As filed with the Securities and Exchange Commission on July 2, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under The Securities Act of 1933
COMFORCE Corporation
(Exact name of registrant as specified in its charter)
Delaware 7361 36 - 2262248
(State or other jurisdiction (Primary Standard (I.R.S Employer
of incorporation Industrial Classification Identification No.)
or organization) Code Number)
--------------------
COMFORCE Corporation
415 Crossways Park Drive
P.O. Box 9006
Woodbury, New York 11797
(516) 437-3300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------
Harry Maccarrone
Executive Vice President
COMFORCE Corporation
415 Crossways Park Drive
P.O. Box 9006
Woodbury, New York 11797
(516) 437-3300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------
Copy to:
David G. Edwards, Esquire
Doepken Keevican & Weiss Professional Corporation
58th Floor, USX Tower
600 Grant Street
Pittsburgh, Pennsylvania 15219-2703
(412) 355-2600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Proposed
Proposed Maximum Amount
Title of Amount Maximum Aggregate of
Securities To Be Offering Price Offering Registra-
to be Registered Registered Per Share(1) Price(1) tion Fee
- ------------------------------- ----------------------- ---------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Shares of common stock, 330,000 $5.41 $1,785,000 $496.23
$0.01 par value per share,
of COMFORCE
Corporation
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rules 457(h)(1) under the Securities Act of 1933, the Proposed
Maximum Offering Price Per Share is based upon the option exercise prices
of the securities being registered. The average weighted exercise price of
the shares issuable upon exercise of the options is $5.41.
This Registration Statement is being filed pursuant to General Instruction
E of Form S-8 in order to register additional securities of the same class as
other securities for which registration statements on this form relating the
COMFORCE Corporation Long-Term Stock Investment Plan is effective. On July 28,
1997, the Registrant filed a registration statement or Form S-8 (File No.
333-32271) to register 3,074,372 shares of the Registrant, and on February 24,
1998, the Registrant filed a registration statement on Form S-8 (Registration
No. 333-46787) to register an additional 254,500 shares of the Registrant.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
*Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from the Registration Statement in accordance with Rule 428 under the
Securities Act of 1933 and the Note to Part I of Form S-8. The Registrant is not
registering hereunder and has not registered under the Form S-8 (File No.
333-32271) filed July 28, 1997 or the Form S-8 (Registration No. 333-46787)
filed February 24, 1998 555,628 shares in the aggregate claimed by Austin Iodice
(and/or Nitsua, Ltd.) and Anthony Giglio to be issuable to them upon the
exercise of options under the Registrant's Long-Term Stock Investment Plan.
Registrant maintains that the options to purchase such 555,628 shares have
terminated.
REOFFER PROSPECTUS
COMFORCE Corporation
3,658,872 Shares of Common Stock
This prospectus relates to the up to 3,658,872 shares of our common stock
which the people identified under "Selling Stockholders" may offer and sell from
time to time in one or more types of transactions (which may include block
transactions) on the American Stock Exchange, where our common stock is listed
for trading under the symbol "CFS," in other markets where our common stock is
traded, in negotiated transactions, through put or call options transactions,
through short sales transactions, or in a combination of such methods of sale.
They will sell the common stock at prices to which the parties agree. The
selling stockholders may or may not use brokers and dealers in these
transactions. The respective selling stockholders will pay any brokerage fees or
commissions relating to sales by them. See "Method of Sale."
We may issue these shares of common stock to the selling stockholders upon
the exercise by the selling stockholders of options we have previously awarded
to them.
We will not receive any of the proceeds from any sales by the selling
stockholders. We will pay all of the expenses associated with the registration
of the common stock and this prospectus.
On June 30, 1999, the last reported sale price of the common stock on the
American Stock Exchange was $3.00 per share.
See "Risk Factors" beginning on page 6 of this prospectus for a discussion
of certain risks and other factors that you should consider before purchasing
our common stock.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, and they have not
determined if this prospectus is truthful and complete. Any representation to
the contrary is a criminal offense.
-----------
The date of this Prospectus if July 2, 1999.
<PAGE>
TABLE OF CONTENTS
Page
Where You Can Find More Information ...........................................2
Risk Factors...................................................................3
The Company....................................................................8
Selling Stockholders...........................................................9
Use of Proceeds................................................................9
Method of Sale.................................................................9
Legal Matters.................................................................10
Experts.......................................................................10
Annex 1 -- Selling Stockholders...............................................11
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You can read and copy
any document filed by us at the public reference facilities maintained by the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You may request copies of
these documents, upon payment of a duplicating fee, by writing the SEC at the
address in the previous sentence. Please call the SEC at 1- 800-SEC-0330 for
further information on the operation of its public reference room. Our SEC
filings are also available on the SEC's Website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" information from other
documents that we file with it, which means that we can disclose important
information by referring you to those documents. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents:
o Our Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
o Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
o Our Current Reports on Form 8-K dated January 7, 1999 and May 7, 1999.
o The description of our common stock contained in our Form 8-A dated October
10, 1985, as amended by Amendment No. 1 on Form 8A/A dated July 25, 1997.
o All other documents filed by us pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus and prior to
termination of this offering of common stock.
You may request a copy of any of these documents, except exhibits to the
documents (unless the exhibits are specifically incorporated by reference), at
no cost, by writing or telephoning us at the following address:
COMFORCE Corporation
Attention: Linda Annicelli
415 Crossways Park Drive
P.O. Box 9006
Woodbury, New York 11797
(516) 437-3300
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone else to provide you with
different information.
2
<PAGE>
RISK FACTORS
Before you invest in the common stock, you should consider carefully the
following factors, in addition to the other information contained in this
prospectus. In addition to historical information, this prospectus contains
forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those projected or suggested in any
forward-looking statement. The factors discussed below and the other factors
discussed in this prospectus could cause or contribute to such differences.
Other factors which we have not yet identified could also cause or contribute to
such differences.
Effect of Fluctuations in the General Economy
The general level of economic activity in the country significantly affects
demand for staffing and consulting services. Companies use staffing and
consulting services to manage personnel costs and changes in staffing needs, in
part due to business fluctuations. When economic activity increases, employers
often add employees from staffing and consulting companies before they hire
full-time employees. During such times, there is intense competition among
staffing and consulting companies for qualified personnel for placement, and we
may not be able to recruit and retain sufficient personnel to meet the needs of
our clients. Conversely, as economic activity slows, companies may choose to
reduce their usage of employees from staffing and consulting companies before
laying off their regular employees.
Highly Competitive Market
The contingent staffing and consulting industry is highly competitive.
Heightened competition for customers as well as for contingent personnel could
adversely impact our business in several ways:
o We may need to reduce our current fee scales without being able to reduce
the personnel costs of our billable employees.
o Large, traditional staffing companies have begun to enter the specialty
staffing and consulting sector. As a result, margins may decrease,
particularly for the less highly skilled personnel in that sector.
o Barriers to entry in the contingent staffing business are low, and we could
experience competition from additional competitors entering the business.
o We may not be able to fulfill our customers' needs because of shortages of
qualified personnel, which currently exist in some specialty sectors and
could occur in the future.
o Customers could employ personnel directly (rather than using our services)
to ensure the availability of such personnel.
Some of our competitors have greater marketing, financial and personnel
resources than we do and could offer increased competition. We expect that the
level of competition will remain high in the future and that this competition
could affect our margins, which could have a material adverse effect on our
business, financial condition and results of operations.
3
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Dependence on Availability of Qualified Staffing Personnel
Our business depends on our ability to attract and retain personnel who
possess the skills and experience necessary to meet the staffing and consulting
requirements of our customers. Competition for individuals with proven skills in
certain areas, particularly information technology, is intense. We compete for
such individuals with other contingent staffing and consulting firms, systems
integrators, providers of outsourcing services, computer systems consultants,
customers and personnel agencies. We must continually evaluate and upgrade our
base of available personnel to keep pace with changing customers' needs and
emerging technologies. We may not be able to continue to attract qualified
personnel in sufficient numbers and on acceptable economic terms. In addition,
although the employment agreements we have entered into contain non-compete
covenants, we may not be able to effectively enforce such agreements against our
former employees.
Liabilities for Customer and Employee Actions
Contingent staffing and consulting firms are in the business of employing
people and placing them in the workplace of other businesses. An attendant risk
of such activity includes possible claims by customers of employee misconduct or
negligence, claims of discrimination and harassment, claims relating to
employment of illegal aliens and other similar claims. We have implemented
policies and guidelines to minimize our exposure to these risks. However, a
failure to follow these policies and guidelines may result in negative publicity
and we could be required to pay money damages or fines. Although historically we
have not had any significant problems in this area, we may experience such
problems in the future.
We are also exposed to liability for actions taken by our employees while
on assignment, such as damage caused by employee errors, misuse of customer
proprietary information or theft of customer property. We maintain insurance to
limit our exposure to these risks. However, because of the nature of our
assignments, in particular the access of our employees to customer information
systems and confidential information, and the potential liability for improper
acts by employees, insurance coverage may not continue to be available or may
not be adequate to cover any such liability.
Increases in Employment Related Costs
We must pay unemployment insurance premiums and workers' compensation
benefits for our billable employees. The states in which employees perform
services set unemployment insurance premiums annually. These premiums could
increase for various reasons, including increased levels of unemployment and the
lengthening of periods for which unemployment compensation is available.
Workers' compensation costs may increase if various states in which we conduct
operations raise levels of compensation or liberalize allowable claims. We are
focusing on efforts to reduce our potential exposure to such claims. We are
largely self-insured with respect to workers' compensation claims, but we
maintain an umbrella insurance policy limiting our exposure for self-insured
claims to $250,000 per claim and a total of $2.3 million in any year. However,
we may incur costs related to workers' compensation claims at rates higher than
anticipated if we experience an increase in the number or the severity of
claims.
Our costs could also increase as the result of any future health care
reforms. Certain federal and state legislative proposals have included
provisions extending health insurance benefits to billable employees who do not
presently receive such benefits.
We may not be able to increase the fees charged to our customers in a
sufficient amount to cover increased costs related to workers' compensation,
unemployment insurance and health care reforms or other employment-related
regulatory changes.
4
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Potential Impairment of Intangible Assets
More than 50% of our total assets are intangible assets. These intangible
assets substantially represent amounts attributable to goodwill recorded in
connection with our acquisitions and are generally amortized over a five to 40
year period. This amortization results in significant annual charges. Various
factors could impact our ability to generate the earnings necessary to support
this amortization schedule, including
o fluctuations in the economy;
o the degree and nature of competition;
o demand for our services; and
o Our ability to integrate the operations of acquired businesses, to recruit
and place staffing professionals and to maintain gross margins in the face
of pricing pressures.
If we fail to generate earnings necessary to support the amortization
charge, an impairment of the asset may occur. The resulting write-off could have
a material adverse effect on our business, financial condition and results of
operations.
Substantial Leverage
We have a very high level of debt. Our level of debt could have important
consequences to you, including the following:
o we will have to use a substantial portion of our cash flow from operations
to pay for debt service, rather than for operations or growth;
o our competitors with less debt could have a competitive advantage;
o we could be more vulnerable to economic downturns and less able to take
advantage of significant business opportunities and react to changes in
market or industry conditions;
o we will be vulnerable to increases in interest rates to the extent of
borrowings under our senior credit facility;
o we may not be able to obtain additional financing for working capital,
capital expenditures, debt service requirements or other purposes; and
o we may have to dispose of material assets or operations or refinance our
debt to meet our debt service obligations. We may not be successful in
accomplishing these actions if any of them becomes necessary.
Restrictions Imposed by Terms of Indebtedness
The agreements governing the public debt obligations of our COMFORCE
Operating, Inc. subsidiary, and the credit facility to which we and our
subsidiaries are parties, contain restrictions that affect our ability to incur
debt, make distributions, make acquisitions, create liens, make capital
expenditures and affiliate payments and pay dividends. They also require us to
limit our capital expenditures, affiliate payments and dividends. In addition,
our credit facility requires us to meet specified financial ratios and tests.
5
<PAGE>
Events beyond our control may affect our ability to comply with these
covenants and restrictions, and we may not achieve operating results that will
comply with the financial ratios and tests. If we do not comply with these
covenants and restrictions, an event of default could occur. An event of default
under any of our financing agreements could have a material adverse effect on
our business and financial condition if it is not cured or waived.
Year 2000 Issues Could Disrupt our Operations
Many existing computer systems and software products do not properly
recognize dates after December 31, 1999. This Year 2000 issue could result in
system failures or miscalculations causing disruptions of operations, including,
among others, a temporary inability to process financial information,
communicate with our customers and our various field offices, issue bills and
payroll statements and otherwise engage in similar normal business activities.
We initiated a major system conversion beginning in early 1998 in order to
improve access to business information through common, integrated computing
systems nationwide. Our conversion to these new systems, which are expected to
make our information technology systems fully Year 2000 compliant, has not been
completed. If this conversion is not completed by December 31, 1999, certain
portions of our existing systems are not expected to be Year 2000 compliant. If
our systems' functions are impaired on January 1, 2000, we believe that we would
be able to perform necessary functions through manual intervention. However, the
use of manual intervention would significantly disrupt our operations and we
would be unable to continue manual processing for an extended period. Any such
disruptions would represent a significant drain on our financial and personnel
resources.
As a part of our Year 2000 compliance program, we are in communication with
material customers, vendors and service providers in order to assess their Year
2000 readiness and seek to ensure that they will be Year 2000 compliant. We
believe that Year 2000 issues faced by these customers and providers, if not
effectively remediated, could adversely affect our business. Other factors which
could potentially cause us to suffer business interruptions or other losses
include our failure to identify latent or other non-compliant codes or
technologies, or the ineffectiveness of any contingency plans we put in place to
mitigate the effects of interruptions in our businesses due to Year 2000
problems.
Future Capital Needs; Potential Dilution
We may need additional financing to fund our strategy of growth through
market development and selective acquisitions. If we issue equity securities to
secure any needed financing, our stockholders may experience dilution. Such
equity securities may have rights, preferences, or privileges senior to those of
the common stock. If we issue debt securities, our leverage would increase. See
" --Substantial Leverage."
Risks Associated with Acquisitions
Since October 1995, we have completed 10 acquisitions. Acquisitions involve
special risks, including unanticipated liabilities and contingencies and
difficulties related to the integration of the acquired businesses. We are
currently in the process of integrating the various information systems of the
acquired businesses. Any significant delay in, or increase in the cost of,
completing this systems integration could have a material adverse effect on our
business, financial condition and results of operations.
Dependence on Key Personnel
We depend in a significant way on our management. Our success depends upon
the availability and performance of John Fanning, Chairman and Chief Executive
Officer, Harry Maccarrone, Executive Vice President, and Robert Baldwin, Chief
Financial Officer. The loss of services of any of these key persons could have a
material adverse effect upon our operations.
6
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Control by Insiders
John Fanning, Chairman and Chief Executive Officer, currently controls
nearly 30% of our outstanding common stock. As a result, Mr. Fanning will have a
significant influence on all issues submitted to our stockholders. This
concentration of ownership could limit the price that certain investors might be
willing to pay in the future for shares of common stock and could make it more
difficult for a third party to acquire, or could discourage a third party from
attempting to acquire control of us.
Anti-Takeover Provisions
Our Certificate of Incorporation and Bylaws authorize the issuance of
"blank check" preferred stock and establish advance notice requirements for
director nominations and actions to be taken at stockholder meetings. These
provisions could discourage or impede a tender offer, proxy contest or other
similar transaction involving control of COMFORCE, including transactions in
which the stockholders might otherwise receive a premium for their shares over
then current market prices and other transactions that they may deem to be in
their best interests. In particular, preferred stock
o has a preferred position over the common stock on liquidation;
o generally has the right to a fixed or minimum dividend before any dividend
is paid or accrued on the common stock;
o may have the right to approve certain extraordinary corporate matters; and
o could contain terms that would
o delay or prevent a change in control of COMFORCE;
o make removal of our present management more difficult;
o restrict the payment of dividends and other distributions to the
holders of common stock; and
o make it more difficult for a hostile acquiror to gain control of
COMFORCE.
No Cash Dividends
For the foreseeable future we expect to retain our earnings for the
operation and expansion of our business. Thus, we do not expect to pay cash
dividends on our common stock. In addition, our revolving credit facility
prohibits the payment of cash dividends on the common stock without the consent
of the lender.
Historical Losses
On a historical basis, we had net losses of $3.7 million for the year ended
December 31, 1997. While we had net income of $805,000 for the year ended
December 31, 1998, we had net losses in the quarter ended March 31, 1999 of $1.2
million and our operations may not be profitable in the future.
Risks Related to the Loss of Key Customers
As is common in the staffing industry, our engagements to provide services
to our customers are generally non-exclusive, of a short-term nature and subject
to termination by the customer with little or no notice, although some of our
business is done through long-term contracts and contracts that provide us with
the first opportunity to supply
7
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the personnel required by the customer. For the year ended December 31, 1998,
one customer accounted for approximately 10% of our revenues and the largest
four customers accounted for approximately 31% of our revenues. We also have
numerous other significant customers. The loss of or a material reduction in the
revenues from any of our significant customers could have a material adverse
effect on our business, results of operations and financial condition.
Possible Volatility of Stock Price
From time to time, the market price for our common stock has been, and may
continue to be, volatile. The market price may fluctuate because of our
quarterly operating results, the operating results of other staffing companies,
changes in general conditions in the economy, the financial markets or the
staffing industry, natural disasters or other developments. In addition, in
recent years the stock market has experienced extreme price and volume
fluctuations. This volatility has had a significant effect on the market prices
of securities issued by many companies for reasons unrelated to their operating
performance.
THE COMPANY
We are a leading provider of specialty staffing, consulting and outsourcing
services primarily to Fortune 500 companies for their information technology,
telecommunications, scientific and engineering-related needs. Through a national
network of 66 offices (47 company-owned and 19 licensed), we recruit and place
highly skilled contingent personnel and provides financial and outsourcing
services for a broad customer base of over 2,300 companies, including Boeing
Corporation, Microsoft Corporation and Sun Microsystems. Our labor force
includes over 8,000 billable employees (on a full-time equivalent basis),
consisting primarily of computer programmers, systems consultants and analysts,
engineers, technicians, scientists, researchers and skilled office support
personnel. Since entering the staffing services business in 1995, we have grown
significantly through a combination of acquisitions and internal growth.
We operate the Staff Augmentation segment of our business through three
divisions -- Information Technology (IT), Telecom and Staffing Services. We
operate the Financial Services segment of our business through our Financial
Services Division. A description of the types of services provided by each
division follows:
o Our IT division provides highly skilled programmers, help desk
personnel, systems consultants and analysts, software engineers and
project managers for a wide range of technical assignments, including
client/server, mainframe, desktop services and Internet/Intranet.
o Our Telecom division provides skilled personnel to plan, design,
engineer, install and maintain wireless and wireline
telecommunications systems, including cellular, PCS, microwave, radio,
satellite and other networks.
o Our Staffing Services division includes the Technical Services group
and the Professional Services group. Our Technical Services group
provides staffing for national laboratory research in such areas as
environmental safety, alternative energy source development and laser
technology, and provides highly-skilled labor meeting diverse
commercial needs in the avionics and aerospace, architectural,
automotive, energy and power, pharmaceutical, marine and petrochemical
fields. Our Professional Services group provides highly specialized
professional chemists, biologists, engineers, laboratory
instrumentation operators, technicians and others to companies
involved in pharmaceutical, environmental, biotech and processing
businesses.
o Through our Financial Services' PrO Unlimited subsidiary, we provide
confidential consulting and conversion services to companies that
require assistance in complying with regulations associated with the
use of independent contractors, returning retirees and consultants.
The Financial Services
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segment also includes outsourcing services to independent consulting
and staffing companies, in which we provide payroll funding services
and back office support to those clients.
SELLING STOCKHOLDERS
The table attached as Annex I hereto sets forth, as of the date of this
prospectus or a subsequent date if amended or supplemented, (a) the name of each
selling stockholder and his or her relationship to us during the past three
years; (b) the number of shares of common stock each selling stockholders
beneficially owns (assuming that all options and restricted shares which they
have previously been granted are fully vested and free from restrictions on
transfer); (c) the number of shares of common stock offered pursuant to this
prospectus by each selling stockholder; and (d) the amount and percentage of the
common stock outstanding to be held by such selling stockholder after giving
effect to the offering of the common stock covered by this prospectus. The
information contained in Annex I may be amended or supplemented from time to
time to include other persons who may from time to acquire "control securities"
or "restricted securities" as described under General Instruction C of Form S-8.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
by the selling stockholders.
METHOD OF SALE
We are not aware of any plan of distribution with respect to the shares of
common stock offered by this prospectus. This prospectus relates to the possible
offer and sale from time to time by the selling stockholders of their shares of
common stock which they may receive upon the exercise of options or which they
may transfer upon the lapse of restrictions on restricted shares. These options
and restricted shares have been issued under employment agreements between us
and such selling stockholders. We have registered their shares for resale to
provide them with freely tradeable securities. However, registration of their
shares does not necessarily mean that they will offer or sell any of their
shares. We will not receive any proceeds from the offering or sale of their
shares.
The selling stockholders may offer and sell the shares of common stock to
which this prospectus relates from time to time in one or more types of
transactions (which may include block transactions) on the American Stock
exchange, where our common stock is listed for trading under the symbol "CFS,"
in other markets where our common stock is traded, in negotiated transactions,
through put or call options transactions, through short sales transactions, or
in a combination of such methods of sale. They will sell the common stock at
prices which are current when the sales take place or at other prices to which
the parties agree. The respective selling stockholders may use brokers or
dealers to sell the shares, and will pay any brokerage fees or commissions
relating to sales by them in amounts to be negotiated by them prior to sale. The
selling stockholders and any brokers or dealers participating in the sale of the
common stock may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any discounts and
commissions received by them and any profit realized by them on the resale of
the shares may be deemed to be underwriting discounts and commissions under the
Securities Act. Some shares may also be sold by other people or entities which
receive the shares from one or more of the selling stockholders by gift, by
operation of law (including the laws of descent and distribution) or by other
transfers or assignments.
Selling stockholders also may resell all or a portion of their shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
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LEGAL MATTERS
Doepken, Keevican & Weiss Professional Corporation, Pittsburgh,
Pennsylvania, will render a legal opinion on the validity of the common stock
being offered.
EXPERTS
The consolidated balance sheets of COMFORCE Corporation and Subsidiaries as
of December 31, 1998 and 1997, and the consolidated statements of operations,
changes in stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1998, incorporated by reference in this
prospectus, have been incorporated herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
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ANNEX I
SELLING STOCKHOLDERS (1)
<TABLE>
<CAPTION>
Shares Beneficially Owned
Shares Shares After Offering: (2)
Relationships to Beneficially Offered --------------------------
Name COMFORCE Owned Hereby Number Percentage
---- -------- ----- ------ ------ ----------
<S> <C> <C> <C> <C> <C>
John C. Fanning Chairman and 4,955,579 200,000 4,755,579 29.4%
Chief Executive
Officer
Harry Maccarrone Executive Vice 4,861,931 130,000 4,731,931 29.2%
President and
Secretary
</TABLE>
- ----------
(1) Assumes that all options held by the listed individuals are fully vested
and exercisable. Shares deemed beneficially owned by virtue of these
assumptions are treated as outstanding for purposes of determining
beneficial ownership by such individual.
(2) Assumes the sale of all securities offered hereby.
(3) The shares beneficially owned by Mr. Fanning, the Chairman and Chief
Executive Officer of the Company, include (1) 24,200 shares currently held
of record by him, (2) 3,398,169 shares owned by the John C. Fanning
Irrevocable Trust, of which Mr. Fanning is the beneficiary, (3) 1,333,210
shares held by a limited partnership of which the John C. Fanning
Irrevocable Trust is the general partner and (4) 200,000 shares issuable to
him upon exercise of an option at an exercise price of $5.25 per share. Mr.
Fanning disclaims beneficial ownership of shares owned by the limited
partnership in excess of his proportionate interest in the limited
partnership. Harry Maccarrone holds sole voting power with respect to the
shares held by the limited partnership and the John C. Fanning Irrevocable
Trust.
(4) The shares beneficially owned by Mr. Maccarrone, Executive Vice President
and Secretary of the Company, include (1) 552 shares currently held of
record by him, (2) 30,000 shares issuable to him upon exercise of an option
at an exercise price of $7.00 per share, (3) 100,000 shares issuable to him
upon exercise of an option at an exercise price of $5.25 per share, (4)
3,398,169 shares owned by the John C. Fanning Irrevocable Trust, of which
Mr. Maccarrone is the trustee, and (5) 1,333,210 shares held by a limited
partnership of which the John C. Fanning Irrevocable Trust is the general
partner. Harry Maccarrone holds sole voting power with respect to the
shares held by the limited partnership and the John C. Fanning Irrevocable
Trust.
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PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by COMFORCE Corporation (the
"Company" or the "Registrant"), are incorporated herein by reference and shall
be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999.
3. The Company's Current Reports on Form 8-K dated January 7, 1999 and
May 7, 1999.
4. The description of the Company's common stock contained in our Form
8-A dated October 10, 1985, as amended by Amendment No. 1 on Form 8A/A
dated July 25, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, are deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the respective
dates of filing of such documents (such documents, and the documents enumerated
in paragraphs (1) through (4) above, being hereinafter referred to as
"Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such first statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The Company's Bylaws effectively provide that the Company, to the full
extent permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time ("Section 145"), shall indemnify all
directors and officers of the Company and may indemnify all employees,
representatives and other persons as permitted pursuant thereto.
Section 145 permits a corporation to indemnify its directors and officers
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 a third party if such directors or
officers 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, indemnification may be made only for expenses
actually and reasonably incurred by directors and officers in connection with
the defense or settlement of an action or suit and only with respect to a matter
as to which they shall
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<PAGE>
have acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interest 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
officers or directors are reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
COMFORCE has entered into separate indemnification agreements with certain
of its current directors, officers and employees. The Company maintains
insurance against liabilities under the Securities Act of 1933 for the benefit
of its officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
2.1 Agreement and Plan of Merger, dated as of August 13, 1997, by and
among COMFORCE Corporation, COMFORCE Columbus, Inc. and Uniforce
Services, Inc. (included as an exhibit to the Company's Current Report
on Form 8-K dated August 20, 1997 and incorporated herein by
reference).
2.2 Stockholders Agreement, dated as of August 13, 1997, by and among
COMFORCE Corporation, COMFORCE Columbus, Inc., John Fanning and
Fanning Limited Partnership, L.P. (included as an exhibit to the
Company's Current Report on Form 8-K dated August 20, 1997 and
incorporated herein by reference).
2.3 Registration Rights Agreement dated as of August 13, 1997 by and among
the Company, John Fanning and Fanning Asset Partners, L.P., a Georgia
limited partnership (included as an exhibit to Amendment No. 2 to the
Registration Statement on Form S-4 of the Company filed with the
Commission on October 24, 1997 and incorporated herein by reference).
3.1 Restated Certificate of Incorporation of the Company, as amended by
Certificates of Amendment filed with the Delaware Secretary of State
on June 14, 1987 and February 12, 1991 (included as an exhibit to
Amendment No. 1 to the Registration Statement on Form S-1 of the
Company filed with the Commission on May 10, 1996 and incorporated
herein by reference).
3.2 Certificate of Ownership (Merger) of COMFORCE Corporation into the
Company (included as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1995 and incorporated herein by
reference).
3.3 Bylaws of the Company, as amended and restated effective as of
February 26, 1997 (included as an exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 1996 and
incorporated herein by reference).
3.4 Certificate of Ownership (Merger) of AZATAR into the Company (included
as an exhibit to the Company's Current Report on Form 8-K dated
November 8, 1996 and incorporated herein by reference).
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<PAGE>
4.1 Indenture dated as of November 26, 1997 with respect to 12% Senior
Notes due 2007 between COMFORCE Operating, Inc., as issuer, and
Wilmington Trust Company, as trustee (included as an exhibit to the
Company's Current Report on Form 8-K dated December 9, 1997 and
incorporated herein by reference).
4.2 Indenture dated as of November 26, 1997 with respect to 15% Senior
Secured PIK Debentures due 2009 between COMFORCE Corporation, as
issuer, and The Bank of New York, as trustee (included as an exhibit
to the Company's Current Report on Form 8-K dated December 9, 1997 and
incorporated herein by reference).
5.1* Opinion of Doepken Keevican & Weiss.
10.1 Loan and Security Agreement dated as of November 26, 1997 among
COMFORCE Corporation and specified subsidiaries thereof and Heller
Financial, Inc., as lender and agent for other lenders (included as an
exhibit to the Company's Current Report on Form 8-K dated December 9,
1997 and incorporated herein by reference).
10.2 Purchase Agreement, dated as of November 19, 1997, by and between
COMFORCE Operating, Inc. and NatWest Capital Markets Limited, as
Initial Purchaser (included as an exhibit to the Registration
Statement on Form S-4 of the Company filed with the Commission on
December 24, 1997 and incorporated herein by reference).
10.3 Purchase Agreement, dated as of November 19, 1997, by and between
dated as of November 26, 1997, by and between the Company and NatWest
Capital Markets Limited, as Initial Purchaser (included as an exhibit
to the Registration Statement on Form S-4 of the Company filed with
the Commission on December 24, 1997 and incorporated herein by
reference).
10.4 Warrant Agreement dated November 26, 1997 by and between the Company
and The Bank of New York, as Warrant Agent (included as an exhibit to
the Registration Statement on Form S-4 of the Company filed with the
Commission on December 24, 1997 and incorporated herein by reference).
10.5 Pledge Agreement dated November 26, 1997 by and between the Company
and The Bank of New York, as Collateral Agent (included as an exhibit
to the Registration Statement on Form S-4 of the Company filed with
the Commission on December 24, 1997 and incorporated herein by
reference).
10.6 Employment Agreement dated as of January 1, 1999 between the Company,
COMFORCE Operating, Inc. and John C. Fanning (included as an exhibit
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 and incorporated herein by reference).
10.7 Employment Agreement dated as of January 1, 1999 between the Company,
COMFORCE Operating, Inc. and Harry Maccarrone (included as an exhibit
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 and incorporated herein by reference).
23.1* Consent of Doepken Keevican & Weiss (included in the opinion filed as
Exhibit 5.1 to this Registration Statement.
23.2* Consent of PricewaterhouseCoopers LLP.
24.1* Powers of Attorney.
- ----------
* Filed herewith.
14
<PAGE>
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(a) The 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 this 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 this Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this 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 with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this 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 the time shall be deemed to be the initial bona
fide offering thereof.
(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 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 this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the 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 a
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 a 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.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be filed on its behalf by the
undersigned, thereunto duly authorized, in the City of Woodbury, State of New
York, on July 2, 1999.
COMFORCE Corporation
(Registrant)
By: /s/ Robert H.B. Baldwin, Jr.
--------------------------------
Robert H.B. Baldwin, Jr.,
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John C. Fanning* Chairman, Chief Executive
- ------------------------------ Officer and Director
John C. Fanning (Principal Executive Officer) July 2, 1999
/s/ Harry Maccarrone* Executive Vice President
- ------------------------------ and Director (Principal
Harry Maccarrone Accounting Officer) July 2, 1999
/s/ Robert H.B. Baldwin, Jr. Senior Vice President and
- ------------------------------ Chief Financial Officer
Robert H.B. Baldwin, Jr. (Principal Financial Officer) July 2, 1999
/s/ Gordon Robinett* Director July 2, 1999
- ------------------------------
Gordon Robinett
/s/ Daniel Raynor* Director July 2, 1999
- ------------------------------
Daniel Raynor
/s/ Kenneth Daley* Director July 2, 1999
- ------------------------------
* By: /s/ Robert H.B. Baldwin, Jr. Attorney-in-Fact July 2, 1999
--------------------------------
Robert H.B. Baldwin, Jr.
</TABLE>
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Exhibit 5.1
DOEPKEN KEEVICAN & WEISS
PROFESSIONAL CORPORATION
600 Grant Street, 58th Floor
Pittsburgh, Pennsylvania 15219
Phone: 412-355-2600
Fax: 412-355-2609
July 2, 1999
COMFORCE Corporation
415 Crossways Park Drive
P.O. Box 9006
Woodbury, New York 11797
Re: Registration Statement on Form S-8
Gentlemen and Ladies:
We have acted as special counsel to COMFORCE Corporation (the "Company") in
connection with the preparation of a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), relating to up to 330,000 shares of common stock of the Company (the
"Common Stock") which may be purchased by employees of the Company under the
COMFORCE Corporation Long-Term Stock Investment Plan (the "Plan").
In connection with this opinion, we have examined, among other things:
(1) the Certificate of Incorporation of the Company, as amended to date;
(2) resolutions adopted by the stockholders and the Board of directors of
the Company the Plan and approving certain amendments to the Plan; and
(3) the Plan, as currently in effect.
Based upon the foregoing and upon an examination of such other documents,
corporate proceedings, statutes, decisions and questions of law as we considered
necessary in order to enable us to furnish this opinion, and subject to the
assumptions set forth above, we are pleased to advise you that in our opinion:
(a) The Company has been duly incorporated and is a validly existing
corporation under the laws of the State of Delaware; and
(b) The shares of Common Stock being registered and which may be issued by
the Company pursuant to the provisions of the Plan have been duly
authorized, and upon such issuance in accordance with the provisions
of the Plan such shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Yours truly,
/s/ Doepken Keevican & Weiss
Professional Corporation
17
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of COMFORCE Corporation on Form S-8 (File no. _______________) of our report
dated February 25, 1999, on our audits of the consolidated financial statements
and financial statement schedule of COMFORCE Corporation as of December 31, 1998
and 1997 and for the years ended December 31, 1998, 1997 and 1996, which report
is included in the Annual Report on Form 10-K. We also consent to the reference
to our firm under the caption "Experts."
PRICEWATERHOUSECOOPERS LLP
New York, New York
July 2, 1999
18
Exhibit 24.1
POWER OF ATTORNEY
KNOW BY ALL MEN BY THESE PRESENTS, that each of the undersigned, a director
or officer or both, of COMFORCE Corporation, a Delaware corporation (the
"Company"), does hereby appoint Harry Maccarrone and Robert H.B. Baldwin, Jr.,
and each of them, with full power to act without the other, such person's true
and lawful attorneys-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign Form S-3 and S-8 Registration Statements, and any and all
amendments thereto (including post-effective amendments), relating to the
registration of shares to be issued by selling stockholders, including any S-8
respecting the COMFORCE Corporation Long-Term Stock Investment Plan, and to file
the same, with exhibits and schedules thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them, with full power and authority to do and
perform each and every act and thing necessary or desirable to be done in or
about the premises, as fully to all intents and purposes as he or she might or
could do in person, thereby ratifying and confirming all that said
attorneys-in-fact, or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 29th
day of June, 1999.
/s/ Gordon Robinett
- ----------------------------
Gordon Robinett
/s/ Daniel Raynor
- ----------------------------
Daniel Raynor
/s/ Kenneth Daley
- ----------------------------
Kenneth Daley
19
<PAGE>
POWER OF ATTORNEY
KNOW BY ALL MEN BY THESE PRESENTS, that each of the undersigned, a director
or officer or both, of COMFORCE Corporation, a Delaware corporation (the
"Company"), does hereby appoint Harry Maccarrone and Robert H.B. Baldwin, Jr.,
and each of them, with full power to act without the other, such person's true
and lawful attorneys-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign Form S-3 and S-8 Registration Statements, and any and all
amendments thereto (including post-effective amendments), relating to the
registration of shares to be issued by selling stockholders, including any S-8
respecting the COMFORCE Corporation Long-Term Stock Investment Plan, and to file
the same, with exhibits and schedules thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them, with full power and authority to do and
perform each and every act and thing necessary or desirable to be done in or
about the premises, as fully to all intents and purposes as he or she might or
could do in person, thereby ratifying and confirming all that said
attorneys-in-fact, or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 2nd
day of July, 1999.
/s/ John C. Fanning
- -------------------------------
John C. Fanning
/s/ Harry Maccarrone
- -------------------------------
Harry Maccarrone
/s/ Robert H.B. Baldwin, Jr.
- -------------------------------
Robert H.B. Baldwin, Jr.
20
