UNITED STATES
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):
July 1, 2005
BARRETT BUSINESS SERVICES, INC.
(Exact name of registrant as specified in charter)
Maryland
(State or other jurisdiction of incorporation)
0-21886
(SEC File Number)
52-0812977
(IRS Employer Identification No.)
4724 S.W. Macadam Avenue
Portland, Oregon 97239
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(503) 220-0988
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Credit Agreement
Barrett Business Services, Inc. (the "Company"), entered into a new Credit
Agreement (the "Credit Agreement") with its principal bank, Wells Fargo Bank,
National Association ("Wells Fargo"), effective July 1, 2005. The Credit
Agreement provides for an unsecured revolving credit facility of up to $4.0
million, which includes a subfeature under the line of credit for standby
letters of credit for not more than $4.0 million. The interest rate on advances,
if any, will be, at the Company's discretion, either (i) equal to the prime rate
or (ii) LIBOR plus 1.50%. The Credit Agreement expires July 1, 2006. Copies of
the Credit Agreement and the related Revolving Line of Credit Note dated as of
July 1, 2005, are filed as Exhibits 10.1 and 10.2, respectively, to this report
and incorporated herein by reference.
Pursuant to the Credit Agreement, the Company is required to maintain compliance
with the following financial covenants: (1) a Current Ratio not less than 1.10
to 1.0 with "Current Ratio" defined as total current assets divided by total
current liabilities; (2) net income after taxes not less than $1.00 on an annual
basis, determined as of each fiscal year end; and (3) pre-tax profit not less
than $1.00 on a quarterly basis, determined as of each fiscal quarter end. The
Credit Agreement also restricts the Company from incurring additional debt,
other than for equipment purchases up to a total of $100,000, and from acquiring
any other entity in a transaction involving a purchase price greater than $20
million, without the prior written consent of Wells Fargo.
The Credit Agreement replaces the Company's previous secured revolving credit
facility with Wells Fargo. In connection with the Credit Agreement, Wells Fargo
has released its interest in the Company's assets that secured the previous
facility.
Option Grants
At a meeting held July 1, 2005, the Compensation Committee of the Company's
Board of Directors awarded officers and non-employee directors options to
purchase the Company's common stock under its 2003 Stock Incentive Plan (the
"Plan") as follows: William W. Sherertz, 98,697 shares; Michael D. Mulholland,
43,073 shares; Gregory R. Vaughn, 26,908 shares; Michael L. Elich, 25,000
shares; and Thomas J. Carley, James B. Hicks, Jon L. Justesen, Anthony Meeker,
and Nancy B. Sherertz, 3,750 shares each.
In May 2005, the Board of Directors suspended the automatic annual grants to
non-employee directors provided for under the Plan and the Compensation
Committee deferred annual discretionary grants to executive officers while the
Company considered the effects of new rules regarding the financial accounting
treatment of stock option grants.
The options are exercisable in full beginning July 1, 2005, have a term of ten
years, and have an exercise price of $15.20 per share, the market value as of
the date of grant. Forms of agreements evidencing the option grants are filed as
Exhibits 10.3 and 10.4 to this report and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
10.1 Credit Agreement, dated as of July 1, 2005, between the Company and
Wells Fargo Bank, National Association.
10.2 Revolving Line of Credit Note, dated as of July 1, 2005, in the
amount of $4,000,000 issued to Wells Fargo Bank, National
Association.
10.3 Form of Incentive Stock Option Agreement approved July 1, 2005,
under the 2003 Stock Incentive Plan.
10.4 Form of Nonqualified Stock Option Agreement approved July 1, 2005,
under the 2003 Stock Incentive Plan.
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 thereunto duly authorized.
BARRETT BUSINESS SERVICES, INC.
Dated: July 6, 2005 By: /s/ Michael D. Mulholland
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Michael D. Mulholland
Vice President - Finance