THE MEANINGS ASSIGNED TO THEM
IN THE PROSPECTUS WHICH FORMS A PART OF THIS REGISTRATION STATEMENT
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the
offering described in this Registration Statement, exclusive of those expenses
to be borne by the Selling Stockholders. All of such amounts (except the SEC
Registration Fee) are estimated.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee.........................................................$ 6,694
Blue Sky Fees and Expenses................................................... 500
Accounting Fees and Expenses................................................. 500
Legal Fees and Expenses...................................................... 500
Printing and Engraving Costs................................................. 500
Transfer Agent Fees and Expenses............................................. 1,000
Miscellaneous................................................................ 500
--------
$ 10,194
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Bylaws provide that the Company shall, to the fullest
extent permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify all persons whom it may
indemnify pursuant thereto.
Section 145 of the General Corporation Law of the State of Delaware
permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that the directors, officers, employee or
agents acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
The Company's Certificate of Incorporation, as amended, provides that
the Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors except (a) for any breach of the duty of loyalty to the
Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the General Corporation Law of the State of Delaware, which makes
directors liable for unlawful dividends or unlawful stock repurchases or
redemptions or (d) for transactions from which directors derive improper
personal benefit.
In accordance with Delaware law, the Company has entered into
indemnification agreements with its executive officers and directors, pursuant
to which it will agree to pay certain expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement incurred by such directors in
connection with certain actions, suits or proceedings. These agreements require
directors to repay the amount of any expenses advanced if it shall be determined
that they shall not have been entitled to indemnification.
II-1
<PAGE> 15
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Form of Certificate evidencing ownership of Common Stock of
StaffMark, Inc. (Incorporated by reference to Exhibit 4.1 to
the registration Statement on Form S-1 (File No. 333-07513) of
the Company.
5.1 Opinion of Gordon Y. Allison, Esq.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Gordon Y. Allison, Esq. (contained in Exhibit 5.1)
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b), if in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 16
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fayetteville, State of Arkansas, on October 1, 1998.
STAFFMARK, INC.
By: /s/ CLETE T. BREWER
-----------------------------------------------
Clete T. Brewer
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature to this registration statement appears below
hereby constitutes and appoints Clete T. Brewer, Terry C. Bellora and Gordon Y.
Allison, and each of them, as his true and lawful attorney-in-fact and agent,
with full power of substitution, to sign on his or her behalf individually and
in the capacity stated below and to perform any acts necessary to be done in
order to file all amendments and post-effective amendments to this registration
statement, and any and all instruments or documents filed as part of or in
connection with this registration statement or the amendments thereto and each
of the undersigned does hereby ratify and confirm all that said attorney-in-fact
and agent, or his substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ CLETE T. BREWER President, Chief Executive October 1, 1998
- ------------------------------------------------------- Officer and Director
Clete T. Brewer (Principal Executive
Officer)
/s/ TERRY C. BELLORA Chief Financial Officer October 1, 1998
- ------------------------------------------------------- (Principal Financial and
Terry C. Bellora Accounting Officer)
/s/ JERRY T. BREWER Chairman of the Board October 1, 1998
- -------------------------------------------------------
Jerry T. Brewer
/s/ W. DAVID BARTHOLOMEW Executive Vice President-- October 1, 1998
- ------------------------------------------------------- Eastern Operations and
W. David Bartholomew Director
/s/ STEVEN E. SCHULTE Executive Vice President-- October 1, 1998
- ------------------------------------------------------- Administration and Director
Steven E. Schulte
/s/ JOHN H. MAXWELL, JR. Executive Vice President-- October 1, 1998
- ------------------------------------------------------- Medical Services and
John H. Maxwell, Jr. Director
</TABLE>
II-4
<PAGE> 18
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ JANICE BLETHEN Executive Vice President-- October 1, 1998
- ------------------------------------------------------- Clinical Trials Support
Janice Blethen Services and Director
/s/ WILLIAM T. GREGORY General Manager--Carolina October 1, 1998
- ------------------------------------------------------- Region
William T. Gregory
/s/ WILLIAM J. LYNCH Director October 1, 1998
- -------------------------------------------------------
William J. Lynch
/s/ R. CLAYTON McWHORTER Director October 1, 1998
- -------------------------------------------------------
R. Clayton McWhorter
/s/ CHARLES A. SANDERS Director October 1, 1998
- -------------------------------------------------------
Charles A. Sanders
</TABLE>
II-5
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Form of Certificate evidencing ownership of Common Stock of
StaffMark, Inc. (Incorporated by reference to Exhibit 4.1 to
the Registration Statement on Form S-1 (File No. 333-07513) of
the Company.
5.1 Opinion of Gordon Y. Allison, Esq.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Gordon Y. Allison, Esq. (contained in Exhibit 5.1)
</TABLE>
<PAGE> 1
[StaffMark, Inc. Letterhead]
EXHIBIT 5.1
StaffMark, Inc.
302 East Millsap
Fayetteville, AR 72703
Re: Registration of Shares Pursuant to Registration Statement on Form S-3
Ladies and Gentlemen:
I am the Executive Vice President-General Counsel of StaffMark, Inc., a
Delaware corporation (the "Company"), and have acted as counsel to the Company
in connection with the preparation and filing with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), of a
Registration Statement on Form S-3 (the "Registration Statement") relating to an
aggregate of 1,305,915 shares of the Company's Common Stock, par value $.01 per
share, to be sold by certain selling shareholders of the Company (the "Shares").
In so acting, I have examined originals, or copies certified or
otherwise identified to my satisfaction, of the Certificate of Incorporation of
the Company, as amended, the Amended and Restated By-laws of the Company and
such other documents, records, certificates and other instruments as in my
judgment are necessary or appropriate for purposes of this opinion.
Based on the foregoing, I am of the opinion that the Shares have been
duly authorized and validly issued by the Company and are fully paid for and
non-assessable. I render this opinion as a member of the Bar of the State of
Arkansas and the District of Columbia and express no opinion as to any other law
other than the General Corporation Law of the State of Delaware. I consent to
the use of this opinion as an exhibit to the Registration Statement and to the
use of my name under the caption "Legal Matters" in the Registration Statement.
In giving this consent, I do not admit that I am acting within the category of
persons whose consent is required under Section 7 of the Act.
Very truly yours,
STAFFMARK, INC.
/s/ Gordon Y. Allison
Gordon Y. Allison, Esq.
Executive Vice President-General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference into the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated January 27, 1998,
appearing on page 20 of the StaffMark, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997, and to all references to our firm included in this
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
----------------------------------------
Arthur Andersen LLP
Little Rock, Arkansas,
October 1, 1998
