EXHIBIT 4.10
AMENDMENT NO. 2 TO AMENDED AND RESTATED RIGHTS AGREEMENT
THIS AMENDMENT NO. 2 TO AMENDED AND RESTATED RIGHTS AGREEMENT (this
"Amendment"), dated as of February 24, 2004, is entered into by and between
Administaff, Inc., a Delaware corporation (the "Company"), and Mellon Investor
Services LLC, a New Jersey limited liability company, as rights agent (the
"Rights Agent"), pursuant to Section 27 of the Amended and Restated Rights
Agreement, dated as of April 19, 2003, as amended (the "Rights Agreement"),
between the Company and the Rights Agent, at the Company's direction.
RECITALS:
WHEREAS, Section 27 of the Rights Agreement provides that the Company
may in its sole discretion, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of the Rights Agreement in any
respect without the approval of the holders of the Rights; and
WHEREAS, on August 8, 2003 the Company received a copy of a Schedule
13G/A filed by the Earnest Partners, LLC ("Earnest Partners") indicating that
such group beneficially owned 4,082,896 shares of the Company's Common Stock
constituting approximately 15.4% of the outstanding shares of the Company's
Common Stock; and
WHEREAS, subsequent to the filing of the Schedule 13G/A on August 8,
2003, Earnest Partners acquired additional shares of the Company's Common Stock
so that, as of August 19, 2003, Earnest Partners informed the Company that it
beneficially owned 4,481,616 shares of the Company's Common Stock; and
WHEREAS, on August 21, 2003, Amendment No. 1 to the Rights Agreement
was executed to amend the definition of Exempt Person (which excludes persons
who would otherwise be deemed to be Acquiring Persons, as that term is defined
in the Rights Agreement) to include Earnest Partners, subject to certain
limitations set forth therein; and
WHEREAS, subsequent to the execution of Amendment No. 1 to the Rights
Agreement, Earnest Partners acquired additional shares of the Company's Common
Stock so that, as of February 18, 2004, Earnest Partners informed the Company
that it beneficially owned 5,121,454 shares of the Company's Common Stock; and
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company to further amend the definition of
"Exempt Person" in the Rights Agreement with respect to Earnest Partners; and
WHEREAS, in accordance with Section 27 of the Rights Agreement, the
Company has delivered a certificate from an appropriate officer of the Company
stating that this Amendment is in compliance with the terms of Section 27 of the
Rights Agreement;
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein and in the Rights Agreement, the parties hereby agree as
follows:
Section 1. Definitions. Capitalized terms used but not defined herein
shall have the meaning assigned to such terms in the Rights Agreement.
Section 2. Amendments to Rights Agreement. The definition of "Exempt
Person" contained in Section 1 (p) of the Rights Agreement, as amended by
Amendment No. 1, is hereby further amended to read in its entirety as follows:
"Exempt Person" shall mean:
(i) the Company or any Subsidiary (as such term is hereinafter
defined) of the Company or any employee benefit plan of the Company's;
(ii) Paul J. Sarvadi, his spouse, lineal descendants, heirs,
executors or other legal representatives and any trusts or limited
partnerships established for the benefit of the foregoing, or any other
person or entity in which the foregoing persons or entities are at the
time of determination the direct record and beneficial owners of all
outstanding voting securities (collectively, the "Sarvadi
Stockholders"), provided that the Sarvadi Stockholders shall cease to
be an Exempt Person if the shares of Common Stock of which the Sarvadi
Stockholders are the Beneficial Owner exceeds 17% of the shares of
Common Stock then outstanding (the "Sarvadi Threshold");
(iii) Earnest Partners, LLC ("Earnest Partners"), provided
that Earnest Partners shall cease to be an Exempt Person if the shares
of Common Stock of which Earnest Partners is the Beneficial Owner
exceeds 20% of the shares of Common Stock then outstanding (the
"Earnest Threshold," and each of the Earnest Threshold and the Sarvadi
Threshold, a "Threshold"); provided, however, that (a) if during the
term of this Agreement Earnest Partners sells, transfers or otherwise
disposes of any shares of Common Stock of which Earnest Partners is a
Beneficial Owner, the Earnest Threshold shall be reduced to that
percentage of the Common Stock of which Earnest Partners is a
Beneficial Owner, determined immediately after giving effect to such
sale, transfer or other disposition, and (b) if the Earnest Threshold
is reduced during the term of this Agreement to less than 15%, or if
Earnest Partners modifies its Schedule 13G or files a Schedule 13D to
indicate an intent to change or influence control of the Company, then
Earnest Partners shall no longer constitute an Exempt Person. Solely as
to the period prior to the entering into of Amendment No. 2 to this
Agreement, Earnest Partners shall not be deemed to be or to have become
an Acquiring Person for any purpose under this Agreement.
Notwithstanding the foregoing, no Person shall cease to be an Exempt
Person as the result of an acquisition of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person;
provided, however, that if a Person shall become the Beneficial Owner
of more than such Person's relevant Threshold of the Common Stock of
the Company then outstanding by reason of the share purchases of the
Company and shall, after such share purchases by the Company, become
the Beneficial Owner of any additional Common Stock of the Company,
then such Person shall cease to be an "Exempt Person" unless upon the
consummation of the acquisition of such additional shares of Common
Stock such Person does not own more than such Person's relevant
Threshold.
Section 3. Miscellaneous.
(a) The term "Agreement" as used in the Rights Agreement shall be
deemed to refer to the Rights Agreement as amended hereby.
(b) This Amendment shall be effective as of the date first above
written, and, except as set forth herein, the Rights Agreement
shall remain in full force and effect and shall be otherwise
unaffected hereby.
(c) This Amendment may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together
constitute but one and the same instrument.
(d) This Amendment shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed
entirely within such State; provided, however, that all
provisions regarding the rights, duties, liabilities and
obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely
within such State.
(e) Except to the extent specifically amended hereby, the
provisions of the Rights Agreement shall remain unmodified,
and the Rights Agreement as amended hereby is confirmed as
being in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and attested, all as of the day and year
first above written.
ADMINISTAFF, INC.
By: /s/ John H. Spurgin, II
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Name: John H. Spurgin, II
Title: Senior Vice President of Legal,
General Counsel and Secretary
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By: /s/ Mona Vorhees
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Name: Mona Vorhees
Title: Assistant Vice President