COMFORCE Corporation
415 Crossways Park Drive
P.O. Box 9006
Woodbury, NY 11797
March 18, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Re: COMFORCE Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
We are transmitting herewith the above Registrant's Registration Statement
on Form S-3.
Very truly yours,
COMFORCE Corporation
/s/ Robert H.B. Baldwin, Jr.
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Robert H.B. Baldwin, Jr.
Chief Financial Officer
Enclosures
<PAGE>
As filed with the Securities and Exchange Commission on March 19, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
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)
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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)
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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>
(Cover page continued)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement as
determined by market conditions and other factors.
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, 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 Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered (1) Offering Price Per Share Aggregate Offering Price Registration
Registered (2) (2) Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 88,270 $3.875 $342,046 $951
====================================================================================================================================
</TABLE>
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(1) Includes certain shares of common stock of COMFORCE Corporation issuable
pursuant to the terms of a contract entered with COMFORCE.
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c), the offering price and registration fee are
computed on the basis of the average of the high and low prices of
COMFORCE's shares of common stock traded on the American Stock Exchange
within five business days prior to the filing of this registration
statement. The per share price of $3.875 represents such average on March
16, 1999, a date within five business days prior to the filing of this (the
fee as to which is paid herewith).
COMFORCE hereby amends this Registration Statement on such date or dates as may
be necessary to delay its effective date until COMFORCE 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>
Subject to Completion Dated March 18, 1999
PROSPECTUS
COMFORCE Corporation
88,270 Shares of Common Stock
This prospectus relates to 88,270 shares of common stock of COMFORCE
Corporation that may be sold from time to time by the selling stockholders named
in this prospectus.
COMFORCE will not receive any of the proceeds from the sales by the selling
stockholders.
The common stock is traded on the American Stock Exchange under the symbol
"CFS." On March 8, 1999, the last reported sale price of the common stock on the
American Stock Exchange was $4.0625 per share.
Investing in the common stock involves certain risks. You should carefully
consider the risk factors beginning on page 2. Neither the Securities and
Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined that this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
COMFORCE Corporation
415 Crossways Park Drive
P.O. Box 9006
Woodbury, New York 11797
(516) 437-3300
The date of this Prospectus is _________, 1999.
<PAGE>
TABLE OF CONTENTS
Page
Where You Can Find More Information ...........................................2
Risk Factors...................................................................3
The Company....................................................................7
Use of Proceeds................................................................8
Selling Stockholders...........................................................8
Plan of Distribution...........................................................9
Legal Matters..................................................................9
Experts........................................................................9
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, 1997.
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998.
o Our Current Reports on Form 8-K dated October 2, 1998 and January 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: Robert Ende
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.
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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 the
Company may not be able to recruit and retain sufficient personnel to meet the
needs of its 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 the Company's business in several ways:
o The Company may need to reduce its current fee scales without being able to
reduce the personnel costs of its 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 the
Company could experience competition from additional competitors entering
the business.
o The Company may not be able to fulfill its 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 the Company's
services) to ensure the availability of such personnel.
Some of the Company's competitors have greater marketing, financial and
personnel resources than the Company does and could offer increased competition.
The Company expects that the level of competition will remain high in the future
and that this competition could affect the Company's margins, which could have a
material adverse effect on its business, financial condition and results of
operations.
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Dependence on Availability of Qualified Staffing Personnel
The Company's business depends on its ability to attract and retain
personnel who possess the skills and experience necessary to meet the staffing
and consulting requirements of its customers. Competition for individuals with
proven skills in certain areas, particularly information technology, is intense.
The Company competes for such individuals with other contingent staffing and
consulting firms, systems integrators, providers of outsourcing services,
computer systems consultants, customers and personnel agencies. The Company must
continually evaluate and upgrade its base of available personnel to keep pace
with changing customers' needs and emerging technologies. The Company may not be
able to continue to attract qualified personnel in sufficient numbers and on
acceptable economic terms. In addition, although the Company's employment
agreements contain non-compete covenants, the Company may not be able to
effectively enforce such agreements against its 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. The Company has
implemented policies and guidelines to minimize its exposure to these risks.
However, a failure to follow these policies and guidelines may result in
negative publicity and the Company being required to pay money damages or fines.
Although the Company historically has not had any significant problems in this
area, it may experience such problems in the future.
The Company is also exposed to liability for actions taken by its employees
while on assignment, such as damage caused by employee errors, misuse of
customer proprietary information or theft of customer property. The Company
maintains insurance to limit its exposure to these risks. However, because of
the nature of the Company's assignments, in particular the access of its
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
The Company must pay unemployment insurance premiums and workers'
compensation benefits for its 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 the Company
conducts operations raise levels of compensation or liberalize allowable claims.
The Company is focusing on efforts to reduce its potential exposure to such
claims. The Company is largely self-insured with respect to workers'
compensation claims, but it maintains an umbrella insurance policy limiting its
exposure for self-insured claims to $100,000 per claim and a total of $2.5
million in any year. However, the Company may incur costs related to workers'
compensation claims at rates higher than anticipated if it experiences an
increase in the number or the severity of claims.
The Company's 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.
The Company may not be able to increase the fees charged to its 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.
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Potential Impairment of Intangible Assets
More than 50% of the Company's total assets are intangible assets. These
intangible assets substantially represent amounts attributable to goodwill
recorded in connection with the Company's acquisitions and are generally
amortized over a five to forty year period. This amortization results in
significant annual charges. Various factors could impact the Company's 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 the Company's services; and
o the Company's 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 the Company fails 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 the Company's business,
financial condition and results of operations.
Substantial Leverage
The Company has a high level of debt. The Company's level of debt could
have important consequences to you, including the following:
o the Company will have to use a substantial portion of its cash flow from
operations to pay for debt service, rather than for operations or growth;
o the Company's competitors with less debt could have a competitive
advantage;
o the Company 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 the Company will be vulnerable to increases in interest rates to the extent
of borrowings under its senior credit facility;
o the Company may not be able to obtain additional financing for working
capital, capital expenditures, debt service requirements or other purposes;
and
o the Company may have to dispose of material assets or operations or
refinance its debt to meet its debt service obligations. The Company 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 COMFORCE Operating,
Inc., a subsidiary of COMFORCE Corporation, and the credit facility to which
COMFORCE and its subsidiaries are parties, contain restrictions that affect the
Company's ability to incur debt, make distributions, make acquisitions, create
liens, make capital expenditures and affiliate payments and pay dividends. They
also require the Company to limit its capital expenditures, affiliate payments
and dividends. In addition, the Company's credit facility requires the Company
to meet specified financial ratios and tests.
5
<PAGE>
Events beyond the Company's control may affect its ability to comply with
these covenants and restrictions, and the Company may not achieve operating
results that will comply with the financial ratios and tests. If the Company
does not comply with these covenants and restrictions, an event of default could
occur. An event of default under any of the Company's financing agreements could
have a material adverse effect on its business and financial condition if it is
not cured or waived.
Future Capital Needs; Potential Dilution
The Company may need additional financing to fund its strategy of growth
through market development and selective acquisitions. If the Company issues
equity securities to secure any needed financing, its stockholders may
experience dilution. Such equity securities may have rights, preferences, or
privileges senior to those of the common stock. If the Company issues debt
securities, the Company's leverage would increase. See " - Substantial
Leverage."
Risks Associated with Acquisitions
Since October 1995, the Company has completed 10 acquisitions. Acquisitions
involve special risks, including unanticipated liabilities and contingencies and
difficulties related to the integration of the acquired businesses. The Company
is currently in the process of integrating the various information systems of
its acquired businesses. Any significant delay in, or increase in the cost of,
completing this systems integration could have a material adverse effect on the
Company's business, financial condition and results of operations.
Dependence on Key Personnel
The Company depends in a significant way on its management. Its success
depends upon the availability and performance of John Fanning, its Chairman and
Chief Executive Officer, and Harry Maccarrone, its Executive Vice President, and
Robert Baldwin, it Chief Financial Officer. The loss of services of any of these
key persons could have a material adverse effect upon the Company.
Control by Insiders
John Fanning, the Company's Chairman and Chief Executive Officer, currently
controls nearly 30% of its outstanding common stock. As a result, Mr. Fanning
will have a significant influence on all issues submitted to the Company's
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 the Company.
Anti-Takeover Provisions
The Company's 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 the Company, 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
6
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o could contain terms that would
o delay or prevent a change in control of the Company;
o make removal of present management of the Company 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 the
Company.
No Cash Dividends
For the foreseeable future the Company expects to retain its earnings for
the operation and expansion of its business. Thus, the Company does not expect
to pay cash dividends on its common stock. In addition, the Company's 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, the Company had net losses of $3.7 million for the
year ended December 31, 1997. While the Company had net income of $371,000 for
the nine months ended September 30, 1998, the Company's operations may not be
profitable in the future.
Risks Related to the Loss of Key Customers
As is common in the staffing industry, the Company's engagements to provide
services to its 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 the Company's business is done through long-term contracts and contracts
that provide the Company with the first opportunity to supply the personnel
required by the customer. In the first nine months of 1998, one customer
accounted for approximately 12% of the Company's revenues and the largest four
customers accounted for approximately 33% of the Company's revenues. The Company
also has numerous other significant customers. The loss of or a material
reduction in the revenues from any of the Company's significant customers could
have a material adverse effect on its business, results of operations and
financial condition.
Possible Volatility of Stock Price
From time to time, the market price for the Company's common stock has
been, and may continue to be, volatile. The market price may fluctuate because
of the Company's 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
The Company is 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), the
Company recruits and places highly skilled contingent personnel and provides
financial and outsourcing services for a broad customer base of over 2,300
companies, including Boeing Information Services, Microsoft Corporation and Sun
Microsystems. The Company's 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
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office support personnel. COMFORCE has grown dramatically since its
establishment in 1995, through a combination of acquisitions and internal
growth.
The Company is organized into four divisions, Information Technology,
Telecom, Financial Services and Staffing Services, and operates in major markets
throughout the United States. The Information Technology division offers IT
staffing services in a wide range of computer-related disciplines. The Telecom
division provides skilled personnel to plan, design, engineer, install and
maintain wireline and wireless telecommunications systems. Through the Financial
Services' Pro Unlimited division, the Company offers consulting, conversion and
payroll services to companies that require assistance in complying with
regulations associated with the use of independent contractors. The Financial
Services division also provides back office and payroll financing services to
smaller, independent staffing and consulting firms. The Staffing Services
division encompasses two business lines: Technical Services, which provides both
manufacturing and engineering support on research and development and product
design projects, and Professional Services, which provides highly specialized
professional chemists, biologists, engineers and technicians in addition to
skilled clerical personnel.
USE OF PROCEEDS
COMFORCE will not receive any proceeds from the sale of the common stock
offered by the selling stockholders.
SELLING STOCKHOLDERS
The security holder listed below and any transferee, pledgee or assignee of
this holder named in any supplement to this prospectus are offering for resale
88,270 shares of common stock. We undertake to file a supplement to name as a
selling stockholder any such subsequent holder of these shares of common stock.
Because the selling stockholders may offer all or some part of the common stock
they hold pursuant to the offering contemplated by this prospectus, and because
this offering is not being underwritten (on a firm commitment or any other
basis), no estimate can be given as to the amount of common stock that will be
held by the selling stockholders upon termination of this offering. The table
below sets forth information as of March 15, 1999, concerning the beneficial
ownership of common stock of the selling stockholder named below.
Name of Beneficial Owner Shares Beneficially Shares Offered in this
Owned Prospectus
W. Mark Holbrook 386,042 (1) 88,270
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(1) These shares are owned of record by Mr. Holbrook. The shares beneficially
owned by Mr. Holbrook represent less than 1.0% of our issued and
outstanding common stock.
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PLAN OF DISTRIBUTION
We are not aware of any plan of distribution with respect to the shares of
common stock offered by this prospectus. The selling stockholders may effect
sales in one or more transactions (which many involve block transactions) (i) on
the American Stock Exchange, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchange or in the over-the-counter market
or (iv) in a combination of any such transactions. The selling stockholders may
effect these sales at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices or at fixed
prices. Furthermore, they may effect these sales by selling shares to or through
underwriters, brokers or dealers, and such underwriters, brokers or dealers may
receive compensation in the form of discounts or commissions from the selling
stockholders and may receive commissions from the purchasers of shares for whom
they may act as agent.
The selling stockholders and any broker-dealers who participate in a sale
of its shares of common stock may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933, and any commissions
received by them, and proceeds of any such sales as principal, may be deemed to
be underwriting discounts and commissions under the Securities Act.
We will bear all expenses of the registration of this common stock, which
we believe will be about $5,000. When we are required to update this prospectus,
we may incur additional expenses in excess of this estimated amount. The selling
shareholders will be required to pay normal commission expenses and brokerage
fees, as well as any applicable transfer taxes.
We will not receive any proceeds from the sale of the common stock offered
hereby by the selling stockholders.
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, 1997 and 1996, and the consolidated statements of operations,
changes in stockholders' equity (deficit) and cash flows for each of the three
years in the period ended December 31, 1997, 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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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses estimated to be incurred (other than the fees of the
Commission which are actual) in connection with the offering, all of which are
payable by COMFORCE, are as follows:
Description Amount
- ------------------------------------- ---------------------
SEC. Registration Fee $ 951
Printing Costs 200*
Legal Fees 2,500*
Accounting Fees 1,500*
Miscellaneous 349*
Total $ 5,500*
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*Estimate
Item 15. Indemnification of Directors and Officers.
The Registrant's Bylaws effectively provide that the Registrant, 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 COMFORCE 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 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 no present intention of entering into separate indemnification
agreements with its current directors, officers, or employees but may do so in
the future. It may also enter into contracts with anyone else it is permitted to
indemnify under Delaware law, but has no present intention of doing so.
COMFORCE maintains insurance against liabilities under the Securities Act
of 1933 for the benefit of its officers and directors.
II-1
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Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers or
persons controlling COMFORCE pursuant to the foregoing provisions, COMFORCE 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 16. 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 COMFORCE'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 COMFORCE'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
COMFORCE, 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 COMFORCE filed with the Commission
on October 24, 1997 and incorporated herein by reference).
3.1 Restated Certificate of Incorporation of COMFORCE, 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 COMFORCE filed with
the Commission on May 10, 1996 and incorporated herein by reference).
3.2 Certificate of Ownership (Merger) of COMFORCE Corporation into COMFORCE
(included as an exhibit to COMFORCE's Annual Report on Form 10-K for the
year ended December 31, 1995 and incorporated herein by reference).
3.3 Bylaws of COMFORCE, as amended and restated effective as of February 26,
1997 (included as an exhibit to COMFORCE'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 COMFORCE (included as an
exhibit to COMFORCE's Current Report on Form 8-K dated November 8, 1996
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
COMFORCE'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 COMFORCE 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 COMFORCE and NatWest Capital
Markets Limited, as Initial Purchaser (included as an exhibit to the
Registration Statement on Form S-4 of COMFORCE filed with the Commission
on December 24, 1997 and incorporated herein by reference).
II-2
<PAGE>
10.4 Warrant Agreement dated November 26, 1997 by and between COMFORCE and The
Bank of New York, as Warrant Agent (included as an exhibit to the
Registration Statement on Form S-4 of COMFORCE filed with the Commission
on December 24, 1997 and incorporated herein by reference).
10.5 Pledge Agreement dated November 26, 1997 by and between COMFORCE and The
Bank of New York, as Collateral Agent (included as an exhibit to the
Registration Statement on Form S-4 of COMFORCE filed with the Commission
on December 24, 1997 and incorporated herein by reference).
10.6 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 COMFORCE's Current
Report on Form 8-K dated December 9, 1997 and incorporated herein by
reference).
10.7 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
COMFORCE's Current Report on Form 8-K dated December 9, 1997 and
incorporated herein by reference).
21.1* List of Subsidiaries.
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.
- ----------
* Filed herewith.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
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.
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<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 March 18, 1999.
COMFORCE Corporation
(Registrant)
By: /s/ Robert H.B. Baldwin, Jr.
----------------------------------
Robert H.B. Baldwin, Jr.,
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John C. Fanning and Harry Maccarrone, or any one
of them, his true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution for him and in his name, place and stead in any
and all capacities to execute in the name of each such person who is then an
officer or director of the Registrant any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same
with all exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing required or necessary to be done in and about the premises
as fully as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
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:
SIGNATURE TITLE DATE
- --------------------------- ---------------------- ------------
/s/ John C. Fanning Chairman, Chief Executive March 17, 1999
- --------------------------- Officer and Director
John C. Fanning
/s/ Harry Maccarrone Executive Vice President March 17, 1999
- --------------------------- and Director (Principal
Harry Maccarrone Accounting Officer)
/s/ Robert H.B. Baldwin, Jr. Chief Financial Officer March 17, 1999
- --------------------------- (Principal Financial
Robert H.B. Baldwin, Jr. Officer)
/s/ Daniel Raynor Director March 17, 1999
- ---------------------------
Daniel Raynor
/s/ Gordon Robinett Director March 17, 1999
- ---------------------------
Gordon Robinett
/s/ Keith Goldberg Director March 17, 1999
- ---------------------------
Keith Goldberg
/s/ Michael D. Madden Director March 17, 1999
- ---------------------------
Michael D. Madden
/s/ Marc Werner Director March 17, 1999
- ---------------------------
Marc Werner
II-4
Exhibit 21.1
Subsidiaries of COMFORCE Corporation
The following is a complete list of all of the subsidiaries of COMFORCE
Corporation with jurisdiction of incorporation indicated thereby.
1. COMFORCE Operating, Inc. (Delaware)
2. COMFORCE Technical Services, Inc. (Delaware)
3. COMFORCE Information Technologies, Inc. (Delaware)
4. COMFORCE Telecom, Inc. (Delaware)
5. Project Staffing Support Team, Inc. (Arizona)
6. RHO Acquisition Company (Delaware)
7. RHO Company Incorporated (Washington)
8. COMFORCE IT Acquisition Corp., Inc. (Delaware)
9. Force Five, Inc. (Texas)
10. SUMTEC Corporation (Delaware)
11. Uniforce Services, Inc. (New York)
12. PrO Unlimited, Inc. (New York)
13. E.O. Operations Corp. (New York)
14. E.O. Servicing Co., Inc. (New York)
15. Uniforce Staffing Services, Inc. (New York)
16. PrO N.E., Inc. (New York)
17. USSI-NE Corp. (New York)
18. Uniforce Information Services, Inc. (New York)
19. Uniforce Payrolling Services, Inc. (New York)
20. USI Inc. of California (California)
21. UTS Corp. of Minnesota (Minnesota)
22. UTS of Delaware, Inc. (Delaware)
23. LabForce of America, Inc. (New York)
24. Uniforce MIS Services of Georgia, Inc. (Georgia)
d/b/a Brannon & Tully, Inc.
25. Uniforce Medical Office Support, Inc. (New York)
26. Uniforce Information Services of Texas, Inc. (New York)
27. Temporary Help Industry Servicing Co., Inc. (New York)
28. Montare International, Inc. (Texas)
29. Brannon & Tully, Inc. (Georgia)
30. Staffing Industry Funding & Support, Inc. (New York)
31. Professional Staffing Funding & Support, Inc. (New York)
32. Brentwood Service Group, Inc. (New York)
33. Tempfunds International, Inc. (New York)
34. Computer Consultants Funding & Support, Inc. (New York)
35. Thisco of Canada, Inc. (New York)
36. Camelot Consulting Group, Inc. (New Jersey)
37. Camelot Communications Group, Inc. (New Jersey)
38. Camelot Control Group, Inc. (New Jersey)
39. Camelot Group, Inc. (New Jersey)
40. RHO Services, Inc. (Washington)
41. PrO Services, Inc. (Delaware)
42. PrO Unlimited Services, Inc. (Delaware)
43. COMFORCE Technical Administrative Services, Inc. (New York)
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March 17, 1999
COMFORCE Corporation
415 Crossways Park Drive
P.O. Box 9006
Woodbury, NY 11797
RE: COMFORCE Corporation
Registration Statement of Form S-3
Ladies and Gentlemen:
We have acted as counsel for COMFORCE Corporation, a Delaware corporation
(the "Company"), in connection with the registration with the Securities and
Exchange Commission (the "SEC") by the Company of 88,270 shares of the Company's
common stock ("Common Stock") pursuant to the Securities Act of 1933, as amended
(the "Act"), for sale by certain selling stockholders.
In connection with the registration, we have examined the following:
(a) The Certificate of Incorporation and By-laws of the Company, each as
amended to date;
(b) The Registration Statement on Form S-3 (the "Registration Statement"),
including the prospectus which is a part thereof (the "Prospectus"),
relating to the Common Stock, as filed with the SEC;
(c) Resolutions of the Board of Directors of the Company authorizing the
issuance of the Common Stock; and
(d) Such other agreements, documents, records, opinions, certificates and
papers as we have deemed necessary or appropriate in order to give the
opinions hereinafter set forth.
The opinions hereinafter expressed are subject to the following
qualifications and assumptions:
(i) In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity of all documents submitted to us as copies to the originals
thereof.
(ii) As to the accuracy of certain factual matters, we have relied on the
certificates of officers of the Company and certificates, letters,
telegrams or statements of public officials.
Based upon and subject to the foregoing, we are pleased to advise you that,
insofar as the laws of the State of Delaware are concerned, it is our opinion
that the 88,270 shares of Common Stock being registered for resale under the
Registration Statement are or, upon issuance, will be legally issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the use of our name in the Prospectus in
connection with the matters referred to under the caption "Legal Matters."
Very truly yours,
/s/ Doepken Keevican & Weiss
DOEPKEN KEEVICAN & WEISS
PROFESSIONAL CORPORATION
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EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of COMFORCE Corporation on Form S-3 (File no. ) of our report dated February 23,
1998, on our audits of the consolidated financial statements and financial
statement schedules of COMFORCE Corporation as of December 31, 1997 and 1996 and
for the years ended December 31, 1997, 1996 and 1995, 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
March 18, 1999
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