SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): MARCH 7, 2000
WESTAFF, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-024990 94-1266151
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
301 LENNON LANE, WALNUT CREEK, CA 94598
(Address of principal executive offices/Zip Code)
Registrant's telephone number, including area code: (925) 930-5300
Former name, former address, and former fiscal year, if changed since last
report: N/A
ITEM 5. OTHER EVENTS.
On March 7, 2000, Westaff, Inc. ("Westaff"), a Delaware corporation,
Cornerstone Equity Investors IV, L.P. ("Cornerstone"), Centre Capital Investors
III, L.P. ("Centre"), Westaff Acquisition Corp. ("Merger Sub"), a Delaware
corporation formed by Centre and Cornerstone, and The Stover Revocable Trust,
The Stover 1999 Charitable Remainder Unitrust and The Stover Foundation
(collectively, the "Stockholders") entered into a Recapitalization Agreement and
Plan of Merger (the "Merger Agreement").
Pursuant to, and subject to, the terms and conditions of the Merger
Agreement: (i) Westaff will amend its Certificate of Incorporation or adopt a
Certificate of Designation to create a new series of Preferred Stock ("New
Preference Stock"); (ii) the Stockholders (together with certain members of
Westaff's management) will exchange an aggregate of 500,000 shares of Westaff
common stock for shares of New Preference Stock; (iii) each of Cornerstone and
Centre will contribute $31,645,020 to the equity of Westaff in exchange for
316,450.2 shares each of New Preference Stock; and (iv) Westaff and Merger Sub
will effect a merger in which (A) each share of the capital stock of Merger Sub
issued and outstanding immediately prior to the effective time of the merger
will be converted into the right to receive $1,000, (B) each share of Westaff
common stock and New Preference Stock (if any) held in the treasury of Westaff
or by any wholly owned subsidiary of Westaff will be canceled and retired,
without any consideration, (C) each other share of Westaff common stock issued
and outstanding immediately prior to the effective time of the merger (other
than shares with respect to which appraisal rights have been perfected) will be
converted into the right to receive $10.00 per share in cash, (D) each share of
New Preference Stock issued and outstanding immediately prior to the effective
time of the merger will be converted into the right to receive 10 shares of
common stock and 10 shares of preferred stock of the surviving corporation in
the merger, and (E) each option to purchase Westaff common stock issued and
outstanding immediately prior to the effective time of the merger will be
converted into the right to receive the product of (x) the excess, if any, of
$10.00 over the exercise price per share of such option and (y) the number
of shares of Westaff common stock subject to the option (the foregoing items (i)
- - (iv) are collectively referred to as the "Transactions").
Consummation of the Transactions is subject to various conditions,
including: (i) receipt of the approval of the holders of at least 66 2/3% of the
outstanding shares of Westaff's common stock; (ii) expiration or early
termination of the waiting period under the Hart-Scott Rodino Antitrust
Improvements Act of 1976, as amended; and (iii) receipt of debt financing
pursuant to commitment letters.
The Merger Agreement and the Transactions will be submitted for
approval at a meeting of the holders of shares of Westaff common stock.
In connection with the Merger Agreement, the Stockholders and Merger
Sub entered into a Support Agreement, dated as of March 7, 2000 (the "Support
Agreement"), whereby the
Stockholders, who beneficially own in the aggregate approximately 53% of the
outstanding shares of Westaff common stock, agreed to, among other things, vote
(or cause to be voted) their shares of Westaff common stock at any stockholders'
meeting (i) in favor of the Merger, the adoption of the Merger Agreement and
approval of the Transactions; and (ii) against any competing transaction (as
defined in the Merger Agreement) or any amendment of Westaff's Certificate of
Incorporation or by-laws or other proposal or transaction involving Westaff or
any of its subsidiaries, which amendment or other proposal or transaction would
in any manner impede, frustrate, prevent or nullify, the Merger, the Merger
Agreement or any of the Transactions. Under the Support Agreement, the
Stockholders also granted an irrevocable proxy to certain individuals designated
by Merger Sub to vote their shares as described above at any meeting of
stockholders.
The Merger Agreement and the Support Agreement also include
"fiduciary out" and "break-up fee" provisions applicable under certain
circumstances to the Company and the Stockholders.
The foregoing summary of the Merger Agreement, the Support Agreement
and the Transactions is qualified in its entirety by reference to the text of
the Merger Agreement, the Support Agreement and Westaff's press release dated
March 7, 2000, which are attached hereto as Exhibits 2.1, 2.2, and 99.1,
respectively, and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits
The following Exhibits are provided in accordance with the
provisions of Item 601 of Regulation S-K and are filed herewith unless otherwise
noted.
* 2.1 Recapitalization Agreement and Plan of Merger, dated March
7, 2000, among Westaff Acquisition Corp., Westaff, Inc., The
Stover Revocable Trust, The Stover 1999 Charitable Remainder
Unitrust, The Stover Foundation, Cornerstone Equity Investors
IV, L.P. and Centre Capital Investors III, L.P.
2.2 Support Agreement, dated as of March 7, 2000, by and among
Westaff Acquisition Corp. and The Stover Revocable Trust, The
Stover 1999 Charitable Remainder Unitrust, and The Stover
Foundation.
99.1 Press Release of Westaff, Inc. dated March 7, 2000.
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* The Exhibits and schedules thereto have been omitted but copies thereof
will be furnished supplementally to the Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTAFF, INC.
By: /s/ Paul A. Norberg
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Paul A. Norberg
Executive Vice President
and Chief Financial Officer
March 10, 2000
EXHIBIT INDEX
2.1 Recapitalization Agreement and Plan of Merger, dated March 7,
2000, among Westaff Acquisition Corp., Westaff, Inc., The
Stover Revocable Trust, The Stover 1999 Charitable Remainder
Unitrust, The Stover Foundation, Cornerstone Equity Investors
IV, L.P. and Centre Capital Investors III, L.P.
2.2 Support Agreement, dated as of March 7, 2000, by and among
Westaff Acquisition Corp. and The Stover Revocable Trust, The
Stover 1999 Charitable Remainder Unitrust, and The Stover
Foundation.
99.1 Press Release of Westaff, Inc. dated March 7, 2000.