1
Exhibit 99.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INTERIM SERVICES INC.,
INTERIM MERGER CORPORATION
AND
NORRELL CORPORATION
Dated as of March 24, 1999
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TABLE OF CONTENTS
Page
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Parties..................................................................................................... 1
Preamble.................................................................................................... 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER................................................................ 1
1.1 Merger.......................................................................................... 1
1.2 Time and Place of Closing....................................................................... 1
1.3 Effective Time.................................................................................. 2
ARTICLE 2 - TERMS OF MERGER................................................................................. 2
2.1 Charter......................................................................................... 2
2.2 Bylaws.......................................................................................... 2
2.3 Directors and Officers.......................................................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES..................................................................... 3
3.1 Conversion of Shares............................................................................ 3
3.2 Shares Held by Norrell or Interim............................................................... 5
3.3 Fractional Shares............................................................................... 5
3.4 Conversion of Stock Options..................................................................... 5
3.5 Anti-Dilution Provisions........................................................................ 6
3.6 Withholding..................................................................................... 6
ARTICLE 4 - EXCHANGE OF SHARES.............................................................................. 6
4.1 Exchange Procedures............................................................................. 6
4.2 Rights of Former Norrell Stockholders........................................................... 7
ARTICLE 5 - REPRESENTATIONS OF NORRELL...................................................................... 7
5.1 Organization, Standing, and Power............................................................... 7
5.2 Authority of Norrell; No Breach By Agreement.................................................... 8
5.3 Capital Stock................................................................................... 8
5.4 Norrell Subsidiaries............................................................................ 9
5.5 SEC Filings; Financial Statements............................................................... 10
5.6 Absence of Undisclosed Liabilities.............................................................. 10
5.7 Absence of Certain Changes or Events............................................................ 10
5.8 Material Contracts.............................................................................. 11
5.9 Contract Provisions............................................................................. 11
5.10 Compliance with Laws............................................................................ 11
5.11 Statements True and Correct..................................................................... 11
5.12 Opinion of Financial Advisor.................................................................... 12
5.13 Board Recommendation............................................................................ 12
ARTICLE 6 - REPRESENTATIONS OF INTERIM...................................................................... 12
6.1 Organization, Standing, and Power............................................................... 12
6.2 Authority; No Breach By Agreement............................................................... 13
6.3 Capital Stock................................................................................... 13
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6.4 Norrell Subsidiaries............................................................................ 14
6.5 Statements True and Correct..................................................................... 14
6.6 Authority of Sub................................................................................ 15
6.7 Board Recommendation............................................................................ 15
6.8 SEC Filings; Financial Statements............................................................... 16
6.9 Compliance with Laws............................................................................ 16
6.10 Absence of Undisclosed Liabilities.............................................................. 16
6.11 Absence of Certain Changes or Events............................................................ 17
6.12 Material Contracts.............................................................................. 17
6.13 Opinion of Financial Advisor.................................................................... 17
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION........................................................ 17
7.1 Affirmative Covenants of Norrell................................................................ 17
7.2 Negative Covenants of Norrell................................................................... 18
7.3 Affirmative Covenants of Interim................................................................ 20
7.4 Negative Covenants of Interim................................................................... 20
7.5 Adverse Changes in Condition.................................................................... 21
7.6 Reports......................................................................................... 21
ARTICLE 8 - ADDITIONAL AGREEMENTS........................................................................... 21
8.1 Applications; Antitrust Notification............................................................ 21
8.2 Filings with State Offices...................................................................... 22
8.3 Public Health Council........................................................................... 22
8.4 Agreement as to Efforts to Consummate........................................................... 22
8.5 Confidentiality................................................................................. 23
8.6 Press Releases.................................................................................. 23
8.7 No Solicitation by Norrell...................................................................... 24
8.8 Employee Benefits and Contracts................................................................. 25
8.9 Indemnification................................................................................. 26
8.10 Registration Statement; Proxy Statement......................................................... 27
8.11 Norrell Shareholders'Meeting.................................................................... 28
8.12 Interim Shareholders'Meeting.................................................................... 28
8.13 Exchange Listing................................................................................ 28
8.14 Access to Information........................................................................... 28
8.15 Accounting and Tax Treatment.................................................................... 29
8.16 Interim's Accountant's Letters.................................................................. 29
8.17 Norrell's Accountant's Letters.................................................................. 29
8.18 Director Seat................................................................................... 29
8.19 Tax Opinions.................................................................................... 29
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE............................................... 29
9.1 Conditions to Obligations of Each Party......................................................... 29
9.2 Conditions to Obligations of Interim............................................................ 31
9.3 Conditions to Obligations of Norrell............................................................ 32
ARTICLE 10 - TERMINATION.................................................................................... 33
10.1 Termination..................................................................................... 33
10.2 Effect of Termination........................................................................... 35
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10.3 Non-Survival of Representations and Covenants................................................... 35
ARTICLE 11 - MISCELLANEOUS.................................................................................. 35
11.1 Definitions..................................................................................... 35
11.2 Expenses........................................................................................ 42
11.3 Brokers and Finders............................................................................. 43
11.4 Entire Agreement................................................................................ 43
11.5 Amendments...................................................................................... 44
11.6 Waivers......................................................................................... 44
11.7 Assignment...................................................................................... 44
11.8 Notices......................................................................................... 44
11.9 Governing Law................................................................................... 45
11.10 Counterparts.................................................................................... 45
11.11 Captions; Articles and Sections................................................................. 45
11.12 Interpretation.................................................................................. 46
11.13 Enforcement of Agreement........................................................................ 46
11.14 Severability.................................................................................... 46
Signatures.................................................................................................. 47
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of March 24, 1999, by and among NORRELL CORPORATION
("Norrell"), a Georgia corporation; INTERIM MERGER CORPORATION ("Sub"), a
Delaware corporation; and INTERIM SERVICES INC. ("Interim"), a Delaware
corporation.
Preamble
The respective Boards of Directors of Norrell, Interim and Sub are of
the opinion that the transactions described herein are in the best interests of
the parties to this Agreement and their respective shareholders. This Agreement
provides for the merger of Norrell with Interim pursuant to the merger of
Norrell with and into Sub. At the effective time of such merger, each
outstanding share of the capital stock of Norrell will be converted into the
right to receive the Merger Consideration, as set forth herein. As a result,
Norrell will continue to conduct its business and operations as a wholly owned
subsidiary of Interim. The transactions described in this Agreement are subject
to the approvals of the shareholders of each of Interim and Norrell, expiration
of the required waiting period under the HSR Act, and the satisfaction of
certain other conditions described in this Agreement.
Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, Norrell will be merged with and into Sub in
accordance with the provisions of Section 252 of the DGCL, and in accordance
with the provisions of Section 14-2-1101 et. seq. of the GBCC (the "Merger").
Sub will be the Surviving Corporation resulting from the Merger and will be a
wholly owned Subsidiary of Interim and will continue to be governed by the Laws
of the State of Delaware. The Merger will be consummated pursuant to the terms
of this Agreement, which has been approved and adopted by the respective Boards
of Directors of Norrell, Sub and Interim and by Interim, as the sole
shareholder of Sub.
1.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs, or at such other time as the Parties, acting
through their authorized officers, may mutually agree, at the offices of Alston
& Bird LLP in Atlanta, Georgia or at such other location as may be mutually
agreed upon by the Parties.
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1.3 Effective Time. Subject to the terms and conditions hereof,
unless otherwise mutually agreed upon in writing by the authorized officers of
each Party, the Parties will use their reasonable efforts to cause the
Certificate of Merger to be filed with the Secretary of State of the State of
Delaware and the Articles of Merger to be filed with the Secretary of State of
the State of Georgia on the first business day following the last to occur of
(i) the effective date (including expiration of any applicable waiting period)
of the last required Consent of any Regulatory Authority having authority over
and approving or exempting the Merger, (ii) the date on which all conditions
required pursuant to Article 9 herein have been satisfied or waived, (iii) the
date on which the shareholders of Norrell approve this Agreement, (iv) the date
on which the shareholders of Interim approve this Agreement, and (v) the date
on which all other approvals required by the Articles of Incorporation and
Bylaws of Norrell and the Certificate of Incorporation and Bylaws of each of
Interim and Sub are obtained. The Merger and other transactions contemplated by
this Agreement will become effective on the later to occur of the date and at
the time (a) the Certificate of Merger reflecting the Merger is filed with the
Secretary of State of the State of Delaware, and (b) the Articles of Merger
reflecting the Merger are filed with the Secretary of State of the State of
Georgia (the "Effective Time").
ARTICLE 2
TERMS OF MERGER
2.1 Charter. At the Effective Time, the Certificate of
Incorporation of Sub shall be amended to change the name of Sub to Norrell
Corporation. From and after the Effective Time, the Certificate of
Incorporation of Sub, as so amended, will be the Certificate of Incorporation
of the Surviving Corporation until duly amended or repealed.
2.2 Bylaws. The Bylaws of Sub in effect immediately prior to the
Effective Time will be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.3 Directors and Officers. The directors of Sub in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, will serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation. The officers of Norrell in office immediately prior
to the Effective Time, together with such additional persons as may thereafter
be elected, will serve as the officers of the Surviving Corporation from and
after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of Interim, Norrell, Sub or the shareholders of any of the
foregoing:
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(a) Each share of capital stock of Interim issued and
outstanding immediately prior to the Effective Time will remain issued and
outstanding from and after the Effective Time.
(b) Each share of Sub Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time
(c) Each share of Norrell Common Stock, excluding shares
held by any Norrell Entity or any Interim Entity, issued and outstanding
immediately prior to the Effective Time will cease to be outstanding and will
be converted into and exchanged for the right to receive 0.9 share of Interim
Common Stock (the "Merger Shares"), subject to Section 3.1(d) below.
(d) Notwithstanding Section 3.1(c) above, and subject to
Sections 3.1(e) and (f), each share of Norrell Common Stock, excluding shares
held by any Norrell Entity or Interim Entity, issued and outstanding
immediately prior to the Effective Time may, in lieu of the Merger Shares and
at the election of such holder in accordance with Section 3.1(e), be exchanged
for the right to receive a cash payment equal to the greater of (i) 0.9 times
the Base Period Trading Price or (ii) $16.00 (the "Cash Payment") with respect
to all or such lesser number of such holder's shares of Norrell Common Stock
that is a whole multiple of 100 shares (such an election is hereinafter
referred to as a "Cash Election" and the shares of Norrell Common Stock with
respect to which a Cash Election is made are hereinafter referred to as the
"Cash Election Shares").
(e) An election form (the "Election Form") and other
appropriate and customary transmittal materials (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
theretofore representing shares of Norrell Common Stock shall pass only upon
proper delivery of such certificates to the Exchange Agent and such other
matters as Interim shall reasonably require) in such form as Interim and
Norrell shall mutually agree shall be mailed at the same time as the Proxy is
mailed to the Norrell Shareholders or on such other date as Norrell and Interim
shall mutually agree ("Mailing Date") to each holder of record of Norrell
Common Stock as of five business days prior to the Mailing Date ("Election Form
Record Date").
Each Election Form shall permit the holder of Norrell Common Stock (or
the beneficial owner thereof through appropriate and customary documentation
and instructions) to elect to receive only the Cash Payment, in lieu of the
Merger Shares, with respect to Cash Election Shares, subject to reductions in
the number of Cash Election Shares as set forth in Section 3.1(f).
Any Norrell Common Stock with respect to which the holder (or the
beneficial owner, as the case may be) shall not have submitted to the Exchange
Agent, an effective, properly completed Election Form on or before 5:00 p.m.,
on the 20th day following the Mailing Date (or such other time and date as
Interim and Norrell may mutually agree) (the "Election Deadline") shall be
exchanged for the Merger Shares in accordance with Section 3.1(c).
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Interim shall make available one or more Election Forms as may be
reasonably requested by all persons who become holders (or beneficial owners)
of Norrell Common Stock between the Election Form Record Date and close of
business on the business day prior to the Election Deadline, and Norrell shall
provide to the Exchange Agent all information reasonably necessary for it to
perform as specified herein.
Any such Cash Election shall have been properly made only if the
Exchange Agent shall have actually received a properly completed Election Form
by the Election Deadline. An Election Form shall be deemed properly completed
only if accompanied by one or more certificates (or customary affidavits and
indemnification regarding the loss or destruction of such certificates or the
guaranteed delivery of such certificates) representing all shares of Norrell
Common Stock covered by such Election Form, together with duly executed
transmittal materials included in the Election Form. Any Election Form may be
revoked or changed by the person submitting such Election Form at or prior to
the Election Deadline. In the event an Election Form is revoked prior to the
Election Deadline, the shares of Norrell Common Stock represented by such
Election Form shall be treated as if no Cash Election had been made with
respect thereto. Subject to the terms of this Agreement and of the Election
Form, the Exchange Agent shall have reasonable discretion to determine whether
any election, revocation or change has been properly or timely made and to
disregard immaterial defects in the Election Form, and any good faith decisions
of the Exchange Agent regarding such matters shall be binding and conclusive.
Neither Interim nor the Exchange Agent shall be under any obligation to notify
any person of any defect in an Election Form.
(f) Within five (5) calendar days after the Election
Deadline, the Exchange Agent shall determine the aggregate number of Cash
Election Shares as to which a Cash Election was timely and properly made. If:
(a) the number of Cash Election Shares would, but for the provisions of this
Section 3.1(f), result in the sum of (i) the aggregate amount of the Cash
Payments plus (ii) all payments made since March 24, 1996 by any Norrell Entity
in connection with extraordinary dividends or the purchase or redemption of
Norrell Common Stock (the sum of the amounts determined pursuant to clauses
(a)(i) and (a)(ii) is referred to herein in the aggregate as the "Deemed Cash
Purchase Price"), to exceed 49% (the "Percentage Maximum") of the sum of (x) the
aggregate amount of the Deemed Cash Purchase Price plus (y) the aggregate fair
market value of the Merger Shares; or (b) the aggregate amount of the Cash
Payments would, but for the provisions of this Section 3.1(f), exceed $175
million (the "Maximum Cash Payment"); then the aggregate number of Cash Election
Shares shall be reduced to the highest number of Cash Election Shares that
causes neither the Percentage Maximum nor the Maximum Cash Payment to be
exceeded (the "Maximum Cash Election Shares"), with each Cash Election being
reduced to the number of Cash Election Shares determined by multiplying (a) the
number of such holder's Cash Election Shares originally subject to such Cash
Election by (b) a fraction, (i) the numerator of which is the Maximum Cash
Election Shares and (ii) the denominator of which is the aggregate number of
Cash Election Shares originally subject to all Cash Elections. For purposes of
this Section 3.1(f), the fair market value of a Merger Share shall be equal to
the closing price of a share of Interim Common Stock on the New York Stock
Exchange on the trading day immediately preceding the day on which the Effective
Time occurs. The number of shares of Norrell Common Stock that remain subject to
such Cash Election after the foregoing reduction shall be deemed converted into
and
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exchanged for the right to receive the Cash Payment as provided in Section
3.1(d). The Cash Election as to any shares of Norrell Common Stock that
represent the amount by which any Cash Election is reduced as a result of the
application of this Section 3.1(f) shall be deemed revoked, and such shares
shall remain converted into and exchanged for the right to receive the Merger
Shares as provided in Section 3.1(c).
3.2 Shares Held by Norrell or Interim. Each of the shares of
Norrell Common Stock held by any Norrell Entity or by any Interim Entity, other
than the shares of Common Stock of the Surviving Corporation into which shares
of Sub Common Stock are converted as provided in Section 3.1(b), will be
cancelled and retired at the Effective Time and no consideration will be issued
in exchange therefor.
3.3 Fractional Shares. Notwithstanding any other provision of
this Agreement, each holder of shares of Norrell Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Interim Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
Interim Common Stock multiplied by the Base Period Trading Price. No such
holder will be entitled to dividends, voting rights, or any other rights as a
shareholder in respect of any fractional share.
3.4 Conversion of Stock Options. At the Effective Time, each
option or other right to purchase shares of Norrell Common Stock pursuant to
stock options or stock appreciation rights ("Norrell Options") granted by
Norrell under the Norrell Stock Plans, which are outstanding at the Effective
Time, whether or not exercisable, will be converted into an option or right to
purchase 0.9 shares of Interim Common Stock for each share of Norrell Common
Stock subject to such option or right at the exercise or purchase price per
share equal to (i) the exercise price per share in effect under such option or
right immediately prior to the Effective Time, divided by (ii) 0.9, and
otherwise on substantially the same terms and conditions, including the terms
under which such option or rights are exercisable, as in effect under such
options or right immediately prior to the Effective Time. If the terms under
which any such options or right are exercisable are based upon or measured by
performance or characteristics of Norrell or any Norrell Entity, then unless
the terms of such option or right provide for the acceleration of the
exercisability of such option or right upon the occurrence of the transaction
provided for herein, such terms of exercise shall be replaced by terms of
measurement or performance that shall, as nearly as possible, afford to the
holder of such option or right the same opportunity for the exercise of such
option or right as existed immediately prior to the Effective Time.
3.5 Anti-Dilution Provisions. In the event Interim changes the
number of shares of Interim Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in
the case of a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.6 Withholding. Interim or the Exchange Agent shall be entitled
to deduct and withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of shares of Norrell Common Stock such amounts as
Interim or the Exchange Agent is required to
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deduct and withhold with respect to the making of such payment under the Code,
or any provision of state, local or foreign tax law. To the extent amounts are
so withheld by Interim or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Norrell Common Stock in respect of which such deduction and
withholding was made by Interim or the Exchange Agent. Amounts withheld as
herein permitted shall be paid timely to appropriate taxing authorities.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time,
Interim and Norrell will cause the bank or trust company selected by Interim as
the exchange agent (the "Exchange Agent") to mail to each holder of record of a
certificate or certificates which represented shares of Norrell Common Stock
immediately prior to the Effective Time (the "Certificates") appropriate
transmittal materials and instructions (which will specify that delivery will
be effected, and risk of loss and title to such Certificates will pass, only
upon proper delivery of such Certificates to the Exchange Agent). The
Certificate or Certificates so delivered will be duly endorsed as the Exchange
Agent may require. In the event of a transfer of ownership of shares of Norrell
Common Stock represented by Certificates that are not registered in the
transfer records of Norrell, the Merger Consideration may be issued to a
transferee if the Certificates representing such shares are delivered to the
Exchange Agent, accompanied by all documents required to evidence such transfer
and by evidence satisfactory to the Exchange Agent that any applicable stock
transfer taxes have been paid. If any Certificate has been lost, stolen,
mislaid or destroyed, upon receipt of (i) an affidavit of that fact from the
record holder of a Certificate claiming such Certificate to be lost, mislaid,
stolen or destroyed, (ii) such bond, security or indemnity as Interim and the
Exchange Agent may reasonably require and (iii) any other documents necessary
to evidence and effect the bona fide exchange thereof, the Exchange Agent will
issue to such holder the Merger Consideration into which the shares represented
by such lost, stolen, mislaid or destroyed Certificate will have been
converted. The Exchange Agent may establish such other reasonable and customary
rules and procedures in connection with its duties as it may deem appropriate.
After the Effective Time, each holder of shares of Norrell Common Stock (other
than shares to be canceled pursuant to Section 3.2) issued and outstanding at
the Effective Time will surrender the Certificate or Certificates representing
such shares to the Exchange Agent and will promptly upon surrender thereof
receive in exchange therefor the Merger Consideration. Interim will not be
obligated to deliver the Merger Consideration to which any former holder of
Norrell Common Stock is entitled as a result of the Merger until such holder
surrenders such holder's Certificate or Certificates for exchange as provided
in this Section 4.1. Any other provision of this Agreement notwithstanding,
neither Interim, the Surviving Corporation nor the Exchange Agent will be
liable to a holder of Norrell Common Stock for any amounts paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat or similar Law. Approval of this Agreement by the
shareholders of Norrell will constitute ratification of the appointment of the
Exchange Agent.
4.2 Rights of Former Norrell Shareholders. At the Effective Time,
the stock transfer books of Norrell will be closed as to holders of Norrell
Common Stock immediately prior to the Effective Time and no transfer of Norrell
Common Stock by any such
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holder will thereafter be made or recognized. Until surrendered for exchange in
accordance with the provisions of Section 4.1, each Certificate theretofore
representing shares of Norrell Common Stock (other than shares to be canceled
pursuant to Section 3.2) will from and after the Effective Time represent for
all purposes only the right to receive the Merger Consideration in exchange
therefor, subject, however, to the Surviving Corporation's obligation to pay
(if not theretofore paid by Norrell) the quarterly dividend in the amount of
$0.04 per share of Norrell Common Stock, which dividend was declared on March
2, 1999, and is payable April 1, 1999 to holders of record of Norrell Common
Stock on March 17, 1999 (the "Declared Dividend").
ARTICLE 5
REPRESENTATIONS OF NORRELL
Norrell hereby represents to Interim as follows:
5.1 Organization, Standing, and Power. Norrell is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Georgia, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material Assets.
Norrell is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Norrell Material
Adverse Effect. The minute books and other organizational documents for Norrell
have been made available to Interim for its review and, except as disclosed in
Section 5.1 of the Norrell Disclosure Memorandum, are true and complete in all
material respects as in effect as of the date of this Agreement and accurately
reflect in all material respects all amendments to the organizational documents
and all proceedings of the Board of Directors and shareholders thereof.
5.2 Authority of Norrell; No Breach By Agreement.
(a) Except as disclosed in Section 5.2(a) of the Norrell
Disclosure Memorandum, Norrell has all requisite corporate power and authority,
and has taken all corporate action necessary, to execute, deliver, and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby, subject only to the approval of this Agreement and the
transactions contemplated hereby by the holders of a majority of the
outstanding shares of Norrell Common Stock, and to the receipt of any required
approvals by any Regulatory Authority. This Agreement represents a legal,
valid, and binding obligation of Norrell, enforceable against Norrell in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
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(b) Except as disclosed in Section 5.2(b) of the Norrell
Disclosure Memorandum, neither the execution and delivery of this Agreement by
Norrell, nor the consummation by Norrell of the transactions contemplated
hereby, nor compliance by Norrell with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Norrell's Articles of
Incorporation or Bylaws or the certificate or articles of incorporation or
bylaws of any Norrell Subsidiary or any resolution adopted by the board of
directors or the shareholders of any Norrell Entity, or (ii) constitute or
result in a Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any Norrell Entity under, any material
Contract or Permit of any Norrell Entity where such Default or Lien or the
absence of such Consent is likely to result in a Norrell Material Adverse
Effect, or (iii) subject to receipt of the requisite Consents referred to in
Sections 9.1(c) and 9.1(d), constitute or result in a Default under, or require
any Consent pursuant to, any Law or Order applicable to any Norrell Entity or
any of their respective Assets where such Default or the absence of such
Consent is likely to result in a Norrell Material Adverse Effect.
(c) Except as disclosed in Section 5.2(c) of the Norrell
Disclosure Memorandum, and other than Consents required from Regulatory
Authorities, no notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by Norrell of the Merger and the
other transactions contemplated in this Agreement.
5.3 Capital Stock.
(a) As of March 22, 1999, the authorized capital stock
of Norrell consists of (i) 50,000,000 shares of Norrell Common Stock, of which
28,096,745 shares are issued, 26,689,072 shares are outstanding and 1,407,673
shares are held as treasury shares, and (ii) 10,000,000 shares of preferred
stock, no par value per share, none of which are issued and outstanding. All of
the outstanding shares of capital stock of Norrell are duly and validly issued
and outstanding and are fully paid and nonassessable under the GBCC. None of
the outstanding shares of capital stock of Norrell has been issued in violation
of any preemptive rights of the current or past shareholders of Norrell.
(b) Except as disclosed in Section 5.3(b) of the Norrell
Disclosure Memorandum, there are no outstanding Equity Rights relating to the
capital stock of Norrell. Section 5.3(b) of the Norrell Disclosure Memorandum
shows the number of shares of Norrell Common Stock reserved for future issuance
pursuant to Equity Rights outstanding as of the date of this Agreement that
relate to the capital stock of Norrell, the exercise prices and the plans under
which the options were granted.
5.4 Norrell Subsidiaries. Norrell has disclosed in Section 5.4 of
the Norrell Disclosure Memorandum all of the Norrell Subsidiaries that are
corporations (identifying its jurisdiction of incorporation and percentage
ownership interest represented by such share ownership) and all of the Norrell
Subsidiaries that are general or limited partnerships, limited liability
companies, or other non-corporate entities (identifying the Law under which
such entity is organized and the nature of the ownership interest therein).
Except as disclosed in Section 5.4 of the Norrell Disclosure Memorandum,
Norrell or one of its wholly owned Subsidiaries owns all of the issued and
outstanding shares of capital stock (or other equity interests) of each Norrell
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Subsidiary. No capital stock (or other equity interest) of any Norrell
Subsidiary is or may become required to be issued (other than to another
Norrell Entity) by reason of any Equity Rights, and there are no Contracts by
which any Norrell Subsidiary is bound to issue (other than to another Norrell
Entity) additional shares of its capital stock (or other equity interests) or
Equity Rights or by which any Norrell Entity is or may be bound to transfer any
shares of the capital stock (or other equity interests) of any Norrell
Subsidiary (other than to another Norrell Entity). There are no Contracts
relating to the rights of any Norrell Entity to vote or to dispose of any
shares of the capital stock (or other equity interests) of any Norrell
Subsidiary. All of the shares of capital stock (or other equity interests) of
each Norrell Subsidiary held by a Norrell Entity are fully paid and
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Norrell
Entity free and clear of any Lien. Each such Subsidiary is duly organized,
validly existing, and (as to corporations) in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each Norrell Subsidiary
is duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Norrell Material Adverse Effect. The
minute books and other organizational documents for each Norrell Subsidiary
have been made available to Interim for its review and, except as disclosed in
Section 5.4 of the Norrell Disclosure Memorandum, are true and complete in all
material respects as in effect as of the date of this Agreement and accurately
reflect in all material respects all amendments to the organizational documents
and all proceedings of the Board of Directors and shareholders thereof.
5.5 SEC Filings; Financial Statements.
(a) Norrell has timely filed and made available to
Interim all SEC Documents required to be filed by Norrell (the "Norrell SEC
Reports"). The Norrell SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Laws and
other applicable Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in such Norrell SEC Reports
or necessary to make the statements in such Norrell SEC Reports, in light of
the circumstances under which they were made, not misleading. No Norrell
Subsidiary is required to file any SEC Documents.
(b) Each of the Norrell Financial Statements (including,
in each case, any related notes) contained in the Norrell SEC Reports,
including any Norrell SEC Reports filed after the date of this Agreement until
the Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by
Form 10-Q of the SEC), and fairly presented in all material respects the
consolidated financial position of Norrell and its Subsidiaries as at the
respective
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dates and the consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
5.6 Absence of Undisclosed Liabilities. No Norrell Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Norrell Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheet of Norrell as of
January 31, 1999, which balance sheet was disclosed in the Norrell SEC Reports
filed prior to the date hereof, or incurred since January 31, 1999 consistent
with the next sentence. No Norrell Entity has incurred or paid any Liability
since January 31, 1999, except for such Liabilities incurred or paid (i) in the
ordinary course of business consistent with past business practice and which
are not reasonably likely to have, individually or in the aggregate, a Norrell
Material Adverse Effect or (ii) in connection with the transactions
contemplated by this Agreement.
5.7 Absence of Certain Changes or Events. Except as disclosed in
Section 5.7 of the Norrell Disclosure Memorandum, since January 31, 1999 and
except as disclosed in the Norrell Financial Statements delivered prior to the
date of this Agreement, (i) there have been no events, changes, or occurrences
which have had, or are reasonably likely to have, individually or in the
aggregate, a Norrell Material Adverse Effect, and (ii) the Norrell Entities
have not taken any action, or failed to take any action, which action or
failure would represent or result in a material breach or violation of any of
the covenants and agreements of Norrell contained herein.
5.8 Material Contracts. With respect to each Material Norrell
Contract, as defined herein, and except as disclosed in Section 5.8 of the
Norrell Disclosure Memorandum or except as is consistent with ordinary business
or past practices: (i) each Material Norrell Contract is in full force and
effect; (ii) no Norrell Entity is in Default thereunder; (iii) no Norrell
Entity has repudiated or waived any material provision of any such Material
Norrell Contract; and (iv) no other party to any such Material Norrell Contract
is, to the Knowledge of Norrell, in Default in any respect or has repudiated or
waived any material provision thereunder. As used herein, "Material Norrell
Contract" includes (a) any contract filed by Norrell with the SEC and (b) any
other contract to which Norrell, or any Norrell Entity, is a party and which
involves an amount in excess of $5,000,000.
5.9 Contract Provisions. Except as disclosed in Section 5.9 of
the Norrell Disclosure Memorandum, since November 1, 1998, Norrell has not
entered into a Contract that, as a result of the consummation of the
transactions contemplated hereby, either alone or in connection with the
occurrence of an additional event or events, would cause or result in, or give
to any other party to such Contract the right to cause or effect, either (i)
the termination of such Contract, (ii) the payment of any consideration by
Norrell or the Surviving Corporation, or (iii) the loss of any material right
to Norrell or the Surviving Corporation under the terms of such Contract.
5.10 Compliance with Laws. Each Norrell Entity has in effect all
Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except where the absence of which would
not have a Norrell Material Adverse Effect.
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Except as disclosed in Section 5.10 of the Norrell Disclosure Memorandum, and
except for such Defaults as are not reasonably likely to have, individually or
in the aggregate, a Norrell Material Adverse Effect, none of the Norrell
Entities: (a) is in Default under any of the provisions of its Articles of
Incorporation or Bylaws (or other governing instruments), or (b) is in Default
under any Laws, Orders, or Permits applicable to its business or employees
conducting its business. Except as disclosed in Section 5.10 of the Norrell
Disclosure Memorandum, since January 31, 1999, neither Norrell nor any Norrell
Entity has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory Authority
or the staff thereof (i) asserting that any Norrell Entity is not in compliance
with any of the Laws or Orders which such governmental authority or Regulatory
Authority enforces, (ii) threatening to revoke any Permits, or (iii) requiring
any Norrell Entity to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking, other
than such of the foregoing as is not reasonably likely to have, individually or
in the aggregate, a Norrell Material Adverse Effect.
5.11 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by or on behalf of any
Norrell Entity or any Affiliate thereof to or for the benefit of Interim
pursuant to this Agreement or any other document, agreement or instrument
referred to herein contains or will contain any untrue statement of material
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied by any Norrell
Entity or any Affiliate thereof for inclusion in the Registration Statement to
be filed with the SEC, will, when filed and, when the Registration Statement
becomes effective, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by any Norrell
Entity or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to Norrell's shareholders in connection with the Norrell Shareholders'
Meeting and to be mailed to Interim's shareholders in connection with the
Interim Shareholders' Meeting, will, at the time such Proxy Statement is first
mailed to the respective shareholders of Norrell and Interim, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, as to such Proxy Statement or
any amendment thereof or supplement thereto, at the time of each of Interim's
and Norrell's Shareholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the respective Shareholders' Meeting.
5.12 Opinion of Financial Advisor. Norrell has received the
opinion of Goldman Sachs & Co., dated the date of this Agreement, to the effect
that the Exchange Ratio is fair, from a financial point of view, to Norrell's
shareholders.
5.13 Board Recommendation. The Board of Directors of Norrell, at a
meeting duly called and held, has by unanimous vote of those directors present
(who constituted all of the directors then in office) (i) approved the Merger
and declared it to be advisable, (ii) determined that this Agreement and the
transactions contemplated hereby are fair to and in the
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best interests of the shareholders and (iii) resolved to recommend that the
holders of the shares of Norrell Common Stock adopt this Agreement.
ARTICLE 6
REPRESENTATIONS OF INTERIM
Interim hereby represents to Norrell as follows:
6.1 Organization, Standing, and Power. Interim is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Delaware, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material Assets.
Interim is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, an Interim
Material Adverse Effect. Except as disclosed in Section 6.1 of the Interim
Disclosure Memorandum, the minute books and other organizational documents of
Interim have been made available to Norrell for its review and are true and
complete in all material respects as in effect as of the date of this Agreement
and accurately reflect in all material respects all amendments to the
organizational documents and all proceedings of the Board of Directors and
shareholders thereof.
6.2 Authority; No Breach By Agreement.
(a) Except as disclosed in Section 6.2(a) of the Interim
Disclosure Memorandum, Interim has all requisite corporate power and authority,
and has taken all corporate action necessary, to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby, subject only to the approval of this Agreement and the
transactions contemplated hereby by the holders of a majority of the
outstanding shares of Interim Common Stock and to the receipt of any required
approvals by any Regulatory Authority. This Agreement represents a legal,
valid, and binding obligation of Interim, enforceable against Interim in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
(b) Except as disclosed in Section 6.2(b) of the Interim
Disclosure Memorandum, neither the execution and delivery of this Agreement by
Interim, nor the consummation by Interim of the transactions contemplated
hereby, nor compliance by Interim with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Interim's Certificate
of Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any Interim Entity under, any material Contract or Permit of any
Interim Entity, or (iii) subject to receipt of
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the requisite Consents referred to in Section 9.1(c) and 9.1(d), constitute or
result in a Default under, or require any Consent pursuant to, any Law or Order
applicable to any Interim Entity or any of their respective material Assets
where such Default or the absence of such Consent is likely to result in an
Interim Material Adverse Effect.
(c) Other than Consents required from Regulatory
Authorities, no notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by Interim of the Merger and the
other transactions contemplated in this Agreement.
6.3 Capital Stock. As of March 19, 1999, the authorized capital
stock of Interim consists of (i) 100,000,000 shares of Interim Common Stock, of
which 47,427,492 shares are issued, 47,268,292 shares are outstanding and
159,200 shares are held as treasury shares, and (ii) 2,500,000 shares of
preferred stock, par value $0.01 per share, none of which are issued and
outstanding. All of the outstanding shares of capital stock of Interim are, and
all of the shares of Interim Common Stock to be issued as part of the Merger
Consideration upon consummation of the Merger, when issued in accordance with
the terms of this Agreement, will be, duly and validly issued and outstanding
and are fully paid and nonassessable under the DGCL. None of the outstanding
shares of Interim Common Stock has been, and none of the shares of Interim
common Stock to be issued as part of the Merger Consideration upon consummation
of the Merger will be, issued in violation of any preemptive rights of the
current or past shareholders of Interim.
6.4 Interim Subsidiaries. Interim has disclosed in Section 6.4 of
the Interim Disclosure Memorandum all of the Interim Subsidiaries that are
corporations (identifying its jurisdiction of incorporation and percentage
ownership interest represented by such share ownership) and all of the Interim
Subsidiaries that are general or limited partnerships, limited liability
companies, or other non-corporate entities (identifying the Law under which
such entity is organized and the amount and nature of the ownership interest
therein). Except as disclosed in Section 6.4 of the Interim Disclosure
Memorandum, Interim or one of its wholly owned Subsidiaries owns all of the
issued and outstanding shares of capital stock (or other equity interests) of
each Interim Subsidiary. Except as set forth in Section 6.4 of the Interim
Disclosure Memorandum, no capital stock (or other equity interest) of any
Interim Subsidiary is or may become required to be issued (other than to
another Interim Entity) by reason of any Equity Rights, and there are no
Contracts by which any Interim Subsidiary is bound to issue (other than to
another Interim Entity) additional shares of its capital stock (or other equity
interests) or Equity Rights or by which any Interim Entity is or may be bound
to transfer any shares of the capital stock (or other equity interests) of any
Interim Subsidiary (other than to another Interim Entity). Except as disclosed
in Section 6.4 of the Interim Disclosure Memorandum, there are no Contracts
relating to the rights of any Interim Entity to vote or to dispose of any
shares of the capital stock (or other equity interests) of any Interim
Subsidiary. Except as disclosed in Section 6.4 at the Interim Disclosure
Memorandum, all of the shares of capital stock (or other equity interests) of
each Interim Subsidiary held by an Interim Entity are fully paid and
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Interim
Entity free and clear of any Lien. Each such Subsidiary is duly organized,
validly existing, and (as to corporations) in good standing under the
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Laws of the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each Interim Subsidiary
is duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, an Interim Material Adverse Effect.
Except as disclosed in Section 6.4 of the Interim Disclosure Memorandum, the
minute books and other organizational documents for each Interim Subsidiary
have been made available to Norrell for its review, and are true and complete
in all material respects as in effect as of the date of this Agreement and
accurately reflect in all material respects all amendments to the
organizational documents and all proceedings of the Board of Directors and
shareholders thereof.
6.5 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by or on behalf of any
Interim Entity or any Affiliate thereof to or for the benefit of Norrell
pursuant to this Agreement or any other document, agreement or instrument
referred to herein contains or will contain any untrue statement of material
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied by any Interim
Entity or any Affiliate thereof for inclusion in the Registration Statement to
be filed with the SEC, will, when filed and when the Registration Statement
becomes effective, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by any Interim
Entity or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to Norrell's shareholders in connection with the Norrell Shareholders'
Meeting and to be mailed to Interim's shareholders in connection with the
Interim Shareholder's Meeting, will, at the time such Proxy Statement is first
mailed to the respective shareholders of Norrell and Interim, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, as to such Proxy Statement or
any amendment thereof or supplement thereto, at the time of each of Interim's
and Norrell's Shareholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the respective Shareholders' Meeting.
6.6 Authority of Sub. Sub is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware
as a wholly owned Subsidiary of Interim. The authorized capital stock of Sub
consists of 1,000 shares of Sub Common Stock, 100 of which are validly issued
and outstanding, fully paid and nonassessable and are owned by Interim free and
clear of any Lien, except as disclosed in Section 6.6 of the Interim Disclosure
Memorandum,. Sub has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Sub. This
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Agreement represents a legal, valid and binding obligation of Sub, enforceable
against Sub in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought). Interim,
as the sole shareholder of Sub, has voted the shares of Sub Common Stock in
favor of adoption of this Agreement, as and to the extent required by
applicable Law.
6.7 Board Recommendation. The Board of Directors of Interim, at a
meeting duly called and held, has by unanimous vote of those directors present
(who constituted all of the directors then in office) approved the Merger and
declared it to be advisable. The Board of Directors of Sub, by unanimous
written consent action, has approved the Merger. Interim, as the sole
shareholder Sub, has (i) approved the Merger and (ii) resolved to recommend
that the holders of Interim Common Stock approve this Agreement and the
transactions contemplated hereby.
6.8 SEC Filings; Financial Statements.
(a) Interim has timely filed and made available to
Norrell all SEC Documents required to be filed by Interim (the "Interim SEC
Reports"). The Interim SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Laws and
other applicable Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in such Interim SEC Reports
or necessary to make the statements in such Interim SEC Reports, in light of
the circumstances under which they were made, not misleading. No Interim
Subsidiary is required to file any SEC Documents.
(b) Each of the Interim Financial Statements (including,
in each case, any related notes) contained in the Interim SEC Reports,
including any Interim SEC Reports filed after the date of this Agreement until
the Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by
Form 10-Q of the SEC), and fairly presented in all material respects the
consolidated financial position of Interim and its Subsidiaries as at the
respective dates and the consolidated results of operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which were not
or are not expected to be material in amount or effect.
6.9 Compliance with Laws. Each Interim Entity has in effect all
Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except where the absence of which would
not have an Interim Material Adverse Effect. Except as disclosed in Section 6.9
of the Interim Disclosure Memorandum, and except for such Defaults as are not
reasonably likely to have, individually or in the aggregate, an Interim
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Material Adverse Effect, none of the Interim Entities: (a) is in Default under
any of the provisions of its Articles of Incorporation or Bylaws (or other
governing instruments), or (b) is in Default under any Laws, Orders, or Permits
applicable to its business or employees conducting its business. Except as
disclosed in Section 6.9 of the Interim Disclosure Memorandum, since December
25, 1998, neither Interim nor any Interim Entity has received any notification
or communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any Interim Entity is not in compliance with any of the Laws or Orders which
such governmental authority or Regulatory Authority enforces, (ii) threatening
to revoke any Permits, or (iii) requiring any Interim Entity to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, other than such of the foregoing as is not
reasonably likely to have, individually or in the aggregate, an Interim
Material Adverse Effect.
6.10 Absence of Undisclosed Liabilities. Except as disclosed in
Section 6.10 of the Interim Disclosure Memorandum, No Interim Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, an Interim Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheet of Interim as of
December 25, 1998, which balance sheet was disclosed in the Interim SEC Reports
filed prior to the date hereof, or incurred since December 25, 1998 consistent
with the next sentence. No Interim Entity has incurred or paid any Liability
since December 25, 1998, except for such Liabilities incurred or paid (i) in
the ordinary course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the aggregate, an
Interim Material Adverse Effect or (ii) in connection with the transactions
contemplated by this Agreement.
6.11 Absence of Certain Changes or Events. Since December 25,
1998, except as disclosed in the Interim Financial Statements delivered prior
to the date of this Agreement, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or
in the aggregate, an Interim Material Adverse Effect, and (ii) the Interim
Entities have not taken any action, or failed to take any action, which action
or failure would represent or result in a material breach or violation of any
of the covenants and agreements of Interim contained herein.
6.12 Material Contracts. With respect to each Material Interim
Contract, as defined herein, and except as disclosed in Section 6.12 of the
Interim Disclosure Memorandum: (i) the Material Interim Contract is in full
force and effect; (ii) no Interim Entity is in Default thereunder; (iii) no
Interim Entity has repudiated or waived any material provision of any such
Material Interim Contract; and (iv) no other party to any such Material Interim
Contract is, to the Knowledge of Interim, in Default in any respect or has
repudiated or waived any material provision thereunder. As used herein,
"Material Interim Contract" includes (a) any contract filed by Interim with the
SEC and (b) any other contract to which Interim, or any Interim Entity, is a
party and which involves an amount is excess of $5,000,000.
6.13 Opinion of Financial Advisor. Interim has received the
opinion of NationsBanc Montgomery Securities LLC, dated March 24, 1999, to the
effect that the Merger
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Consideration to be paid to Norrell's shareholders upon the consummation of the
Merger is fair, from a financial point of view, to Interim.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of Norrell. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Interim has been obtained, and
except as otherwise expressly contemplated herein, Norrell will and will cause
each of its Subsidiaries to (a) operate its business only in the usual,
regular, and ordinary course, consistent with past practices, (b) use
commercially reasonable efforts to preserve intact its business organization
and Assets and maintain its rights and franchises, and (c) take no action which
would (i) adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentences of
Section 9.1(c) or 9.1(d), or (ii) materially adversely affect the ability of
any Party to perform its covenants and agreements under this Agreement.
7.2 Negative Covenants of Norrell. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Interim has been obtained, and
except as otherwise expressly contemplated herein, Norrell covenants and agrees
that it will not do or agree or commit to do, or permit any of its Subsidiaries
to do or agree or commit to do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of any Norrell Entity, except for the Articles
of Correction of the Amended and Restated Articles of Incorporation of
Norrell, to be filed on March 25, 1999, or as soon as practicable
thereafter;
(b) incur any additional debt obligation or other
obligation for borrowed money, other than indebtedness of a Norrell
Entity to another Norrell Entity, borrowings made in the ordinary
course of business and consistent with past practices under the credit
facilities of Norrell as existing on the date of this Agreement, or
except in the ordinary course of the business of Norrell Entities
consistent with past practices, or impose, or suffer the imposition,
on any Asset of any Norrell Entity, of any Lien or permit any such
Lien to exist;
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any Norrell
Entity, or, after the date hereof, declare or pay any dividend or make
any other distribution in respect of Norrell's capital stock, other
than the Declared Dividend;
(d) except for this Agreement, or pursuant to the
exercise of stock options outstanding as of the date hereof and
pursuant to the terms thereof in existence on the date hereof, or as
disclosed in Section 7.2(d) of the Norrell Disclosure Memorandum,
issue, sell,
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pledge, encumber, authorize the issuance of, enter into any Contract
to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional shares of
Norrell Common Stock or any other capital stock of any Norrell Entity,
or any stock appreciation rights, or any option, warrant, or other
Equity Right;
(e) adjust, split, dividend, combine, reclassify or
recapitalize any capital stock of any Norrell Entity or issue or
authorize the issuance of any other securities in respect of or in
substitution for shares of Norrell Common Stock, or sell, lease,
mortgage or otherwise dispose of or otherwise encumber (x) any shares
of capital stock of any Norrell Subsidiary (unless any such shares of
stock are sold or otherwise transferred to another Norrell Entity) or
(y) any Asset other than in the ordinary course of business consistent
with past practice;
(f) except for purchases of U.S. Treasury securities or
U.S. Government agency securities, which in either case have
maturities of three years or less, purchase any securities or, except
for commitments outstanding prior to the date hereof, make any
investment, either by purchase of stock or securities, contributions
to capital, Asset transfers, or purchase of any Assets, in any Person
other than an existing wholly owned Norrell Subsidiary, or otherwise
acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business,
or (ii) the creation of new wholly owned Subsidiaries organized to
conduct or continue activities otherwise permitted by this Agreement;
(g) grant any increase in compensation or benefits to
the employees or officers of any Norrell Entity, except in accordance
with past practice or as required by Law; pay any severance or
termination pay or any bonus other than pursuant to written policies
or written Contracts in effect on the date of this Agreement and
disclosed in Section 7.2(g) of the Norrell Disclosure Memorandum;
enter into or amend any severance agreements or change in control
agreements with officers or employees of any Norrell Entity; or grant
any increase in fees or other increases in compensation or other
benefits to directors of any Norrell Entity; or voluntarily accelerate
the vesting of any stock options or other stock based compensation or
employee benefits or other Equity Rights;
(h) except for Contracts entered into in the ordinary
course of business consistent with past practices, enter into or amend
any employment Contract between any Norrell Entity and any Person
(unless such amendment is required by Law) that the Norrell Entity
does not have the unconditional right to terminate upon not more than
thirty (30) days written notice without Liability (other than
Liability for services already rendered or for severances permitted by
Section 7.2(g) herein), at any time on or after the Effective Time;
(i) adopt any new employee benefit plan of any Norrell
Entity or terminate or withdraw from, or make any material change in
or to, any existing employee benefit plans of any Norrell Entity other
than any such change that is required by Law or that, in the opinion
of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan, or make any distributions from such employee
benefit plans, except as required by Law, the terms of such plans or
consistent with past practice;
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(j) make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in tax Laws or regulatory accounting
requirements or GAAP;
(k) commence any Litigation or settle any Litigation
involving any Liability of any Norrell Entity for money damages
exceeding $250,000 or material restrictions upon the operations of any
Norrell Entity;
(l) except as disclosed in Section 7.2(l) of the Norrell
Disclosure Memorandum, enter into, modify, amend or terminate any
material Contract or waive, release, compromise or assign any material
rights or claims, which action would result in a Norrell Material
Adverse Effect; or
(m) elect or appoint any new officer or director of any
Norrell Entity other than in the ordinary course of business.
7.3 Affirmative Covenants of Interim. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Norrell has been obtained, and
except as otherwise expressly contemplated herein, Interim covenants and agrees
that it will take no action which would (i) materially adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the
type referred to in the last sentences of Section 9.1(c) or 9.1(d), or (ii)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement. Interim further covenants and agrees that
it will not, without the prior written consent of Norrell, amend the
Certificate of Incorporation or Bylaws of Interim, in each case, in any manner
adverse to the holders of Norrell Common Stock as compared to the rights of the
holders of Interim Common Stock generally as of the date of this Agreement.
7.4 Negative Covenants of Interim. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Norrell has been obtained, and
except as otherwise expressly contemplated herein, Interim covenants and agrees
that it shall, and shall cause the Interim Entities to, carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, except where the failure
to so act would not materially adversely affect Interim's ability to perform
its obligations hereunder, and that Interim will not do or commit to do, or
permit any of its Subsidiaries to do or commit to do, any of the following:
(a) amend the Certificate of Incorporation, Bylaws or
other governing instruments of Interim so as to create any difference
between the rights, preferences and benefits of the Interim Common
Stock and the rights, preferences and benefits of that class of
securities of Interim having unlimited voting rights and the right to
receive the net assets of Interim upon dissolution;
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(b) declare or pay any dividend or make any other
distribution in respect of Interim's capital stock, other than an
issuance of rights under the Rights Agreement between Interim and
Boatmen's Trust Company dated March 17, 1994, as amended through the
date hereof, and as may be amended and dividends payable solely in
Interim Common Stock; or
(c) enter into, modify, amend or terminate any material
Contract or waive, release, compromise or assign any material rights
or claims, which action would result in an Interim Material Adverse
Effect; or
(d) cause or permit the shares of Interim Common Stock
to not be listed for trading on the NYSE.
Notwithstanding anything herein to the contrary, nothing contained in this
Agreement shall prohibit Interim from entering into acquisition transactions
and consummating such transactions or engaging in debt and/or equity
transactions, on an arm's length basis, provided, however, that prior to the
Effective Time, without the prior written consent of Norrell, Interim shall not
consummate or enter into any of the foregoing if such transaction would
materially and adversely affect Interim's ability to consummate the
transactions contemplated by this Agreement.
7.5 Adverse Changes in Condition. Norrell agrees to give written
notice promptly to Interim upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Norrell Material Adverse Effect, or (ii) would cause or constitute
a material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same. Interim agrees to give written notice promptly to Norrell upon
becoming aware of the occurrence or impending occurrence of any event or
circumstance relating to it or any of its Subsidiaries which (i) is reasonably
likely to have, individually or in the aggregate, an Interim Material Adverse
Effect, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same. The giving of
notice pursuant to this Section 7.5 by either party shall not be deemed a
waiver by the receiving Party of any representation, warranty or covenant
contained herein.
7.6 Reports. Each Party and its Subsidiaries will file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and will deliver to the other Party
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the
entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
material). As of their respective dates, such reports filed with the SEC will
comply in all material respects with the Securities Laws and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
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statements therein, in light of the circumstances under which they were made,
not misleading. Any financial statements contained in any other reports to
another Regulatory Authority will be prepared in accordance with Laws
applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Applications; Antitrust Notification. Interim and Norrell
will promptly prepare and file applications with all Regulatory Authorities
having jurisdiction over the transactions contemplated by this Agreement
seeking the requisite Consents necessary to consummate the transactions
contemplated by this Agreement. To the extent required by the HSR Act, each of
the Parties will within fourteen (14) business days of the date hereof file
with the United States Federal Trade Commission and the United States
Department of Justice the notification and report form required for the
transactions contemplated hereby and any supplemental or additional information
which may reasonably be requested in connection therewith pursuant to the HSR
Act and will comply in all material respects with the requirements of the HSR
Act. The Parties will deliver to each other copies of all filings,
correspondence and orders to and from all Regulatory Authorities in connection
with the transactions contemplated hereby. Without limiting the foregoing, in
the event that either the Federal Trade Commission or the Antitrust Division of
the United States Department of Justice should issue a request for Additional
Information or Documentary Material under 17 C.F.R. SS. 803.20 (a "Second
Request"), then Norrell and Interim each agree to use their reasonable best
efforts to respond fully to such Second Request as soon as reasonably
practical, but in no event longer than twenty (20) days after its receipt and
will promptly make any further filings or information submissions and make any
employee available for interview or testimony pursuant to the foregoing (both
before and after any Second Request) that may be necessary, proper or
advisable.
8.2 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, Norrell will execute and file the Articles of
Merger with the Secretary of State of the State of Georgia and Sub will execute
and file the Certificate of Merger with the Secretary of State of the State of
Delaware in connection with the Closing.
8.3 Public Health Council. Without limiting Sections 8.1 or 8.2
above, Interim will take all necessary actions to promptly prepare and file a
timely application, in complete and proper form, with the New York Public
Health Council ("PHC") for approval of the transactions contemplated by this
Agreement. Interim shall further take all actions necessary to further said
application, including, without limitation, promptly and fully responding to
all documentation requests by the PHC, and complying with all other requests
from the PHC in connection with such application
8.4 Agreement as to Efforts to Consummate. Subject to the terms
and conditions of this Agreement, each Party agrees to use its reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper, or advisable under applicable Laws to
consummate and make effective, as soon as reasonably practicable after the date
of this Agreement, the transactions contemplated by this Agreement, including
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using its reasonable efforts to lift or rescind any Order adversely affecting
its ability to consummate the transactions contemplated herein and to cause to
be satisfied the conditions referred to in Article 9; provided, that nothing
herein will preclude either Party from exercising its rights under this
Agreement. Each Party will use, and will cause each of its Subsidiaries to use,
its reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
8.5 Confidentiality.
(a) Each Party will, and will cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and will not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party will promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(b) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent,
either a material breach of any representation, warranty, covenant or agreement
of the other Party or which has had or is reasonably likely to have a Norrell
Material Adverse Effect or a Interim Material Adverse Effect, as applicable.
This Section 8.5 shall not apply to confidential information as to
which:
(i) written consent is obtained from the other Party
permitting disclosure or use of the specific confidential information for the
purpose(s) requested;
(ii) the specific confidential information is or
generally becomes available to the public other than as a result of disclosure
by the disclosing Party or, the availability of any such confidential
information under the freedom of information laws of any state in the United
States or utilization of any such confidential information in response to a
request for proposal, shall, in either event, be deemed to be generally
available to the public;
(iii) the disclosing Party was in the possession of the
disclosing Party prior to the commencement of negotiations leading to this
Agreement;
(iv) the specific confidential information is hereafter
disclosed to the disclosing Party by a third party having no obligation of
confidentiality with regard to this information, to the knowledge of the
disclosing party; or
(v) the specific confidential information is
independently generated through the disclosing Party's own research without any
material use of the disclosure by the other Party.
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If this Agreement is terminated, each Party shall immediately return
to the other any and all confidential information which was furnished to it
hereunder and all materials prepared by each Party in connection with the use
of such confidential information, shall be destroyed, without retaining any
copy(ies) thereof, and shall so certify in a letter delivered to the other
Party.
8.6 Press Releases. Prior to the Effective Time, Norrell and
Interim will consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby, and neither party will issue any such
press release or make any other public disclosure without the consent of the
other party, which consent will not be unreasonably withheld; provided, that
nothing in this Section 8.6 will be deemed to prohibit any Party from making
any disclosure which its counsel deems necessary or advisable to satisfy such
Party's disclosure obligations imposed by Law or any Regulatory Authority.
8.7 No Solicitation by Norrell.
(a) For purposes of this Agreement, "Acquisition
Proposal" means any inquiry or proposal (as such proposal may be amended,
modified or supplemented from time to time) with respect to a merger,
consolidation, share exchange or similar transaction involving Norrell or any
Norrell Entity, or any purchase of all or any significant portion of the assets
of Norrell or any Norrell Entity, or any equity interest in Norrell or any
Norrell Entity, other than the transactions contemplated hereby or any other
similar transaction with Interim or any of its Affiliates. For purposes of this
Agreement, "Superior Proposal" means any proposal (i) made by a third party to
acquire, directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration consisting
of cash and/or securities, more than 50% of the combined voting power of the
shares of Norrell Common Stock then outstanding or all or substantially all the
assets of Norrell, (ii) which the Board of Directors of Norrell determines in
its good faith judgment (after consultation with its financial advisor) that
such proposal, if accepted, is reasonably likely to be consummated, taking into
account all legal, financial and regulatory aspects of the proposal and the
Person making the proposal and (iii) which would, if consummated, result in a
more favorable transaction than the transaction contemplated by this Agreement,
taking into account, to the extent relevant, the long-term prospects and
interests of Norrell and its shareholders.
(b) Except as permitted in Section 8.7(c) hereof,
Norrell will not, and will not authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor, attorney,
accountant or other representative retained by it to, directly or indirectly,
(i) solicit, initiate or encourage (including by way of furnishing non-public
information), or take any other action to facilitate, any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, an Acquisition Proposal or (ii) participate in any discussions or
negotiations regarding an Acquisition Proposal. Notwithstanding the
aforementioned, in the event any of Norrell's executive officers or directors
receive an Acquisition Proposal, Norrell shall promptly notify Interim of the
relevant terms of such Acquisition Proposal, and provide Interim a copy of any
written Acquisition Proposal.
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(c) If, at any time, the Board of Directors of Norrell
determines in good faith, after consultation with and upon the advice of
outside counsel, that failure to take the actions described in Section 8.7(b)
hereof would be reasonably likely to constitute a breach of its fiduciary
duties to Norrell's shareholders under applicable law, then Norrell, in
response to an Acquisition Proposal that (i) was unsolicited or that resulted
from solicitation undertaken by Norrell prior to the date hereof or that did
not otherwise result from a breach of this Section 8.7 and (ii) is reasonably
likely to lead to a Superior Proposal, may (i) furnish non-public information
with respect to Norrell to the person who made such Acquisition Proposal
pursuant to a customary confidentiality agreement and (ii) participate in
negotiations regarding such Acquisition Proposal.
(d) Unless, the Board of Directors of Norrell has
determined in good faith, after consultation with and upon the advice of
outside counsel, that failure to do so would be reasonably likely to constitute
a breach of its fiduciary duties to Norrell's shareholders under applicable
law, the Board of Directors of Norrell will not (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Interim, its approval or
recommendation of this Agreement or the Merger unless there is a Superior
Proposal outstanding, (ii) approve or recommend, or propose to approve or
recommend, an Acquisition Proposal that is not a Superior Proposal or (iii)
cause Norrell to enter into any letter of intent, agreement in principle,
acquisition agreement or other agreement with respect to an Acquisition
Proposal that is not a Superior Proposal.
(e) Nothing contained in this Section 8.7 will prohibit
Norrell from at any time taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the 1934 Act; provided,
however, that neither Norrell nor its Board of Directors will, except as
permitted by Section 8.7(d) hereof, propose to approve or recommend, an
Acquisition Proposal.
(f) Any determination as to whether an Acquisition
Proposal constitutes or is likely to result in a Superior Proposal shall be
made by the Special Committee of the Board of Directors of Norrell appointed on
or about December 29, 1999.
8.8 Employee Benefits and Contracts. Following the Effective
Time, Interim will provide employee benefits under employee benefit and welfare
plans to officers and employees of the Norrell Entities who become employees of
the Surviving Corporation or its Subsidiaries on terms and conditions which,
when taken as a whole with any benefits being provided by Norrell, are
substantially similar to those currently provided by the Interim Entities to
their similarly situated officers and employees. For purposes of participation,
vesting and benefit accrual under Interim's employee benefit plans, the service
of the employees of the Norrell Entities prior to the Effective Time will be
treated as service with an Interim Entity participating in such employee
benefit plans. All co-payments and deductibles paid by any participant during
this contract year with respect to any health or other employee benefit plans
will be credited for similar purposes under the comparable Interim benefit
plan. Interim also will cause the Surviving Corporation and its Subsidiaries to
honor in accordance with their terms all employment, severance, consulting and
other compensation Contracts disclosed in Section 8.8 of the Norrell Disclosure
Memorandum between any Norrell Entity and any current or former
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director, officer, or employee thereof, and all provisions for vested benefits
or other vested amounts earned or accrued through the Effective Time under any
employee benefit plans maintained by Norrell.
8.9 Indemnification.
(a) The Surviving Corporation will, to the fullest
extent permitted by applicable law, indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date hereof, or who
becomes prior to the Effective Time, an officer or director of Norrell or any
of its Subsidiaries (each an "Indemnified Party" and collectively, the
"Indemnified Parties") against all Indemnified Liabilities arising out of
actions or omissions occurring prior to the Effective Time (and whether
asserted or claimed prior to, at or after the Effective Time) that are, in
whole or in part, based on or arise out of the fact that such person is or was
a director or officer of Norrell or one of its Subsidiaries, or is or was
serving at the request of Norrell or one of its Subsidiaries as an officer or
director of another entity; provided, however, the Surviving Corporation shall
not be obligated to indemnify any such person under this Section 8.9(a) to a
greater extent than such person is entitled to be indemnified under the
Articles of Incorporation or Bylaws of Norrell or under any indemnification
agreement in effect between such person and Norrell at the Effective Time. The
Surviving Corporation will pay the reasonable fees and expenses of counsel
selected by the Indemnified Parties, which counsel will be reasonably
satisfactory to Interim and the Surviving Corporation, promptly after
statements therefor are received, and otherwise advance to such Indemnified
Party upon request reimbursement of documented expenses reasonably incurred, in
either case to the extent not prohibited by the GBCC, and any determination
required to be made with respect to whether an Indemnified Party's conduct
complies with the standards set forth under the GBCC or the Articles of
Incorporation or Bylaws of Norrell or any indemnification agreement between
such person and Norrell will be made by independent counsel mutually acceptable
to Interim and the Indemnified Party; provided, however, that the Surviving
Corporation will not be liable for any settlement effected without its written
consent (which consent will not be unreasonably withheld), and provided,
further that this indemnity will be secondary to any existing insurance
policies providing such indemnity. The Indemnified Parties as a group may
retain only one law firm with respect to each related matter except to the
extent there is, in the opinion of counsel to an Indemnified Party, under
applicable standards of professional conduct, a conflict on any significant
issue between positions of such Indemnified Party and any other Indemnified
Party or Indemnified Parties.
(b) The Surviving Corporation agrees to indemnify,
defend and hold harmless each person who is a director of Norrell against all
Indemnified Liabilities , including the documented expenses reasonably incurred
by such person in connection with any pending, threatened or contemplated
claim, action, suit or proceeding, whether civil, criminal, administrative or
investigative, to which the person is, or is threatened to be made, a party
based upon, arising out of or pertaining to the approval of this Agreement and
the transactions contemplated hereby.
(c) Interim agrees to guarantee unconditionally the
performance of the Surviving Corporation's obligations pursuant to Sections
8.9(a) and 8.9(b).
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(d) For a period of five (5) years after the Effective Time, the
Surviving Corporation will cause to be maintained in effect policies of
directors and officers' liability insurance maintained by Norrell for the
benefit of those persons who are currently covered by such policies on terms not
materially less favorable than the terms of such current insurance coverage;
provided, however, that the Surviving Corporation will not be required to expend
in any year an amount in excess of 125% of the annual aggregate premiums
currently paid by Norrell for such insurance; and provided, further, that if the
annual premiums of such insurance coverage exceed such amount, the Surviving
Corporation will be obligated to obtain a policy with the best coverage
available, in the reasonable judgment of the Board of Directors of Interim, for
a cost not exceeding such amount.
(e) If Interim, the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other person or entity and
will not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all of substantially all of its
properties and assets to any person or entity, then and in either such case,
proper provisions will be made so that the successors and assigns of Interim
will assume the obligations set forth in this Section 8.9.
(f) To the fullest extent permitted by law, from and after the
Effective Time, all rights to indemnification as of the date hereof in favor of
the employees, agents, directors and officers of Norrell and its Subsidiaries
with respect to their activities as such prior to the Effective Time, as
provided in their respective Articles of Incorporation and Bylaws in effect on
the date thereof, or otherwise in effect on the date hereof, will survive the
Merger and will continue in full force and effect for a period of not less than
five (5) years from the Effective Time.
(g) The provisions of this Section 8.9 are intended to be for the
benefit of, and will be enforceable by, each Indemnified Party, his or her heirs
and his or her Representative.
8.10 Registration Statement; Proxy Statement.
(a) As soon as possible after the execution of this Agreement,
Norrell and Interim shall prepare and file with the SEC the Registration
Statement, including therein the Proxy Statement to be sent to the shareholders
to each of Norrell and Interim and prospectus, in connection with the
registration under the 1933 Act of the shares of Interim Common Stock to be
issued to the holders of Norrell Common Stock pursuant to the Merger. Norrell
and Interim each shall use all reasonable efforts to cause the Registration
Statement to become effective as promptly as practicable, and, prior to the
effective date of the Registration Statement, Interim shall take all or any
action required under any applicable federal or state securities laws in
connection with the issuance of shares of Interim Common Stock pursuant to the
Merger. As promptly as practicable after the Registration Statement shall have
become effective, Norrell and Interim shall each mail the Proxy Statement to its
respective shareholders. The Proxy Statement shall include the recommendation of
the Board of Directors of Norrell and the recommendation of the Board of
Directors of Interim in favor of the Merger unless the Board of Directors of
Norrell withdraws such recommendation as permitted by Section 8.7 hereof.
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No amendment or supplement to the Proxy Statement or the
Registration Statement will be made by Norrell or Interim without the approval
of the other party, which shall not be unreasonably withheld. Norrell or
Interim each will advise the other, promptly after it receives notice thereof,
of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Interim Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy Statement or the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information.
(b) Norrell, Interim and Sub each hereby (i) consents to
the use of its name and, on behalf of its subsidiaries and affiliates, the
names of such subsidiaries and affiliates, and to the inclusion of financial
statements and business information relating to such party and its subsidiaries
and affiliates (in each case, to the extent required by applicable securities
laws), in the Registration Statement and the Proxy Statement, (ii) agrees to
use all reasonable efforts to obtain the written consent of any person or
entity retained by it which may be required to be named (as an expert or
otherwise) in the Registration Statement or the Proxy Statement, and (iii)
agrees to cooperate fully, and agrees to use all reasonable efforts to cause
its subsidiaries and affiliates to cooperate fully, with any legal counsel,
investment banker, accountant or other agent or representative retained by any
of the parties specified in clause (i) above in connection with the preparation
of any and all information required, as determined after consultation with each
party's counsel, to be disclosed by applicable securities laws in the
Registration Statement or the Proxy Statement.
8.11 Norrell Shareholders' Meeting. Norrell shall call the Norrell
Shareholders' Meeting, to be held as soon as reasonably practicable, for the
purpose of approving this Agreement and the transactions contemplated thereby
and such other related matters as it deems appropriate.
8.12 Interim Shareholders' Meeting. Interim shall call the Interim
Shareholders' Meeting, to be held as soon as reasonably practicable, for the
purpose of approving this Agreement and the transactions contemplated hereby
and such other related matters as it deems appropriate.
8.13 Exchange Listing. Interim shall use its reasonable efforts to
list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of Interim Common Stock to be issued to the holders of
Norrell Common Stock pursuant to the Merger, and Interim shall give all notices
and make all filings with the NYSE required in connection with the transactions
contemplated herein.
8.14 Access to Information From the date hereof until the earlier
of (i) the termination of this Agreement and (ii) the Effective Time, Norrell
and Interim will each provide to the other, during normal business hours and
upon reasonable notice, access to all information and documents which the other
may reasonably request regarding the business, assets, liabilities,
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employees and other aspects of the other party, other than information and
documents that in the opinion of such other party's counsel may not be
disclosed under applicable Law.
8.15 Accounting and Tax Treatment. Each Party undertakes and
agrees to use its reasonable best efforts to cause the Merger to qualify, and
to take no action which would cause the Merger not to qualify for treatment as
a "reorganization" within the meaning of Section 368(a) of the Code for federal
income tax purposes. No Party has any knowledge of any fact or circumstance
that would be reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code. Each Party
acknowledges and agrees that it will report this transaction to its respective
stockholders and to the Internal Revenue Service as a reorganization within the
meaning of Section 368(a) of the Code.
8.16 Interim's Accountant's Letters. Interim undertakes and agrees
to use its reasonable best efforts to insure that Norrell shall have received
from Deloitte & Touche LLP letters dated (i) the date of the Proxy Statement
and (ii) the Effective Time, with respect to certain financial information
regarding Interim, in form and substance reasonably satisfactory to Norrell,
which letters shall be based upon customary specified procedures undertaken by
such firm, containing statements and information of the type ordinarily
included in accountant's "comfort letters."
8.17 Norrell's Accountant's Letters. Norrell undertakes and agrees
to use its reasonable best efforts to insure that Interim shall have received
from Arthur Andersen LLP letters dated (i) the date of the Proxy Statement and
(ii) the Effective Time, with respect to certain financial information
regarding Norrell, in form and substance reasonably satisfactory to Interim,
which letters shall be based upon customary specified procedures undertaken by
such firm, containing statements and information of the type ordinarily
included in accountant's "comfort letters."
8.18 Director Seat. Following the Effective Time, the Board of
Directors of Interim shall take the required action to appoint Guy W. Millner,
or his nominee, to the Board of Directors of Interim. Such individual shall be
classified as a Class II Director, as set forth in the Certificate of
Incorporation and Bylaws of Interim, and whose initial term will expire at the
2001 Annual Meeting of Shareholders of Interim.
8.19 Tax Opinions. Interim undertakes and agrees to use its
reasonable best efforts to insure that Baker & McKenzie delivers the opinion
referred to in Section 9.2(e). Norrell undertakes and agrees to use its
reasonable best efforts to insure that Alston & Bird LLP delivers the opinion
referred to in Section 9.3(e).
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions
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contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by both Parties pursuant to Section 11.6:
(a) Norrell Shareholder Approval. The shareholders of
Norrell will have approved this Agreement and the transactions contemplated
hereby, as and to the extent required by Law, by the provisions of the Articles
of Incorporation and Bylaws of Norrell, or by the rules of the NYSE.
(b) Interim Shareholder Approval. The shareholders of
Interim will have approved this Agreement and the transactions contemplated
hereby, as and to the extent required by Law, by the provisions of the
Certificate of Incorporation and Bylaws of Interim, or by the rules of the
NYSE.
(c) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities (other
than such Consents as may be required from the PHC) required for consummation
of the Merger will have been obtained or made and will be in full force and
effect and all waiting periods required by Law will have expired. No Consent
obtained from any Regulatory Authority which is necessary to consummate the
transactions contemplated hereby will be conditioned or restricted in a manner
which in the reasonable judgment of the Board of Directors of Interim would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.
(d) Consents and Approvals. Each Party will have
obtained any and all Consents (other than such Consents as may be required from
the PHC) required for consummation of the Merger (other than those referred to
in Section 9.1(c)) or for the preventing of any Default under any Contract or
Permit of such Party which, if not obtained or made, is reasonably likely to
have, individually or in the aggregate, a Norrell Material Adverse Effect or an
Interim Material Adverse Effect, as applicable. No Consent so obtained which is
necessary to consummate the transactions contemplated hereby will be
conditioned or restricted in a manner which in the reasonable judgment of the
Board of Directors of Interim would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement that,
had such condition or requirement been known, such Party would not, in its
reasonable judgment, have entered into this Agreement.
(e) Legal Proceedings. No court or governmental or
regulatory authority of competent jurisdiction will have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits, restricts
or makes illegal consummation of the transactions contemplated by this
Agreement.
(f) Injunctions; Restraints. No court or governmental or
regulatory authority of competent jurisdiction will have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action
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which prohibits, restricts or makes illegal consummation of the transactions
contemplated by this Agreement.
(g) Registration Statement. The Registration Statement
shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no action,
suit, proceeding or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the 1933 Act or 1934 Act relating to
the issuance or trading of the shares of Interim Common Stock issuable pursuant
to the Merger shall have been received.
(h) Exchange Listing. The shares of Interim Common Stock
issuable pursuant to the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
9.2 Conditions to Obligations of Interim. The obligations of
Interim to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Interim pursuant to Section 11.6(a):
(a) Representations. The representations of Norrell set
forth in this Agreement (other than the representations set forth in Section
5.3) will be true and correct at the Effective Time as though all such
representations had been made at the Effective Time (provided that
representations which are confined to a specified date will speak only as of
such date). The representations of Norrell set forth in Section 5.3 will be
true and correct at the Effective Time (except for changes permitted under
Section 7.2(d) hereof and inadvertent and de minimis errors in the number of
shares outstanding or the number of shares subject to Equity Rights).
(b) Performance of Agreements and Covenants. Each and
all of the agreements and covenants of Norrell to be performed and complied
with pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time will have been duly performed and complied with in
all material respects.
(c) Certificates. Norrell will have delivered to Interim
(i) a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to Norrell and in Section
9.2(a) and 9.2(b) have been satisfied, and (ii) certified copies of resolutions
duly adopted by Norrell's Board of Directors and shareholders evidencing the
taking of all corporate action necessary to authorize the execution, delivery
and performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Interim and its counsel
will request.
(d) Fairness Opinion. At the Effective Time, NationsBanc
Montgomery Securities LLC shall have reaffirmed in writing the opinion
described in Section 6.13, as if such opinion was issued on such date.
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(e) Tax Opinion. Interim shall have received from Baker
& McKenzie its opinion, in form and substance reasonably satisfactory to
Interim, dated as of the Effective Time, substantially to the effect that, on
the basis of facts, representations and assumptions set forth in such opinion:
(i) the Merger of Norrell into Sub and the
issuance of shares of Interim Common Stock in connection
therewith, as described in this Agreement, will constitute a
tax-free reorganization as defined in Section 368(a) of the
Code.
(ii) Each of Norrell, Interim and Sub will be
considered a party to the reorganization.
(iii) Except for the recognition of gain as
required by Section 356(a) of the Code with respect to the
receipt by shareholders of Norrell of cash either in lieu of
the issuance of fractional shares of Interim Common Stock or
as a Cash Payment, no gain or loss will be recognized by
shareholders of Norrell upon the exchange of Norrell Common
Stock for Interim Common Stock as a result of the Merger.
(iv) In general, cash received by holders of
Norrell Common Stock in lieu of fractional shares or as a
Cash Payment will be treated as amounts distributed in
redemption of their shares and will be taxable under the
provisions of Section 302 of the Code.
9.3 Conditions to Obligations of Norrell. The obligations of
Norrell to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Norrell pursuant to Section 11.6(b):
(a) Representations. The representations of Interim set
forth in this Agreement will be true and correct at the Effective Time as
though all such representations and warranties had been made at the Effective
Time (provided that representations and warranties which are confined to a
specified date will speak only as of such date).
(b) Performance of Agreements and Covenants. Each and
all of the agreements and covenants of Interim to be performed and complied
with pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time will have been duly performed and complied with in
all material respects.
(c) Certificates. Interim will have delivered to Norrell
(i) a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to Interim and in Section
9.3(a) and 9.3(b) have been satisfied, and (ii) certified copies of resolutions
duly adopted by Interim's Board of Directors and shareholders and Sub's Board
of Directors and sole
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shareholder evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as Norrell and its counsel will request.
(d) Fairness Opinion. At the time of the mailing of the
Proxy Statement to the Norrell Shareholders, Goldman Sachs & Co. shall have
reaffirmed in writing the opinion described in Section 5.12 herein, as if such
opinion was issued on such date, and such opinion shall not have been withdrawn
prior to the Effective Time.
(e) Tax Opinion. Norrell shall have received from Alston
& Bird LLP its opinion, in form and substance reasonably satisfactory to
Norrell, dated as of the Effective Time, substantially to the effect that, on
the basis of facts, representations and assumptions set forth in such opinion:
(i) the Merger of Norrell into Sub and the
issuance of shares of Interim Common Stock in connection
therewith, as described in this Agreement, will constitute a
tax-free reorganization as defined in Section 368(a) of the
Code.
(ii) Each of Norrell, Interim and Sub will be
considered a party to the reorganization.
(iii) Except for the recognition of gain as
required by Section 356(a) of the Code with respect to the
receipt by shareholders of Norrell of cash either in lieu of
the issuance of fractional shares of Interim Common Stock or
as a Cash Payment, no gain or loss will be recognized by
shareholders of Norrell upon the exchange of Norrell Common
Stock for Interim Common Stock as a result of the Merger.
(iv) In general, cash received by holders of
Norrell Common Stock in lieu of fractional shares or as a
Cash Payment will be treated as amounts distributed in
redemption of their shares and will be taxable under the
provisions of Section 302 of the Code.
Notwithstanding the foregoing, in the event that Alston &
Bird LLP fails for any reason to deliver the opinion referred to in this
Section 9.3(e), then this condition may be satisfied by the delivery to Norrell
of the opinion referred to in Section 9.2(e), which opinion shall expressly
permit the reliance of Norrell thereon.
ARTICLE 10
TERMINATION
10.1 Termination. This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of Interim and Norrell; or
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(b) By either Party (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the event of a material breach
by the other Party of any representation or warranty contained in this
Agreement which cannot be cured or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach and which breach
would be reasonably likely, in the opinion of the non-breaching Party, to have,
individually or in the aggregate, a Norrell Material Adverse Effect or an
Interim Material Adverse Effect, as applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the event of a material breach
by the other Party of any covenant or agreement contained in this Agreement
which cannot be cured or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach and which breach would be
reasonably likely, in the opinion of the non-breaching Party, to have,
individually or in the aggregate, a Norrell Material Adverse Effect or a
Interim Material Adverse Effect, as applicable, on the breaching Party; or
(d) By either Party (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the event (i) any Consent of
any Regulatory Authority required for consummation of the Merger will have been
denied by final nonappealable action of such authority or if any action taken
by such authority is not appealed within the time limit for appeal, (ii) the
shareholders of Norrell fail to vote their approval of this Agreement and the
transactions contemplated hereby at the Norrell Shareholders' Meeting where
such matters were presented to such shareholders for approval and voted upon,
except under the circumstances set forth in Section 10.1(h)(iii), or (iii) the
shareholders of Interim fail to vote their approval of this Agreement and the
transactions contemplated hereby at the Interim Shareholders' Meeting where
such matters were presented to such shareholders for approval and voted upon;
(e) By either Party in the event that the Merger will
not have been consummated by September 30, 1999, if the failure to consummate
the transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the Party electing to terminate pursuant to
this Section 10.1(e); or
(f) By either Party (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the event that any of the
conditions precedent to the obligations of such Party to consummate the Merger
cannot be satisfied or fulfilled by the date specified in Section 10.1(e); or
(g) By Interim, in the event that the Board of Directors
of Norrell withdraws or fails to reaffirm its approval of this Agreement and
the transactions contemplated hereby (to the exclusion of any other Acquisition
Proposal), or resolves not to reaffirm the Merger, or affirms, recommends or
authorizes entering into any other Acquisition Proposal or
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other transaction involving a merger, share exchange, consolidation or transfer
of substantially all of the Assets of Norrell;
(h) By Norrell, in the event that either (i) the Board
of Directors of Norrell withdraws or modifies its approval or recommendation of
this Agreement and the transactions contemplated hereby while there is a
Superior Proposal outstanding, (ii) Norrell enters into any letter of intent,
agreement in principle, acquisition agreement or other agreement with respect
to an Acquisition Proposal that is a Superior Proposal or with respect to which
the Board of Directors Norrell has determined, in good faith after consultation
with and upon the advice of outside counsel, that the failure to enter into
such letter of intent, agreement in principle, acquisition agreement or other
agreement would be reasonably likely to constitute a breach of its fiduciary
duties to Norrell's shareholders under applicable law, or (iii) following the
commencement, public proposal, public disclosure or communications of an
Acquisition Proposal to Norrell (or the public disclosure or communication to
Norrell of the willingness of any Person to make an Acquisition Proposal), the
requisite approval of Norrell's shareholders for the Merger is not obtained at
the Norrell Shareholders' Meeting; or
(i) By either Party if the Base Period Trading Price is
less than $12.00.
10.2 Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to Section 10.1, this
Agreement will become void and have no effect, except that (i) the provisions
of this Section 10.2 and Section 8.5 and Article 11 will survive any such
termination and abandonment, and (ii) a termination pursuant to Sections
10.1(b), 10.1(c) or 10.1(f) will not relieve the breaching Party from Liability
for an uncured willful breach of a representation, warranty, covenant, or
agreement giving rise to such termination.
10.3 Non-Survival of Representations and Covenants. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties will not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.5, 8.8 and 8.9 shall survive the
Effective Time and shall not be extinguished by the consummation of the Merger.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the capitalized
terms set forth below will have the following meanings:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
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"Affiliate" of a Person means: (i) any other Person directly,
or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial
owner of any 10% or greater equity or voting interest of such Person;
or (iii) any other Person for which a Person described in clause (ii)
acts in any such capacity.
"Agreement" means this Agreement and Plan of Merger.
"Articles of Merger" means the Articles of Merger to be
executed by Norrell and filed with the Secretary of State of the State
of Georgia relating to the Merger as contemplated by Section 1.1.
"Assets" of a Person means all of the assets, properties,
businesses and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or
utilized in such Person's business, directly or indirectly, in whole
or in part, whether or not carried on the books and records of such
Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"Base Period Trading Price" means the average of the daily
closing sale prices for shares of Interim Common Stock for the twenty
(20) consecutive full trading days on which such shares are actually
traded on the NYSE ending at the close of trading on the second
trading day immediately preceding the Effective Time.
"Certificate of Merger" means the Certificate of Merger to be
executed by Sub and filed with the Secretary of State of the State of
Delaware relating to the Merger as contemplated by Section 1.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consent" means any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by, or required
notices of filings with, any Person pursuant to any Contract, Law,
Order or Permit.
"Contract" means any written agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking
of any kind or character, or other document to which any Person is a
party or that is binding on any Person or its capital stock, Assets or
business.
"DGCL" means the General Corporation Law of the State of
Delaware.
"Default" means (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order,
or Permit, (ii) any occurrence of any event that with the passage of
time or the giving of notice or both would constitute a breach or
violation of, default under, contravention of, or conflict with, any
Contract, Law, Order, or Permit, or (iii) any occurrence of any event
that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain
any relief under, terminate or revoke, suspend, cancel, or modify or
change the current
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terms of, or renegotiate, or to accelerate the maturity or performance
of, or to increase or impose any Liability under, any Contract, Law,
Order, or Permit, where, in any such event, such Default is reasonably
likely to have, individually or in the aggregate, a Norrell Material
Adverse Effect or a Interim Material Adverse Effect, as applicable.
"Expenses" means all actual documented fees and expenses
incurred or paid by or on behalf of Norrell or Interim, as applicable,
in connection with the Merger or the consummation of any of the
transactions contemplated by this Agreement, including all actual
documented printing costs and reasonable fees and expenses of counsel,
investment banking firms, accountants, experts and consultants to
Norrell or Interim, as applicable.
"Equity Rights" means all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is
or may be bound to issue additional shares of its capital stock or
other Equity Rights.
"Exchange Ratio" means 0.9 to 1.0.
"GAAP" means generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" means the Georgia Business Corporations Code.
"HSR Act" means Section 7A of the Clayton Act, as added by
Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Indemnified Liabilities" means the obligation to pay a
judgment, settlement, penalty, fine or reasonable expenses (including
attorneys' fees and court costs) incurred with respect to any
threatened, pending or contemplated claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative and whether
formal or informal.
"Interim Common Stock" means the $0.01 par value common stock
of Interim.
"Interim Disclosure Memorandum" means the written information
entitled "Interim Disclosure Memorandum" delivered prior to the date
of this Agreement to Norrell describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with
respect to one Section will be deemed disclosed for purposes of all
other Sections whether or not such other sections are specifically
referred to in such disclosure.
"Interim Entities" means, collectively, Interim and all
Interim Subsidiaries, including Sub.
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"Interim Financial Statements" means (i) the consolidated
statements of balance sheets (including related notes and schedules,
if any) of Interim as of December 25, 1998, and as of December 26,
1997, and the related statements of income, changes in shareholders'
equity, and cash flows (including related notes and schedules, if any)
for the three fiscal years ended December 25, 1998, December 26, 1997
and December 27, 1996, as filed by Interim in SEC Documents, and (ii)
the consolidated balance sheets of Interim (including related notes
and schedules, if any) and related statements if income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to December 25, 1998.
"Interim Material Adverse Effect" means an event, change or
occurrence (other than general economic conditions or conditions
occurring or prevailing in the staffing industry generally) which,
individually or together with any other event, change or occurrence,
has or reasonably could be expected to have a material adverse impact
on (i) the business, operations, properties, financial position or
results of operations of Interim and its Subsidiaries, taken as a
whole, or (ii) the ability of Interim to perform its obligations under
this Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement.
"Interim Shareholders' Meeting" means the meeting of the
shareholders of Interim to be held pursuant to Section 8.12, including
any adjournment or adjournments thereof.
"Interim Subsidiaries" mean the Subsidiaries of Interim,
which will include the Interim Subsidiaries described in the Interim
Disclosure Memorandum and any corporation or other organization
acquired as a Subsidiary of Interim in the future and held as a
Subsidiary by Interim at the Effective Time.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) means
those facts that are known or should reasonably have been known after
inquiry to a commercially reasonable extent by the chairman,
president, chief financial officer, chief accounting officer, chief
operating officer, general counsel or any senior, executive or other
corporate level vice president of such Person.
"Law" means any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute
applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"Liability" means any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or
expense (including costs of investigation, collection and defense),
claim, deficiency, guaranty or endorsement of or by any Person (other
than endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
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"Lien" means any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage, pledge, reservation, restriction,
security interest, title retention or other security arrangement, or
any adverse right or interest, charge, or claim of any nature
whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable, (ii) Liens under existing Norrell credit agreements and
(iii) Liens which do not materially impair the use of or title to the
Assets subject to such Lien.
"Litigation" means any action, arbitration, cause of action,
claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated
by this Agreement.
"Material" and "material" for purposes of this Agreement will
be determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement will determine materiality in that instance.
"Merger Consideration" means the Cash Payment and/or the
Merger Shares.
"Norrell Common Stock" means the no par value common stock of
Norrell.
"Norrell Disclosure Memorandum" means the written information
entitled "Norrell Disclosure Memorandum" delivered prior to the date
of this Agreement to Interim describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with
respect to one Section will be deemed disclosed for purposes of all
other Sections whether or not such other sections are specifically
referred to in such disclosure.
"Norrell Entities" means, collectively, Norrell and all
Norrell Subsidiaries.
"Norrell Financial Statements" means (i) the consolidated
statements of balance sheets (including related notes and schedules,
if any) of Norrell as of November 1, 1998, and as of November 2, 1997,
and the related statements of income, changes in shareholders' equity,
and cash flows (including related notes and schedules, if any) for the
three fiscal years ended November 1, 1998, November 2, 1997 and
October 27, 1996, as filed by Norrell in SEC Documents, and (ii) the
consolidated balance sheets of Norrell (including related notes and
schedules, if any) and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to November 1, 1998.
"Norrell Material Adverse Effect" means an event, change or
occurrence (other than general economic conditions or conditions
occurring or prevailing in the staffing industry generally) which,
individually or together with any other event, change or occurrence,
has or reasonably could be expected to have a material adverse impact
on (i) the business, operations, properties, financial position, or
results of operations of Norrell and its Subsidiaries, taken as a
whole, or (ii) the ability of Norrell to perform its obligations
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under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement.
"Norrell Shareholders' Meeting" means the meeting of the
shareholders of Norrell to be held pursuant to Section 8.11, including
any adjournment or adjournments thereof.
"Norrell Stock Plans" means the existing Employee Stock
Purchase Plan and the stock option plans of Norrell designated as
follows: 1991 Stock Option Plan, 1994 Stock Incentive Plan, Massey
Investment Co. Agreement, Comtex Stock Option Plan and Non-Qualified
Deferred Compensation Plan.
"Norrell Subsidiaries" means the Subsidiaries of Norrell,
which will include the Norrell Subsidiaries described in Section 5.4
of the Norrell Disclosure Memorandum and any corporation or other
organization acquired as a Subsidiary of Norrell in the future and
held as a Subsidiary by Norrell at the Effective Time.
"NYSE" means the New York Stock Exchange, Inc.
"Order" means any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"Party" means either Norrell or Interim or Sub, and "Parties"
will mean Norrell, Interim and Sub collectively.
"Permit" means any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"Person" means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"Proxy Statement" means the joint proxy statement used by
Norrell to solicit the approval of its shareholders of this Agreement
and the transactions contemplated hereby and by Interim to solicit the
approval of its shareholders of this Agreement and the transactions
contemplated hereby.
"Registration Statement" means the Registration Statement on
Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC
by Interim under the 1933 Act with respect to the shares of Interim
Common Stock to be issued to the shareholders of Norrell in connection
with the transactions contemplated by this Agreement.
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"Regulatory Authorities" means, collectively, the Federal
Trade Commission, the United States Department of Justice, SEC,
Internal Revenue Service, NYSE, Pension Benefit Guaranty Corporation
and all other federal, state, county, local or other governmental or
regulatory agencies, authorities (including self-regulatory
authorities), instrumentalities, commissions, boards or bodies having
jurisdiction over the Parties and their respective Subsidiaries
(whether domestic or foreign).
"Representative" means any investment banker, financial
advisor, attorney, accountant, consultant, or other representative
engaged by a Person.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" means all forms, proxy statements,
registration statements, reports, schedules, and other documents
filed, or required to be filed, by a Party or any of its Subsidiaries
with any Regulatory Authority pursuant to the Securities Laws.
"Securities Laws" means the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors
Act of 1940, as amended, the Trust Indenture Act of 1939, as amended,
and the rules and regulations of any Regulatory Authority promulgated
thereunder.
"Sub Common Stock" means $0.01 par value common stock of Sub.
"Subsidiaries" means all those corporations, associations, or
other business entities of which the entity in question either (i)
owns or controls 50% or more of the outstanding equity securities
either directly or through an unbroken chain of entities as to each of
which 50% or more of the outstanding equity securities is owned
directly or indirectly by its parent (provided, there will not be
included any such entity the equity securities of which are owned or
controlled in a fiduciary capacity), (ii) in the case of partnerships,
serves as a general partner, (iii) in the case of a limited liability
company, serves as a managing member, or (iv) otherwise has the
ability to elect a majority of the directors, trustees or managing
members thereof.
"Surviving Corporation" means Sub as the surviving
corporation resulting from the Merger.
(b) The terms set forth below will have the meanings
ascribed thereto in the referenced sections:
Acquisition Proposal Section 8.7(a)
Cash Election Section 3.1(e)
Cash Election Shares Section 3.1(d)
Certificates Section 4.1
Cash Payment Section 3.1(d)
Closing Section 1.2
Declared Dividend Section 4.2
Deemed Cash Purchase Price Section 3.1(f)
Effective Time Section 1.3
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Election Section 3.1(d)
Election Deadline Section 3.1(e)
Election Form Section 3.1(e)
Election Form Record Date Section 3.1(e)
Exchange Agent Section 4.1
Indemnified Party Section 8.9(a)
Interim SEC Reports Section 6.8(a)
Mailing Date Section 3.1(e)
Material Interim Contract Section 6.12
Material Norrell Contract Section 5.8
Maximum Cash Payment Section 3.1(f)
Maximum Cash Election Shares Section 3.1(f)
Merger Section 1.1
Merger Shares Section 3.1(c)
Percentage Maximum Section 3.1(f)
Norrell Options Section 3.4(a)
Norrell SEC Reports Section 5.5(a)
PHC Section 8.3
Second Request Section 8.1
Superior Proposal Section 8.7(a)
(c) Any singular term in this Agreement will be deemed
to include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they will be
deemed followed by the words "without limitation."
11.2 Expenses.
(a) Except as otherwise provided in this Section 11.2,
each of the Parties will bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial or other consultants,
investment bankers, accountants and counsel; provided, however, that HSR filing
fees and all expenses, other than attorneys fees, related to printing, filing
and mailing the Registration Statement and the Proxy Statement and all SEC and
other regulatory filing fees incurred in connection with the Registration
Statement and the Proxy Statement will be borne one-half each.
(b) Notwithstanding the foregoing, if either
(i) this Agreement is terminated by Interim pursuant to
any of Sections 10.1(b), 10.1(c), 10.1(d)(ii) (as relates to approval
of Norrell's shareholders), 10.1(f) (based upon the failure of Norrell
or its shareholders, as the case may be, to satisfy any of the
conditions set forth in Sections 9.2), 10.1(g) or 10.1(i), or
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(ii) this Agreement is terminated by Norrell pursuant to
Section 10.1(h), 10.1(i) or 10.1(d)(ii) (as it relates to approval of
Norrell's shareholders) or 10.1(f) (based upon the failure of the
conditions set forth in Section 9.3(d)),
then Norrell will promptly pay Interim an amount in cash equal to
Interim's Expenses up to $1,000,000.
(c) Notwithstanding the foregoing, if this Agreement is
terminated by Norrell pursuant to any of Sections 10.1(b), 10.1(c), or 10.1(f)
(based upon the failure of Interim to satisfy any of the conditions set forth
in Section 9.3(a)(b) or (c)), then Interim will promptly pay Norrell an amount
in cash equal to Norrell's Expenses up to $1,000,000.
(d) In addition to the foregoing, if this Agreement is
terminated by Interim pursuant to Section 10.1(g) or Norrell pursuant to
Section 10.1(h), Norrell will promptly pay to Interim an amount in cash equal
to the sum of
(i) Interim's Expenses up to $1,000,000, plus
(ii) $10,000,000, less
(iii) any amounts previously paid by Norrell to Interim
pursuant to Section 11.2(b),
which sum shall constitute liquidated damages in full and complete satisfaction
of, and shall be Interim's sole and exclusive remedy for any loss, liability,
damage or claim arising out of or in connection with any such termination of
this Agreement or the facts and circumstances resulting in such termination or
otherwise related to or otherwise arising out of or in connection with this
Agreement.
11.3 Brokers and Finders. Except for Goldman Sachs & Co. and CLB
Advisors, LLC as to Norrell and except for NationsBanc Montgomery Securities
LLC as to Interim, each of the Parties represents and warrants that neither it
nor any of its officers, directors, employees, or Affiliates has employed any
broker or finder or incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions, or finders' fees in
connection with this Agreement or the transactions contemplated hereby. In the
event of a claim by any broker or finder based upon his or its representing or
being retained by or allegedly representing or being retained by Norrell or by
Interim, each of Norrell and Interim, as the case may be, agrees to indemnify
and hold the other Party harmless of and from any Liability in respect of any
such claim.
11.4 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral. Nothing in this
Agreement expressed or implied, is intended to confer upon any Person, other
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than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, other than as
provided in Sections 8.8 and 8.9.
11.5 Amendments. This Agreement may be amended by a subsequent
writing signed by each of the Parties upon the approval of each of the Parties,
but only if such amendment is effective prior to the approval of this Agreement
by the Shareholders of Norrell.
11.6 Waivers.
(a) Prior to or at the Effective Time, Interim, acting
through its Board of Directors, chief executive officer or other authorized
officer, will have the right to waive any Default in the performance of any
term of this Agreement by Norrell, to waive or extend the time for the
compliance or fulfillment by Norrell of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of Interim under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver will be
effective unless in writing signed by a duly authorized officer of Interim.
(b) Prior to or at the Effective Time, Norrell, acting
through its Board of Directors, chief executive officer or other authorized
officer, will have the right to waive any Default in the performance of any
term of this Agreement by Interim, to waive or extend the time for the
compliance or fulfillment by Interim of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of Norrell under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver will be
effective unless in writing signed by a duly authorized officer of Norrell.
(c) The failure of any Party at any time or times to
require performance of any provision hereof will in no manner affect the right
of such Party at a later time to enforce the same or any other provision of
this Agreement. No waiver of any condition or of the breach of any term
contained in this Agreement in one or more instances will be deemed to be or
construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
11.7 Assignment. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests or obligations hereunder will
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
11.8 Notices. All notices or other communications which are
required or permitted hereunder will be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
will be deemed to have been delivered as of the date so delivered:
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Norrell: Norrell Corporation
3535 Piedmont Rd, NE
Atlanta, GA 30305
Attention: Mark Hain, Esq.
Telephone: (404) 240-3158
Telecopy: (404) 240-5572
Copy to Counsel: Alston & Bird LLP
(which shall not One Atlantic Center
constitute notice) 1201 West Peachtree Street
Atlanta, GA 30309
Attention: Sidney J. Nurkin, Esq.
Telephone: (404) 881-7260
Telecopy: (404) 881-4777
Interim: Interim Services Inc.
Corporate Service Center
2050 Spectrum Boulevard
Ft. Lauderdale, FL 33309
Attention: John B. Smith, Esq.
Telephone: (954) 938-7710
Telecopy: (954) 938-7780
Copy to Counsel:
(which shall not Baker & McKenzie
constitute notice) 1200 Brickell Ave.
Nineteenth Floor
Miami, FL 33131
Attention: Andrew Hulsh, Esq.
Telephone: (305) 789-8985
Telecopy: (305) 789-8953
11.9 Governing Law. This Agreement will be governed by and
construed in accordance with the Laws of the State of Georgia, without regard
to any applicable conflicts of Laws.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same instrument.
11.11 Captions; Articles and Sections. The captions contained in
this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to particular Articles or
Sections will mean and refer to the referenced Articles and Sections of this
Agreement.
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11.12 Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein will be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement will be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and will be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all
parties hereto.
11.13 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties will be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction will, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision will be
interpreted to be only so broad as is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be executed on its behalf by its duly authorized officers as of the day and
year first above written.
INTERIM SERVICES INC.
By:
------------------------------
President
INTERIM MERGER CORPORATION
By:
------------------------------
President
NORRELL corporation
By:
------------------------------
President
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