<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 7, 1994
REGISTRATION STATEMENT NO. 33-55627
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ROBERT HALF INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 94-1648752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
2884 SAND HILL ROAD, SUITE 200, MENLO PARK, CALIFORNIA 94025 (415) 854-9700
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
STEVEN KAREL
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ROBERT HALF INTERNATIONAL INC.
2884 SAND HILL ROAD
MENLO PARK, CALIFORNIA 94025
(415) 854-9700
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------
WITH COPIES TO:
<TABLE>
<S> <C> <C>
LARRY W. SONSINI and PAUL C. PRINGLE
WILSON, SONSINI, GOODRICH & ROSATI BROWN & WOOD
650 Page Mill Road 555 California Street
Palo Alto, CA 94304-1050 San Francisco, CA 94104
(415) 493-9300 (415) 772-1200
</TABLE>
------------------------
Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE
AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If the only securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock......................... 5,610,000 $18.625(a) $104,486,250(a) $36,030(a)(b)
165,000 $18.25(c) $3,011,250(c) $603(c)
<FN>
(a) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457, based upon the trading price of the Company's
Common Stock on September 23, 1994.
(b) Paid in connection with initial filing of this Registration Statement.
(c) Estimated solely for purposes of determining the registration fee with
respect to the additional shares of Common Stock registered pursuant to this
Amendment No. 1, based upon the trading price of the Company's Common Stock
on October 6, 1994, and application of the current 1/50th of 1% registration
fee.
</TABLE>
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: one to be used
in connection with an offering in the United States and Canada (the "U.S.
Prospectus") and one to be used in a concurrent offering outside the United
States and Canada (the "International Prospectus"). The two prospectuses will be
identical in all respects except for the front and back cover pages and the
section entitled "Underwriting." Pages to be included in the International
Prospectus and not the U.S. Prospectus are marked "Alternate Page."
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 7, 1994
PROSPECTUS
5,250,000 SHARES
ROBERT HALF INTERNATIONAL INC.
COMMON STOCK
-------------------
Of the 5,250,000 shares of Common Stock being offered, 108,555 shares are
being sold by Robert Half International Inc. (the "Company") and 5,141,445 are
being sold for the account of certain stockholders of the Company (the "Selling
Stockholders"). The Company will not receive any of the proceeds of the sale of
the shares being sold by the Selling Stockholders.
Of the 5,250,000 shares of Common Stock offered hereby, 4,200,000 shares are
being offered in the United States and Canada by the U.S. Underwriters and
1,050,000 shares are being offered in a concurrent offering outside of the
United States and Canada by the International Underwriters. The price to public
and underwriting discount per share are identical for both offerings. See
"Underwriting."
The Company's Common Stock is traded on the New York Stock Exchange under
the symbol "RHI". On October 6, 1994, the last reported sale price of the Common
Stock on the New York Stock Exchange was $18 3/8 per share.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN MATTERS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
<S> <C> <C> <C> <C>
Per Share............................... $ $ $ $
Total (3)............................... $ $ $ $
<FN>
(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $260,000.
(3) The Company has granted the U.S. Underwriters and the International
Underwriters options exercisable within 30 days after the date hereof to
purchase up to 420,000 and 105,000 additional shares of Common Stock,
respectively, in each case to cover over-allotments, if any. See
"Underwriting." If all such shares are purchased, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ , $ and
$ , respectively.
</TABLE>
-------------------
The shares of Common Stock are being offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by the Underwriters, and
subject to the approval of certain legal matters by counsel for the Underwriters
and to certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify any offer and to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made in New York,
New York on or about , 1994.
-------------------
MERRILL LYNCH & CO. WILLIAM BLAIR & COMPANY
------------
The date of this Prospectus is , 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
--------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports, proxy and
information statements and other information with the Securities and Exchange
Commission. Such reports, proxy and information statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's
regional offices at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and at 7 World Trade Center, New York, New York
10048. Copies of such material can be obtained at prescribed rates upon request
from the Public Reference Room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such reports, proxy and information statements
and other information concerning the Company can also be inspected at the
offices of the New York Stock Exchange at 20 Broad Street, New York, New York
10005.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933 with respect to the securities offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain portions
of which are omitted as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the
securities offered hereby, reference is made to such Registration Statement and
exhibits and schedules. Statements contained or incorporated by reference in
this Prospectus as to the contents of any contract or any other document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. The Registration Statement, together with its exhibits and
schedules, may be obtained upon payment of a fee prescribed by the Commission,
or may be inspected free of charge at the Commission's principal office in
Washington, D.C.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Robert Half International Inc. will deliver without charge to each person,
including any beneficial owner, to whom a Prospectus is delivered, upon written
or oral request of such person, a copy of any and all of the information that
has been incorporated by reference in this Prospectus (other than exhibits to
such information which are not specifically incorporated by reference into the
information that this Prospectus incorporates). Requests for information should
be directed to Secretary, Robert Half International Inc., 2884 Sand Hill Road,
Menlo Park, California 94025, (415) 854-9700.
The following documents are hereby incorporated by reference in this
Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1994 and June 30, 1994.
3. The description of the Company's Common Stock contained in its Form
8-A relating to its Common Stock, filed with the Commission on January 5,
1990, as amended.
4. The description of the Company's Preferred Share Purchase Rights
contained in its Form 8-A relating to its Preferred Share Purchase Rights,
filed with the Commission on July 30, 1990, as amended.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 subsequent to the date hereof and
prior to the termination of the offering (except information included in any
such document in response to Items 402(i), 402(k) or 402(l) of Regulation S-K)
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
--------------------------
No action has been or will be taken in any jurisdiction by the Company or by
any Underwriter that would permit the public offering of the Common Stock or the
possession or distribution of this Prospectus in any jurisdiction where action
for that purpose is required, other than in the United States. Persons into
whose possession this Prospectus comes are required by the Company and the
Underwriters to inform themselves about and to observe any restrictions as to
the offering of the Common Stock and the distribution of this Prospectus.
2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN. THIS
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH INFORMATION. UNLESS
OTHERWISE EXPRESSLY INDICATED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES THAT
THE OVER-ALLOTMENT OPTIONS GRANTED TO THE U.S. UNDERWRITERS AND THE
INTERNATIONAL UNDERWRITERS ARE NOT EXERCISED. ALL REFERENCES TO "$" OR "DOLLARS"
MEAN UNITED STATES DOLLARS. ALL SHARE AND PER SHARE AMOUNTS HAVE BEEN RESTATED
TO RETROACTIVELY REFLECT THE TWO-FOR-ONE STOCK SPLIT EFFECTED IN THE FORM OF A
STOCK DIVIDEND IN AUGUST 1994.
THE COMPANY
Robert Half International Inc. (the "Company") is the world's largest
specialized provider of temporary and permanent personnel in the fields of
accounting and finance. Its divisions include ACCOUNTEMPS-R- and ROBERT HALF-R-,
providers of temporary and permanent personnel, respectively, in the fields of
accounting and finance. The Company, utilizing its experience as a specialized
provider of temporary and permanent personnel, has expanded into additional
specialty fields. In December 1991, the Company formed OFFICETEAM-R- to provide
skilled temporary administrative and office personnel. In 1992, the Company
acquired THE AFFILIATES-R-, which focuses on placing temporary and permanent
employees in paralegal, legal administrative and other legal support positions.
In addition, the Company recently established RHI CONSULTING-TM- to concentrate
on providing temporary information technology professionals in positions ranging
from PC/LAN technician to system design and application programmer.
The Company's business was originally founded in 1948. Prior to 1986, the
Company was primarily a franchisor of ACCOUNTEMPS and ROBERT HALF offices.
Beginning in 1986, the Company and its current management embarked on a strategy
of acquiring franchised locations and other local or regional independent
providers of specialized temporary service personnel. The Company has acquired
all but five of the ACCOUNTEMPS and ROBERT HALF franchises in 45 separate
transactions, and has acquired 14 other local or regional providers of
specialized temporary service personnel. Since 1986, the Company has
significantly expanded operations at many of the acquired locations and has
opened over 50 new locations. The Company believes that direct ownership of
offices allows it to better monitor and protect the image of the ACCOUNTEMPS and
ROBERT HALF names, promotes a more consistent and higher level of quality and
service throughout its network of offices and improves profitability by
centralizing many of its administrative functions. The Company currently has
more than 160 offices in 36 states and five foreign countries and placed
approximately 59,000 employees on temporary assignment with clients in 1993.
The Company is a Delaware corporation. Its principal executive offices are
located at 2884 Sand Hill Road, Menlo Park, California, 94025 and its telephone
number is (415) 854-9700.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by:
The Company........................... 108,555 shares
The Selling Stockholders.............. 5,141,445 shares
Common Stock to be outstanding after
this offering.......................... 27,535,051 shares
Use of proceeds......................... Repayment of a portion of outstanding
indebtedness
New York Stock Exchange symbol.......... RHI
</TABLE>
3
<PAGE>
SUMMARY FINANCIAL DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
----------------------------------------------------- --------------------
1989 1990 1991 1992 1993 1993 1994
--------- --------- --------- --------- --------- --------- ---------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION AND PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net service revenues........................ $ 234,504 $ 248,557 $ 209,455 $ 220,179 $ 306,166 $ 142,019 $ 206,410
Gross margin................................ 114,822 117,765 91,872 88,304 117,874 55,764 79,993
Amortization of intangible assets........... 3,357 3,721 3,896 3,961 4,251 2,078 2,279
Income before income taxes and extraordinary
gain (a)................................... 23,044 14,933 8,076 7,906 21,557 9,757 20,674
Net income.................................. 13,467 9,319 4,115 4,382 11,723 5,286 11,877
Net income per fully diluted share.......... $ .57 $ .41 $ .18 $ .18 $ .46 $ .21 $ .42
Weighted average number of fully diluted
shares..................................... 27,664 22,935 23,273 24,007 25,260 24,758 28,191
PERCENTAGE OF REVENUES DATA:
Gross margin................................ 49.0% 47.4% 43.9% 40.1% 38.5% 39.3% 38.8%
Selling, general and administrative
expenses................................... 34.6% 36.4% 35.0% 32.8% 28.8% 29.6% 27.2%
Operating margin before amortization of
intangible assets.......................... 14.4% 11.0% 8.9% 7.3% 9.7% 9.7% 11.6%
Net income margin........................... 5.7% 3.7% 2.0% 2.0% 3.8% 3.7% 5.8%
<FN>
- ------------------------------
(a) Extraordinary gains were recorded in 1989 and 1990 in the amounts of
$345,000 and $453,000, respectively, related to the repurchase of
convertible subordinated debentures.
</TABLE>
4
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS AND DOCUMENTS
INCORPORATED BY REFERENCE HEREIN, THE FOLLOWING FACTORS SHOULD BE CONSIDERED IN
EVALUATING AN INVESTMENT IN THE SHARES OF COMMON STOCK.
DEPENDENCE UPON PERSONNEL
The Company is engaged in the personnel services business. As such, its
success or failure is highly dependent upon the performance of its management
personnel and employees, rather than upon technology or upon tangible assets (of
which the Company has few). There can be no assurance that the Company will be
able to attract and retain the personnel that are essential to its success.
HIGHLY COMPETITIVE BUSINESS
The personnel services business is highly competitive and, because it is a
service business, the barriers to entry are quite low. There are many
competitors, some of which have greater resources than the Company, and new
competitors are entering the market all the time. In addition, long-term
contracts form a negligible portion of the Company's revenue. Therefore, there
can be no assurance that the Company will be able to retain clients or market
share in the future. Nor can there be any assurance that the Company will, in
light of competitive pressures, be able to remain profitable or, if profitable,
maintain its current profit margins.
BUSINESS HIGHLY DEPENDENT UPON THE STATE OF THE ECONOMY
The demand for the Company's services is highly dependent upon the state of
the economy and upon the staffing needs of the Company's clients. Any variation
in the economic condition of the U.S. or of any of the foreign countries in
which the Company does business, or in the economic condition of any region of
any of the foregoing, or in any specific industry may severely reduce the demand
for the Company's services and thereby significantly decrease the Company's
revenues. The ROBERT HALF division has traditionally taken longer to recover
from the effects of recessions than the ACCOUNTEMPS division.
AVAILABILITY OF CANDIDATES
The Company's business consists of the placement of individuals seeking
temporary and permanent employment. There can be no assurance that qualified
candidates for employment will continue to seek temporary employment through the
Company. Qualified candidates generally seek temporary or permanent positions
through multiple sources, including the Company and its competitors. Any
shortage of qualified candidates could materially adversely affect the Company.
GOVERNMENT REGULATION
The Company's business is subject to regulation or licensing in many states
and in certain foreign countries. While the Company has had no material
difficulty complying with regulations in the past, there can be no assurance
that the Company will be able to continue to obtain all necessary licenses or
approvals or that the cost of compliance will not prove to be material. Any
inability of the Company to comply with government regulation or licensing
requirements could materially adversely affect the Company.
POTENTIAL LIABILITY TO EMPLOYEES AND CLIENTS
The Company's temporary services business entails employing individuals on a
temporary basis and placing such individuals in clients' workplaces. The
Company's ability to control the workplace environment is limited. As the
employer of record of its temporary employees, the Company incurs a risk of
liability to its temporary employees for various workplace events, including
claims of physical injury, discrimination or harassment. While such claims have
not historically had a material adverse effect upon the Company, there can be no
assurance that such claims in the future will not result in adverse publicity or
have a material adverse effect upon the Company.
The Company also incurs a risk of liability to its clients resulting from
allegations of errors, omissions or theft by its temporary employees. The
Company maintains insurance with respect to many of such claims. While such
claims have not historically had a material adverse effect upon the Company,
there can be no assurance that the Company will continue to be able to obtain
insurance at a cost that does not have a
5
<PAGE>
material adverse effect upon the Company or that such claims (whether by reason
of the Company not having insurance or by reason of such claims being outside
the scope of the Company's insurance) will not have a material adverse effect
upon the Company.
ABILITY TO CONTINUE GROWTH
There can be no assurance that the growth recently experienced by the
Company will continue in the future. Growth is dependent upon a number of
factors, including, but not limited to, the recruitment of qualified employees,
the availability of working capital, the level of competition and the ability of
the Company to control costs and maintain margins. In addition, to the extent
that past growth has occurred through acquisitions, there can be no assurance
that the Company will be able to continue to locate and acquire businesses in
the future or that any such acquisition will not have a material adverse effect
upon the performance of the Company or the ability of its management to focus
its efforts on current operations.
HEALTH CARE REFORM
Various health care reform proposals, including proposals to require that
employers provide greater benefits to employees and that temporary employers
provide benefits to temporary employees, are being considered by the federal
government and certain state governments. It is impossible at present to predict
what proposals, if any, will be adopted. Therefore, there can be no assurance
that any proposals that are adopted will not have a material adverse effect upon
the Company.
USE OF PROCEEDS
The net proceeds from the sale of the shares offered by the Company are
estimated to be approximately $1,654,910 ($10,915,910 if the Underwriters'
over-allotment options are exercised in full), assuming a public offering price
of $18 3/8 (the last reported sale price on the New York Stock Exchange on
October 6, 1994). The Company intends to use the proceeds for repayment of a
portion of the borrowings under the Company's revolving credit agreement, which
borrowings bear interest either at the Eurodollar rate plus 1% or at prime.
The Company will not receive any of the proceeds from the sale of the shares
offered by the Selling Stockholders.
6
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at June 30,
1994, and as adjusted to reflect (i) the sale of shares of Common Stock by the
Company in this offering at an assumed public offering price of $18 3/8 per
share and (ii) the application of the estimated net proceeds therefrom.
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Notes payable and other indebtedness, less current portion......................... $ 3,112 $ 3,112
Bank loan (revolving credit)....................................................... 18,600 16,945
Stockholders' equity:
Common stock, $.001 par value:
authorized -- 100,000,000; issued and outstanding -- 27,330,644 actual;
27,439,199 as adjusted........................................................ 27 27
Capital surplus.................................................................. 67,168 68,823
Deferred compensation............................................................ (6,535) (6,535)
Accumulated translation adjustments.............................................. (536) (536)
Retained earnings................................................................ 87,318 87,318
---------- -----------
Total stockholders' equity................................................... 147,442 149,097
---------- -----------
Total capitalization............................................................... $ 169,154 $ 169,154
---------- -----------
---------- -----------
</TABLE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Common Stock is listed on the New York Stock Exchange and is
traded under the symbol RHI. The following table sets forth, for the periods
shown, the quarterly high and low sale prices per share of Common Stock as
reported on the New York Stock Exchange Composite Tape. All prices reflect the
Company's two-for-one stock split in August 1994.
<TABLE>
<CAPTION>
SALES PRICES
-------------------
HIGH LOW
------ ------
<S> <C> <C>
1992
First Quarter................................................................. $ 73/16 $ 51/2
Second Quarter................................................................ 615/16 53/4
Third Quarter................................................................. 57/8 51/8
Fourth Quarter................................................................ 71/4 513/16
1993
First Quarter................................................................. $ 91/16 $ 65/16
Second Quarter................................................................ 111/4 81/8
Third Quarter................................................................. 15 1011/16
Fourth Quarter................................................................ 141/8 12
1994
First Quarter................................................................. $167/16 $123/4
Second Quarter................................................................ 203/16 151/16
Third Quarter................................................................. 231/16 17
Fourth Quarter (through October 6)............................................ 191/8 181/8
</TABLE>
On October 6, 1994, the last reported sale price of the Common Stock on the
New York Stock Exchange was $18 3/8 per share. On September 30, 1994, there were
approximately 1,370 holders of record of the Common Stock.
No cash dividends have been paid in the last five years. The Company, as it
deems appropriate, may continue to retain all earnings for use in its business
or may consider paying a dividend in the future.
7
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below as of December 31,
1992 and 1993 and for each of the years in the three year period ended December
31, 1993 have been derived from the consolidated financial statements of Robert
Half International Inc. and its subsidiaries, which have been audited by Arthur
Andersen LLP, independent auditors, which have been incorporated herein by
reference. The selected consolidated financial data set forth below as of
December 31, 1989, 1990 and 1991 and for each of the years in the two year
period ended December 31, 1990 were derived from audited consolidated financial
statements. The selected consolidated financial data set forth below as of and
for the six months ended, June 30, 1993 and 1994 have been derived from the
unaudited consolidated financial statements of the Company incorporated herein
by reference. Such unaudited financial statements, in the opinion of management,
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the results for those interim periods.
Results for the six months ended June 30, 1994 are not necessarily indicative of
results to be expected for the year ending December 31, 1994. The data presented
below is qualified by, and should be read in conjunction with, the consolidated
financial statements, related notes and other financial information incorporated
herein by reference and "Management's Discussion and Anaylsis of Financial
Condition and Results of Operations."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
----------------------------------------------------- --------------------
1989 1990 1991 1992 1993 1993 1994
--------- --------- --------- --------- --------- --------- ---------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION AND PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net service revenues.......................... $ 234,504 $ 248,557 $ 209,455 $ 220,179 $ 306,166 $ 142,019 $ 206,410
Direct costs of services, consisting of
payroll and payroll taxes for temporary
employees.................................... 119,682 130,792 117,583 131,875 188,292 86,255 126,417
--------- --------- --------- --------- --------- --------- ---------
Gross margin.................................. 114,822 117,765 91,872 88,304 117,874 55,764 79,993
Selling, general and administrative
expenses..................................... 81,157 90,518 73,326 72,136 88,074 41,981 56,085
Amortization of intangible assets............. 3,357 3,721 3,896 3,961 4,251 2,078 2,279
Interest expense.............................. 7,264 8,593 6,574 4,301 3,992 1,948 955
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes and extraordinary
gain......................................... 23,044 14,933 8,076 7,906 21,557 9,757 20,674
Provision for income taxes.................... 9,922 6,067 3,961 3,524 9,834 4,471 8,797
--------- --------- --------- --------- --------- --------- ---------
Income before extraordinary gain.............. 13,122 8,866 4,115 4,382 11,723 5,286 11,877
Extraordinary gain from repurchases of
debentures, net of income tax effects........ 345 453 -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income.................................... $ 13,467 $ 9,319 $ 4,115 $ 4,382 $ 11,723 $ 5,286 $ 11,877
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Income per fully diluted share:
Income before extraordinary gain.............. $ .56 $ .39 $ .18 $ .18 $ .46 $ .21 $ .42
Extraordinary gain............................ .01 .02 -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income.................................... $ .57 $ .41 $ .18 $ .18 $ .46 $ .21 $ .42
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Weighted average number of fully diluted
shares....................................... 27,664 22,935 23,273 24,007 25,260 24,758 28,191
PERCENTAGE OF REVENUES DATA:
Gross margin.................................. 49.0% 47.4% 43.9% 40.1% 38.5% 39.3% 38.8%
Selling, general and administrative
expenses..................................... 34.6% 36.4% 35.0% 32.8% 28.8% 29.6% 27.2%
Operating margin before amortization of
intangible assets............................ 14.4% 11.0% 8.9% 7.3% 9.7% 9.7% 11.6%
Pretax margin................................. 9.8% 6.0% 3.9% 3.6% 7.0% 6.9% 10.0%
Net income margin............................. 5.7% 3.7% 2.0% 2.0% 3.8% 3.7% 5.8%
BALANCE SHEET DATA (AT PERIOD END):
Intangible assets............................. $ 133,695 $ 141,728 $ 140,715 $ 143,757 $ 152,156 $ 146,119 $ 155,012
Total assets.................................. 181,437 187,844 178,207 181,999 204,598 190,766 218,243
Total debt.................................... 90,298 86,475 67,614 61,855 32,740 57,444 22,846
Stockholders' equity.......................... 68,675 77,291 84,419 90,972 133,602 98,234 147,442
</TABLE>
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993.
Net service revenues for the six months ending June 30, 1994 increased 45.3%
compared to the six months ending June 30, 1993. Temporary service revenues
increased approximately 45.7% during the six months ended June 30, 1994,
including the revenues generated from the Company's OFFICETEAM division, which
was started in 1991 to provide skilled office and administrative personnel.
Permanent placement revenues increased 42.9% during the six months ended June
30, 1994 as compared with the six months ended June 30, 1993. The revenue
comparisons reflect continued improvement in the demand for the Company's
services.
Gross margin dollars increased 43.4% during the six month period ending June
30, 1994, compared with the corresponding six month period ending June 30, 1993.
Gross margin amounts equaled 38.8% of revenues for the six month period ending
June 30, 1994 and 39.3% of revenues for the six month period ending June 30,
1993. The percentage decline related principally to the relatively lower
percentage of revenues from the ROBERT HALF permanent placement division (which
has higher gross margins).
Selling, general and administrative expenses were approximately $56 million
during the six months ended June 30, 1994 compared to approximately $42 million
during the six months ended June 30, 1993. Selling, general and administrative
expenses as a percentage of revenues were 27.2% in the six months ended June 30,
1994 compared to 29.6% in the six months ended June 30, 1993. The percentage
decline was attributable to increased coverage of fixed costs due to revenue
growth.
Interest expense for the six months ended June 30, 1994 decreased 51.0% over
the comparable 1993 period due primarily to the conversion of the Company's
convertible subordinated debentures in the fourth quarter of 1993 and a
reduction in outstanding indebtedness.
The provision for income taxes for the six months ended June 30, 1994, was
42.6% compared to 45.8% of income before taxes for the same period in 1993. The
decrease in 1994 is the result of a smaller percentage of non-deductible
intangible expenses relative to income.
RESULTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, 1993
Temporary services revenues increased 40% during 1993, including the
revenues generated from the Company's OFFICETEAM division. Permanent placement
revenues increased 30% during the year ended December 31, 1993. The positive
revenue comparisons reflect strong demand for the Company's services.
Net service revenues grew at a slower rate in 1992 compared to 1991,
primarily as a result of the general economic recession. Temporary services
revenues increased 9% while revenues of the ROBERT HALF division decreased 21%.
Gross margin as a percentage of revenues declined 1% between 1993 and 1992
and equaled 39% of revenue in 1993. In 1992, gross margin equaled 40% of revenue
and in 1991, gross margin was 44% of revenue. The percentage declines related
principally to the relatively lower percentage of revenues from the ROBERT HALF
division (which has higher gross margins) and higher unemployment insurance
costs associated with the temporary services divisions.
Selling, general and administrative expenses were $88 million during 1993
compared to $72 million in 1992 and $73 million in 1991. Selling, general and
administrative expenses as a percentage of revenues was 29% in 1993, compared to
33% in 1992 and 35% in 1991. The percentage declines were attributable to
increased coverage of fixed costs due to revenue growth coupled with the
Company's cost containment measures.
Amortization of intangible assets increased from 1991 to 1993 due to
acquisitions in that period of additional personnel services operations.
9
<PAGE>
Interest expense for the years ended December 31, 1993 and 1992 decreased 7%
and 35%, respectively, over the comparable prior periods due to the reduction in
outstanding indebtedness in both years and declining interest rates in the year
ending December 31, 1992.
The provision for income taxes was 46% in 1993, as compared to 45% in 1992
and 49% in 1991. The 1993 increase reflects the effect of the 1% increase in the
federal corporate income tax rate as a result of the 1993 Tax Act. Because of
the increase in pre-tax book income, the effect of the non-deductible intangible
amortization on the effective tax rate was reduced in 1993 as compared to 1992.
The 1992 reduction relative to 1991 was due primarily to a one-time benefit in
the fourth quarter of 1992 for the resolution of tax accounting issues related
to previous acquisitions. The Financial Accounting Standards Board issued a new
standard on accounting for income taxes, which the Company was required to adopt
on January 1, 1993. The cumulative effect of the adoption of the accounting
method prescribed by the new standard was immaterial.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1994, the Company's sources of liquidity included
approximately $1.5 million in cash and cash equivalents and $26.4 million in net
working capital. In addition, as of June 30, 1994, approximately $58 million
remained available for borrowing under the Company's $80 million bank revolving
credit facility at interest rates of either the Eurodollar rate plus 1% or at
prime.
The Company's liquidity during the first half of 1994 was increased by $17.0
million from funds generated by operating activities. These funds were used for
personnel services acquisitions, capital expenditures and payments on
outstanding indebtedness.
The Company's working capital requirements consist primarily of the
financing of accounts receivable. While there can be no assurances in this
regard, the Company expects that internally generated cash plus the bank
revolving credit facility will be sufficient for the foreseeable future to
support the working capital needs of the Company.
10
<PAGE>
BUSINESS
Robert Half International Inc. is the world's largest specialized provider
of temporary and permanent personnel in the fields of accounting and finance.
Its divisions include ACCOUNTEMPS-R- and ROBERT HALF-R-, providers of temporary
and permanent personnel, respectively, in the fields of accounting and finance.
The Company, utilizing its experience as a specialized provider of temporary and
permanent personnel, has expanded into additional specialty fields. In December
1991, the Company formed OFFICETEAM-R- to provide skilled temporary
administrative and office personnel. In 1992, the Company acquired THE
AFFILIATES-R-, which focuses on placing temporary and permanent employees in
paralegal, legal administrative and other legal support positions. In addition,
the Company recently established RHI CONSULTING-TM- to concentrate on providing
temporary information technology professionals in positions ranging from PC/LAN
technician to system design and application programmer.
The Company's business was originally founded in 1948. Prior to 1986, the
Company was primarily a franchisor of ACCOUNTEMPS and ROBERT HALF offices.
Beginning in 1986, the Company and its current management embarked on a strategy
of acquiring franchised locations and other local or regional independent
providers of specialized temporary service personnel. The Company has acquired
all but five of the ACCOUNTEMPS and ROBERT HALF franchises in 45 separate
transactions, and has acquired 14 other local or regional providers of
specialized temporary service personnel. Since 1986, the Company has
significantly expanded operations at many of the acquired locations and has
opened over 50 new locations. The Company believes that direct ownership of
offices allows it to better monitor and protect the image of the ACCOUNTEMPS and
ROBERT HALF names, promotes a more consistent and higher level of quality and
service throughout its network of offices and improves profitability by
centralizing many of its administrative functions. The Company currently has
more than 160 offices in 36 states and five foreign countries and placed
approximately 59,000 employees on temporary assignment with clients in 1993.
THE INDUSTRY
The temporary personnel industry has grown rapidly over the past ten years.
According to an independent industry study published by The Omnicomp Group,
industry revenues increased from approximately $7.7 billion in 1984 to
approximately $23.6 billion in 1993, an average annual growth rate of 13.3%, and
from 1992 to 1993, industry revenues increased by 18.5%.
The use of temporary personnel has become widely accepted as a valuable tool
for managing personnel costs and for meeting specialized or fluctuating
employment requirements. Temporary services companies offer their clients a
means of dealing with uneven or peak work loads caused by such predictable
events as vacations, taking inventories, tax work, month-end activities and
special projects and such unpredictable events as illnesses and emergencies.
Businesses view the use of temporary employees as a means of controlling
personnel costs and converting such costs from fixed to variable. The cost and
inconvenience to clients of hiring additional regular employees for short
periods are eliminated by the use of temporaries. This acceptance of the use of
temporaries has resulted in an increase in temporary employees as a percentage
of the workforce from 0.6% in 1984 to 1.4% in 1993, according to the U.S. Bureau
of Labor Statistics and the National Association of Temporary Services,
respectively.
The temporary workers are employees of the temporary service company and are
paid only when working on client assignments. The client pays a fixed rate only
for hours worked. The use of temporary employees therefore enables the client to
shift certain employment costs (such as workers' compensation and unemployment
insurance) to the temporary personnel company.
COMPANY STRATEGY
The Company's strategy is to be the premier provider of specialized staffing
services in the fields of accounting, finance, office administration,
information technology and legal support. Key elements of the Company's strategy
include the following:
- FOCUS ON SPECIALIZED NICHES -- The Company focuses on placing highly
qualified and experienced personnel in positions that require specialized
financial, administrative, technical and legal skills. The
11
<PAGE>
Company believes clients' temporary needs for individuals with these
skills are generally more difficult to fill than lower-level positions.
The Company further believes that its 45 years of experience and
reputation in the area of specialized accounting and financial personnel
give it a competitive advantage in the temporary services industry.
- HIRE ASSIGNMENT AND PLACEMENT MANAGERS POSSESSING SPECIALIZED SKILLS --
The Company's assignment and placement managers typically have experience
in the fields in which they are placing personnel. The Company believes
that this allows its managers to better understand each client's staffing
requirements and to select candidates that best address those needs.
Placement managers seek to develop a long term relationship with each
client and strive to play a consultative role in the client's ongoing
hiring and staffing process.
- EXPAND INTO ADDITIONAL SPECIALTY FIELDS -- The Company has diversified its
service offerings beyond accounting and finance to other professional
fields. In 1991, the Company established its OFFICETEAM division which
specializes in providing skilled temporary and permanent office and
administrative personnel. In 1992, the Company acquired THE AFFILIATES
which specializes in providing legal support
personnel to law firms and corporations. Most recently, in January 1994 the
Company established its RHI CONSULTING division to provide information
systems personnel ranging from PC/LAN technicians to system design and
application programmers.
- PROMOTE BRAND RECOGNITION -- The Company enhances client awareness of its
services through a commitment to advertising and public relations
activities, including national direct mail and broadcast media compaigns
and the frequent publication of articles and books on personnel matters.
Additionally, the Company has established co-marketing programs with
leading financial, accounting and word processing software companies,
including Lotus Development Corporation, WordPerfect Corporation,
Peachtree Software, Inc., and Computer Associates International, Inc. The
Company also actively seeks endorsements and affiliations with
professional organizations in business management, office administration
and professional secretarial fields.
- EXPAND THROUGH ACQUISITIONS -- Since 1986, the Company has acquired all
but five of the ACCOUNTEMPS and ROBERT HALF franchises in 45 separate
transactions and has acquired 14 other local or regional independent
providers of specialized temporary service personnel. The Company
continues to review acquisitions on an opportunistic basis. The Company
believes that direct ownership of offices allows it to better monitor and
protect the image of the ACCOUNTEMPS and ROBERT HALF names, promotes a
more consistent and higher level of quality and service throughout its
network of offices and improves profitability by centralizing many of the
administrative functions.
OPERATIONS
ACCOUNTEMPS
The ACCOUNTEMPS temporary services division offers customers a reliable and
economical means of dealing with uneven or peak work loads for accounting, tax
and finance personnel caused by such predictable events as vacations, taking
inventories, tax work, month-end activities and special projects and such
unpredictable events as illness and emergencies. Businesses increasingly view
the use of temporary employees as a means of controlling personnel costs and
converting such costs from fixed to variable. The cost and inconvenience to
clients of hiring and firing permanent employees are eliminated by the use of
ACCOUNTEMPS temporaries. The temporary workers are employees of ACCOUNTEMPS and
are paid by ACCOUNTEMPS only when working on customer assignments. The customer
pays a fixed rate only for hours worked.
ACCOUNTEMPS clients may fill their permanent employment needs by using an
ACCOUNTEMPS employee on a trial basis and, if so desired, "converting" the
temporary position to a permanent position. The client typically pays a one-time
fee for such conversions.
The ACCOUNTEMPS business accounted for 75% of the Company's revenue in 1993
and 68% of the Company's revenue during the first six months of 1994.
12
<PAGE>
OFFICETEAM
The Company's OFFICETEAM division, which commenced operations in 1991,
places temporary and permanent office and administrative personnel, ranging from
word processors to office managers, from over 100 locations in the United
States. OFFICETEAM operates in much the same fashion as the ACCOUNTEMPS and
ROBERT HALF divisions. The OFFICETEAM business accounted for 14% of the
Company's revenue in 1993 and 18% of the Company's revenue during the first six
months of 1994.
ROBERT HALF
The Company offers permanent placement services through its office network
under the name ROBERT HALF. The Company's ROBERT HALF division specializes in
placing accounting, financial, tax and banking personnel. Fees for successful
permanent placements are paid only by the employer and are generally a
percentage of the new employee's annual compensation. No fee for permanent
placement services is charged to employment candidates.
The ROBERT HALF business accounted for 9% of the Company's revenue in 1993
and during the first six months of 1994.
OTHER ACTIVITIES
In 1992, the Company acquired THE AFFILIATES, a small operation involving
only a limited number of offices, which places temporary and permanent employees
in paralegal, legal administrative and legal secretarial positions. The legal
profession's requirements (the need for confidentiality, accuracy and
reliability, a strong drive toward cost-effectiveness, and frequent peak
workload periods) are similar to the demands of the clients of the ACCOUNTEMPS
division.
The Company recently established its RHI CONSULTING division, which
specializes in providing information technology professionals ranging from
PC/LAN technician to system design and application programmer.
MARKETING AND RECRUITING
The Company markets its services to clients as well as employment
candidates. Local marketing and recruiting are generally conducted by each
office or related group of offices. Advertising directed to clients and
employment candidates consists primarily of yellow pages advertisements,
classified advertisements and radio. Direct marketing through mail and telephone
solicitation also constitutes a significant portion of the Company's total
advertising. National advertising conducted by the Company consists primarily of
print advertisements in national newspapers, magazines and certain trade
journals. Joint marketing arrangements have been entered into with Lotus
Development Corporation, WordPerfect Corporation, Peachtree Software, Inc., and
Computer Associates International, Inc. and typically provide for cooperative
advertising, joint mailings and similar promotional activities. The Company also
actively seeks endorsements and affiliations with professional organizations in
the business management, office administration and professional secretarial
fields. The Company also conducts public relations activities designed to
enhance public recognition of the Company and its services. Local employees are
encouraged to be active in civic organizations and industry trade groups.
The Company owns many trademarks, service marks and tradenames, including
the ROBERT HALF-R-, ACCOUNTEMPS-R-, OFFICETEAM-R-, THE AFFILIATES-R- and RHI
CONSULTING-TM- marks, which are registered in the United States and in a number
of foreign countries.
ORGANIZATION
Management of the Company's operations is coordinated from its headquarters
in Menlo Park, California. The Company's headquarters provides support and
centralized services to its offices in the administrative, marketing,
accounting, training and legal areas, particularly as it relates to the
standardization of the operating procedures of its offices. The Company has more
than 160 offices in 36 states and five foreign countries. Office managers are
responsible for most activities of their offices, including sales, local
advertising and marketing and recruitment.
13
<PAGE>
COMPETITION
The Company faces competition in its efforts to attract clients as well as
high-quality specialized employment candidates. The temporary and permanent
placement businesses are highly competitive, with a number of firms offering
services similar to those provided by the Company on a national, regional or
local basis. In many areas the local companies are the strongest competitors.
The most significant competitive factors in the temporary and permanent
placement businesses are price and the reliability of service, both of which are
often a function of the availability and quality of personnel. The Company
believes it derives a competitive advantage from its long experience with and
commitment to the specialized employment market, its national presence, and its
various marketing activities.
EMPLOYEES
The Company has approximately 1,450 full-time staff employees. The Company's
offices placed approximately 59,000 employees on temporary assignments with
clients during 1993. Temporary employees placed by the Company are the Company's
employees for all purposes while they are working on assignments. The Company
pays the related costs of employment, such as workers' compensation insurance,
state and federal unemployment taxes, social security and certain fringe
benefits. The Company provides voluntary health insurance coverage to interested
temporary employees.
14
<PAGE>
EXECUTIVE OFFICERS
The following table lists the name of each executive officer of the Company,
his or her age as of September 30, 1994, and his or her current positions and
offices with the Company:
<TABLE>
<CAPTION>
NAME AGE OFFICE
- ----------------------------------- ---- --------------------------------------------------
<S> <C> <C>
Harold M. Messmer, Jr. ............ 48 Chairman of the Board, President and Chief
Executive Officer
M. Keith Waddell................... 37 Senior Vice President, Chief Financial Officer and
Treasurer
Robert W. Glass.................... 36 Senior Vice President, Corporate Development
Steven Karel....................... 44 Vice President, Secretary and General Counsel
Kirk E. Lundburg................... 35 Vice President, Administration
Barbara J. Forsberg................ 33 Vice President and Controller
</TABLE>
Mr. Messmer has been Chairman of the Board since November 1988, Chief
Executive Officer since May 1987, Chief Executive Officer of the ACCOUNTEMPS and
ROBERT HALF businesses since their acquisition by the Company in 1986 and
President since October 1985. Mr. Messmer is a director of Airborne Freight
Corporation, Health Care Property Investors, Inc., Pacific Enterprises and
Spieker Properties, Inc.
Mr. Waddell has been Senior Vice President of the Company since May 1993,
Chief Financial Officer of the Company since February 1988 and Treasurer since
1987. From October 1986 when he joined the Company until May 1993, he served as
Vice President. Prior to joining the Company, Mr. Waddell was an audit manager
with Arthur Andersen & Co.
Mr. Glass has been Senior Vice President, Corporate Development, since May
1993. He served as Vice President, Corporate Development from February 1988
until May 1993. From 1987 until February 1988, he served as Vice President,
Planning of the Company. From January 1986 until May 1987, Mr. Glass was
employed as an investment analyst by the Company.
Mr. Karel has been Vice President and General Counsel of the Company since
September 1989 and Secretary since May 1993. From 1984 to 1989, Mr. Karel was
employed by Cooper Laboratories, Inc. and CooperVision, Inc. From 1980 to 1984,
he was an associate with the law firm of Pillsbury, Madison & Sutro.
Mr. Lundburg has been Vice President, Administration since July 1993. Prior
to joining the Company, Mr. Lundburg was an associate with the law firm of
Latham & Watkins.
Ms. Forsberg has been Vice President of the Company since May 1993 and
Controller since May 1990. For more than five years prior to joining the
Company, Ms. Forsberg worked in the audit division of Arthur Andersen & Co.
15
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information as of September 30, 1994,
concerning beneficial ownership of Common Stock by the Selling Stockholders.
<TABLE>
<CAPTION>
NUMBER OF
SHARES TO
BE SOLD
SHARES OF COMMON STOCK ----------
SHARES BENEFICIALLY
BENEFICIALLY OWNED
PRIOR TO OFFERING OWNED AFTER OFFERING
----------------------- ----------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- ---------------------------------------------------------- ---------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
The Fulcrum III Limited Partnership....................... 3,690,994 13.5% 2,986,097 704,897 2.6%
600 Madison Avenue
New York, NY 10022
The Second Fulcrum III Limited Partnership................ 2,509,006 9.1% 2,155,348 353,658 1.3%
600 Madison Avenue
New York, NY 10022
</TABLE>
The sole general partner of each of the Selling Stockholders is Gibbons,
Goodwin, van Amerongen ("GGvA"). The general partners of GGvA are Edward W.
Gibbons (a director of the Company), Todd Goodwin (a director of the Company),
Lewis W. van Amerongen and Elizabeth V. Camp. Mr. Gibbons directly owns 200,000
shares of the Company's Common Stock and Messrs. Gibbons and Goodwin each hold
options to purchase 30,000 shares of the Company's Common Stock.
The Company has agreed with the Selling Stockholders to pay for certain
expenses incurred in connection with the registration of the shares offered
hereby, such as filing fees, printing expenses, blue-sky fees and expenses, fees
and disbursements of counsel for the Company and accounting fees. The Selling
Stockholders have agreed to pay all underwriting discounts, selling commissions
and stock transfer taxes applicable to the shares being sold by the Selling
Stockholders, as well as the fees and disbursements of counsel for the Selling
Stockholders.
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS
The following is a general discussion of certain United States federal tax
consequences of the acquisition, ownership and disposition of Common Stock by a
holder that, for United States federal income tax purposes, is not a "United
States person" (a "Non-United States Holder"). This discussion is based upon the
United States federal tax law now in effect, which is subject to change,
possibly retroactively. For purposes of this discussion, a "United States
person" means a citizen or resident of the United States; a corporation,
partnership, or other entity created or organized in the United States or under
the laws of the United States or of any political subdivision thereof; or an
estate or trust whose income is includible in gross income for United States
federal income tax purposes regardless of its source. This discussion does not
address investors other than original purchasers and does not consider any
specific facts or circumstances that may apply to a particular Non-United States
Holder. Prospective investors are urged to consult their tax advisors regarding
the United States federal tax consequences of acquiring, holding and disposing
of Common Stock, as well as any tax consequences that may arise under the laws
of any state, municipal, foreign or other taxing jurisdiction.
DIVIDENDS
Dividends, if any, paid to a Non-United States Holder will generally be
subject to withholding of United States federal income tax at the rate of 30%
unless the dividend is effectively connected with the conduct of a trade or
business within the United States by the Non-United States Holder, in which case
the dividend will be subject to the United States federal income tax on net
income that applies to United States persons generally (and, with respect to
corporate holders and under certain circumstances, the branch profits tax).
Non-United States Holders should consult any applicable income tax treaties,
which may provide for a lower
16
<PAGE>
rate of withholding or other rules different from those described above. A
Non-United States Holder may be required to satisfy certain certification
requirements in order to claim treaty benefits or otherwise claim a reduction of
or exemption from withholding under the foregoing rules.
GAIN ON DISPOSITION
A Non-United States Holder will generally not be subject to United States
federal income tax on any gain recognized on a sale or other disposition of
Common Stock unless (i) the gain is effectively connected with the conduct of a
trade or business within the United States by the Non-United States Holder, (ii)
in the case of a Non-United States Holder who is a nonresident alien individual
and holds the Common Stock as a capital asset, such holder is present in the
United States for 183 or more days in the taxable year and certain other
requirements are met or (iii) the Company is or becomes a "United States real
property holding corporation" for United States federal income tax purposes and
certain other requirements are met. The Company believes that presently it is
not a United States real property holding corporation for federal income tax
purposes.
FEDERAL ESTATE TAXES
Common Stock owned or treated as owned by an individual who is not a citizen
or resident (as specifically defined for United States federal estate tax
purposes) of the United States at the date of death will be included in such
individual's estate for United States federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise. Such individual's estate may be
subject to United States federal estate tax on the property includible in the
estate for United States federal estate tax purposes. Estates of nonresident
aliens are generally allowed a credit that is equivalent to an exclusion of
$60,000 of assets from the estate for United States federal estate tax purposes.
BACKUP WITHHOLDING AND INFORMATION REPORTING
The Company must report annually to the Internal Revenue Service (the "IRS")
and to each Non-United States Holder the amount of dividends paid to, and the
tax withheld with respect to, each Non-United States Holder. Copies of these
information returns may be made available under the provisions of a specific
treaty or agreement with the tax authorities in the country in which the
Non-United States Holder resides. Dividends not subject to withholding tax may
be subject to backup withholding (at the rate of 31%) if the Non-United States
Holder is not an "exempt recipient" and fails to provide its tax identification
number and other information to the Company.
The payment of the proceeds from the disposition of Common Stock to or
through the United States office of a broker will be subject to information
reporting and backup withholding unless the owner, under penalties of perjury,
certifies, among other things, as to its status as a Non-United States Holder or
otherwise establishes an exemption (and the broker has no actual knowledge to
the contrary). The payment of the proceeds from the disposition of Common Stock
to or through a non-United States office of a broker generally will not be
subject to information reporting or backup withholding. However, information
reporting (but not backup withholding) will apply to a payment of the proceeds
from a sale of Common Stock if the payment is made through a Non-United States
office of a United States broker or through a Non-United States office of a
Non-United States broker that is (i) a controlled foreign corporation for United
States federal income tax purposes or (ii) a person 50% or more of whose gross
income for a certain three-year period is effectively connected with a United
States trade or business, unless the broker has documentary evidence in its
records that the holder is a Non-United States Holder and certain conditions are
met, or the holder otherwise establishes an exemption.
Any amount withheld under backup withholding rules may be refunded to the
holder or credited against the holder's United States federal income tax
liability, provided that the required information is furnished to the IRS.
The backup withholding and information reporting rules currently are under
review by the U.S. Treasury Department and their application to the Common Stock
is subject to change.
17
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"U.S. Purchase Agreement"), the Company and the Selling Stockholders have agreed
to sell to the U.S. Underwriters named below (the "U.S. Underwriters"), and the
U.S. Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated
and William Blair & Company are acting as representatives (the "U.S.
Representatives"), have severally agreed to purchase, the number of shares of
Common Stock set forth opposite their respective names below.
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITER SHARES
- -------------------------------------------------------------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................
William Blair & Company.............................................
---------
Total..................................................... 4,200,000
---------
---------
</TABLE>
The Company and the Selling Stockholders have entered into a purchase
agreement (the "International Purchase Agreement" and, together with the U.S.
Purchase Agreement, the "Agreements") with certain underwriters outside the
United States and Canada (the "International Underwriters"), for whom Merrill
Lynch International Limited and William Blair & Company are acting as lead
managers (the "International Representatives"). Subject to the terms and
conditions set forth in the International Purchase Agreement, the Company and
the Selling Stockholders have agreed to sell to the International Underwriters,
and the International Underwriters have severally agreed to purchase, an
aggregate of 1,050,000 shares of Common Stock. The initial public offering price
per share and the underwriting discount per share are identical under the U.S.
Purchase Agreement and the International Purchase Agreement.
In the U.S. Purchase Agreement and the International Purchase Agreement, the
several U.S. Underwriters and the several International Underwriters
(collectively, the "Underwriters"), respectively, have agreed, subject to the
terms and conditions set forth therein, to purchase all of the shares of Common
Stock being sold pursuant to such Agreement if any of the shares of Common Stock
being sold pursuant to such Agreement are purchased. The U.S. Purchase Agreement
provides that, in the event of a default by a U.S. Underwriter, the purchase
commitments of the non-defaulting U.S. Underwriters may in certain circumstances
be increased, and the International Purchase Agreement provides that, in the
event of a default by an International Underwriter, the purchase commitments of
the non-defaulting International Underwriters may in certain circumstances be
increased. The closing with respect to the sale of the shares of Common Stock
pursuant to the U.S. Purchase Agreement is a condition to the closing with
respect to the sale of the shares of Common Stock pursuant to the International
Purchase Agreement, and the closing with respect to the sale of the shares of
Common Stock pursuant to the International Purchase Agreement is a condition to
the closing with respect to the sale of the shares of Common Stock pursuant to
the U.S. Purchase Agreement.
The U.S. Underwriters and the International Underwriters have entered into
an intersyndicate agreement (the "Intersyndicate Agreement") which provides for
the coordination of their activities. Under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and the International Underwriters are
permitted to sell shares of Common Stock to each other.
The U.S. Representatives have advised the Company that the U.S. Underwriters
propose initially to offer the shares of Common Stock offered hereby to the
public at the public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in excess
of $ per share. The U.S. Underwriters may allow, and such dealers may
reallow, a discount not in excess of $ per share on sales to other
dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
18
<PAGE>
The Company has granted to the U.S. Underwriters an option, exercisable for
30 days after the date hereof, to purchase up to 420,000 additional shares of
Common Stock and to the International Underwriters an option, exercisable for 30
days after the date hereof, to purchase up to 105,000 additional shares of
Common Stock, in each case solely to cover over-allotments, if any, at the
initial public offering price less the underwriting discount. To the extent that
the U.S. Underwriters exercise this option, each of the U.S. Underwriters will
be obligated, subject to certain conditions, to purchase approximately the same
percentage of such shares which the number of shares of Common Stock to be
purchased by it shown in the foregoing table bears to the total number of shares
of Common Stock initially purchased by the U.S. Underwriters.
Under the terms of the Intersyndicate Agreement, the U.S. Underwriters and
any dealer to whom they sell shares of Common Stock will offer to sell or sell
shares of Common Stock only to persons whom they believe are United States
Persons or Canadian Persons (as defined in the Intersyndicate Agreement) or to
persons whom they believe intend to reoffer or resell the same to United States
Persons or Canadian Persons, and the International Underwriters and any bank,
broker or dealer to whom they sell shares of Common Stock will not offer to sell
or sell shares of Common Stock to persons whom they believe to be United States
Persons or Canadian Persons or to persons whom they believe intend to reoffer or
resell the same to United States Persons or Canadian Persons, except in each
case for transactions pursuant to the Intersyndicate Agreement which, among
other things, permits the Underwriters to purchase from each other and offer for
resale such number of shares of Common Stock as the selling Underwriter or
Underwriters and the purchasing Underwriter or Underwriters may agree.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
The Company has agreed not to sell, offer to sell, grant any option for sale
of, or otherwise dispose of, any shares of Common Stock, or any securities
convertible or exchangeable into or exercisable for Common Stock, without the
prior written consent of the U.S. and International Representatives, for a
period of 90 days after the date of this Prospectus, except for the Common Stock
offered hereby, up to 1,000,000 shares of Common Stock that may be issued by the
Company in connection with business acquisitions, and Common Stock or options
that may be issued pursuant to the Company's employee benefit plans.
Three executive officers and a director of the Company who, at September 30,
1994, beneficially owned an aggregate of 1,062,675 shares of Common Stock
(including shares that can be acquired on the exercise of options that are
currently exercisable or become exercisable prior to November 30, 1994) have
agreed not to sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, any shares of Common Stock, or any securities convertible
or exchangeable into or exercisable for Common Stock, without the prior written
consent of the U.S. and International Representatives, for a period of 90 days
after the date of this Prospectus. Such officers and director are the only
executive officers and directors of the Company who, at September 30, 1994,
beneficially owned more than 100,000 shares of Common Stock, other than two
directors (the "Subject Directors") who beneficially owned an aggregate of
2,110,660 shares of Common Stock at that date. However, the Company has informed
the Underwriters that the Subject Directors are "affiliates" (as defined in Rule
144 under the Securities Act of 1933, as amended) of the Company and, to the
extent that either Subject Director sells any such shares pursuant to Rule 144,
such sale will be subject to the volume limitations of Rule 144. In general,
under Rule 144 as currently in effect, each Subject Director would be entitled
to sell, within any three-month period, a number of shares that does not exceed
the greater of (a) one percent of the outstanding shares of the Common Stock or
(b) an amount equal to the average weekly reported volume of trading in shares
of Common Stock during the four calendar weeks preceding such sale.
The Selling Stockholders have agreed not to sell, offer to sell, grant any
option for sale of, or otherwise dispose of, any shares of Common Stock, or any
securities convertible or exchangeable into or exercisable for Common Stock,
without the prior written consent of the U.S. and International Representatives,
for a period of 120 days after the date of this Prospectus, except for the
Common Stock offered hereby and except for the distribution of shares of Common
Stock by the Selling Stockholders to their respective partners; provided that
the certificates evidencing any shares of Common Stock distributed to such
partners shall bear a legend setting forth, and such shares will therefore be
subject to, a similar restriction on transfers.
19
<PAGE>
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, Palo
Alto, California. Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, New York,
New York, are acting as counsel for the Selling Stockholders. Through limited
partnership interests in The Fulcrum III Limited Partnership and The Second
Fulcrum III Limited Partnership, certain partners of Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel have an indirect interest in approximately 45,000 shares
of Common Stock of the Company but such persons currently do not have the power
to vote or dispose of such shares. Brown & Wood, San Francisco, California, will
act as counsel for the Underwriters.
EXPERTS
The financial statements and schedules included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993, and
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement relating to this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included and incorporated by reference therein and herein in
reliance upon the authority of said firm as experts in giving said reports.
20
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDERS OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 2
Additional Information......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Prospectus Summary............................. 3
Risk Factors................................... 5
Use of Proceeds................................ 6
Capitalization................................. 7
Price Range of Common Stock and Dividend
Policy........................................ 7
Selected Consolidated Financial Data........... 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 9
Business....................................... 11
Executive Officers............................. 15
Selling Stockholders........................... 16
Certain United States Federal Tax Consequences
to Non-United States Holders.................. 16
Underwriting................................... 18
Legal Matters.................................. 20
Experts........................................ 20
</TABLE>
5,250,000 SHARES
ROBERT HALF
INTERNATIONAL INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
MERRILL LYNCH & CO.
WILLIAM BLAIR & COMPANY
, 1994
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 7, 1994
PROSPECTUS
5,250,000 SHARES
ROBERT HALF INTERNATIONAL INC.
COMMON STOCK
-------------------
Of the 5,250,000 shares of Common Stock being offered, 108,555 shares are
being sold by Robert Half International Inc. (the "Company") and 5,141,445 are
being sold for the account of certain stockholders of the Company (the "Selling
Stockholders"). The Company will not receive any of the proceeds of the sale of
the shares being sold by the Selling Stockholders.
Of the 5,250,000 shares of Common Stock offered hereby, 1,050,000 shares are
being offered outside the United States and Canada by the International
Underwriters and 4,200,000 shares are being offered in a concurrent offering in
the United States and Canada by the U.S. Underwriters. The price to public and
underwriting discount per share are identical for both offerings. See
"Underwriting."
The Company's Common Stock is traded on the New York Stock Exchange under
the symbol "RHI". On October 6, 1994, the last reported sale price of the Common
Stock on the New York Stock Exchange was $18 3/8 per share.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN MATTERS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
<S> <C> <C> <C> <C>
Per Share............................... $ $ $ $
Total (3)............................... $ $ $ $
<FN>
(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $260,000.
(3) The Company has granted the International Underwriters and the U.S.
Underwriters options exercisable within 30 days after the date hereof to
purchase up to 105,000 and 420,000 additional shares of Common Stock,
respectively, in each case to cover over-allotments, if any. See
"Underwriting." If all such shares are purchased, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ , $ and
$ , respectively.
</TABLE>
-------------------
The shares of Common Stock are being offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by the Underwriters, and
subject to the approval of certain legal matters by counsel for the Underwriters
and to certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify any offer and to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made in New York,
New York on or about , 1994.
-------------------
MERRILL LYNCH INTERNATIONAL LIMITED WILLIAM BLAIR & COMPANY
------------
The date of this Prospectus is , 1994.
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"International Purchase Agreement"), the Company and the Selling Stockholders
have agreed to sell to the International Underwriters named below (the
"International Underwriters"), and the International Underwriters, for whom
Merrill Lynch International Limited and William Blair & Company are acting as
lead managers (the "International Representatives"), have severally agreed to
purchase, the number of shares of Common Stock set forth opposite their
respective names below.
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL UNDERWRITER SHARES
- -------------------------------------------------------------------- ---------
<S> <C>
Merrill Lynch International Limited.................................
William Blair & Company.............................................
---------
Total..................................................... 1,050,000
---------
---------
</TABLE>
The Company and the Selling Stockholders have also entered into a purchase
agreement (the "U.S. Purchase Agreement" and, together with the International
Purchase Agreement, the "Agreements") with certain underwriters in the United
States and Canada (the "U.S. Underwriters"), for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated and William Blair & Company are acting as
representatives (the "U.S. Representatives"). Subject to the terms and
conditions set forth in the U.S. Purchase Agreement, the Company and the Selling
Stockholders have agreed to sell to the U.S. Underwriters, and the U.S.
Underwriters have severally agreed to purchase, an aggregate of 4,200,000 shares
of Common Stock. The initial public offering price per share and the
underwriting discount per share are identical under the International Purchase
Agreement and the U.S. Purchase Agreement.
In the International Purchase Agreement and the U.S. Purchase Agreement, the
several International Underwriters and the several U.S. Underwriters
(collectively, the "Underwriters"), respectively, have agreed, subject to the
terms and conditions set forth therein, to purchase all of the shares of Common
Stock being sold pursuant to such Agreement if any of the shares of Common Stock
being sold pursuant to such Agreement are purchased. The International Purchase
Agreement provides that, in the event of a default by an International
Underwriter, the purchase commitments of the non-defaulting International
Underwriters may in certain circumstances be increased, and the U.S. Purchase
Agreement provides that, in the event of a default by a U.S. Underwriter, the
purchase commitments of the non-defaulting U.S. Underwriters may in certain
circumstances be increased. The closing with respect to the sale of the shares
of Common Stock pursuant to the International Purchase Agreement is a condition
to the closing with respect to the sale of the shares of Common Stock pursuant
to the U.S. Purchase Agreement, and the closing with respect to the sale of the
shares of Common Stock pursuant to the U.S. Purchase Agreement is a condition to
the closing with respect to the sale of the shares of Common Stock pursuant to
the International Purchase Agreement.
The International Underwriters and the U.S. Underwriters have entered into
an intersyndicate agreement (the "Intersyndicate Agreement") which provides for
the coordination of their activities. Under the terms of the Intersyndicate
Agreement, the International Underwriters and the U.S. Underwriters are
permitted to sell shares of Common Stock to each other.
The International Representatives have advised the Company that the
International Underwriters propose initially to offer the shares of Common Stock
offered hereby to the public at the public offering price set forth on the cover
page of this Prospectus and to certain dealers at such price less a concession
not in excess of $ per share. The International Underwriters may allow, and
such dealers may reallow, a discount not in excess of $ per share on sales
to other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
18
<PAGE>
The Company has granted to the International Underwriters an option,
exercisable for 30 days after the date hereof, to purchase up to 105,000
additional shares of Common Stock and to the U.S. Underwriters an option,
exercisable for 30 days after the date hereof, to purchase up to 420,000
additional shares of Common Stock, in each case solely to cover over-allotments,
if any, at the initial public offering price less the underwriting discount. To
the extent that the International Underwriters exercise this option, each of the
International Underwriters will be obligated, subject to certain conditions, to
purchase approximately the same percentage of such shares which the number of
shares of Common Stock to be purchased by it shown in the foregoing table bears
to the total number of shares of Common Stock initially purchased by the
International Underwriters.
Under the terms of the Intersyndicate Agreement, the U.S. Underwriters and
any dealer to whom they sell shares of Common Stock will offer to sell or sell
shares of Common Stock only to persons whom they believe are United States
Persons or Canadian Persons (as defined in the Intersyndicate Agreement) or to
persons whom they believe intend to reoffer or resell the same to United States
Persons or Canadian Persons, and the International Underwriters and any bank,
broker or dealer to whom they sell shares of Common Stock will not offer to sell
or sell shares of Common Stock to persons whom they believe to be United States
Persons or Canadian Persons or to persons whom they believe intend to reoffer or
resell the same to United States Persons or Canadian Persons, except in each
case for transactions pursuant to the Intersyndicate Agreement which, among
other things, permits the Underwriters to purchase from each other and offer for
resale such number of shares of Common Stock as the selling Underwriter or
Underwriters and the purchasing Underwriter or Underwriters may agree.
Under the terms of the Agreement Among Managers entered into by the
International Underwriters, each International Underwriter has agreed that (i)
it has not offered or sold and will not offer or sell, in the United Kingdom by
means of any document, any shares of Common Stock other than to persons whose
ordinary business it is to buy or sell shares or debentures, whether as
principal or agent (except in circumstances which do not constitute an offer to
the public within the meaning of the Companies Act 1985); (ii) it has complied
and will comply with all applicable provisions of the Financial Services Act
1986 with respect to anything done by it in relation to the shares of Common
Stock offered hereby in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on to any
person in the United Kingdom any document received by it in connection with the
issue of the shares of Common Stock if that person is of a kind described in
Article 9(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) order 1988, as amended, or is a person to whom such document may
otherwise lawfully be issued or passed on.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
The Company has agreed not to sell, offer to sell, grant any option for sale
of, or otherwise dispose of, any shares of Common Stock, or any securities
convertible or exchangeable into or exercisable for Common Stock, without the
prior written consent of the U.S. and International Representatives, for a
period of 90 days after the date of this Prospectus, except for the Common Stock
offered hereby, up to 1,000,000 shares of Common Stock that may be issued by the
Company in connection with business acquisitions and Common Stock or options
that may be issued pursuant to the Company's employee benefit plans.
Three executive officers and a director of the Company who, at September 30,
1994, beneficially owned an aggregate of 1,062,675 shares of Common Stock
(including shares that can be acquired on the exercise of options that are
currently exercisable or become exercisable prior to November 30, 1994) have
agreed not to sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, any shares of Common Stock, or any securities convertible
or exchangeable into or exercisable for Common Stock, without the prior written
consent of the U.S. and International Representatives, for a period of 90 days
after the date of this Prospectus. Such officers and director are the only
executive officers and directors of the Company who, at September 30, 1994,
beneficially owned more than 100,000 shares of Common Stock, other than two
directors (the "Subject Directors") who beneficially owned an aggregate of
2,110,660 shares of Common Stock at that date. However, the Company has informed
the Underwriters that the Subject Directors are
19
<PAGE>
"affiliates" (as defined in Rule 144 under the Securities Act of 1933, as
amended) of the Company and, to the extent that either Subject Director sells
any such shares pursuant to Rule 144, such sale will be subject to the volume
limitations of Rule 144. In general, under Rule 144 as currently in effect, each
Subject Director would be entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (a) one percent of the
outstanding shares of the Common Stock or (b) an amount equal to the average
weekly reported volume of trading in shares of Common Stock during the four
calendar weeks preceding such sale.
The Selling Stockholders have agreed not to sell, offer to sell, grant any
option for sale of, or otherwise dispose of, any shares of Common Stock, or any
securities convertible or exchangeable into or exercisable for Common Stock,
without the prior written consent of the U.S. and International Representatives,
for a period of 120 days after the date of this Prospectus, except for the
Common Stock offered hereby and except for the distribution of shares of Common
Stock by the Selling Stockholders to their respective partners; provided that
the certificates evidencing any shares of Common Stock distributed to such
partners shall bear a legend setting forth, and such shares will therefore be
subject to, a similar restriction on transfers.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, Palo
Alto, California. Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, New York,
New York, are acting as counsel for the Selling Stockholders. Through limited
partnership interests in The Fulcrum III Limited Partnership and The Second
Fulcrum III Limited Partnership, certain partners of Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel have an indirect interest in approximately 45,000 shares
of Common Stock of the Company but such persons currently do not have the power
to vote or dispose of such shares. Brown & Wood, San Francisco, California, will
act as counsel for the Underwriters.
EXPERTS
The financial statements and schedules included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993, and
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement relating to this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included and incorporated by reference therein and herein in
reliance upon the authority of said firm as experts in giving said reports.
20
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDERS OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 2
Additional Information......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Prospectus Summary............................. 3
Risk Factors................................... 5
Use of Proceeds................................ 6
Capitalization................................. 7
Price Range of Common Stock and Dividend
Policy........................................ 7
Selected Consolidated Financial Data........... 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 9
Business....................................... 11
Executive Officers............................. 15
Selling Stockholders........................... 16
Certain United States Federal Tax Consequences
to Non-United States Holders.................. 16
Underwriting................................... 18
Legal Matters.................................. 20
Experts........................................ 20
</TABLE>
5,250,000 SHARES
ROBERT HALF
INTERNATIONAL INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
MERRILL LYNCH INTERNATIONAL
LIMITED
WILLIAM BLAIR & COMPANY
, 1994
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses, other than
underwriting discounts and commissions, to be incurred in connection with the
offering:
<TABLE>
<CAPTION>
PAYABLE BY
COMPANY
----------
<S> <C>
SEC Registration Fee.................................................. $ 36,633
NASD Filing Fee....................................................... 11,779
NYSE Listing Fee...................................................... 2,713
Blue Sky Fees and Expenses............................................ 10,000
Printing and Engraving Costs.......................................... 65,000
Legal Fees and Expenses............................................... 90,000
Accounting Fees and Expenses.......................................... 30,000
Transfer Agent Fees and Expenses...................................... 2,500
Miscellaneous......................................................... 11,375
----------
Total............................................................... $ 260,000
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
RESTATED CERTIFICATE OF INCORPORATION. Section 145 of the Delaware General
Corporation Law authorizes a corporation to indemnify its directors and officers
under the terms and circumstances described therein. The Restated Certificate of
Incorporation of the Company provides that each director, officer and employee
of the Company shall be indemnified and held harmless by the Company to the
fullest extent authorized by the Delaware General Corporation Law against all
expenses, liabilities and losses incurred or suffered by such individual in his
capacity as director, officer or employee. The right to indemnification
contained in the Restated Certificate of Incorporation includes the right,
subject to the conditions contained therein, to be reimbursed for expenses in
advance of the final disposition of any action, suit or proceeding. The
Registrant has entered into Indemnification Agreements with each of its
directors and certain executive officers (the form of which Indemnification
Agreements was approved by the Company's stockholders in May 1989) that provide,
among other things, for (a) indemnification, under the terms and circumstances
described in the Indemnification Agreements, to the fullest extent not
prohibited by applicable law, against any and all expenses and liabilities
resulting from service with the Company and (b) advancement to the individual of
expenses reasonably incurred in connection with any threatened or actual action,
suit or proceeding in which such individual is involved by reason of having been
a director, officer, or employee. The Company has insured its directors and
officers against certain liabilities and has insurance against certain payments
which it may be obligated to make to such persons pursuant to the
indemnification provisions of its Restated Certificate of Incorporation or
pursuant to the Indemnification Agreements described above.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
NUMBER EXHIBIT
- ------ ------------------------------------------------------------------------------------------
<C> <S>
1 Purchase Agreements.
4.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1994.
4.2 Rights Agreement, dated as of July 23, 1990, between the Registrant and Manufacturers
Hanover Trust Company of California, incorporated by reference to (i) Exhibit 1 to the
Registrant's Registration Statement on Form 8-A for its Preferred Share Purchase Rights,
which Registration Statement was filed with the Commission on July 30, 1990, (ii) Exhibit
19.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A Amendment No. 2 filed
on December 2, 1993.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
NUMBER EXHIBIT
- ------ ------------------------------------------------------------------------------------------
<C> <S>
4.3 Registration and Expenses Agreement by and between the Registrant and the Selling
Stockholders
5 Opinion of Wilson, Sonsini, Goodrich & Rosati, P.C. (to be filed by amendment).
23.1 Consent of Arthur Andersen LLP (previously filed)
23.2 Consent of Wilson, Sonsini, Goodrich & Rosati, P.C. (contained in Exhibit 5) (to be filed
by amendment).
24.1 Powers of Attorney (see page II-3).
</TABLE>
ITEM 17. UNDERTAKINGS.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described herein, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(i) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance on Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
under the Securities Act shall be deemed to be part of the registration
statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Menlo Park, State of California on October 6, 1994.
ROBERT HALF INTERNATIONAL INC.
(Registrant)
By: /s/ M. KEITH WADDELL
-----------------------------------
M. Keith Waddell
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND TREASURER
(PRINCIPAL FINANCIAL OFFICER)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harold M. Messmer, Jr. and M. Keith Waddell,
jointly and severally, his attorney-in-fact, each with full power of
substitution, for him in any and all capacities, to sign any amendments to this
registration statement, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
Chairman of the Board, President,
/s/ HAROLD M. MESSMER, JR.* Chief Executive Officer, and a
------------------------------------------- Director (Principal Executive October 6, 1994
Harold M. Messmer, Jr. Officer)
/s/ ANDREW S. BERWICK, JR.*
------------------------------------------- Director October 6, 1994
Andrew S. Berwick, Jr.
/s/ FREDERICK P. FURTH
------------------------------------------- Director October 6, 1994
Frederick P. Furth
/s/ EDWARD W. GIBBONS*
------------------------------------------- Director October 6, 1994
Edward W. Gibbons
/s/ TODD GOODWIN*
------------------------------------------- Director October 6, 1994
Todd Goodwin
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
/s/ FREDERICK A. RICHMAN
------------------------------------------- Director October 6, 1994
Frederick A. Richman
/s/ THOMAS J. RYAN*
------------------------------------------- Director October 6, 1994
Thomas J. Ryan
/s/ J. STEPHEN SCHAUB
------------------------------------------- Director October 6, 1994
J. Stephen Schaub
/s/ M. KEITH WADDELL Senior Vice President, Chief
------------------------------------------- Financial Officer and Treasurer October 6, 1994
M. Keith Waddell (Principal Financial Officer)
/s/ BARBARA J. FORSBERG*
------------------------------------------- Vice President and Controller October 6, 1994
Barbara J. Forsberg (Principal Accounting Officer)
*By: /s/M. KEITH WADDELL
-------------------------------------------
M. Keith Waddell
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
- ------ ------------------------------------------------------------------------------------------ -------------
<C> <S> <C>
1 Purchase Agreements.
4.1 Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1994.
4.2 Rights Agreement, dated as of July 23, 1990, between the Registrant and Manufacturers
Hanover Trust Company of California, incorporated by reference to (i) Exhibit 1 to the
Registrant's Registration Statement on Form 8-A for its Preferred Share Purchase Rights,
which Registration Statement was filed with the Commission on July 30, 1990, (ii) Exhibit
19.1 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1990 and (iii) Exhibit 3 to Registrant's Form 8-A/A Amendment No. 2 filed
on December 2, 1993.
4.3 Registration and Expenses Agreement by and between the Registrant and the Selling
Stockholders
5 Opinion of Wilson, Sonsini, Goodrich & Rosati, P.C. (to be filed by amendment).
23.1 Consent of Arthur Andersen LLP (previously filed)
23.2 Consent of Wilson, Sonsini, Goodrich & Rosati, P.C. (contained in Exhibit 5) (to be filed
by amendment).
24.1 Powers of Attorney (see page II-3).
</TABLE>
<PAGE>
4,200,000 Shares
ROBERT HALF INTERNATIONAL INC.
(a Delaware corporation)
Common Stock
(Par Value $.001 Per Share)
U.S. PURCHASE AGREEMENT
-, 1994
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WILLIAM BLAIR & COMPANY
as U.S. Representatives of the several
U.S. Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, NY 10281-1209
Dear Sirs:
Robert Half International Inc., a Delaware corporation (the "Company"), and
each of the selling stockholders of the Company named in Schedule B hereto (the
"Selling Stockholders"), confirm their respective agreements with Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
William Blair & Company ("Blair") and each of the other underwriters named in
Schedule A hereto (collectively, the "U.S. Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10), for
whom Merrill Lynch and Blair are acting as representatives (in such capacity,
Merrill Lynch and Blair shall hereinafter be referred to as the "U.S.
Representatives"), with respect to the sale by the Company and the Selling
Stockholders, acting severally and not jointly, and the purchase by the U.S.
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.001 per share, of the Company ("Common
Stock") set forth in said Schedules A and B hereto, and with respect to the
grant by the Company to the U.S. Underwriters, acting severally and not jointly,
of the option described in Section 2(b) hereof to purchase all or any part of
420,000 additional shares of Common Stock to cover over-allotments, in each case
except as may otherwise be provided in the U.S. Pricing Agreement, as
hereinafter defined. The aforementioned 4,200,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the 420,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the "U.S. Option Securities") are collectively
hereinafter called the "U.S. Securities."
It is understood that the Company is concurrently entering into an
International Purchase Agreement dated the date hereof (the "International
Purchase Agreement") providing for the offering by the Company and the Selling
Stockholders of an aggregate of 1,050,000 shares of Common Stock (the "Initial
International Securities") through arrangements with certain underwriters
outside of the United States (the "International Underwriters") for whom
<PAGE>
Merrill Lynch International Limited and Blair are acting as lead managers
(collectively, the "International Representatives"), and the grant by the
Company to the International Underwriters of an option to purchase all or any
part of an additional 105,000 shares of Common Stock (the "International Option
Securities") to cover over-allotments. The Initial International Securities and
the International Option Securities are collectively hereinafter called the
"International Securities," and the U.S. Securities and the International
Securities are hereinafter called the "Securities."
The Company understands that the U.S. Underwriters and the International
Underwriters will concurrently enter into an Intersyndicate Agreement of even
date herewith (the "Intersyndicate Agreement") providing for the coordination of
certain transactions among the U.S. Underwriters and the International
Underwriters under the direction of Merrill Lynch.
Prior to the purchase and public offering of the U.S. Securities by the
several U.S. Underwriters, the Company, the Selling Stockholders and the U.S.
Representatives, acting on behalf of the several U.S. Underwriters, shall enter
into an agreement substantially in the form of Exhibit A hereto (the "U.S.
Pricing Agreement"). The U.S. Pricing Agreement may take the form of an
exchange of any standard form of written telecommunication between the Company,
the Selling Stockholders and the U.S. Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
U.S. Securities will be governed by this Agreement, as supplemented by the U.S.
Pricing Agreement. From and after the date of the execution and delivery of the
U.S. Pricing Agreement, this Agreement shall be deemed to incorporate the U.S.
Pricing Agreement. The public offering price and the purchase price with
respect to the International Securities shall be set forth in an agreement
substantially in the form of Exhibit A to the International Purchase Agreement
(the "International Pricing Agreement"). The public offering price and the
purchase price per share to be paid by the several International Underwriters
for the International Securities shall be identical to the public offering price
and the purchase price per share to be paid by the several U.S. Underwriters for
the U.S. Securities.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-55627) and a related
preliminary prospectuses for the registration of the Securities under the
Securities Act of 1933 (the "1933 Act"), has filed such amendments thereto, if
any, and such amended preliminary prospectuses as may have been required to the
date hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. Such registration statement (as
amended, if applicable) and the U.S. Prospectus(1) and the International
Prospectus(1) constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be part thereof pursuant to Rule 430A(b) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations")), as from time to time amended or supplemented pursuant to the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or
otherwise, are hereinafter referred to as the "Registration Statement," the
"U.S. Prospectus" and the "International Prospectus," respectively, and the U.S.
Prospectus and the International Prospectus are hereinafter referred to as,
individually, a "Prospectus" and, collectively, the "Prospectuses," except that
if any revised prospectus shall be provided to the U.S. Underwriters or the
International Underwriters by the Company for use in connection with the
offering of the Securities which differs from the corresponding Prospectus on
file at the Commission at the time the Registration Statement becomes effective
(whether or not such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) of the 1933 Act Regulations), the term "U.S. Prospectus"
or "International Prospectus," as the case may be, and "Prospectus" and
"Prospectuses" shall refer to such revised prospectus from and after the time it
is first provided to the U.S. Underwriters or the International Underwriters, as
the case may be, for such use. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" in the Registration Statement or the Prospectuses (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be
___________________
(1) Two forms of prospectus are to be used in connection with the offering
and sale of Securities: one relating to the U.S. Securities (the "U.S.
Prospectus") and one relating to the International Securities (the
"International Prospectus"). The International Prospectus is identical
to the U.S. Prospectus, except for the front cover, back cover page
and the section captioned "Underwriting."
-2-
<PAGE>
incorporated by reference in the Registration Statement or the Prospectuses, as
the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectuses shall be deemed to
mean and include the filing of any document under the 1934 Act which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectuses, as the case may be.
The Company and the Selling Stockholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after the Registration Statement becomes
effective and the U.S. Pricing Agreement has been executed and delivered.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each U.S. Underwriter as of
the date hereof, as of the date of the U.S. Pricing Agreement (such latter date
being hereinafter referred to as the "Representation Date"), and as of the
Closing Time referred to in Section 2(c), and agrees with each U.S. Underwriter,
as follows:
(i) At the time the Registration Statement and any amendments
thereto become effective and at the Representation Date, the Registration
Statement will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectuses, at the Representation Date (unless the term
"Prospectuses" refers to a prospectus which has been provided to the U.S.
Underwriters or the International Underwriters, as the case may be, by the
Company for use in connection with the offering of the Securities which
differs from the corresponding Prospectus on file at the Commission at the
time the Registration Statement becomes effective, in which case at the
time it is first provided to the U.S. Underwriters or the International
Underwriters, as the case may be, for such use), at the Closing Time and at
each Date of Delivery, if any, referred to in Section 2(b), will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or Prospectuses.
(ii) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The financial statements included in the Registration
Statement and the Prospectuses present fairly the financial position of the
Company and its consolidated subsidiaries as at the dates indicated and the
results of their operations for the periods specified; except as otherwise
stated in the Registration Statement, said financial statements have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis; the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein.
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectuses, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, that are
material with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
-3-
<PAGE>
(v) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and to enter
into and perform its obligations under this Agreement, the U.S. Pricing
Agreement, the International Purchase Agreement, the International Pricing
Agreement and the Expenses Agreement (as defined in clause (xv) below); and
the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(vi) Each subsidiary of the Company has been duly organized and is
validly existing as a corporation or partnership, as the case may be, in
good standing under the laws of the jurisdiction of its organization, has
power and authority as a corporation or partnership, as the case may be, to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation or partnership, as the case may be, to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or to be in
good standing would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and outstanding capital
stock of each such corporate subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except for directors'
qualifying shares and approximately 27% of the outstanding capital stock of
Norman Parsons S.A., is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim; all of the issued and outstanding partnership
interests of each such subsidiary which is a partnership have been duly
authorized (if applicable) and validly issued and are fully paid and non-
assessable and are owned by the Company, directly or through corporate
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim, except for security interests, pledges, liens,
encumbrances and claims in, on and to the Company's capital stock in Robert
Half of Texas G.P. Ltd., a Delaware corporation ("RHT, G.P.") and XYZ-II
Inc, a Delaware corporation ("XYZ"), respectively,(RHT, G. P. and XYZ are
hereinafter called, collectivly, the "Subject Subsidiaries" and,
individually, a "Subject Subsidiary") securing the Company's obligations
under its $80 million revolving credit agreement with NationsBank of North
Carolina, N.A. and Bank of America NT&SA, as agents, and the other banks
party thereto (the "Credit Agreement"), and the partnership interests of
RHT, G.P. and XYZ in RHT, L.P., a limited partnership organized under
the laws of Texas ("R H T, L.P.") securing the Company's obligations under
the Credit Agreement; and for the year ended December 31, 1993 and the
eight months ended August 31, 1994, the only subsidiary of the Company
which, on an unconsolidated basis, accounted for more than 5% of the
Company's consolidated net service revenues was RHT, L.P.; the sole general
partner and the sole limited partner of RHT, L.P. are RHT, G.P. and XYZ,
respectively; and RHT, G.P. and XYZ are wholly-owned direct subsidiaries
of the Company.
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement or the
International Purchase Agreement or pursuant to options, reservations,
agreements or employee benefit plans referred to in the Prospectuses or in
the documents incorporated by reference therein); the shares of issued and
outstanding Common Stock, including the Securities to be purchased by the
U.S. Underwriters from the Selling Stockholders hereunder and by the
International Underwriters under the International Purchase Agreement, have
been duly authorized and validly issued and are fully paid and non-
assessable; the Securities to be purchased from the Company have been duly
authorized for issuance and sale to the U.S. Underwriters and the
International Underwriters pursuant to this Agreement and the International
Purchase Agreement, respectively, and, when issued and delivered by the
Company pursuant to this Agreement and the International Purchase
Agreement, respectively, against payment of the
-4-
<PAGE>
consideration set forth in the U.S. Pricing Agreement and the International
Pricing Agreement, respectively, will be validly issued and fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses; and the issuance of the Securities
to be purchased from the Company under this Agreement and the International
Underwriting Agreement, respectively, is not subject to preemptive or other
similar rights.
(viii) Neither the Company nor any of its subsidiaries is in
violation of its charter, by-laws or other organizational documents;
neither the Company nor any of its subsidiaries is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for such defaults as would not, singly or
in the aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise;
and the execution, delivery and performance of this Agreement, the U.S.
Pricing Agreement, the International Purchase Agreement, the International
Pricing Agreement and the Expenses Agreement and the consummation of the
transactions contemplated herein and therein have been duly authorized by
all necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any applicable
law, administrative regulation or administrative or court decree.
(ix) No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, is imminent;
and the Company is not aware of any existing or imminent labor disturbance
by the employees of any of its clients which might be expected to result in
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(x) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries (A) which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or (B) which
could reasonably be expected to result in any material adverse change in
the condition, financial or otherwise or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise or which could reasonably be expected to materially and
adversely affect the properties or assets thereof, or (C) which might
materially and adversely affect the consummation of this Agreement or the
International Purchase Agreement; all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of which
any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the aggregate,
not material to the Company and its subsidiaries considered as one
enterprise; and there are no contracts or documents of the Company or any
of its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations which
have not been so filed or incorporated by reference.
(xi) The Company and its subsidiaries own or possess adequate rights
to use, or can acquire on reasonable terms, the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names (collectively, "Intellectual Property") presently employed by them in
connection with the business now operated by them, except where the failure
to own, possess or have the right to acquire on reasonable terms any such
items of Intellectual Property would not, singly or in the aggregate, have
a material adverse effect on the condition, financial or otherwise, or the
-5-
<PAGE>
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and neither the Company nor any
of its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(xii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
offering, issuance or sale of the Securities under this Agreement and the
International Purchase Agreement, except such as may be required under the
1933 Act or the 1933 Act Regulations, state securities laws or the
securities laws of any jurisdiction outside the United States.
(xiii) The Company and its subsidiaries possess such certificates,
authorities, licenses or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct the business
now operated by them, except where the failure to possess any such
certificates, authorities, licenses or permits would not, singly or in the
aggregate, have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority, license or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xiv) This Agreement, the International Purchase Agreement and the
Expenses Agreement have been, and, at the Representation Date, the U.S.
Pricing Agreement and the International Pricing Agreement will have been,
duly authorized, executed and delivered by the Company.
(xv) There are no persons with registration or other similar rights
to have any securities registered pursuant to the Registration Statement or
included in the offering contemplated by this Agreement or the
International Purchase Agreement, or otherwise registered by the Company
under the 1933 Act, except pursuant to the Registration and Expenses
Agreement dated as of -, 1994 (the "Expenses Agreement") among the Company
and the Selling Stockholders; the Company has afforded the Selling
Stockholders the opportunity to register and sell shares of its Common
Stock as part of the offerings contemplated by this Agreement and the
International Purchase Agreement in accordance with the terms of the
Expenses Agreement and has registered the shares of Common Stock which the
Selling Stockholders have elected to include in such offerings; and the
Company otherwise has complied with its obligations under the Expenses
Agreement.
(xvi) The documents incorporated or deemed to be incorporated by
reference in the Prospectuses, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") and, when read
together with the other information in the Prospectuses, at the time the
Registration Statement and any amendments thereto become effective, at the
Representation Date, at the Closing Time and at each Date of Delivery (if
any), will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(xvii) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida Statutes and the rules and regulations thereunder (collectively,
the "Cuba Act") or is exempt therefrom.
(xviii) The Securities to be purchased from the Company under this
Agreement and the International Purchase Agreement have been approved for
listing on the New York Stock Exchange (the
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"NYSE"), and the Securities to be purchased from the Selling Stockholders
under this Agreement and the International Purchase Agreement are listed on
the NYSE.
(xix) The Rights Agreement dated as of July 23, 1990, as amended by
Amendment No. 1 dated as of September 18, 1990 and Amendment No. 2 dated as
of October 28, 1993 (the "Rights Agreement"), between the Company and
Manufacturers Hanover Trust Company of California has been duly authorized,
executed and delivered by the Company; the preferred share purchase rights
(the "Rights") issuable under the Rights Agreement have been duly
authorized by the Company; each outstanding share of Common Stock is
associated with and entitled to one outstanding Right; and, when the Common
Stock to be sold by the Company hereunder is issued, each such share will
be associated with and entitled to one outstanding Right.
(xx) The Company has obtained and delivered to the U.S.
Representatives and the International Representatives the agreement (each a
"Lock-up Agreement") of each of the executive officers and directors named
in Exhibit B hereto, each of which agreements is in substantially the form
set forth in Exhibit C hereto.
(xxi) All certificates evidencing shares of Common Stock distributed
to any partners of the Selling Stockholders at any time during the period
of 120 days from the date of the U.S. Pricing Agreement will bear a legend
to the effect that, during such 120-day period, the shares represented by
such certificates may not be transferred, sold, pledged or otherwise
disposed of, nor may any offer to sell any such shares be made or option
for the sale thereof be granted, directly or indirectly, without the prior
written consent of the U.S. Representatives, and, prior to issuance of any
such certificates, the Company will deliver stop transfer instructions with
respect to all such certificates to the registrar and each transfer agent
for the Common Stock and, unless waived in writing by the U.S. Underwriters
and the International Underwriters, will maintain such instructions in
effect during such 120-day period; and the Company agrees that the U.S.
Representatives may enforce such restrictions on transfers in the name and
on behalf of the Company and that the Company will cooperate with the U.S.
Representatives in enforcing such restrictions, and further agrees that the
Company will not, without the prior written consent of the U.S.
Representatives, consent to any waiver or modification of such transfer
restrictions.
(xxii) The only officers and directors of the Company who
"beneficially own" (as defined below) 100,000 or more shares of Common
Stock are (i) Frederick P. Furth and J. Stephen Schaub, each of whom is a
director of the Company (the "Subject Directors"), and (ii) the persons
listed in Exhibit B hereto; the Subject Directors are "affiliates" (as
defined in Rule 144 under the 1933 Act) of the Company and persons
"controlling" (within the meaning of Section 2(11) of the 1933 Act) the
Company, and any sale of such shares of Common Stock pursuant to Rule 144
will be subject to, among other things, the volume limitations of Rule
144(e); stop transfer orders with respect to the shares of Common Stock
owned by the Subject Directors are in effect with the registrar and each
transfer agent for the Common Stock, and, unless waived in writing by the
U.S. Underwriters and the International Underwriters, such stock transfer
orders will remain in effect for a period of at least 90 days after the
date of the U.S. Pricing Agreement; and the Company agrees that (A) it will
not register any shares of Common Stock "beneficially owned" by the Subject
Directors under the 1933 Act for a period of 90 days after the date of the
U.S. Pricing Agreement and (B) it will not consent to any sale, transfer or
other disposition of any such shares of Common Stock pursuant to Regulation
S under the 1933 Act unless the transferee of such shares agrees that
neither it nor any subsequent transferee will offer, sell or otherwise
dispose of any such shares to a U.S. Person or in the United States (as
such terms are defined in Regulation S) for a period of at least 90 days
after the date of the U.S. Pricing Agreement. For purposes of this
paragraph (xxii), the term "beneficial owner" and "beneficially owned"
shall have the meanings ascribed thereto in Rule 13d-3 under the 1934 Act,
except that, for purposes of this paragraph, the words "within 60 days"
appearing in paragraph (d)(1)(i) of such Rule shall be deemed to have been
replaced by the words "within 90 days after the date of the U.S. Pricing
Agreement."
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(b) Each Selling Stockholder represents and warrants to each U.S.
Underwriter as of the date hereof, as of the Representation Date and as of the
Closing Time, and jointly and severally agrees with each U.S. Underwriter, as
follows:
(i) This Agreement, the International Purchase Agreement and the
Expenses Agreement have been duly authorized, executed and delivered by
such Selling Stockholder and, at the Representation Date, the U.S. Pricing
Agreement and the International Pricing Agreement will have been duly
authorized, executed and delivered by such Selling Stockholder.
(ii) Such Selling Stockholder has duly authorized, executed and
delivered, in the form heretofore furnished to you, a Custody Agreement (a
"Custody Agreement") with Chemical Trust Company of California, as
custodian (the "Custodian"), and such Custody Agreement is a valid and
binding agreement of such Selling Stockholder, enforceable in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
(iii) All authorizations, approvals, consents and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement, the International Purchase Agreement, the U.S. Pricing
Agreement, the International Pricing Agreement, its Custody Agreement and
the Expenses Agreement, and the sale and delivery of the Securities to be
sold by such Selling Stockholder hereunder and under the International
Purchase Agreement, have been obtained and are in full force and effect,
except as may be required under the 1933 Act, the 1933 Act Regulations,
state securities laws or the securities laws of any jurisdiction outside of
the United States of America, and such Selling Stockholder has full right,
power and authority to enter into and perform its obligations under this
Agreement, the International Purchase Agreement, the U.S. Pricing
Agreement, the International Pricing Agreement, the Custody Agreement and
the Expenses Agreement and to sell, transfer and deliver the Securities to
be sold by such Selling Stockholder hereunder and under the International
Purchase Agreement.
(iv) The execution and delivery of this Agreement, the International
Purchase Agreement, the U.S. Pricing Agreement, the International Pricing
Agreement, the Expenses Agreement, the Custody Agreements and the
consummation of the transactions herein and therein contemplated, will not
result in a breach or violation by such Selling Stockholder of, or
constitute a default by such Selling Stockholder under, its limited
partnership agreement, certificate of limited partnership or other
organizational document, or any indenture, deed of trust, contract or other
agreement or instrument or any decree, judgment or order to which such
Selling Stockholder is a party or by which such Selling Stockholder or any
of its assets may be bound.
(v) Such Selling Stockholder has and, at Closing Time, will have
good and marketable title to the Securities to be sold by it under this
Agreement and the International Purchase Agreement, free and clear of any
pledge, lien, security interest, encumbrance, claim or equity other than
under this Agreement, the International Purchase Agreement and the Custody
Agreement; and upon delivery of such Securities and payment of the purchase
price therefor as contemplated in this Agreement and the International
Purchase Agreement, each of the U.S. Underwriters and the International
Underwriters will receive good and marketable title to the Securities
purchased by it from such Selling Stockholder, free and clear of any
pledge, lien, security interest, encumbrance, claim or equity.
(vi) Certificates in negotiable form for all Securities to be sold
by such Selling Stockholder hereunder and under the International Purchase
Agreement have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder and under the International Purchase
Agreement.
(vii) During a period of 120 days from the date of the U.S. Pricing
Agreement, such Selling Stockholder will not, without the U.S.
Representatives' prior written consent, directly or indirectly, sell, offer
to sell, grant any option for the sale of, or otherwise dispose of, any
Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock owned by such Selling Stockholder or
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with respect to which such Selling Stockholder has the power of
disposition, other than pursuant to this Agreement and the International
Purchase Agreement. Notwithstanding the foregoing, nothing herein shall
prohibit a distribution by such Selling Stockholder of any shares of Common
Stock to one or more of its partners; provided, that such partners take
such shares subject to the restrictions on transfer described in Section
1(a)(xxi) and, provided, further, that such Selling Stockholder agrees (A)
that all certificates evidencing such shares of Common Stock will bear the
legend described in Section 1(a)(xxi), (B) that such Selling Stockholder
will deliver to each partner receiving such certificates, prior to or
contemporaneously with the delivery of such certificates, written notice of
the restrictions on transfer thereof, (C) that the U.S. Representatives may
enforce such restrictions on transfers in the name and on behalf of such
Selling Stockholder and that such Selling Stockholder will cooperate with
the U.S. Representatives in enforcing such restrictions, and (D) that such
Selling Stockholder will not consent to any waiver or modification of such
transfer restrictions without the prior written consent of the U.S.
Representatives.
(viii) Such Selling Stockholder does not have any knowledge or any
reason to believe that the representations and warranties of the Company
contained in Section 1(a) hereof are not true and correct; such Selling
Stockholder has reviewed and is familiar with the Registration Statement as
originally filed with the Commission and all amendments and supplements
thereto, if any, filed with the Commission prior to the date hereof, and
with preliminary prospectuses contained therein, as supplemented, if
applicable, to the date hereof, and has no knowledge of any fact, condition
or information not disclosed in such preliminary prospectuses, as so
supplemented, if applicable, which has had or could have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; to the best knowledge of such Selling
Stockholder, such preliminary prospectuses as so supplemented, if
applicable, do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and such Selling Stockholder is not prompted to sell the
Securities to be sold by it hereunder or under the International Purchase
Agreement by any information concerning the Company or any subsidiary of
the Company which is not set forth in such preliminary prospectuses, as so
supplemented, if applicable.
(ix) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(x) Such Selling Stockholder hereby makes the representations and
warranties set forth in the Custody Agreement, which representations and
warranties are hereby incorporated by reference in, and made a part of,
this Agreement.
(c) Any certificate designated as such in its title and as being
delivered pursuant to this Agreement or the International Purchase Agreement and
signed by any officer of the Company and delivered to the U.S. Representatives
or to counsel for the U.S. Underwriters shall be deemed a representation and
warranty by the Company to each U.S. Underwriter as to the matters covered
thereby; and any certificate signed by or on behalf of any Selling Stockholder
and delivered to the U.S. Representatives or to counsel for the U.S.
Underwriters shall be deemed a representation and warranty by such Selling
Stockholder to each U.S. Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, each of the Company
and Selling Stockholders, severally and not jointly, agrees to sell to each U.S.
Underwriter, severally and not jointly, and each U.S. Underwriter, severally and
not jointly, agrees to purchase from the Company and each of the Selling
Stockholders, at the price per share set forth in the U.S. Pricing Agreement,
that proportion of the number of Initial U.S. Securities set forth in Schedule B
opposite the name of the Company or such Selling Stockholder, as the case may be
(plus that proportion of any such additional
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number of shares of Common Stock which the Company or such Selling Stockholder,
as the case may be, may elect to sell pursuant to Section 11) which the number
of Initial U.S. Securities set forth in Schedule A opposite the name of such
U.S. Underwriter bears to the total number of Initial U.S. Securities (except as
otherwise provided in the U.S. Pricing Agreement), subject to such adjustments
as the Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares, plus any additional number of Initial U.S.
Securities which such U.S. Underwriter may become obligated to purchase pursuant
to the provisions of Section 10 hereof.
(1) If the Company has elected not to rely upon Rule 430A under the
1933 Act Regulations, the initial public offering price and the purchase
price per share to be paid by the several U.S. Underwriters for the U.S.
Securities have each been determined and set forth in the U.S. Pricing
Agreement, dated the date hereof, and an amendment to the Registration
Statement and the Prospectuses will be filed before the Registration
Statement becomes effective.
(2) If the Company has elected to rely upon Rule 430A under the 1933
Act Regulations, the purchase price per share to be paid by the several
U.S. Underwriters for the U.S. Securities shall be an amount equal to the
initial public offering price less an amount per share to be determined by
agreement between the U.S. Representatives, the Company and the Selling
Stockholders. The public offering price per share of the U.S. Securities
shall be a fixed price to be determined by agreement between the U.S.
Representatives, the Company and the Selling Stockholders. The public
offering price and the purchase price, when so determined, shall be set
forth in the U.S. Pricing Agreement. In the event that such prices have
not been agreed upon and the U.S. Pricing Agreement has not been executed
and delivered by all parties thereto by the close of business on the fourth
business day following the date of this Agreement, this Agreement shall
terminate forthwith, without liability of any party to any other party,
unless otherwise agreed to by the Company, the Selling Stockholders and the
U.S. Representatives.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the U.S. Underwriters, severally and not
jointly, to purchase up to an additional 408,000 shares of Common Stock at the
price per share set forth in the U.S. Pricing Agreement. The option hereby
granted will expire 30 days after (i) the date the Registration Statement
becomes effective, if the Company has elected not to rely on Rule 430A under the
1933 Act Regulations, or (ii) the Representation Date, if the Company has
elected to rely on Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial U.S. Securities upon notice by the U.S.
Representatives to the Company setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the U.S. Representatives, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined, unless otherwise agreed by the U.S.
Representatives and the Company. If the option is exercised as to all or any
portion of the U.S. Option Securities, each of the U.S. Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
U.S. Option Securities then being purchased which the number of Initial U.S.
Securities set forth in Schedule A opposite the name of such U.S. Underwriter
bears to the total number of Initial U.S. Securities (except as otherwise
provided in the U.S. Pricing Agreement), subject in each case to such
adjustments as the U.S. Representatives in their discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial U.S. Securities shall be made at the offices of Wilson, Sonsini,
Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto,
California 94304, or at such other place as shall be agreed upon by the U.S.
Representatives, the Company and the Selling Stockholders, at 7:00 A.M.
(California time) on the fifth business day (unless postponed in accordance with
the provisions of Section 10 or 11) following the date the Registration
Statement becomes effective (or, if the Company has elected to rely upon Rule
430A, the fifth business day after execution of the U.S. Pricing Agreement), or
such other time not later than ten business days after such date as shall be
agreed upon by the U.S. Representatives, the Company and the Selling
Stockholders (such time and date of payment and delivery being herein called
"Closing Time"). In addition, in the event that any or all of the U.S. Option
Securities are purchased
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by the several U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices of Wilson, Sonsini, Goodrich & Rosati, or at such other
place as shall be agreed upon by the U.S. Representatives and the Company, on
each Date of Delivery as specified in the notice from the U.S. Representatives
to the Company. Payment shall be made to the Company and the Custodian,
respectively, by certified or official bank check or checks drawn in next day
funds payable to the order of the Company and the Custodian, respectively,
against delivery to the U.S. Representatives for the respective accounts of the
U.S. Underwriters of certificates for the U.S. Securities to be purchased by
them, with any stock transfer taxes, stamp duties or other similar taxes thereon
duly paid by the Company and the Selling Stockholders as provided in Section 4.
Certificates for the Initial U.S. Securities and the U.S. Option Securities, if
any, shall be in such denominations and registered in such names as the U.S.
Representatives may request in writing at least two business days before Closing
Time or the relevant Date of Delivery, as the case may be. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Merrill Lynch, individually and not as a
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose check
has not been received by Closing Time or the relevant Date of Delivery, as the
case may be, but such payment shall not relieve such U.S. Underwriter from its
obligations hereunder. The certificates for the Initial U.S. Securities and the
U.S. Option Securities, if any, will be made available for examination and
packaging by the U.S. Representatives not later than 10:00 A.M. on the last
business day prior to Closing Time or the relevant Date of Delivery, as the case
may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
U.S. Underwriter as follows:
(a) The Company will notify the U.S. Representatives immediately,
and confirm the notice in writing, (i) of the effectiveness of the
Registration Statement and any amendment thereto (including any post-
effective amendment), (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to either Prospectus
or for additional information, and (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) The Company will give the U.S. Representatives notice of its
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to
either Prospectus (including any revised prospectus which the Company
proposes for use by the U.S. Underwriters or the International Underwriters
in connection with the offering of the Securities which differs from the
corresponding prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations), whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the U.S. Representatives with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such amendment or supplement
or use any such prospectus to which the U.S. Representatives or counsel for
the U.S. Underwriters shall reasonably object.
(c) The Company will deliver to the U.S. Representatives as many
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated
by reference therein) as the U.S. Representatives may reasonably request
and will also deliver to the U.S. Representatives a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the U.S. Underwriters.
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(d) The Company will furnish to each U.S. Underwriter, from time to
time during the period when the U.S. Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the U.S.
Prospectus (as amended or supplemented) as such U.S. Underwriter may
reasonably request for the purposes contemplated by the 1933 Act or the
1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
(e) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the U.S. Underwriters, to amend or supplement
the U.S. Prospectus in order to make the U.S. Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Company will forthwith amend or supplement the U.S.
Prospectus (in form and substance satisfactory to counsel for the U.S.
Underwriters) so that, as so amended or supplemented the U.S. Prospectus
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein in the
light of the circumstances existing at the time it is delivered to a
purchaser, not misleading (and, if appropriate, will make a corresponding
amendment or supplement to the International Prospectus), and the Company
will furnish to the U.S. Underwriters a reasonable number of copies of such
amendment or supplement.
(f) The Company will endeavor, in cooperation with the U.S.
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the
United States as the U.S. Representatives may designate; provided, however,
that the Company shall not be obligated to qualify as a foreign corporation
in any jurisdiction in which it is not so qualified or to execute a general
consent to service of process in any jurisdiction or to make any
undertaking with respect to the conduct of its business. In each
jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 105 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations and, unless
required thereby, which need not be audited) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(h) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectuses under
"Use of Proceeds."
(i) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the 1933 Act Regulations, then immediately following the
execution of the U.S. Pricing Agreement, the Company will prepare, and file
or transmit for filing with the Commission in accordance with such
Rule 430A and Rule 424(b) of the 1933 Act Regulations, copies of amended
Prospectuses, or, if required by such Rule 430A, a post-effective amendment
to the Registration Statement (including amended Prospectuses), containing
all information so omitted.
(j) The Company will use its reasonable best efforts to effect the
listing of the Securities to be sold by the Company under this Agreement
and the International Purchase Agreement on the New York Stock Exchange.
(k) During a period of 90 days from the date of the U.S. Pricing
Agreement, the Company will not, without the U.S. Representatives' prior
written consent, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for
Common Stock (except for (A) Common Stock issued pursuant to this Agreement
or the International Purchase Agreement, (B) Common Stock or options to
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purchase Common Stock issued pursuant to options, reservations, agreements
or employee benefit plans referred to in Section 1(a)(vii) hereof, (C) up
to one million shares of Common Stock that may be issued in connection with
business acquisitions) and (D) the issuance of Rights or other securities
pursuant to the Rights Agreement.
(l) In accordance with the Cuba Act and without limitation to the
provisions of Sections 6 and 7 hereof, the Company agrees to indemnify and
hold harmless each U.S. Underwriter from and against any and all loss,
liability, claim, damage and expense whatsoever (including fees and
disbursements of counsel), as incurred, arising out of any violation by the
Company of the Cuba Act.
(m) The Company, during the period when the U.S. Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the printing of this Agreement, the U.S.
Pricing Agreement, the International Purchase Agreement, the International
Pricing Agreement, the Intersyndicate Agreement and the Agreement Among
Managers, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including the payment of all stock transfer
taxes, stamp duties and other similar taxes, if any, payable upon the sale,
issuance or delivery of the U.S. Securities to be sold by the Company to the
U.S. Underwriters, the transfer of such U.S. Securities between U.S.
Underwriters and International Underwriters and to the International
Underwriters pursuant to the Intersyndicate Agreement, and the transfer of
Securities between the U.S. Underwriters and the International Underwriters
pursuant to the Intersyndicate Agreement, (iv) the fees and disbursements of the
Company's counsel, accountants, and other advisors, if any, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f), including filing fees and the fees and disbursements
of counsel for the U.S. Underwriters in connection therewith and in connection
with the preparation of the Blue Sky Survey, (vi) the printing and delivery to
the U.S. Underwriters of copies of the Registration Statement as originally
filed and of each amendment thereto, of each preliminary U.S. prospectus, and of
the U.S. Prospectus and any amendments or supplements thereto, (vii) the
printing (or other preparation) and delivery to the U.S. Underwriters of copies
of the Blue Sky Survey and any Canadian "wrapper", (viii) the fees of the
National Association of Securities Dealers, Inc., and (ix) the fees and expenses
incurred in connection with the listing of Securities on the New York Stock
Exchange.
Each of the Company and the Selling Stockholders severally agrees that it
will pay all stock transfer taxes, stamp duties and other similar taxes, if any,
payable (A) upon the sale, issuance or delivery of the U.S. Securities to be
sold by it to the U.S. Underwriters, the transfer of such U.S. Securities
between U.S. Underwriters and International Underwriters and to the
International Underwriters pursuant to the Intersyndicate Agreement, and (B) in
connection with the consummation by it of any of its obligations under this
Agreement or the International Purchase Agreement, and, in the case of each
Selling Stockholder, further authorizes the payment of any such amount by
deduction from the proceeds of the Securities to be sold by it under this
Agreement or the International Purchase Agreement and from funds from time to
time held for its account by the Custodian under the Custody Agreement.
If this Agreement is terminated by the U.S. Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i), the Company shall reimburse
the U.S. Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the U.S. Underwriters.
The provisions of this Section shall not affect any agreement which the
Company and the Selling Stockholders may make for the allocation or sharing of
such expenses and costs.
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SECTION 5. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The obligations
of the U.S. Underwriters hereunder are subject to the accuracy of the respective
representations and warranties of the Company and the Selling Stockholders
herein contained, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or with the consent of the U.S.
Representatives, at a later time and date, not later, however, than
5:30 P.M on the first business day following the date hereof, or at such
later time and date as may be approved by a majority in interest of the
U.S. Underwriters; and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Company has elected to rely upon Rule 430A of the 1933
Act Regulations, the price of the Securities and any price-related
information previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the Commission
for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the
prescribed time period, and prior to the Closing Time the Company shall
have provided evidence satisfactory to the U.S. Representatives of such
timely filing, or a post-effective amendment providing such information
shall have been promptly filed and declared effective in accordance with
the requirements of Rule 430A of the 1933 Act Regulations.
(b) At Closing Time the U.S. Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of Wilson,
Sonsini, Goodrich & Rosati, Professional Corporation, counsel for the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has all requisite corporate power and
corporate authority to own, lease and operate its properties and
to conduct its business as described in the Prospectuses and to
enter into and perform its obligations under this Agreement, the
International Purchase Agreement, the U.S. Pricing Agreement, the
International Pricing Agreement and the Expenses Agreement.
(iii) (A) The authorized, issued and outstanding capital
stock of the Company is as set forth under the caption
"Capitalization" in the Prospectuses (except for subsequent
issuances, if any, pursuant to this Agreement or the
International Purchase Agreement or pursuant to options,
reservations, agreements or employee benefit referred to in the
Prospectuses); (B) all shares of Common Stock issued by the
Company since March 31,1987 and the Securities to be purchased by
the U.S. Underwriters and the International Underwriters from the
Selling Stockholders under this Agreement and the International
Purchase Agreement, respectively, have been duly authorized and
validly issued and are fully paid and non-assessable; and (C) to
their knowledge, except for the rights of the Selling
Stockholders under the Expenses Agreement, there are no persons
with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or included in
the offerings contemplated by this Agreement or the International
Purchase Agreement or otherwise registered by the Company under
the 1933 Act.
(iv) The Rights Agreement has been duly authorized,
executed and delivered by the Company; the Rights issuable under
the Rights Agreement have been duly authorized by the Company;
each outstanding share of Common Stock is associated with and
entitled to one outstanding Right; and, when the Common Stock to
be sold by the
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Company hereunder is issued, each such share will be associated
with and entitled to one outstanding Right.
(v) The Securities to be purchased from the Company have
been duly authorized by the Company for issuance and sale to the
U.S. Underwriters and the International Underwriters pursuant to
this Agreement and the International Purchase Agreement,
respectively, and, when issued and delivered by the Company
pursuant to this Agreement and the International Purchase
Agreement against payment of the consideration set forth in the
U.S. Pricing Agreement and the International Pricing Agreement,
respectively, will be validly issued and fully paid and non-
assessable.
(vi) The issuance of the Securities to be purchased from
the Company by the U.S. Underwriters and the International
Underwriters pursuant to this Agreement and the International
Purchase Agreement, respectively, is not subject to preemptive
rights or other similar rights of security holders of the Company
arising by operation of law, under the certificate of
incorporation or by-laws of the Company or, to their knowledge,
otherwise.
(vii) This Agreement, the International Purchase
Agreement, the U.S. Pricing Agreement, the International Pricing
Agreement and the Expenses Agreement have been duly authorized,
executed and delivered by the Company.
(viii) The Registration Statement is effective under the
1933 Act and, to their knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by
the Commission.
(ix) At the time the Registration Statement and any
amendments thereto became effective and at the Representation
Date, the Registration Statement (other than the financial
statements and supporting schedules included therein and the
documents incorporated by reference therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(x) The Common Stock conforms in all material respects to
the description thereof incorporated by reference into the
Prospectuses, and the form of certificate used to evidence the
Common Stock is in due and proper form and complies with all
applicable requirements of the General Corporation Law of the
State of Delaware.
(xi) The information in the Prospectuses under "Certain
United States Federal Tax Consequences to Non-United States
Holders" and in Item 15 of the Registration Statement, and the
information concerning the Company's authorized but unissued
preferred stock, the Rights Agreement, the Rights and the
preferred stock issuable upon exercise of the Rights incorporated
by reference in the Prospectuses, to the extent that it describes
statutes, rules, regulations or other laws, or summarizes
documents, instruments or agreements, or constitutes matters of
law or legal conclusions, has been reviewed by them and is
correct in all material respects.
(xii) To their knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments or agreements required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, the descriptions
thereof or references thereto are correct in all material
respects.
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<PAGE>
(xiii) No authorization, approval, consent, registration,
declaration, order or filing of or with any court or governmental
authority is required in connection with the offering, issuance
or sale of the Securities to the U.S. Underwriters and the
International Underwriters, except such as may be required under
the 1933 Act or the 1933 Act Regulations, state securities laws
or securities laws of any jurisdiction outside of the United
States; and, to their knowledge, the execution, delivery and
performance of this Agreement, the International Purchase
Agreement, the U.S. Pricing Agreement, the International Pricing
Agreement and the Expenses Agreement and the consummation of the
transactions contemplated herein and therein will not conflict
with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
subsidiaries pursuant to, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument or
agreement to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation
or by-laws of the Company, or, to their knowledge, any applicable
law, administrative regulation or administrative or court decree.
(xiv) Each document filed pursuant to the 1934 Act (other
than the financial statements and supporting schedules included
therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectuses complied when so filed as to form in all material
respects with the 1934 Act and the 1934 Act Regulations.
(xv) The Subject Directors are "affiliates" (as defined in
Rule 144 under the 1933 Act) of the Company and persons
"controlling" (within the meaning of Section 2(11) of the 1933
Act) the Company, and any sale of such shares of Common Stock
pursuant to Rule 144 will be subject to, among other things, the
volume limitations of Rule 144(e).
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions) upon representations set forth in
certificates of officers of the Company and its subsidiaries and of
public officials and, with respect to the opinion in subparagraph
(iii)(A) above regarding the number of shares of issued and
outstanding capital stock of the Company, the registrar and transfer
agent for the Company's capital stock.
(2) The favorable opinion, dated as of the Closing Time, of
Steven Karel, Vice President, Secretary and General Counsel of the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, to the effect that:
(i) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of
California and, to his knowledge, in each other jurisdiction in
which such qualification is required, except where the failure to
so qualify or to be in good standing would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered
as one enterprise.
(ii) Each of the Subject Subsidiaries has been duly
organized and is validly existing as a corporation or
partnership, as the case may be, in good standing under the laws
of the jurisdiction of its organization, has power and authority
as a corporation or partnership, as the case may be, to own,
lease and operate its properties and to conduct its business as
described in the Prospectuses and, to his knowledge, is duly
qualified as a foreign corporation or partnership, as the case
may be, to transact business and is in
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good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify or to be in good
standing would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and all of the
issued and outstanding capital stock of each corporate Subject
Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and, to his knowledge, except for
directors' qualifying shares, is owned by the Company, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim, except for security
interests, pledges, liens, encumbrances and claims in, on and to
such capital stock securing the Company's obligations under the
Credit Agreement; and all of the issued and outstanding
partnership interests of RHT, L.P. have been duly authorized
(if applicable) and validly issued and are fully paid and non-
assessible and are owned by the Company, through RHT, G.P. and
XYZ, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim, except for security interests,
pledges, liens, encumbrances and claims in, on and to such
partnership interests securing the Company's obligations under
the Credit Agreement.
(iii) To his knowledge, there are no legal or governmental
proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those
disclosed therein, and all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or
to which any of their property is subject which are not described
in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material to the Company and its subsidiaries
considered as one enterprise.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions) upon representations set forth in
certificates of officers of the Company and its subsidiaries and of
public officials and, as to the matters referred to in subparagraph
(ii) above, upon the opinions of local counsel (each of which opinions
shall be dated and furnished to the U.S. Representatives as of the
Closing Time, shall be satisfactory in form and substance to counsel
for the U.S. Underwriters and shall expressly state that the Company's
General Counsel, in rendering his opinion pursuant to this Section
5(b)(2), and the U.S. Underwriters and International Underwriters may
rely on such opinion as if it were addressed to them), provided that
the opinion of the Company's General Counsel shall state that he
believes that he and the U.S. Underwriters and the International
Underwriters are justified in relying on such opinions.
(3) The favorable opinion, dated as of the Closing Time, of
Dorsey & Whitney, special counsel to the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, to the
effect that all shares of Common Stock issued by the Company from the
date of its incorporation through and including March 31, 1987 were
duly authorized and validly issued and are fully paid and non-
assessable.
(4) The favorable opinion, dated as of Closing Time, of Kramer,
Levin, Naftalis, Nessen, Kamin & Frankel, counsel for the Selling
Stockholders, in form and substance satisfactory to counsel for the
U.S. Underwriters, to the effect that:
(i) This Agreement, the International Purchase Agreement,
the U.S. Pricing Agreement, the International Pricing Agreement
and the Expenses Agreement have been duly authorized, executed
and delivered by each of the Selling Stockholders.
(ii) A Custody Agreement has been duly authorized,
executed and delivered by each of the Selling Stockholders and
constitutes a valid and binding agreement of such Selling
Stockholder, enforceable against such Selling Stockholder in
accordance with its
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terms except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by
general equitable principles.
(iii) All authorizations, approvals, consents and orders
necessary for the execution and delivery by the Selling
Stockholders of this Agreement, the International Purchase
Agreement, the U.S. Pricing Agreement, the International Pricing
Agreement, the Custody Agreements and the Expenses Agreement, and
the sale and delivery of the Securities to be sold by the Selling
Stockholders hereunder and under the International Purchase
Agreement, have been obtained and are in full force and effect,
except as may be required under the 1933 Act, the 1933 Act
Regulations, state securities laws or the securities laws of any
jurisdiction outside of the United States of America, and the
Selling Stockholders have full right, power and authority to
enter into and perform their respective obligations under this
Agreement, the International Purchase Agreement, the U.S. Pricing
Agreement, the International Pricing Agreement, the Custody
Agreements and the Expenses Agreement, and to sell, transfer and
deliver the Securities to be sold by the Selling Stockholders
hereunder and under the International Purchase Agreement.
(iv) The execution and delivery of this Agreement, the
International Purchase Agreement, the U.S. Pricing Agreement, the
International Pricing Agreement, the Expenses Agreement and the
Custody Agreements, and the consummation of the transactions
herein and therein contemplated, do not result in a breach or
violation by either Selling Stockholder of, or constitute a
default by either Selling Stockholder under, its limited
partnership agreement, certificate of limited partnership or
other organizational document, or any material indenture, deed of
trust, contract or other agreement or instrument or any decree,
judgment or order to which such Selling Stockholder is a party or
by which such Selling Stockholder or any of its assets may be
bound.
(v) Each of the Selling Stockholders is the legal and
registered owner of the Securities to be sold by such Selling
Stockholder hereunder and under the International Purchase
Agreement and, to their knowledge, the partners of the Selling
Stockholders (or persons having an interest through such
partners) are the only persons with any beneficial interest in
such Securities.
(vi) Upon the delivery of the Securities to be sold by the
Selling Stockholders under this Agreement and the International
Purchase Agreement and payment of the purchase price therefor as
herein and therein contemplated, each of the U.S. Underwriters
and International Underwriters will receive good and marketable
title to the Securities purchased by it from the Selling
Stockholders, free and clear of any mortgage, pledge, lien,
security interest, encumbrance, claim or equity. In rendering
such opinion, counsel may assume that the Underwriters are
purchasing such Securities in good faith and without notice of
any adverse claim.
(5) The favorable opinion, dated as of Closing Time, of Brown &
Wood, counsel for the U.S. Underwriters and the International
Underwriters, with respect to the matters set forth in (i), (v), (vi)
(solely as to preemptive rights arising by operation of the law or
under the certificate of incorporation or by-laws of the Company),
(vii), (viii), (ix) and (x) of subsection (b)(1) of this Section.
(6) In giving their opinions required by subsections (b)(1) and
(b)(5), respectively, of this Section, Wilson, Sonsini, Goodrich &
Rosati, Professional Corporation, and Brown & Wood shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement (except for
financial statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to which
counsel need make
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no statement), at the time it became effective or at the
Representation Date, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectuses (except for financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which counsel need make no statement), at the
Representation Date (unless the term "Prospectuses" refers to a
prospectus which has been provided to the U.S. Underwriters or the
International Underwriters by the Company for use in connection with
the offering of the Securities which differs from the corresponding
Prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time it is first
provided to the U.S. Underwriters or the International Underwriters,
as the case may be, for such use) or at Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(c) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectuses, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, and the U.S.
Representatives shall have received a certificate of the Chief Executive
Officer or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) are true and correct with
the same force and effect as though expressly made at and as of Closing
Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to this
Agreement or the International Purchase Agreement at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(d) At Closing Time you shall have received a certificate of the
Selling Stockholders, dated as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Stockholders contained in
Section 1(b) are true and correct with the same force and effect as though
expressly made at and as of Closing Time, and (ii) the Selling Stockholders
have complied with all agreements and satisfied all conditions on their
part to be performed or satisfied at or prior to Closing Time.
(e) At the time of the execution of this Agreement, the U.S.
Representatives shall have received from Arthur Andersen & Co. a letter
dated such date, in form and substance satisfactory to the U.S.
Representatives, to the effect that (i) they are independent public
accountants with respect to the Company and its subsidiaries within the
meaning of the 1933 Act and the 1933 Act Regulations; (ii) in their
opinion, the financial statements and financial statement schedules audited
by them and incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1934 Act, and the related published
rules and regulations; (iii) based upon limited procedures set forth in
detail in such letter (which shall include, without limitation, the
procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described in
STATEMENT OF AUDITING STANDARDS NO. 71, INTERIM FINANCIAL INFORMATION, with
respect to the unaudited condensed consolidated financial statement of the
Company and its subsidiaries included in the Registration Statement),
nothing has come to their attention which causes them to believe that
(A) any material modifications should be made to the unaudited condensed
consolidated financial statements included in the Registration Statement
for them to be in conformity with generally accepted accounting principles
or (B) the unaudited condensed consolidated financial statements included
in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act as it
applies to Form 10-Q and the related published rules and regulations or
(C) at a specified date not more than five days prior to the date of this
Agreement, there has been any change in the capital stock of the Company or
any increase in the consolidated long term debt
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of the Company and its subsidiaries or any decrease in consolidated net
current assets or net assets as compared with the amounts shown in the
September 30, 1994 balance sheet included in the Registration Statement or,
during the period from October 1, 1994 to a specified date not more than
five days prior to the date of this Agreement, there were any decreases as
compared with the corresponding period in the preceding year, in
consolidated net service revenues, gross margins, net income or net income
per fully diluted share of the Company and its subsidiaries, except in all
instances for changes, increases or decreases which the Registration
Statement and the Prospectuses disclose have occurred or may occur; and
(iv) in addition to the examination referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are included
and incorporated by reference in the Registration Statement and
Prospectuses and which are specified by the U.S. Representatives, and have
found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company and its subsidiaries identified in such letter.
(f) At Closing Time the U.S. Representatives shall have received
from Arthur Andersen & Co. a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than five days prior to Closing Time
and, if the Company has elected to rely on Rule 430A of the 1933 Act
Regulations, to the further effect that they have carried out procedures as
specified in clause (iv) of subsection (e) of this Section with respect to
certain amounts, percentages and financial information specified by the
U.S. Representatives and deemed to be a part of the Registration Statement
pursuant to Rule 430A(b) and have found such amounts, percentages and
financial information to be in agreement with the records specified in such
clause (iv).
(g) At the Closing Time and at each Date of Delivery, if any, all of
the Securities to be sold by the Company on such date shall have been
approved for listing on the New York Stock Exchange upon notice of
issuance, and the U.S. Representatives shall have received evidence of such
listing in form and substance reasonably satisfactory to them.
(h) At or prior to the date of this Agreement, the U.S.
Representatives and the International Representatives shall have received
an agreement substantially in the form of Exhibit C hereto signed by each
of the executive officers and directors of the Company listed in Exhibit B
hereto and each such agreements shall be in full force and effect at the
Closing Time and at each Date of Delivery.
(i) At Closing Time and at each Date of Delivery, if any, counsel
for the U.S. Underwriters and the International Underwriters shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as contemplated herein and in the International Purchase
Agreement and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
agreements or conditions, herein contained; and all proceedings taken by
the Company and the Selling Stockholders in connection with the issuance
and sale of the Securities as contemplated in this Agreement and in the
International Purchase Agreement shall be reasonably satisfactory in form
and substance to the U.S. Representatives and counsel for the U.S.
Underwriters.
(j) In the event that the U.S. Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the U.S.
Option Securities, the respective representations and warranties of the
Company and the Selling Stockholders contained herein and the statements in
any certificates furnished by the Company and the Selling Stockholders
hereunder and under the International Purchase Agreement shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery,
the U.S. Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the Chief
Executive Officer or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company
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confirming that the certificate delivered at the Closing Time pursuant
to Section 5(c) hereof remains true and correct as of such Date of
Delivery.
(2) A certificate, dated such Date of Delivery, of the Selling
Stockholders confirming that the certificate delivered at the Closing
Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
(3) The favorable opinion of Wilson, Sonsini, Goodrich &
Rosati, Professional Corporation, counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased from the Company on such Date of Delivery and otherwise to
the same effect as the opinion required by Sections 5(b)(1) and
5(b)(6) hereof.
(4) The favorable opinion of Steven Karel, Vice President,
Secretary and General Counsel of the Company, together with the
favorable opinions of the local counsel relied upon by such General
Counsel, each in form and substance satisfactory to counsel for the
U.S. Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased from the Company on such Date of
Delivery and otherwise to the same effect as the opinions required by
Section 5(b)(2) hereof.
(5) The favorable opinion of Dorsey & Whitney, special counsel
for the Company, in form and substance satisfactory to counsel for the
U.S. Underwriters, dated such Date of Delivery, to the same effect as
the opinion required by Section 5(b)(3) hereof.
(6) The favorable opinion of Brown & Wood, counsel for the U.S.
Underwriters and the International Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Sections 5(b)(5) and 5(b)(6) hereof.
(7) A letter from Arthur Andersen & Co., in form and substance
satisfactory to the U.S. Representatives and dated such Date of
Delivery, substantially the same in form and substance as the letter
furnished to the U.S. Representatives pursuant to Section 5(e) hereof,
except that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(k) At the Closing Time, the U.S. Representatives shall have
received copies of the form of Common Stock certificates referred to in
Section 1(a)(xxi) hereof, each of which certificates shall bear the legend
referred to in such Section, and copies of the stop transfer instructions
referred to in Sections 1(a)(xxi) and 1(a)(xxii) hereof.
It shall be a further condition to the obligations of the U.S. Underwriters
hereunder that, contemporaneously with their purchase of the Initial U.S.
Securities under this Agreement, the International Underwriters shall have
purchased the Initial International Securities under the International Purchase
Agreement.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
U.S. Representatives by notice to the Company at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and provided further that Sections 3(l), 6
and 7 hereof shall survive such termination.
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SECTION 6. INDEMNIFICATION.
(a) The Company and, subject to subsection (e) of this Section 6 below,
the Selling Stockholders, jointly and severally, agree to indemnify and hold
harmless each U.S. Underwriter and each person, if any, who controls any U.S.
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) of the 1933 Act
Regulations, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever, based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the indemnifying party or parties, as the case may
be; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by Merrill Lynch), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever, based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter or International Underwriter through Merrill Lynch expressly
for use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or Prospectus (or any amendment or supplement thereto);
and PROVIDED, FURTHER, that this indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any U.S. Underwriter
from whom the person asserting any such losses, liabilities, claims, damages or
expenses purchased Securities, or any person controlling such U.S. Underwriter,
if a copy of the U.S. Prospectus (as then amended or supplemented if the Company
shall have furnished any such amendments or supplements thereto to such U.S.
Underwriter, but excluding documents incorporated or deemed to be incorporated
by reference therein) was not sent or given by or on behalf of such U.S.
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
U.S. Prospectus (as so amended or supplemented, if applicable) would have
corrected the defect giving rise to such loss, liability, claim, damage or
expense, it being understood, however, that this proviso shall not be applicable
if such defect shall have been corrected in a document which is incorporated or
deemed to be incorporated by reference in the U.S. Prospectus.
(b) Each U.S. Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any , who controls the Company within the meaning
of Section 15 of the 1933 Act and each Selling Stockholder against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any preliminary U.S.
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with the written information furnished to the
Company by such U.S. Underwriter through Merrill Lynch expressly for use in the
Registration Statement
-22-
<PAGE>
(or any amendment thereto) or such preliminary U.S. prospectus or the U.S.
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) Any payment made by the Company or any Selling Stockholder pursuant to
Section 6(a) or 7, or by any U.S. Underwriter pursuant to Section 6(b) or 7,
which arises with respect to any loss, liability, claim, damage or expense
incurred in a currency other than U.S. dollars shall be made by the Company,
such Selling Stockholder or such U.S. Underwriter, as the case may be, in such
amount of U.S. dollars as shall be necessary to enable the indemnified party to
purchase the amount of such other currency needed to satisfy such loss,
liability, claim, damage or expense, including any premiums and costs of
exchange payable in connection with conversion of U.S. dollars into the relevant
currency.
(e) The Selling Stockholders shall only be liable under this Section 6 to
the extent that any loss, claim, damage, liability, action or expense incurred
by any Underwriters or any person, if any, who controls any Underwriter arises
out of or is based upon any untrue statement or omission, or any alleged untrue
statement or omission, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Selling Stockholder expressly
for use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or Prospectus (or any amendment or supplement thereto);
PROVIDED that the amount of such indemnification or reimbursement by each of the
Selling Stockholders shall be limited to the amount of proceeds to such Selling
Stockholder from the sale of the Shares to the several Underwriters. The
Company, each Selling Stockholder and the Underwriters acknowledge and agree
that the only written information furnished by the Selling Stockholders as
aforesaid is the information set forth in the first two paragraphs under the
caption "Selling Stockholders" in the Registration Statement and the
Prospectuses.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the Selling
Stockholders and the U.S. Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Selling Stockholders and one
or more of the U.S. Underwriters, as incurred, in such proportions that the U.S.
Underwriters are responsible for that portion represented by the percentage that
the underwriting discount appearing on the cover page of the U.S. Prospectus
bears to the initial public offering price appearing thereon and the Company
and, in the proportions that they have agreed to indemnify, the Selling
Stockholders are responsible for the balance; PROVIDED, HOWEVER, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls a U.S. Underwriter within the meaning of Section 15
of the 1933 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company. The Selling Stockholders shall not be
required to make any contribution payment under this Section 7 as long as and to
the extent that the Company pays and contributes the full amount of all such
losses, liabilities, claims, damages and expenses for which the Company and the
Selling Stockholders are responsible under the first sentence of this Section 7.
-23-
<PAGE>
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement and the U.S. Pricing Agreement, or contained in certificates of
officers of the Company or the Selling Stockholders submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or any Selling Stockholder, and shall
survive delivery of the Securities to the U.S. Underwriters and the
International Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The U.S. Representatives may terminate this Agreement, by notice to
the Company and the Selling Stockholders, at any time at or prior to Closing
Time (i) if there has been, since the date of this Agreement or since the
respective dates as of which information is given in the Registration Statement
or the Prospectuses, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which in any such case is such as to make it, in the
judgment of the U.S. Representatives, impracticable to market the U.S.
Securities or to enforce contracts for the sale of the U.S. Securities, or
(iii) if trading in the Common Stock has been suspended or limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange, the New York Stock Exchange or the International Stock
Exchange of the United Kingdom or the Republic of Ireland has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by any of said Exchanges or
by order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal, New York or California
authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and further provided further that Sections 3(l), 6 and 7
hereof shall survive such termination.
SECTION 10. DEFAULT BY ONE OR MORE OF THE U.S. UNDERWRITERS. If one or
more of the U.S. Underwriters shall fail at Closing Time to purchase the U.S.
Securities which it or they are obligated to purchase on such date under this
Agreement and the U.S. Pricing Agreement (the "Defaulted Securities"), the U.S.
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting U.S. Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the U.S. Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Initial U.S. Securities, the non-defaulting U.S. Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting U.S.
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Initial U.S. Securities, this Agreement shall terminate without
liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the U.S. Representatives or the Company shall have the
right to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectuses or
in any other documents or arrangements.
-24-
<PAGE>
SECTION 11. DEFAULT BY THE SELLING STOCKHOLDERS OR THE COMPANY. If the
Company or one or more of the Selling Stockholders (for the purposes of this
Section 11, the Company and the Selling Stockholders are hereinafter called,
collectively, the "Sellers" and, individually, a "Seller") shall fail at Closing
Time to sell and deliver the number of Securities which such Seller or Sellers
are obligated to sell hereunder on such date, and the remaining Seller or
Sellers, as the case may be, do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder on such date to the total number of Securities to be sold by all
Sellers on such date, then the U.S. Underwriters may at the U.S.
Representatives' option, by notice from the U.S. Representatives to the
non-defaulting Seller or Sellers, as the case may be, either (a) terminate this
Agreement without any liability on the part of any non-defaulting party or
(b) elect to purchase the Securities which the non-defaulting Seller or Sellers
have agreed to sell hereunder.
In the event of a default by any Seller as referred to in this Section,
either the U.S. Representatives or (by joint action only) the non-defaulting
Seller or Sellers shall have the right to postpone Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or U.S. Prospectus or in any other documents or arrangements.
No action taken pursuant to this Section shall relieve any Seller so
defaulting from liability, if any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at Merrill Lynch &
Co., 101 California Street, San Francisco, California 94111, attention of Jay A.
Cohen; notices to the Company shall be directed to it at 2884 Sand Hill Road,
Suite 200, Menlo Park, California 94025, attention of Steven Karel, Vice
President, Secretary and General Counsel; and notices to the Selling
Stockholders shall be directed to Gibbons, Goodwin, van Amerongen, 600 Madison
Avenue, New York, New York 10022, attention of Edward W. Gibbons.
SECTION 13. PARTIES. This Agreement and the U.S. Pricing Agreement shall
each inure to the benefit of and be binding upon the U.S. Underwriters, the
Company, the Selling Stockholders and their respective successors. Nothing
expressed or mentioned in this Agreement or the U.S. Pricing Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the U.S. Underwriters, the Company and the Selling Stockholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or the U.S. Pricing Agreement or any provision herein or therein contained.
This Agreement and the U.S. Pricing Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and exclusive benefit of the
U.S. Underwriters, the Company, the Selling Stockholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any U.S. Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. This Agreement and the U.S. Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Except as otherwise set forth herein, specified times of day refer to
New York City time. Each of this Agreement and the U.S. Pricing Agreement may
be signed in two or more counterparts, and by different parties on separate
counterparts each of which shall constitute an original, with the same effect as
if the signatures on such counterparts were on the same instrument.
-25-
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the U.S. Underwriters, the Company and the Selling Stockholders in accordance
with its terms.
Very truly yours,
ROBERT HALF INTERNATIONAL INC.
By: _________________________________________
Harold S. Messmer, Jr.
Chairman and Chief Executive Officer
THE FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________________
-
General Partner
THE SECOND FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________________
-
General Partner
CONFIRMED AND ACCEPTED
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
WILLIAM BLAIR & COMPANY
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: ____________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.
-26-
<PAGE>
SCHEDULE A
Number of
Name of U.S. Underwriter U.S. Securities
------------------------ ---------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . .
William Blair & Company. . . . . . . . . . . . . . . . . . .
-----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000
-----------
-----------
-27-
<PAGE>
SCHEDULE B
Number of
Initial U.S.
Securities
------------
The Company:
Robert Half International Inc.. . . . . . . . . . . . . 86,845
The Selling Stockholders:
The Fulcrum III Limited Partnership . . . . . . . . . .
The Second Fulcrum III Limited Partnership. . . . . . .
-----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000
-----------
-----------
-28-
<PAGE>
Exhibit A
4,200,000 Shares
ROBERT HALF INTERNATIONAL INC.
(a Delaware corporation)
Common Stock
(Par Value $.001 Per Share)
U.S. PRICING AGREEMENT
-, 1994
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WILLIAM BLAIR & COMPANY
As U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, NY 10281-1209
Dear Sirs:
Reference is made to the U.S. Purchase Agreement dated -, 1994 (the "U.S.
Purchase Agreement") relating to the purchase by the several underwriters named
in Schedule A thereto (the "U.S. Underwriters"), for whom Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and William Blair & Company
are acting as representatives (the "U.S. Representatives"), of the above shares
of Common Stock (the "U.S. Securities") of Robert Half International Inc., a
Delaware corporation (the "Company").
Pursuant to Section 2 of the U.S. Purchase Agreement, the Company and the
Selling Stockholders agree with each U.S. Underwriter as follows:
1. The initial public offering price per share for the U.S. Securities shall
be $-.
2. The purchase price per share for the U.S. Securities to be paid by the
several U.S. Underwriters shall be $-, being an amount equal to the initial
public offering price set forth above less $- per share.
A-1
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the U.S. Underwriters, the Company and the Selling Stockholders in accordance
with its terms.
Very truly yours,
ROBERT HALF INTERNATIONAL INC.
By: _________________________________________
Harold S. Messmer, Jr.
Chairman and Chief Executive Officer
THE FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________________
-
General Partner
THE SECOND FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________________
-
General Partner
CONFIRMED AND ACCEPTED
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
WILLIAM BLAIR & COMPANY
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: ____________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.
A-2
<PAGE>
Exhibit B
EXECUTIVE OFFICERS AND DIRECTORS SUBJECT
LOCK-UP AGREEMENTS
Edward W. Gibbons
Harold M. Messmer, Jr.
Robert W. Glass
M. Keith Waddell
B-1
<PAGE>
Exhibit C
-, 1994
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WILLIAM BLAIR & CO.,
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH INTERNATIONAL LIMITED
WILLIAM BLAIR & CO.
as International Representatives of the several
International Underwriters to be named in the
within-mentioned International Purchase Agreement
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Re: PROPOSED PUBLIC OFFERING BY ROBERT HALF INTERNATIONAL INC.
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of Robert
Half International Inc., a Delaware corporation (the "Company"), understands
that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and William Blair & Co. ("Blair") as the U.S. representatives
(the "U.S. Representatives") of the several U.S. underwriters (the "U.S.
Underwriters") to be named in the U.S. Purchase Agreement hereinafter referred
to, and Merrill Lynch International Limited ("MLI") and Blair, as the
international representatives (the "International Representatives") of the
international underwriters (the "International Underwriters") to be named in the
International Purchase Agreement hereinafter referred to, propose to enter into
a U.S. Purchase Agreement (the "U.S. Purchase Agreement") and an International
Purchase Agreement (the "International Purchase Agreement") with the Company and
the Selling Stockholders (as defined therein), which agreements provide for the
public offering of shares (the "Securities") of the Company's common stock, par
value $.001 per share (the "Common Stock"). The undersigned further understands
that the U.S. Representatives and the International Representatives will enter
into a related U.S. Pricing Agreement and International Pricing Agreement,
respectively, which agreements will set forth, among other things, the initial
public offering price of the Securities. In recognition of the benefit that
such an offering will confer upon the undersigned as a stockholder, and an
officer and/or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each U.S. Underwriter to be named in the U.S. Purchase
Agreement and each International Underwriter to be named in the International
Purchase Agreement that, during a period of 90 days from the date of the U.S.
Pricing Agreement, the undersigned will not, without the prior written consent
of the U.S. Representatives, directly or indirectly, sell, offer to sell, grant
any
B-2
<PAGE>
option for the sale of, or otherwise dispose of or transfer, any shares of the
Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing.
Very truly yours,
Signature:___________________________________
Print Name:__________________________________
B-3
<PAGE>
1,050,000 Shares
ROBERT HALF INTERNATIONAL INC.
(a Delaware corporation)
Common Stock
(Par Value $.001 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
-, 1994
MERRILL LYNCH INTERNATIONAL LIMITED
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
WILLIAM BLAIR & COMPANY
as International Representatives of the several
International Underwriters
c/o Merrill Lynch International Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Dear Sirs:
Robert Half International, Inc., a Delaware corporation (the "Company"),
and each of the selling stockholders of the Company named in Schedule B hereto
(the "Selling Stockholders"), confirm their respective agreements with Merrill
Lynch International Limited ("MLIL"), William Blair & Company ("Blair") and each
of the other underwriters named in Schedule A hereto (collectively, the
"International Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10), for whom MLIL and Blair are
acting as representatives (in such capacity, MLIL and Blair shall hereinafter be
referred to as the "International Representatives"), with respect to the sale by
the Company and the Selling Stockholders, acting severally and not jointly, and
the purchase by the International Underwriters, acting severally and not
jointly, of the respective numbers of shares of Common Stock, par value $.001
per share, of the Company ("Common Stock") set forth in said Schedules A and B
hereto, and with respect to the grant by the Company to the International
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 105,000 additional shares of
Common Stock to cover over-allotments, in each case except as may otherwise be
provided in the International Pricing Agreement, as hereinafter defined. The
aforementioned 1,050,000 shares of Common Stock (the "Initial International
Securities") to be purchased by the International Underwriters and all or any
part of the 105,000 shares of Common Stock subject to the option described in
Section 2(b) hereof (the "International Option Securities") are collectively
hereinafter called the "International Securities."
It is understood that the Company is concurrently entering into a U.S.
Purchase Agreement dated the date hereof (the "U.S. Purchase Agreement")
providing for the offering by the Company and the Selling Stockholders of an
aggregate of 4,200,000 shares of Common Stock (the "Initial U.S. Securities")
through arrangements with certain underwriters outside of the United States (the
"U.S. Underwriters") for whom Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch") and Blair are acting as lead managers
(collectively,
<PAGE>
the "U.S. Representatives"), and the grant by the Company to the U.S.
Underwriters of an option to purchase all or any part of an additional 420,000
shares of Common Stock (the "U.S. Option Securities") to cover over-allotments.
The Initial U.S. Securities and the U.S. Option Securities are collectively
hereinafter called the "U.S. Securities," and the International Securities and
the U.S. Securities are hereinafter called the "Securities."
The Company understands that the International Underwriters and the U.S.
Underwriters will concurrently enter into an Intersyndicate Agreement of even
date herewith (the "Intersyndicate Agreement") providing for the coordination of
certain transactions among the International Underwriters and the U.S.
Underwriters under the direction of Merrill Lynch.
Prior to the purchase and public offering of the International Securities
by the several International Underwriters, the Company, the Selling Stockholders
and the International Representatives, acting on behalf of the several
International Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "International Pricing Agreement"). The
International Pricing Agreement may take the form of an exchange of any standard
form of written telecommunication between the Company, the Selling Stockholders
and the International Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
International Securities will be governed by this Agreement, as supplemented by
the International Pricing Agreement. From and after the date of the execution
and delivery of the International Pricing Agreement, this Agreement shall be
deemed to incorporate the International Pricing Agreement. The public offering
price and the purchase price with respect to the U.S. Securities shall be set
forth in an agreement substantially in the form of Exhibit A to the U.S.
Purchase Agreement (the "U.S. Pricing Agreement"). The public offering price
and the purchase price per share to be paid by the several U.S. Underwriters for
the U.S. Securities shall be identical to the public offering price and the
purchase price per share to be paid by the several International Underwriters
for the International Securities.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-55627) and a related
preliminary prospectuses for the registration of the Securities under the
Securities Act of 1933 (the "1933 Act"), has filed such amendments thereto, if
any, and such amended preliminary prospectuses as may have been required to the
date hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. Such registration statement (as
amended, if applicable) and the International Prospectus(1) and the U.S.
Prospectus(1) constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be part thereof pursuant to Rule 430A(b) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations")), as from time to time amended or supplemented pursuant to the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or
otherwise, are hereinafter referred to as the "Registration Statement," the
"International Prospectus" and the "U.S. Prospectus," respectively, and the
International Prospectus and the U.S. Prospectus are hereinafter referred to as,
individually, a "Prospectus" and, collectively, the "Prospectuses," except that
if any revised prospectus shall be provided to the International Underwriters or
the U.S. Underwriters by the Company for use in connection with the offering of
the Securities which differs from the corresponding Prospectus on file at the
Commission at the time the Registration Statement becomes effective (whether or
not such revised prospectus is required to be filed by the Company pursuant to
Rule 424(b) of the 1933 Act Regulations), the term "International Prospectus" or
"U.S. Prospectus," as the case may be, and "Prospectus" and "Prospectuses" shall
refer to such revised prospectus from and after the time it is first provided to
the International Underwriters or the U.S. Underwriters, as the case may be, for
such use. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement or the Prospectuses (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectuses, as the case may be;
____________________
(1) Two forms of prospectus are to be used in connection with the offering and
sale of the Securities: one relating to the U.S. Securities (the "U.S.
Prospectus") and one relating to the International Securities (the
"International Prospectus"). The International Prospectus is identical to
the U.S. Prospectus, except for the front cover page, back cover page and
the section captioned "Underwriting."
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and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectuses shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectuses, as
the case may be.
The Company and the Selling Stockholders understand that the International
Underwriters propose to make a public offering of the International Securities
as soon as the International Representatives deem advisable after the
Registration Statement becomes effective and the International Pricing Agreement
has been executed and delivered.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each International Underwriter
as of the date hereof, as of the date of the International Pricing Agreement
(such latter date being hereinafter referred to as the "Representation Date"),
and as of the Closing Time referred to in Section 2(c), and agrees with each
International Underwriter, as follows:
(i) At the time the Registration Statement and any amendments
thereto become effective and at the Representation Date, the Registration
Statement will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectuses, at the Representation Date (unless the term
"Prospectuses" refers to a prospectus which has been provided to the
International Underwriters or the U.S. Underwriters, as the case may be, by
the Company for use in connection with the offering of the Securities which
differs from the corresponding Prospectus on file at the Commission at the
time the Registration Statement becomes effective, in which case at the
time it is first provided to the International Underwriters or the U.S.
Underwriters, as the case may be, for such use), at the Closing Time and at
each Date of Delivery, if any, referred to in Section 2(b), will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or Prospectuses.
(ii) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The financial statements included in the Registration
Statement and the Prospectuses present fairly the financial position of the
Company and its consolidated subsidiaries as at the dates indicated and the
results of their operations for the periods specified; except as otherwise
stated in the Registration Statement, said financial statements have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis; the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein.
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectuses, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, that are
material with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
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(v) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and to enter
into and perform its obligations under this Agreement, the International
Pricing Agreement, the U.S. Purchase Agreement, the U.S. Pricing Agreement
and the Expenses Agreement (as defined in clause (xv) below); and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(vi) Each subsidiary of the Company has been duly organized and is
validly existing as a corporation or partnership, as the case may be, in
good standing under the laws of the jurisdiction of its organization, has
power and authority as a corporation or partnership, as the case may be, to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation or partnership, as the case may be, to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or to be in
good standing would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and outstanding capital
stock of each such corporate subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except for directors'
qualifying shares and approximately 27% of the outstanding capital stock of
Norman Parsons S.A., is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim; all of the issued and outstanding partnership
interests of each such subsidiary which is a partnership have been duly
authorized (if applicable) and validly issued and are fully paid and non-
assessable and are owned by the Company, directly or through corporate
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim, except for security interests, pledges, liens,
encumbrances and claims in, on and to the Company's capital stock in Robert
Half of Texas G.P. Ltd., a Delaware corporation ("RHT, G.P.") and XYZ-II
Inc, a Delaware corporation ("XYZ"), respectively, (RHT, G. P. and XYZ are
hereinafter called, collectivly, the "Subject Subsidiaries" and,
individually, a "Subject Subsidiary") securing the Company's obligations
under its $80 million revolving credit agreement with NationsBank of North
Carolina, N.A. and Bank of America NT&SA, as agents, and the other banks
party thereto (the "Credit Agreement"), and the partnership interests of
RHT, G.P. and XYZ in RHT, L.P., a limited partnership organized under
the laws of Texas ("R H T, L.P.") securing the Company's obligations under
the Credit Agreement; and for the year ended December 31, 1993 and the
eight months ended August 31, 1994, the only subsidiary of the Company
which, on an unconsolidated basis, accounted for more than 5% of the
Company's consolidated net service revenues was RHT, L.P.; the sole general
partner and the sole limited partner of RHT, L.P. are RHT, G.P. and XYZ,
respectively; and RHT, G.P. and XYZ are wholly-owned direct subsidiaries
of the Company.
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement or the U.S.
Purchase Agreement or pursuant to options, reservations, agreements or
employee benefit plans referred to in the Prospectuses or in the documents
incorporated by reference therein); the shares of issued and outstanding
Common Stock, including the Securities to be purchased by the International
Underwriters from the Selling Stockholders hereunder and by the U.S.
Underwriters under the U.S. Purchase Agreement, have been duly authorized
and validly issued and are fully paid and non-assessable; the Securities to
be purchased from the Company have been duly authorized for issuance and
sale to the International Underwriters and the U.S. Underwriters pursuant
to this Agreement and the U.S. Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and
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the U.S. Purchase Agreement, respectively, against payment of the
consideration set forth in the International Pricing Agreement and the U.S.
Pricing Agreement, respectively, will be validly issued and fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses; and the issuance of the Securities
to be purchased from the Company under this Agreement and the U.S.
Underwriting Agreement, respectively, is not subject to preemptive or other
similar rights.
(viii) Neither the Company nor any of its subsidiaries is in
violation of its charter, by-laws or other organizational documents;
neither the Company nor any of its subsidiaries is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for such defaults as would not, singly or
in the aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise;
and the execution, delivery and performance of this Agreement, the
International Pricing Agreement, the U.S. Purchase Agreement, the U.S.
Pricing Agreement and the Expenses Agreement and the consummation of the
transactions contemplated herein and therein have been duly authorized by
all necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any applicable
law, administrative regulation or administrative or court decree.
(ix) No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, is imminent;
and the Company is not aware of any existing or imminent labor disturbance
by the employees of any of its clients which might be expected to result in
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(x) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries (A) which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or (B) which
could reasonably be expected to result in any material adverse change in
the condition, financial or otherwise or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise or which could reasonably be expected to materially and
adversely affect the properties or assets thereof, or (C) which might
materially and adversely affect the consummation of this Agreement or the
U.S. Purchase Agreement; all pending legal or governmental proceedings to
which the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material to the Company
and its subsidiaries considered as one enterprise; and there are no
contracts or documents of the Company or any of its subsidiaries which are
required to be filed as exhibits to the Registration Statement by the 1933
Act or by the 1933 Act Regulations which have not been so filed or
incorporated by reference.
(xi) The Company and its subsidiaries own or possess adequate rights
to use, or can acquire on reasonable terms, the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names (collectively, "Intellectual Property") presently employed by them in
connection with the business now operated by them, except where the failure
to own, possess or have the right to acquire on reasonable terms any such
items of Intellectual Property would not,
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singly or in the aggregate, have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise.
(xii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
offering, issuance or sale of the Securities under this Agreement and the
U.S. Purchase Agreement, except such as may be required under the 1933 Act
or the 1933 Act Regulations, state securities laws or the securities laws
of any jurisdiction outside the United States.
(xiii) The Company and its subsidiaries possess such certificates,
authorities, licenses or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct the business
now operated by them, except where the failure to possess any such
certificates, authorities, licenses or permits would not, singly or in the
aggregate, have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority, license or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xiv) This Agreement, the U.S. Purchase Agreement and the Expenses
Agreement have been, and, at the Representation Date, the International
Pricing Agreement and the U.S. Pricing Agreement will have been, duly
authorized, executed and delivered by the Company.
(xv) There are no persons with registration or other similar rights
to have any securities registered pursuant to the Registration Statement or
included in the offering contemplated by this Agreement or the U.S.
Purchase Agreement, or otherwise registered by the Company under the 1933
Act, except pursuant to the Registration and Expenses Agreement dated as of
-, 1994 (the "Expenses Agreement") among the Company and the Selling
Stockholders; the Company has afforded the Selling Stockholders the
opportunity to register and sell shares of its Common Stock as part of the
offerings contemplated by this Agreement and the U.S. Purchase Agreement in
accordance with the terms of the Expenses Agreement and has registered the
shares of Common Stock which the Selling Stockholders have elected to
include in such offerings; and the Company otherwise has complied with its
obligations under the Expenses Agreement.
(xvi) The documents incorporated or deemed to be incorporated by
reference in the Prospectuses, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") and, when read
together with the other information in the Prospectuses, at the time the
Registration Statement and any amendments thereto become effective, at the
Representation Date, at the Closing Time and at each Date of Delivery (if
any), will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(xvii) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida Statutes and the rules and regulations thereunder (collectively,
the "Cuba Act") or is exempt therefrom.
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(xviii) The Securities to be purchased from the Company under this
Agreement and the U.S. Purchase Agreement have been approved for listing on
the New York Stock Exchange (the "NYSE"), and the Securities to be
purchased from the Selling Stockholders under this Agreement and the U.S.
Purchase Agreement are listed on the NYSE.
(xix) The Rights Agreement dated as of July 23, 1990, as amended by
Amendment No. 1 dated as of September 18, 1990 and Amendment No. 2 dated as
of October 28, 1993 (the "Rights Agreement"), between the Company and
Manufacturers Hanover Trust Company of California has been duly authorized,
executed and delivered by the Company; the preferred share purchase rights
(the "Rights") issuable under the Rights Agreement have been duly
authorized by the Company; each outstanding share of Common Stock is
associated with and entitled to one outstanding Right; and, when the Common
Stock to be sold by the Company hereunder is issued, each such share will
be associated with and entitled to one outstanding Right.
(xx) The Company has obtained and delivered to the International
Representatives and the U.S. Representatives the agreement (each a "Lock-up
Agreement") of each of the executive officers and directors named in
Exhibit B hereto, each of which agreements is in substantially the form set
forth in Exhibit C to the U.S. Purchase Agreement.
(xxi) All certificates evidencing shares of Common Stock distributed
to any partners of the Selling Stockholders at any time during the period
of 120 days from the date of the U.S. Pricing Agreement will bear a legend
to the effect that, during such 120-day period, the shares represented by
such certificates may not be transferred, sold, pledged or otherwise
disposed of, nor may any offer to sell any such shares be made or option
for the sale thereof be granted, directly or indirectly, without the prior
written consent of the U.S. Representatives, and, prior to issuance of any
such certificates, the Company will deliver stop transfer instructions with
respect to all such certificates to the registrar and each transfer agent
for the Common Stock and, unless waived in writing by the U.S.
Underwriters, will maintain such instructions in effect during such 120-day
period; and the Company agrees that the U.S. Representatives may enforce
such restrictions on transfers in the name and on behalf of the Company and
that the Company will cooperate with the U.S. Representatives in enforcing
such restrictions, and further agrees that the Company will not, without
the prior written consent of the U.S. Representatives, consent to any
waiver or modification of such transfer restrictions.
(xxii) The only officers and directors of the Company who
"beneficially own" (as defined below) 100,000 or more shares of Common
Stock are (i) Frederick P. Furth and J. Stephen Schaub, each of whom is a
director of the Company (the "Subject Directors"), and (ii) the persons
listed in Exhibit B hereto; the Subject Directors are "affiliates" (as
defined in Rule 144 under the 1933 Act) of the Company and persons
"controlling" (within the meaning of Section 2(11) of the 1933 Act) the
Company, and any sale of such shares of Common Stock pursuant to Rule 144
will be subject to, among other things, the volume limitations of Rule
144(e); stop transfer orders with respect to the shares of Common Stock
owned by the Subject Directors are in effect with the registrar and each
transfer agent for the Common Stock, and, unless waived in writing by the
U.S. Underwriters, such stock transfer orders will remain in effect for a
period of at least 90 days after the date of the U.S. Pricing Agreement;
and the Company agrees that (A) it will not register any shares of Common
Stock "beneficially owned" by the Subject Directors under the 1933 Act for
a period of 90 days after the date of the U.S. Pricing Agreement and (B) it
will not consent to any sale, transfer or other disposition of any such
shares of Common Stock pursuant to Regulation S under the 1933 Act unless
the transferee of such shares agrees that neither it nor any subsequent
transferee will offer, sell or otherwise dispose of any such shares to a
U.S. Person or in the United States (as such terms are defined in
Regulation S) for a period of at least 90 days after the date of the U.S.
Pricing Agreement. For purposes of this paragraph (xxii), the term
"beneficial owner" and "beneficially owned" shall have the meanings
ascribed thereto in Rule 13d-3 under the 1934 Act, except that, for
purposes of this paragraph, the words "within 60 days" appearing in
paragraph (d)(1)(i) of such Rule shall be deemed to have been replaced by
the words "within 90 days after the date of the U.S. Pricing Agreement."
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(b) Each Selling Stockholder represents and warrants to each
International Underwriter as of the date hereof, as of the Representation Date
and as of the Closing Time, and jointly and severally agrees with each
International Underwriter, as follows:
(i) This Agreement, the U.S. Purchase Agreement and the Expenses
Agreement have been duly authorized, executed and delivered by such Selling
Stockholder and, at the Representation Date, the International Pricing
Agreement and the U.S. Pricing Agreement will have been duly authorized,
executed and delivered by such Selling Stockholder.
(ii) Such Selling Stockholder has duly authorized, executed and
delivered, in the form heretofore furnished to you, a Custody Agreement (a
"Custody Agreement") with Chemical Trust Company of California, as
custodian (the "Custodian"), and such Custody Agreement is a valid and
binding agreement of such Selling Stockholder, enforceable in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
(iii) All authorizations, approvals, consents and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement, the U.S. Purchase Agreement, the International Pricing
Agreement, the U.S. Pricing Agreement, its Custody Agreement and the
Expenses Agreement, and the sale and delivery of the Securities to be sold
by such Selling Stockholder hereunder and under the U.S. Purchase
Agreement, have been obtained and are in full force and effect, except as
may be required under the 1933 Act, the 1933 Act Regulations, state
securities laws or the securities laws of any jurisdiction outside of the
United States of America, and such Selling Stockholder has full right,
power and authority to enter into and perform its obligations under this
Agreement, the U.S. Purchase Agreement, the International Pricing
Agreement, the U.S. Pricing Agreement, the Custody Agreement and the
Expenses Agreement and to sell, transfer and deliver the Securities to be
sold by such Selling Stockholder hereunder and under the U.S. Purchase
Agreement.
(iv) The execution and delivery of this Agreement, the U.S. Purchase
Agreement, the International Pricing Agreement, the U.S. Pricing Agreement,
the Expenses Agreement, the Custody Agreements and the consummation of the
transactions herein and therein contemplated, will not result in a breach
or violation by such Selling Stockholder of, or constitute a default by
such Selling Stockholder under, its limited partnership agreement,
certificate of limited partnership or other organizational document, or any
indenture, deed of trust, contract or other agreement or instrument or any
decree, judgment or order to which such Selling Stockholder is a party or
by which such Selling Stockholder or any of its assets may be bound.
(v) Such Selling Stockholder has and, at Closing Time, will have
good and marketable title to the Securities to be sold by it under this
Agreement and the U.S. Purchase Agreement, free and clear of any pledge,
lien, security interest, encumbrance, claim or equity other than under this
Agreement, the U.S. Purchase Agreement and the Custody Agreement; and upon
delivery of such Securities and payment of the purchase price therefor as
contemplated in this Agreement and the U.S. Purchase Agreement, each of the
International Underwriters and the U.S. Underwriters will receive good and
marketable title to the Securities purchased by it from such Selling
Stockholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equity.
(vi) Certificates in negotiable form for all Securities to be sold
by such Selling Stockholder hereunder and under the U.S. Purchase Agreement
have been placed in custody with the Custodian for the purpose of effecting
delivery hereunder and under the U.S. Purchase Agreement.
(vii) During a period of 120 days from the date of the U.S. Pricing
Agreement, such Selling Stockholder will not, without the U.S.
Representatives' prior written consent, directly or indirectly, sell, offer
to sell, grant any option for the sale of, or otherwise dispose of, any
Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock owned by such Selling Stockholder or
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with respect to which such Selling Stockholder has the power of
disposition, other than pursuant to this Agreement and the U.S. Purchase
Agreement. Notwithstanding the foregoing, nothing herein shall prohibit a
distribution by such Selling Stockholder of any shares of Common Stock to
one or more of its partners; provided, that such partners take such shares
subject to the restrictions on transfer described in Section 1(a)(xxi) and,
provided, further, that such Selling Stockholder agrees (A) that all
certificates evidencing such shares of Common Stock will bear the legend
described in Section 1(a)(xxi), (B) that such Selling Stockholder will
deliver to each partner receiving such certificates, prior to or
contemporaneously with the delivery of such certificates, written notice of
the restrictions on transfer thereof, (C) that the U.S. Representatives may
enforce such restrictions on transfers in the name and on behalf of such
Selling Stockholder and that such Selling Stockholder will cooperate with
the U.S. Representatives in enforcing such restrictions, and (D) that such
Selling Stockholder will not consent to any waiver or modification of such
transfer restrictions without the prior written consent of the U.S.
Representatives.
(viii) Such Selling Stockholder does not have any knowledge or any
reason to believe that the representations and warranties of the Company
contained in Section 1(a) hereof are not true and correct; such Selling
Stockholder has reviewed and is familiar with the Registration Statement as
originally filed with the Commission and all amendments and supplements
thereto, if any, filed with the Commission prior to the date hereof, and
with preliminary prospectuses contained therein, as supplemented, if
applicable, to the date hereof, and has no knowledge of any fact, condition
or information not disclosed in such preliminary prospectuses, as so
supplemented, if applicable, which has had or could have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; to the best knowledge of such Selling
Stockholder, such preliminary prospectuses as so supplemented, if
applicable, do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and such Selling Stockholder is not prompted to sell the
Securities to be sold by it hereunder or under the U.S. Purchase Agreement
by any information concerning the Company or any subsidiary of the Company
which is not set forth in such preliminary prospectuses, as so
supplemented, if applicable.
(ix) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(x) Such Selling Stockholder hereby makes the representations and
warranties set forth in the Custody Agreement, which representations and
warranties are hereby incorporated by reference in, and made a part of,
this Agreement.
(c) Any certificate designated as such in its title and as being
delivered pursuant to this Agreement or the U.S. Purchase Agreement and signed
by any officer of the Company and delivered to the International Representatives
or to counsel for the International Underwriters shall be deemed a
representation and warranty by the Company to each International Underwriter as
to the matters covered thereby; and any certificate signed by or on behalf of
any Selling Stockholder and delivered to the International Representatives or to
counsel for the International Underwriters shall be deemed a representation and
warranty by such Selling Stockholder to each International Underwriter as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY TO INTERNATIONAL UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, each of the Company
and Selling Stockholders, severally and not jointly, agrees to sell to each
International Underwriter, severally and not jointly, and each International
Underwriter, severally and not jointly, agrees to purchase from the Company and
each of the Selling Stockholders, at the price per share set forth in the
International Pricing Agreement, that proportion of the number of Initial
International Securities set forth in Schedule B opposite the name of the
Company or such Selling Stockholder, as the case may be (plus that proportion
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of any such additional number of shares of Common Stock which the Company or
such Selling Stockholder, as the case may be, may elect to sell pursuant to
Section 11) which the number of Initial International Securities set forth in
Schedule A opposite the name of such International Underwriter bears to the
total number of Initial International Securities (except as otherwise provided
in the International Pricing Agreement), subject to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares, plus any additional number of Initial
International Securities which such International Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(1) If the Company has elected not to rely upon Rule 430A under the
1933 Act Regulations, the initial public offering price and the purchase
price per share to be paid by the several International Underwriters for
the International Securities have each been determined and set forth in the
International Pricing Agreement, dated the date hereof, and an amendment to
the Registration Statement and the Prospectuses will be filed before the
Registration Statement becomes effective.
(2) If the Company has elected to rely upon Rule 430A under the 1933
Act Regulations, the purchase price per share to be paid by the several
International Underwriters for the International Securities shall be an
amount equal to the initial public offering price less an amount per share
to be determined by agreement between the International Representatives,
the Company and the Selling Stockholders. The public offering price per
share of the International Securities shall be a fixed price to be
determined by agreement between the International Representatives, the
Company and the Selling Stockholders. The public offering price and the
purchase price, when so determined, shall be set forth in the International
Pricing Agreement. In the event that such prices have not been agreed upon
and the International Pricing Agreement has not been executed and delivered
by all parties thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless
otherwise agreed to by the Company, the Selling Stockholders and the
International Representatives.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the International Underwriters, severally and
not jointly, to purchase up to an additional 105,000 shares of Common Stock at
the price per share set forth in the International Pricing Agreement. The
option hereby granted will expire 30 days after (i) the date the Registration
Statement becomes effective, if the Company has elected not to rely on Rule 430A
under the 1933 Act Regulations, or (ii) the Representation Date, if the Company
has elected to rely on Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial International Securities upon notice by the
International Representatives to the Company setting forth the number of
International Option Securities as to which the several International
Underwriters are then exercising the option and the time and date of payment and
delivery for such International Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the International
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined, unless otherwise agreed by the International
Representatives and the Company. If the option is exercised as to all or any
portion of the International Option Securities, each of the International
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of International Option Securities then being purchased which
the number of Initial International Securities set forth in Schedule A opposite
the name of such International Underwriter bears to the total number of Initial
International Securities (except as otherwise provided in the International
Pricing Agreement), subject in each case to such adjustments as the
International Representatives in their discretion shall make to eliminate any
sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial International Securities shall be made at the offices of Wilson,
Sonsini, Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo
Alto, California 94304, or at such other place as shall be agreed upon by the
International Representatives, the Company and the Selling Stockholders, at 7:00
A.M. (California time) on the fifth business day (unless postponed in accordance
with the provisions of Section 10 or 11) following the date the Registration
Statement becomes effective (or, if the Company has elected to rely upon Rule
430A, the fifth business day after execution
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of the International Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the International
Representatives, the Company and the Selling Stockholders (such time and date of
payment and delivery being herein called "Closing Time"). In addition, in the
event that any or all of the International Option Securities are purchased by
the several International Underwriters, payment of the purchase price for, and
delivery of certificates for, such International Option Securities shall be made
at the above-mentioned offices of Wilson, Sonsini, Goodrich & Rosati, or at such
other place as shall be agreed upon by the International Representatives and the
Company, on each Date of Delivery as specified in the notice from the
International Representatives to the Company. Payment shall be made to the
Company and the Custodian, respectively, by certified or official bank check or
checks drawn in next day funds payable to the order of the Company and the
Custodian, respectively, against delivery to the International Representatives
for the respective accounts of the International Underwriters of certificates
for the International Securities to be purchased by them, with any stock
transfer taxes, stamp duties or other similar taxes thereon duly paid by the
Company and the Selling Stockholders as provided in Section 4. Certificates for
the Initial International Securities and the International Option Securities, if
any, shall be in such denominations and registered in such names as the
International Representatives may request in writing at least two business days
before Closing Time or the relevant Date of Delivery, as the case may be. It is
understood that each International Underwriter has authorized the International
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase. MLIL,
individually and not as a representative of the International Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
Initial International Securities or the International Option Securities, if any,
to be purchased by any International Underwriter whose check has not been
received by Closing Time or the relevant Date of Delivery, as the case may be,
but such payment shall not relieve such International Underwriter from its
obligations hereunder. The certificates for the Initial International
Securities and the International Option Securities, if any, will be made
available for examination and packaging by the International Representatives not
later than 10:00 A.M. on the last business day prior to Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
International Underwriter as follows:
(a) The Company will notify the International Representatives
immediately, and confirm the notice in writing, (i) of the effectiveness of
the Registration Statement and any amendment thereto (including any post-
effective amendment), (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to either Prospectus
or for additional information, and (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) The Company will give the International Representatives notice
of its intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to either Prospectus (including any revised prospectus which the
Company proposes for use by the International Underwriters or the U.S.
Underwriters in connection with the offering of the Securities which
differs from the corresponding prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of the
1933 Act Regulations), whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the International Representatives with copies of
any such amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which the
International Representatives or counsel for the International Underwriters
shall reasonably object.
(c) The Company will deliver to the International Representatives as
many signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated or deemed to be
incorporated by reference
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therein) as the International Representatives may reasonably request and
will also deliver to the International Representatives a conformed copy of
the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the International Underwriters.
(d) The Company will furnish to each International Underwriter, from
time to time during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the International Prospectus (as amended or supplemented) as such
International Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable
rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the International Underwriters, to amend or
supplement the International Prospectus in order to make the International
Prospectus not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, the Company will forthwith amend or
supplement the International Prospectus (in form and substance satisfactory
to counsel for the International Underwriters) so that, as so amended or
supplemented the International Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading (and,
if appropriate, will make a corresponding amendment or supplement to the
U.S. Prospectus), and the Company will furnish to the International
Underwriters a reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the International
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the
United States as the International Representatives may designate; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
execute a general consent to service of process in any jurisdiction or to
make any undertaking with respect to the conduct of its business. In each
jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 105 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations and, unless
required thereby, which need not be audited) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(h) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectuses under
"Use of Proceeds."
(i) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the 1933 Act Regulations, then immediately following the
execution of the International Pricing Agreement, the Company will prepare,
and file or transmit for filing with the Commission in accordance with such
Rule 430A and Rule 424(b) of the 1933 Act Regulations, copies of amended
Prospectuses, or, if required by such Rule 430A, a post-effective amendment
to the Registration Statement (including amended Prospectuses), containing
all information so omitted.
(j) The Company will use its reasonable best efforts to effect the
listing of the Securities to be sold by the Company under this Agreement
and the U.S. Purchase Agreement on the New York Stock Exchange.
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(k) During a period of 90 days from the date of the U.S. Pricing
Agreement, the Company will not, without the U.S. Representatives' prior
written consent, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for
Common Stock (except for (A) Common Stock issued pursuant to this Agreement
or the U.S. Purchase Agreement, (B) Common Stock or options to purchase
Common Stock issued pursuant to options, reservations, agreements or
employee benefit plans referred to in Section 1(a)(vii) hereof, (C) up to
one million shares of Common Stock that may be issued in connection with
business acquisitions) and (D) the issuance of Rights or other securities
pursuant to the Rights Agreement.
(l) In accordance with the Cuba Act and without limitation to the
provisions of Sections 6 and 7 hereof, the Company agrees to indemnify and
hold harmless each International Underwriter from and against any and all
loss, liability, claim, damage and expense whatsoever (including fees and
disbursements of counsel), as incurred, arising out of any violation by the
Company of the Cuba Act.
(m) The Company, during the period when the International Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the printing of this Agreement, the
International Pricing Agreement, the U.S. Purchase Agreement, the U.S. Pricing
Agreement, the Intersyndicate Agreement and the Agreement Among Managers,
(iii) the preparation, issuance and delivery of the certificates for the
Securities to the Underwriters, including the payment of all stock transfer
taxes, stamp duties and other similar taxes, if any, payable upon the sale,
issuance or delivery of the International Securities to be sold by the Company
to the International Underwriters, the transfer of such International Securities
between International Underwriters and U.S. Underwriters and to the U.S.
Underwriters pursuant to the Intersyndicate Agreement, and the transfer of
Securities between the International Underwriters and the U.S. Underwriters
pursuant to the Intersyndicate Agreement, (iv) the fees and disbursements of the
Company's counsel, accountants, and other advisors, if any, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f), including filing fees and the fees and disbursements
of counsel for the International Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey, (vi) the printing and
delivery to the International Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each preliminary
International prospectus, and of the International Prospectus and any amendments
or supplements thereto, (vii) the printing (or other preparation) and delivery
to the International Underwriters of copies of the Blue Sky Survey and any
Canadian "wrapper", (viii) the fees of the National Association of Securities
Dealers, Inc., and (ix) the fees and expenses incurred in connection with the
listing of Securities on the New York Stock Exchange.
Each of the Company and the Selling Stockholders severally agrees that it
will pay all stock transfer taxes, stamp duties and other similar taxes, if any,
payable (A) upon the sale, issuance or delivery of the International Securities
to be sold by it to the International Underwriters, the transfer of such
International Securities between International Underwriters and U.S.
Underwriters and to the U.S. Underwriters pursuant to the Intersyndicate
Agreement, and (B) in connection with the consummation by it of any of its
obligations under this Agreement or the U.S. Purchase Agreement, and, in the
case of each Selling Stockholder, further authorizes the payment of any such
amount by deduction from the proceeds of the Securities to be sold by it under
this Agreement or the U.S. Purchase Agreement and from funds from time to time
held for its account by the Custodian under the Custody Agreement.
If this Agreement is terminated by the International Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i), the Company
shall reimburse the International Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
International Underwriters.
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The provisions of this Section shall not affect any agreement which the
Company and the Selling Stockholders may make for the allocation or sharing of
such expenses and costs.
SECTION 5. CONDITIONS OF INTERNATIONAL UNDERWRITERS' OBLIGATIONS. The
obligations of the International Underwriters hereunder are subject to the
accuracy of the respective representations and warranties of the Company and the
Selling Stockholders herein contained, to the performance by the Company of its
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or with the consent of the International
Representatives, at a later time and date, not later, however, than
5:30 P.M on the first business day following the date hereof, or at such
later time and date as may be approved by a majority in interest of the
International Underwriters; and at Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Company has elected to rely upon Rule 430A of the 1933
Act Regulations, the price of the Securities and any price-related
information previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the Commission
for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the
prescribed time period, and prior to the Closing Time the Company shall
have provided evidence satisfactory to the International Representatives of
such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A of the 1933 Act Regulations.
(b) At Closing Time the International Representatives shall have
received:
(1) The favorable opinion, dated as of Closing Time, of Wilson,
Sonsini, Goodrich & Rosati, Professional Corporation, counsel for the
Company, in form and substance satisfactory to counsel for the
International Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has all requisite corporate power and
corporate authority to own, lease and operate its properties and
to conduct its business as described in the Prospectuses and to
enter into and perform its obligations under this Agreement, the
U.S. Purchase Agreement, the International Pricing Agreement, the
U.S. Pricing Agreement and the Expenses Agreement.
(iii) (A) The authorized, issued and outstanding capital
stock of the Company is as set forth under the caption
"Capitalization" in the Prospectuses (except for subsequent
issuances, if any, pursuant to this Agreement or the U.S.
Purchase Agreement or pursuant to options, reservations,
agreements or employee benefit referred to in the Prospectuses);
(B) all shares of Common Stock issued by the Company since March
31,1987 and the Securities to be purchased by the International
Underwriters and the U.S. Underwriters from the Selling
Stockholders under this Agreement and the U.S. Purchase
Agreement, respectively, have been duly authorized and validly
issued and are fully paid and non-assessable; and (C) to their
knowledge, except for the rights of the Selling Stockholders
under the Expenses Agreement, there are no persons with
registration or other similar rights to have any securities
registered pursuant to the Registration Statement or included in
the offerings contemplated by this Agreement or the U.S. Purchase
Agreement or otherwise registered by the Company under the 1933
Act.
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<PAGE>
(iv) The Rights Agreement has been duly authorized,
executed and delivered by the Company; the Rights issuable under
the Rights Agreement have been duly authorized by the Company;
each outstanding share of Common Stock is associated with and
entitled to one outstanding Right; and, when the Common Stock to
be sold by the Company hereunder is issued, each such share will
be associated with and entitled to one outstanding Right.
(v) The Securities to be purchased from the Company have
been duly authorized by the Company for issuance and sale to the
International Underwriters and the U.S. Underwriters pursuant to
this Agreement and the U.S. Purchase Agreement, respectively,
and, when issued and delivered by the Company pursuant to this
Agreement and the U.S. Purchase Agreement against payment of the
consideration set forth in the International Pricing Agreement
and the U.S. Pricing Agreement, respectively, will be validly
issued and fully paid and non-assessable.
(vi) The issuance of the Securities to be purchased from
the Company by the International Underwriters and the U.S.
Underwriters pursuant to this Agreement and the U.S. Purchase
Agreement, respectively, is not subject to preemptive rights or
other similar rights of security holders of the Company arising
by operation of law, under the certificate of incorporation or
by-laws of the Company or, to their knowledge, otherwise.
(vii) This Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement, the U.S. Pricing Agreement and
the Expenses Agreement have been duly authorized, executed and
delivered by the Company.
(viii) The Registration Statement is effective under the
1933 Act and, to their knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by
the Commission.
(ix) At the time the Registration Statement and any
amendments thereto became effective and at the Representation
Date, the Registration Statement (other than the financial
statements and supporting schedules included therein and the
documents incorporated by reference therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(x) The Common Stock conforms in all material respects to
the description thereof incorporated by reference into the
Prospectuses, and the form of certificate used to evidence the
Common Stock is in due and proper form and complies with all
applicable requirements of the General Corporation Law of the
State of Delaware.
(xi) The information in the Prospectuses under "Certain
United States Federal Tax Consequences to Non-United States
Holders" and in Item 15 of the Registration Statement, and the
information concerning the Company's authorized but unissued
preferred stock, the Rights Agreement, the Rights and the
preferred stock issuable upon exercise of the Rights incorporated
by reference in the Prospectuses, to the extent that it describes
statutes, rules, regulations or other laws, or summarizes
documents, instruments or agreements, or constitutes matters of
law or legal conclusions, has been reviewed by them and is
correct in all material respects.
(xii) To their knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments or agreements required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto
other than those
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<PAGE>
described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or
references thereto are correct in all material respects.
(xiii) No authorization, approval, consent, registration,
declaration, order or filing of or with any court or governmental
authority is required in connection with the offering, issuance
or sale of the Securities to the International Underwriters and
the U.S. Underwriters, except such as may be required under the
1933 Act or the 1933 Act Regulations, state securities laws or
securities laws of any jurisdiction outside of the United States;
and, to their knowledge, the execution, delivery and performance
of this Agreement, the U.S. Purchase Agreement, the International
Pricing Agreement, the U.S. Pricing Agreement and the Expenses
Agreement and the consummation of the transactions contemplated
herein and therein will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any material
contract, indenture, mortgage, loan agreement, note, lease or
other instrument or agreement to which the Company or any of its
subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of the Company, or, to their knowledge,
any applicable law, administrative regulation or administrative
or court decree.
(xiv) Each document filed pursuant to the 1934 Act (other
than the financial statements and supporting schedules included
therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectuses complied when so filed as to form in all material
respects with the 1934 Act and the 1934 Act Regulations.
(xv) The Subject Directors are "affiliates" (as defined in
Rule 144 under the 1933 Act) of the Company and persons
"controlling" (within the meaning of Section 2(11) of the 1933
Act) the Company, and any sale of such shares of Common Stock
pursuant to Rule 144 will be subject to, among other things, the
volume limitations of Rule 144(e).
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions) upon representations set forth in
certificates of officers of the Company and its subsidiaries and of
public officials and, with respect to the opinion in subparagraph
(iii)(A) above regarding the number of shares of issued and
outstanding capital stock of the Company, the registrar and transfer
agent for the Company's capital stock.
(2) The favorable opinion, dated as of the Closing Time, of
Steven Karel, Vice President, Secretary and General Counsel of the
Company, in form and substance satisfactory to counsel for the
International Underwriters, to the effect that:
(i) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of
California and, to his knowledge, in each other jurisdiction in
which such qualification is required, except where the failure to
so qualify or to be in good standing would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered
as one enterprise.
(ii) Each of the Subject Subsidiaries has been duly
organized and is validly existing as a corporation or
partnership, as the case may be, in good standing under the laws
of the jurisdiction of its organization, has power and authority
as a corporation or
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partnership, as the case may be, to own, lease and operate its
properties and to conduct its business as described in the
Prospectuses and, to his knowledge, is duly qualified as a
foreign corporation or partnership, as the case may be, to
transact business and is in good standing in each jurisdiction in
which such qualification is required, except where the failure to
so qualify or to be in good standing would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered
as one enterprise; and all of the issued and outstanding capital
stock of each corporate Subject Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable
and, to his knowledge, except for directors' qualifying shares,
is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim, except for security interests, pledges,
liens, encumbrances and claims in, on and to such capital stock
securing the Company's obligations under the Credit Agreement;
and all of the issued and outstanding partnership interests of
RHT, L.P. have been duly authorized (if applicable) and validly
issued and are fully paid and non-assessible and are owned by the
Company, through RHT, G.P. and XYZ, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim,
except for security interests, pledges, liens, encumbrances and
claims in, on and to such partnership interests securing the
Company's obligations under the Credit Agreement.
(iii) To his knowledge, there are no legal or governmental
proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those
disclosed therein, and all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or
to which any of their property is subject which are not described
in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material to the Company and its subsidiaries
considered as one enterprise.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions) upon representations set forth in
certificates of officers of the Company and its subsidiaries and of
public officials and, as to the matters referred to in subparagraph
(ii) above, upon the opinions of local counsel (each of which opinions
shall be dated and furnished to the International Representatives as
of the Closing Time, shall be satisfactory in form and substance to
counsel for the International Underwriters and shall expressly state
that the Company's General Counsel, in rendering his opinion pursuant
to this Section 5(b)(2), and the International Underwriters and U.S.
Underwriters may rely on such opinion as if it were addressed to
them), provided that the opinion of the Company's General Counsel
shall state that he believes that he and the International
Underwriters and the U.S. Underwriters are justified in relying on
such opinions.
(3) The favorable opinion, dated as of the Closing Time, of
Dorsey & Whitney, special counsel to the Company, in form and
substance satisfactory to counsel for the International Underwriters,
to the effect that all shares of Common Stock issued by the Company
from the date of its incorporation through and including March 31,
1987 were duly authorized and validly issued and are fully paid and
non-assessable.
(4) The favorable opinion, dated as of Closing Time, of Kramer,
Levin, Naftalis, Nessen, Kamin & Frankel, counsel for the Selling
Stockholders, in form and substance satisfactory to counsel for the
International Underwriters, to the effect that:
(i) This Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement, the U.S. Pricing Agreement and
the Expenses Agreement have been duly authorized, executed and
delivered by each of the Selling Stockholders.
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(ii) A Custody Agreement has been duly authorized,
executed and delivered by each of the Selling Stockholders and
constitutes a valid and binding agreement of such Selling
Stockholder, enforceable against such Selling Stockholder in
accordance with its terms except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(iii) All authorizations, approvals, consents and orders
necessary for the execution and delivery by the Selling
Stockholders of this Agreement, the U.S. Purchase Agreement, the
International Pricing Agreement, the U.S. Pricing Agreement, the
Custody Agreements and the Expenses Agreement, and the sale and
delivery of the Securities to be sold by the Selling Stockholders
hereunder and under the U.S. Purchase Agreement, have been
obtained and are in full force and effect, except as may be
required under the 1933 Act, the 1933 Act Regulations, state
securities laws or the securities laws of any jurisdiction
outside of the United States of America, and the Selling
Stockholders have full right, power and authority to enter into
and perform their respective obligations under this Agreement,
the U.S. Purchase Agreement, the International Pricing Agreement,
the U.S. Pricing Agreement, the Custody Agreements and the
Expenses Agreement, and to sell, transfer and deliver the
Securities to be sold by the Selling Stockholders hereunder and
under the U.S. Purchase Agreement.
(iv) The execution and delivery of this Agreement, the
U.S. Purchase Agreement, the International Pricing Agreement, the
U.S. Pricing Agreement, the Expenses Agreement and the Custody
Agreements, and the consummation of the transactions herein and
therein contemplated, do not result in a breach or violation by
either Selling Stockholder of, or constitute a default by either
Selling Stockholder under, its limited partnership agreement,
certificate of limited partnership or other organizational
document, or any material indenture, deed of trust, contract or
other agreement or instrument or any decree, judgment or order to
which such Selling Stockholder is a party or by which such
Selling Stockholder or any of its assets may be bound.
(v) Each of the Selling Stockholders is the legal and
registered owner of the Securities to be sold by such Selling
Stockholder hereunder and under the U.S. Purchase Agreement and,
to their knowledge, the partners of the Selling Stockholders (or
persons having an interest through such partners) are the only
persons with any beneficial interest in such Securities.
(vi) Upon the delivery of the Securities to be sold by the
Selling Stockholders under this Agreement and the U.S. Purchase
Agreement and payment of the purchase price therefor as herein
and therein contemplated, each of the International Underwriters
and U.S. Underwriters will receive good and marketable title to
the Securities purchased by it from the Selling Stockholders,
free and clear of any mortgage, pledge, lien, security interest,
encumbrance, claim or equity. In rendering such opinion, counsel
may assume that the Underwriters are purchasing such Securities
in good faith and without notice of any adverse claim.
(5) The favorable opinion, dated as of Closing Time, of Brown &
Wood, counsel for the International Underwriters and the U.S.
Underwriters, with respect to the matters set forth in (i), (v), (vi)
(solely as to preemptive rights arising by operation of the law or
under the certificate of incorporation or by-laws of the Company),
(vii), (viii), (ix) and (x) of subsection (b)(1) of this Section.
(6) In giving their opinions required by subsections (b)(1) and
(b)(5), respectively, of this Section, Wilson, Sonsini, Goodrich &
Rosati, Professional Corporation, and Brown & Wood
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shall each additionally state that nothing has come to their attention
that would lead them to believe that the Registration Statement
(except for financial statements and schedules and other financial and
statistical data included or incorporated by reference therein, as to
which counsel need make no statement), at the time it became effective
or at the Representation Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectuses (except for financial statements
and schedules and other financial and statistical data included or
incorporated by reference therein, as to which counsel need make no
statement), at the Representation Date (unless the term "Prospectuses"
refers to a prospectus which has been provided to the International
Underwriters or the U.S. Underwriters by the Company for use in
connection with the offering of the Securities which differs from the
corresponding Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case at the time it
is first provided to the International Underwriters or the U.S.
Underwriters, as the case may be, for such use) or at Closing Time,
included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(c) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectuses, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, and the International
Representatives shall have received a certificate of the Chief Executive
Officer or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) are true and correct with
the same force and effect as though expressly made at and as of Closing
Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to this
Agreement or the U.S. Purchase Agreement at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(d) At Closing Time you shall have received a certificate of the
Selling Stockholders, dated as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Stockholders contained in
Section 1(b) are true and correct with the same force and effect as though
expressly made at and as of Closing Time, and (ii) the Selling Stockholders
have complied with all agreements and satisfied all conditions on their
part to be performed or satisfied at or prior to Closing Time.
(e) At the time of the execution of this Agreement, the
International Representatives shall have received from Arthur Andersen &
Co. a letter dated such date, in form and substance satisfactory to the
International Representatives, to the effect that (i) they are independent
public accountants with respect to the Company and its subsidiaries within
the meaning of the 1933 Act and the 1933 Act Regulations; (ii) in their
opinion, the financial statements and financial statement schedules audited
by them and incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1934 Act, and the related published
rules and regulations; (iii) based upon limited procedures set forth in
detail in such letter (which shall include, without limitation, the
procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described in
STATEMENT OF AUDITING STANDARDS NO. 71, INTERIM FINANCIAL INFORMATION, with
respect to the unaudited condensed consolidated financial statement of the
Company and its subsidiaries included in the Registration Statement),
nothing has come to their attention which causes them to believe that
(A) any material modifications should be made to the unaudited condensed
consolidated financial statements included in the Registration Statement
for them to be in conformity with generally accepted accounting principles
or (B) the unaudited condensed consolidated financial statements included
in the Registration Statement do not comply as to form in all material
respects with the applicable
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accounting requirements of the 1934 Act as it applies to Form 10-Q and the
related published rules and regulations or (C) at a specified date not more
than five days prior to the date of this Agreement, there has been any
change in the capital stock of the Company or any increase in the
consolidated long term debt of the Company and its subsidiaries or any
decrease in consolidated net current assets or net assets as compared with
the amounts shown in the September 30, 1994 balance sheet included in the
Registration Statement or, during the period from October 1, 1994 to a
specified date not more than five days prior to the date of this Agreement,
there were any decreases as compared with the corresponding period in the
preceding year, in consolidated net service revenues, gross margins, net
income or net income per fully diluted share of the Company and its
subsidiaries, except in all instances for changes, increases or decreases
which the Registration Statement and the Prospectuses disclose have
occurred or may occur; and (iv) in addition to the examination referred to
in their opinions and the limited procedures referred to in clause (iii)
above, they have carried out certain specified procedures, not constituting
an audit, with respect to certain amounts, percentages and financial
information which are included and incorporated by reference in the
Registration Statement and Prospectuses and which are specified by the
International Representatives, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting,
financial and other records of the Company and its subsidiaries identified
in such letter.
(f) At Closing Time the International Representatives shall have
received from Arthur Andersen & Co. a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than five days prior to Closing Time
and, if the Company has elected to rely on Rule 430A of the 1933 Act
Regulations, to the further effect that they have carried out procedures as
specified in clause (iv) of subsection (e) of this Section with respect to
certain amounts, percentages and financial information specified by the
International Representatives and deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) and have found such amounts, percentages
and financial information to be in agreement with the records specified in
such clause (iv).
(g) At the Closing Time and at each Date of Delivery, if any, all of
the Securities to be sold by the Company on such date shall have been
approved for listing on the New York Stock Exchange upon notice of
issuance, and the International Representatives shall have received
evidence of such listing in form and substance reasonably satisfactory to
them.
(h) At or prior to the date of this Agreement, the International
Representatives and the U.S. Representatives shall have received an
agreement substantially in the form of Exhibit C to the U.S. Purchase
Agreement signed by each of the executive officers and directors of the
Company listed in Exhibit B hereto and each such agreements shall be in
full force and effect at the Closing Time and at each Date of Delivery.
(i) At Closing Time and at each Date of Delivery, if any, counsel
for the International Underwriters and the U.S. Underwriters shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as contemplated herein and in the U.S. Purchase Agreement
and related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the agreements
or conditions, herein contained; and all proceedings taken by the Company
and the Selling Stockholders in connection with the issuance and sale of
the Securities as contemplated in this Agreement and in the U.S. Purchase
Agreement shall be reasonably satisfactory in form and substance to the
International Representatives and counsel for the International
Underwriters.
(j) In the event that the International Underwriters exercise their
option provided in Section 2(b) hereof to purchase all or any portion of
the International Option Securities, the respective representations and
warranties of the Company and the Selling Stockholders contained herein and
the statements in any certificates furnished by the Company and the Selling
Stockholders hereunder and under the U.S. Purchase Agreement shall be true
and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the International Representatives shall have received:
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(1) A certificate, dated such Date of Delivery, of the Chief
Executive Officer or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(c)
hereof remains true and correct as of such Date of Delivery.
(2) A certificate, dated such Date of Delivery, of the Selling
Stockholders confirming that the certificate delivered at the Closing
Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
(3) The favorable opinion of Wilson, Sonsini, Goodrich &
Rosati, Professional Corporation, counsel for the Company, in form and
substance satisfactory to counsel for the International Underwriters,
dated such Date of Delivery, relating to the International Option
Securities to be purchased from the Company on such Date of Delivery
and otherwise to the same effect as the opinion required by Sections
5(b)(1) and 5(b)(6) hereof.
(4) The favorable opinion of Steven Karel, Vice President,
Secretary and General Counsel of the Company, together with the
favorable opinions of the local counsel relied upon by such General
Counsel, each in form and substance satisfactory to counsel for the
International Underwriters, dated such Date of Delivery, relating to
the International Option Securities to be purchased from the Company
on such Date of Delivery and otherwise to the same effect as the
opinions required by Section 5(b)(2) hereof.
(5) The favorable opinion of Dorsey & Whitney, special counsel
for the Company, in form and substance satisfactory to counsel for the
International Underwriters, dated such Date of Delivery, to the same
effect as the opinion required by Section 5(b)(3) hereof.
(6) The favorable opinion of Brown & Wood, counsel for the
International Underwriters and the U.S. Underwriters, dated such Date
of Delivery, relating to the International Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Sections 5(b)(5) and 5(b)(6) hereof.
(7) A letter from Arthur Andersen & Co., in form and substance
satisfactory to the International Representatives and dated such Date
of Delivery, substantially the same in form and substance as the
letter furnished to the International Representatives pursuant to
Section 5(e) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(k) At the Closing Time, the International Representatives shall
have received copies of the form of Common Stock certificates referred to
in Section 1(a)(xxi) hereof, each of which certificates shall bear the
legend referred to in such Section, and copies of the stop transfer
instructions referred to in Sections 1(a)(xxi) and 1(a)(xxii) hereof.
It shall be a further condition to the obligations of the International
Underwriters hereunder that, contemporaneously with their purchase of the
Initial International Securities under this Agreement, the U.S. Underwriters
shall have purchased the Initial U.S. Securities under the U.S. Purchase
Agreement.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
International Representatives by notice to the Company at any time at or prior
to Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and provided further that
Sections 3(l), 6 and 7 hereof shall survive such termination.
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SECTION 6. INDEMNIFICATION.
(a) The Company and, subject to subsection (e) of this Section 6 below,
the Selling Stockholders, jointly and severally, agree to indemnify and hold
harmless each International Underwriter and each person, if any, who controls
any International Underwriter within the meaning of Section 15 of the 1933 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) of the 1933 Act
Regulations, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever, based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the indemnifying party or parties, as the case may
be; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by MLIL), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever, based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Underwriter or U.S. Underwriter through Merrill Lynch expressly
for use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or Prospectus (or any amendment or supplement thereto);
and PROVIDED, FURTHER, that this indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any International
Underwriter from whom the person asserting any such losses, liabilities, claims,
damages or expenses purchased Securities, or any person controlling such
International Underwriter, if a copy of the International Prospectus (as then
amended or supplemented if the Company shall have furnished any such amendments
or supplements thereto to such International Underwriter, but excluding
documents incorporated or deemed to be incorporated by reference therein) was
not sent or given by or on behalf of such International Underwriter to such
person, if such is required by law, at or prior to the written confirmation of
the sale of such Securities to such person and if the International Prospectus
(as so amended or supplemented, if applicable) would have corrected the defect
giving rise to such loss, liability, claim, damage or expense, it being
understood, however, that this proviso shall not be applicable if such defect
shall have been corrected in a document which is incorporated or deemed to be
incorporated by reference in the International Prospectus.
(b) Each International Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any , who controls the Company
within the meaning of Section 15 of the 1933 Act and each Selling Stockholder
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary International prospectus or the International Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with the
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written information furnished to the Company by such International Underwriter
through Merrill Lynch expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary International prospectus or the
International Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) Any payment made by the Company or any Selling Stockholder pursuant to
Section 6(a) or 7, or by any International Underwriter pursuant to Section 6(b)
or 7, which arises with respect to any loss, liability, claim, damage or expense
incurred in a currency other than U.S. dollars shall be made by the Company,
such Selling Stockholder or such International Underwriter, as the case may be,
in such amount of U.S. dollars as shall be necessary to enable the indemnified
party to purchase the amount of such other currency needed to satisfy such loss,
liability, claim, damage or expense, including any premiums and costs of
exchange payable in connection with conversion of U.S. dollars into the relevant
currency.
(e) The Selling Stockholders shall only be liable under this Section 6 to
the extent that any loss, claim, damage, liability, action or expense incurred
by any Underwriters or any person, if any, who controls any Underwriter arises
out of or is based upon any untrue statement or omission, or any alleged untrue
statement or omission, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Selling Stockholder expressly
for use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or Prospectus (or any amendment or supplement thereto);
PROVIDED that the amount of such indemnification or reimbursement by each of the
Selling Stockholders shall be limited to the amount of proceeds to such Selling
Stockholder from the sale of the Shares to the several Underwriters. The
Company, each Selling Stockholder and the Underwriters acknowledge and agree
that the only written information furnished by the Selling Stockholders as
aforesaid is the information set forth in the first two paragraphs under the
caption "Selling Stockholders" in the Registration Statement and the
Prospectuses.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the Selling
Stockholders and the International Underwriters shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and the Selling
Stockholders and one or more of the International Underwriters, as incurred, in
such proportions that the International Underwriters are responsible for that
portion represented by the percentage that the underwriting discount appearing
on the cover page of the International Prospectus bears to the initial public
offering price appearing thereon and the Company and, in the proportions that
they have agreed to indemnify, the Selling Stockholders are responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an International Underwriter within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as such International
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company. The Selling Stockholders shall not be
required to make any contribution payment under this Section 7 as long as and to
the extent that the Company pays and contributes the full amount of all such
losses, liabilities, claims, damages and expenses for which the Company and the
Selling Stockholders are responsible under the first sentence of this Section 7.
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SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement and the International Pricing Agreement, or contained in certificates
of officers of the Company or the Selling Stockholders submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any International Underwriter or
controlling person, or by or on behalf of the Company or any Selling
Stockholder, and shall survive delivery of the Securities to the International
Underwriters and the U.S. Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The International Representatives may terminate this Agreement, by
notice to the Company and the Selling Stockholders, at any time at or prior to
Closing Time (i) if there has been, since the date of this Agreement or since
the respective dates as of which information is given in the Registration
Statement or the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which in any such case is such as to make
it, in the judgment of the International Representatives, impracticable to
market the International Securities or to enforce contracts for the sale of the
International Securities, or (iii) if trading in the Common Stock has been
suspended or limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange, the New York Stock Exchange or
the U.S. Stock Exchange of the United Kingdom or the Republic of Ireland has
been suspended or limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by any of
said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or California authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and further provided further that Sections 3(l), 6 and 7
hereof shall survive such termination.
SECTION 10. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL UNDERWRITERS. If
one or more of the International Underwriters shall fail at Closing Time to
purchase the International Securities which it or they are obligated to purchase
on such date under this Agreement and the International Pricing Agreement (the
"Defaulted Securities"), the International Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the non-
defaulting International Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
International Representatives shall not have completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Initial International Securities, the non-defaulting
International Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Initial International Securities, this Agreement shall terminate without
liability on the part of any non-defaulting International Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
International Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the International Representatives or the Company shall
have the right to postpone Closing Time for a period not
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exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectuses or in any other documents or arrangements.
SECTION 11. DEFAULT BY THE SELLING STOCKHOLDERS OR THE COMPANY. If the
Company or one or more of the Selling Stockholders (for the purposes of this
Section 11, the Company and the Selling Stockholders are hereinafter called,
collectively, the "Sellers" and, individually, a "Seller") shall fail at Closing
Time to sell and deliver the number of Securities which such Seller or Sellers
are obligated to sell hereunder on such date, and the remaining Seller or
Sellers, as the case may be, do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder on such date to the total number of Securities to be sold by all
Sellers on such date, then the International Underwriters may at the
International Representatives' option, by notice from the International
Representatives to the non-defaulting Seller or Sellers, as the case may be,
either (a) terminate this Agreement without any liability on the part of any
non-defaulting party or (b) elect to purchase the Securities which the
non-defaulting Seller or Sellers have agreed to sell hereunder.
In the event of a default by any Seller as referred to in this Section,
either the International Representatives or (by joint action only) the
non-defaulting Seller or Sellers shall have the right to postpone Closing Time
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or International Prospectus or in any other documents
or arrangements.
No action taken pursuant to this Section shall relieve any Seller so
defaulting from liability, if any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Underwriters shall be directed to the International
Representatives c/o the U.S. Representatives at Merrill Lynch & Co., 101
California Street, San Francisco, California 94111, attention of Jay A. Cohen;
notices to the Company shall be directed to it at 2884 Sand Hill Road,
Suite 200, Menlo Park, California 94025, attention of Steven Karel, Vice
President, Secretary and General Counsel; and notices to the Selling
Stockholders shall be directed to Gibbons, Goodwin, van Amerongen, 600 Madison
Avenue, New York, New York 10022, attention of Edward W. Gibbons.
SECTION 13. PARTIES. This Agreement and the International Pricing
Agreement shall each inure to the benefit of and be binding upon the
International Underwriters, the Company, the Selling Stockholders and their
respective successors. Nothing expressed or mentioned in this Agreement or the
International Pricing Agreement is intended or shall be construed to give any
person, firm or corporation, other than the International Underwriters, the
Company and the Selling Stockholders and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or the International Pricing
Agreement or any provision herein or therein contained. This Agreement and the
International Pricing Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the
International Underwriters, the Company, the Selling Stockholders and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any International
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. This Agreement and the International
Pricing Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in
said State. Except as otherwise set forth herein, specified times of day refer
to New York City time. Each of this Agreement and the International Pricing
Agreement may be signed in two or more counterparts, and by different parties on
separate counterparts each of which shall constitute an original, with the same
effect as if the signatures on such counterparts were on the same instrument.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the International Underwriters, the Company and the Selling Stockholders in
accordance with its terms.
Very truly yours,
ROBERT HALF INTERNATIONAL, INC.
By: ______________________________________
Harold S. Messmer, Jr.
Chairman and Chief Executive Officer
THE FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________
-
General Partner
THE SECOND FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________
-
General Partner
CONFIRMED AND ACCEPTED
as of the date first above written:
MERRILL LYNCH INTERNATIONAL LIMITED
WILLIAM BLAIR & COMPANY
By: MERRILL LYNCH, INTERNATIONAL LIMITED
By: _________________________________
Authorized Signatory
For themselves and as International Representatives
of the other International Underwriters named in
Schedule A hereto.
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<PAGE>
SCHEDULE A
Number of
International
Name of International Underwriter Securities
--------------------------------- ----------------
Merrill Lynch International Limited. . . . . . . . . . . . . . .
William Blair & Company. . . . . . . . . . . . . . . . . . . . .
---------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,050,000
---------
---------
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<PAGE>
SCHEDULE B
Number of
Initial
International
Securities
----------------
The Company:
Robert Half International, Inc.. . . . . . . . . . . . . .
The Selling Stockholders:
The Fulcrum III Limited Partnership. . . . . . . . . . . .
The Second Fulcrum III Limited Partnership . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,050,000
---------
---------
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<PAGE>
Exhibit A
1,050,000 Shares
ROBERT HALF INTERNATIONAL INC.
(a Delaware corporation)
Common Stock
(Par Value $.001 Per Share)
INTERNATIONAL PRICING AGREEMENT
-, 1994
MERRILL LYNCH INTERNATIONAL LIMITED
WILLIAM BLAIR & COMPANY
As International Representatives of the several International Underwriters
c/o Merrill Lynch International Limited
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Dear Sirs:
Reference is made to the International Purchase Agreement dated -, 1994
(the "International Purchase Agreement") relating to the purchase by the several
underwriters named in Schedule A thereto (the "International Underwriters"), for
whom Merrill Lynch International Limited and William Blair & Company are acting
as representatives (the "International Representatives"), of the above shares of
Common Stock (the "International Securities") of Robert Half International Inc.,
a Delaware corporation (the "Company").
Pursuant to Section 2 of the International Purchase Agreement, the Company
and the Selling Stockholders agree with each International Underwriter as
follows:
1. The initial public offering price per share for the International
Securities shall be $-.
2. The purchase price per share for the International Securities to
be paid by the several International Underwriters shall be $-, being an
amount equal to the initial public offering price set forth above less $-
per share.
A-1
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the International Underwriters, the Company and the Selling Stockholders in
accordance with its terms.
Very truly yours,
ROBERT HALF INTERNATIONAL, INC.
By: ______________________________________
Harold S. Messmer, Jr.
Chairman and Chief Executive Officer
THE FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________
-
General Partner
THE SECOND FULCRUM III LIMITED PARTNERSHIP
By: GIBBONS, GOODWIN, VAN AMERONGEN, Its
General Partner
By: _________________________________
-
General Partner
CONFIRMED AND ACCEPTED
as of the date first above written:
MERRILL LYNCH INTERNATIONAL LIMITED
WILLIAM BLAIR & COMPANY
By: MERRILL LYNCH INTERNATIONAL LIMITED
By: _______________________________
Authorized Signatory
For themselves and as International Representatives
of the other International Underwriters named in
Schedule A hereto.
A-2
<PAGE>
Exhibit B
EXECUTIVE OFFICERS AND DIRECTORS SUBJECT
LOCK-UP AGREEMENTS
Edward W. Gibbons
Harold M. Messmer, Jr.
Robert W. Glass
M. Keith Waddell
B-1
<PAGE>
REGISTRATION AND EXPENSES AGREEMENT
This Registration and Expenses Agreement (this "Agreement") is made as of
October __, 1994, by and among Robert Half International Inc., a Delaware
corporation (the "Company"), The Fulcrum III Limited Partnership, a Delaware
limited partnership ("First Fulcrum"), and The Second Fulcrum III Limited
Partnership, a Delaware limited partnership ("Second Fulcrum"; each of First
Fulcrum and Second Fulcrum is hereinafter referred to as a "Holder";
collectively hereinafter referred to as "Holders").
WHEREAS, First Fulcrum and Second Fulcrum each holds shares of Common Stock
of the Company which each wishes to sell to the public by means of a registered
public offering;
WHEREAS, the Company has determined that it is in its best interests and
those of its stockholders that the proposed sale of shares by the Holders be
accomplished by means of an orderly distribution in a registered public
offering.
WHEREAS, the Company believes that the distribution of the shares of Common
Stock of the Company held by the Holders through a registered public offering
will significantly increase the public float and liquidity of its shares of
Common Stock on the stock markets where such shares are traded.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and intending to be legally bound hereby, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of the registration statement by the Commission.
"Registration Expenses" shall mean all expenses incurred by the
Company in filing the Registration Statement and complying herewith including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company, blue
sky fees and expenses, and the expense of any special audits or other accounting
expenses incident to or required by the registration contemplated hereby.
<PAGE>
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the Shares (as defined below)
registered on behalf of either Holder, all internal administrative and other
expenses of either Holder and all fees and disbursements of counsel for either
Holder.
2. REGISTRATION STATEMENT. The Company has filed a registration
statement on Form S-3 (File No. 33-55627, as amended or supplemented from time
to time, and including all documents incorporated or deemed incorporated by
reference therein and the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) promulgated under the Securities Act, the "Registration
Statement") for a public offering of a portion of the shares of Common Stock of
the Company held by First Fulcrum or Second Fulcrum (the "Shares") and shares to
be issued by the Company, and the prospectus to be used in connection therewith
(as amended or supplemented from time to time, and including all documents
incorporated or deemed incorporated by reference therein, the "Prospectus").
3. INFORMATION. Each of First Fulcrum and Second Fulcrum has and will
continue to furnish to the Company such information regarding itself and the
distribution proposed by it as the Company may request and as shall be required
in connection with the registration of the Shares as contemplated by the
Registration Statement.
4. MAINTENANCE OF EFFECTIVENESS. If and once the Registration Statement
is declared effective by the Commission, the Company will use its reasonable
efforts to keep the Registration Statement effective for a period of 45 days or
until the Holders shall have completed the distribution described in the
Registration Statement, whichever first occurs. Notwithstanding anything to the
contrary contained herein, in the event that the Board of Directors of the
Company determines that it is advisable to suspend use of the Prospectus and/or
withdraw the Registration Statement due to pending corporate developments,
public filings with the Commission or similar events, the Company shall be
entitled to do so without any liability or obligation to the Holders.
5. UNDERWRITING AGREEMENT. Each of First Fulcrum, Second Fulcrum and the
Company shall enter into and perform its obligations under an underwriting
agreement or agreements (the "Underwriting Agreement") with the underwriters of
the offering reasonably acceptable to the Company. The Underwriting Agreement
shall be in a form reasonably acceptable to the Company and the Holders.
6. CUSTODY AGREEMENT. With respect to the registration to be effected
pursuant to the Registration Statement, each of First Fulcrum and Second Fulcrum
shall enter into a custody agreement (the "Custody Agreement") in substantially
the form of Exhibit A hereto concurrently with the execution hereof and shall
deliver the Shares to the custodian named therein promptly thereafter. The
Holders hereby confirm and reaffirm to the Company, as if made herein, the
representations, warranties and covenants contained and made by them in the
Custody Agreement.
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<PAGE>
7. EXPENSES. The Company shall be responsible for and pay all
Registration Expenses incurred in connection with the registration to be
effected pursuant to the Registration Statement to be filed pursuant hereto.
Each of First Fulcrum and Second Fulcrum shall be responsible for and pay all
Selling Expenses other than the underwriting discounts, selling commissions and
stock transfer taxes applicable to shares of Common Stock to be registered by
and to be issued by the Company under the Registration Statement.
8. INDEMNIFICATION.
(a) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless the Company and each of its directors, each of its
officers who have signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any and all loss, claim, damage and expense (or actions, proceedings or
investigations in respect thereof), as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading, or arising out of
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein in the light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that each Selling Stockholder will only be liable in any such case to the extent
that such loss, liability, claim, damage or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in the Registration Statement, any
preliminary prospectus, the Prospectus, or any amendment or supplement thereto;
and PROVIDED, FURTHER, that the amount of such indemnification shall be limited
to the amount of proceeds to such Selling Stockholder from the sale of the
Shares.
(b) The Company agrees to indemnify and hold harmless each of the
Selling Stockholders and the directors, officers and partners of each such
Selling Stockholder and each person who controls each Selling Stockholder within
the meaning of Section 15 of the Securities Act, against any and all loss,
claims, damage and expense (or actions, proceedings or investigations in respect
thereof) arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the Company will not be liable in any such
case for any such loss, liability, claim, damage or expense which arises out of
or is based upon any untrue statement or alleged untrue statement or
-3-
<PAGE>
omission or alleged omission in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Selling Stockholder specifically for use in the preparation of
the Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to the indemnifying party of any action commenced against
it in respect of which indemnity may be sought hereunder, but failure to so
notify the indemnifying party shall not relieve such indemnifying party from any
liability which it may have otherwise on account of this indemnity agreement.
An indemnifying party may participate at its own expense in the defense of any
such action. In no event shall an indemnifying party be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from its own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) Any payment made by the Company or any Selling Stockholder
pursuant to paragraph (a) or (b) above, which arises with respect to any loss,
liability, claim, damage or expense incurred in a currency other than the U.S.
dollar shall be made by the Company or such Selling Stockholder, as the case may
be, in such amount of U.S. dollars as shall be necessary to enable the
indemnified party to purchase the amount of such other currency needed to
satisfy such loss, liability, claim, damage or expense, including any premiums
and costs of exchange payable in connection with conversion of U.S. dollars into
the relevant currency.
(e) Each of the Selling Stockholders and the Company acknowledge and
agree that the only written information furnished to the Company by or on behalf
of such Selling Stockholders specifically for use in the preparation of the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, within the meaning of paragraphs (a) and (b)
above is set forth in the first two paragraphs under the caption "SELLING
STOCKHOLDERS" in the Registration Statement.
9. MISCELLANEOUS.
9.1 GOVERNING LAW. The terms of this Agreement shall be governed by
and construed in accordance with the laws of the State of California as applied
to agreements entered into and performed within California solely by residents
of that State without giving effect to conflict of laws principles thereof.
9.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the permitted successors, assigns, heirs, transferees, distributees,
executors and administrators of the parties hereto (it
-4-
<PAGE>
being understood that neither First Fulcrum nor Second Fulcrum may assign any of
its rights without the prior written consent of the Company). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective permitted successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement.
9.3 AMENDMENT AND WAIVER. This Agreement, or any provision hereof,
may be amended or waived only in writing signed by the party against whom
enforcement is sought.
9.4 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to the Company or to either Holder upon any breach or
default of any party hereto under this Agreement shall impair any such right,
power or remedy of the Company or such Holder nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of the Company or either Holder of any breach
or default under this Agreement or any waiver on the part of the Company or
either Holder of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to the Company or either Holder, shall be cumulative and not
alternative.
9.5 NOTICES, ETC. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand or
by messenger, addressed (a) if to a Holder, at such Holder's address set forth
on the signature page hereto, or at such other address as such Holder shall have
furnished to the Company in writing, or (b) if to the Company, at the address of
its principal executive officers and addressed to the attention of the Corporate
Secretary, or at such other address as the Company shall have furnished to the
Holders.
9.6 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
9.7 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
9.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be an original, but all of which together will
constitute one instrument.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
ROBERT HALF INTERNATIONAL INC.
By:__________________________________
Harold M. Messmer, Jr., President
and Chief Executive Officer
2884 Sand Hill Road
Menlo Park, California 94025
"HOLDERS":
THE FULCRUM III LIMITED PARTNERSHIP
By: Gibbons, Goodwin, van Amerongen,
its general partner
By:__________________________________
Title: General Partner
600 Madison Avenue
New York, NY 10022
THE SECOND FULCRUM III LIMITED
PARTNERSHIP
By: Gibbons, Goodwin, van Amerongen,
its general partner
By:__________________________________
Title: General Partner
600 Madison Avenue
New York, NY 10022
-6-
<PAGE>
EXHIBIT A
CUSTODY AGREEMENT
Chemical Trust Company of California
50 California Street, 10th Floor
San Francisco, California 94111
Attn: Daniel W. Spengel
Robert Half International Inc,
2884 Sand Hill Road
Menlo Park, CA 94025
Attn: President
Ladies and Gentlemen:
Pursuant to the terms of the Registration and Expenses Agreement, dated as
of _________, 1994 (the "Expenses Agreement"), by and among Robert Half
International Inc. (the "Company"), The Fulcrum III Limited Partnership ("First
Fulcrum") and The Second Fulcrum III Limited Partnership ("Second Fulcrum"), the
Company has filed a Registration Statement (File No. 33-55627, as amended or
supplemented from time to time, the "Registration Statement") with the
Securities and Exchange Commission to register for sale to the public under the
Securities Act of 1933, as amended, and the rules promulgated thereunder (the
"Act"), shares of the Company's common stock (the "Common Stock").
The shares of Common Stock covered by the Registration Statement consist of
(a) 100,000 shares of Common Stock to be sold by the Company (the "Company
Shares"), (b) __________ shares of Common Stock (the "Firm Shares") to be sold
by the undersigned stockholders of the Company (each a "Selling Stockholder" and
collectively the "Selling Stockholders") and (c) up to an additional _________
shares (the "Option Shares") of Common Stock which may be sold by the Company
pursuant to over-allotment options to be granted by the Company to the
Underwriters, pursuant to the proposed U.S. and international purchase
agreements (collectively, the "Underwriting Agreement") among Merrill Lynch &
Co. (or an affiliate thereof), William Blair & Company (collectively, the
"Representatives"), the Company and the Selling Stockholders. Unless otherwise
defined or noted in this Agreement or the context otherwise requires, all
capitalized terms used herein shall have the meanings given to such terms in the
Underwriting Agreement.
1. A custody arrangement is hereby established by each of the undersigned
Selling Stockholders with Chemical Trust Company of California, as custodian
(the "Custodian"), with respect to the certificates representing the Firm Shares
deposited with the Custodian herewith, and the Custodian is hereby instructed to
act in accordance with this Agreement and any amendments or supplements hereto.
It is understood that the certificates deposited with the Custodian may
represent a greater number of shares of Common Stock than the Firm Shares,
<PAGE>
and reference is made to the second sentence of Section 3(c) hereof with respect
to such excess shares.
2. There are herewith delivered to the Custodian, and the Custodian
hereby acknowledges receipt of, certificates representing shares of Common Stock
as set forth at the end of this letter on the page entitled "CERTIFICATES
DEPOSITED". Each such certificate so delivered is in negotiable and proper
deliverable form and is accompanied by a completed form W-8 or W-9, as
applicable, and a duly executed stock power or powers, in blank, bearing the
signature of the undersigned guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee "medallion" program), pursuant to
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended. Such
certificates are to be held by the Custodian for the account of the Selling
Stockholders and are to be disposed of by the Custodian in accordance with this
Agreement.
3. The Custodian is authorized and directed by each of the Selling
Stockholders:
(a) To hold the certificates representing the Firm Shares delivered
by the Selling Stockholders in its custody;
(b) On or immediately prior to the settlement date for any shares of
Common Stock sold pursuant to the Registration Statement (the "Closing Date"),
to cause such shares to be transferred on the books of the Company and/or the
transfer agent into such names as the Custodian shall have been instructed by
the Representatives; to cause to be issued, against surrender of the
certificates for the shares, a new certificate or certificates for such shares,
free of any restrictive legend, registered in such name or names; to deliver
such new certificates representing such shares to the Representatives as
instructed by the Representatives on the Closing Date for their account or
accounts against full payment therefor; and to give receipt for such payment;
(c) To disburse such payments in the following manner: (i) to
itself, as agent for the Selling Stockholders an amount sufficient to pay any
transfer taxes, stamp duties or other similar taxes which the Selling
Stockholders have agreed to pay pursuant to the Underwriting Agreement and such
further reserve amount to be designated in writing by the Selling Stockholders
from which amount the Custodian shall pay, as soon as reasonably practicable,
any other expenses as are payable by each of the undersigned Selling
Stockholders; and (ii) to each Selling Stockholder, in the manner requested by
such Selling Stockholder at the end of this Custody Agreement or in such manner
as the Custodian, in accordance with the terms hereof, shall deem appropriate,
(A) on the Closing Date, a sum equal to the share of the proceeds (less the
applicable Selling Expenses, as defined in the Registration Rights Agreement) to
which each Selling Stockholder is entitled, and (B) promptly after any
applicable stock transfer taxes or other expenses shall have been paid, any
remaining balance of the amount reserved under clause (i) above. As soon as
practicable after such remittance, the Custodian shall also return to
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<PAGE>
each Selling Stockholder new certificates representing the number of shares of
Common Stock, if any, represented by the certificates deposited that are in
excess of the number of shares sold by such Selling Stockholder to the
Underwriters, which new certificates shall bear the legend set forth in Section
8(e) of this Agreement and such other restrictive legends as are required in the
opinion of counsel for the Company. Before making any payment from the amount,
if any, reserved under clause (i) above, except payments made pursuant to
subclause (B) of clause (ii) above, the Custodian shall request and receive the
written approval of the Selling Stockholders.
4. Subject in each case to the indemnification obligations set forth in
Section 7 hereof, in the event the Firm Shares of either Selling Stockholder are
not sold prior to December 15, 1994, upon request by such Selling Stockholder,
the Custodian shall deliver to such Selling Stockholder as soon as practicable
after such date, certificates deposited by such Selling Stockholder.
Certificates returned to any Selling Stockholder shall be returned with any
related stock powers, and any new certificates issued to the Selling
Stockholders shall bear such restrictive legends as are required in the opinion
of counsel for the Company.
5. This Agreement is for the express benefit of the Company, the
Custodian, the Selling Stockholders, the Representatives, the Underwriters,
Wilson, Sonsini, Goodrich & Rosati and Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel. The obligations and authorizations of the Selling Stockholders here-
under are irrevocable and shall not be terminated by any act of either Selling
Stockholder or by operation of law, whether by liquidation or dissolution of
either Selling Stockholder or by the occurrence of any other event or events
(including without limitation the termination of any trust or estate for which
either Selling Stockholder is acting as a fiduciary or fiduciaries), and if
after the execution hereof either Selling Stockholder is liquidated or
dissolved, or if any other event or events shall occur before the delivery of
either Selling Stockholder's Firm Shares hereunder to the Representatives, such
Firm Shares shall be delivered to the Representatives in accordance with the
terms and conditions of this Agreement, as if such event had not occurred,
regardless of whether or not the Custodian shall have received notice of such
event.
6. Until payment of the purchase price (less the applicable transfer
taxes, stamp duties or other taxes and other expenses) for the Firm Shares has
been made to the Selling Stockholders or to the Custodian, the Selling
Stockholders shall remain the owner of (and shall retain the right to receive
dividends and distributions on, and to vote) the number of shares delivered by
each of them to the Custodian hereunder. Until such payment in full has been
made or until the offering of Shares has been terminated, each Selling
Stockholder agrees that it will not give, sell, pledge, hypothecate, grant any
lien on, transfer, deal with or contract with respect to the Firm Shares and/or
any interests therein.
7. It is understood that the Custodian assumes no responsibility or
liability to any person other than to deal with the certificates deposited with
the Custodian hereunder and the proceeds from the sale of all or a portion of
the shares of Common Stock represented thereby in accordance with the provisions
of this Agreement. The Custodian makes no representations with
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<PAGE>
respect to and shall have no responsibility for the Registration Statement
relating to the proposed public offering of Common Stock or the Prospectus
contained therein or, except as herein expressly provided, for any aspect of the
proposed public offering of Common Stock. The Custodian shall not be liable for
any error of judgment or any act done or omitted or for any mistake of fact or
law except for those as a result of the Custodian's negligence or bad faith.
Each of the undersigned Selling Stockholders agrees to indemnify the Custodian
for and to hold the Custodian harmless against any loss, liability or expense
incurred on its part arising out of or in connection with its acting as
Custodian under this Agreement, and for the cost and expense of defending
against any claim or liability hereunder that is not due to the Custodian's
negligence or bad faith. Each of the undersigned agrees that the Custodian may
consult with legal counsel of its own choice (who may be counsel for the
Company) and the Custodian shall have full and complete authorization and
protection for any action taken or suffered by the Custodian hereunder in good
faith and in accordance with the instructions of such legal counsel. Anything
in this Agreement to the contrary notwithstanding, in no event shall the
Custodian be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the
Custodian has been advised of the likelihood of such loss or damage and
regardless of the form of action, but only so long as such loss or damage does
not arise from the Custodian's negligence or bad faith.
8. Each of the Selling Stockholders represents and warrants as of the
date hereof, as of the date of effectiveness of the Registration Statement, as
of the closing of the sales contemplated thereby, and during such time as shares
of Common Stock are distributed thereunder, and covenants that:
(a) The Selling Stockholder has and at the Closing Date will have
good and valid title to the Firm Shares to be sold by the Selling Stockholder,
free of any liens, encumbrances, equities and claims, and full right, power and
authority to effect the sale and delivery of such Firm Shares; and upon the
delivery of and payment for such Firm Shares pursuant to the Underwriting
Agreement, good and valid title thereto, free of any liens, encumbrances,
equities and claims, will be transferred to the several Underwriters.
(b) The consummation by the Selling Stockholder of the transactions
contemplated herein and in the Underwriting Agreement and the fulfillment by
such Selling Stockholder of the terms hereof and thereof will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Selling Stockholder is a party, or of any decree,
judgment or order to which such Selling Stockholder is a party or by which such
Selling Stockholder or any of its assets may be bound.
(c) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to, or which has constituted, or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock of the Company.
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<PAGE>
(d) The Selling Stockholder (i) has given the Company notice of the
Selling Stockholder's election to sell the Firm Shares to the Underwriters under
the Underwriting Agreement, (ii) has all consents, approvals, authorization and
orders necessary for the execution and delivery by such Selling Stockholder of
this Agreement, the Expenses Agreement and the Underwriting Agreement and for
the sale and delivery to the several Underwriters of the Firm Shares to be sold
by such Selling Stockholder under the Underwriting Agreement, and (iii) has full
right, power and authority to enter into this Agreement, the Expenses Agreement
and the Underwriting Agreement, and to sell, assign, transfer and deliver the
Firm Shares under the Underwriting Agreement. No person has any right to
acquire from the Selling Stockholder any Firm Shares to be sold hereunder and
the Selling Stockholder is under no obligation, whether absolute or contingent,
to sell any Firm Shares to any person, except as disclosed in the Prospectus.
(e) The Selling Stockholder, without the prior written consent of the
Representatives, will not directly or indirectly, offer, sell, contract to sell,
make any short sale, pledge, establish an open "put equivalent position" within
the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as
amended, or otherwise dispose of (the "Resale Restrictions") any shares of
Common Stock, options to acquire shares of Common Stock or securities
exchangeable for or convertible into shares of Common Stock which such Selling
Stockholder may now own or hereafter acquire, including without limitation any
such securities which may be deemed to be beneficially owned by such Selling
Stockholder under the rules of the Commission (the "Restricted Securities"), or
publicly announce such Selling Stockholder's intention to do any of the
foregoing, for a period ending on the date which is one hundred twenty (120)
days after the date of the pricing agreement entered into pursuant to the
Underwriting Agreement; provided that, the foregoing shall not prohibit a
distribution to the partners of a Selling Stockholder of shares of Common Stock
other than the Firm Shares provided that such partners take such distribution
subject to the foregoing restrictions; and, provided further, such Selling
Stockholder acknowledges and agrees that the certificates representing shares of
Common Stock other than the Firm Shares held by such Selling Stockholder or by
such partners as a result of such distribution shall bear a legend substantially
to the following effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR
PLEDGED OR OTHERWISE DISPOSED OF, NOR MAY ANY OFFER TO SELL ANY SUCH SHARES
BE MADE OR OPTION FOR THE SALE THEREOF BE GRANTED, DIRECTLY OR INDIRECTLY,
UNTIL [120 DAY PERIOD], 1995, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
REPRESENTATIVES OF THE UNDERWRITERS REFERRED TO IN THE U.S. PURCHASE
AGREEMENT AND INTERNATIONAL PURCHASE AGREEMENT, EACH DATED
__________________, 1994.
The Selling Stockholder agrees to deliver to the Custodian for such legending
each of the additional certificates held by such Selling Stockholders which
represent shares of Common
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<PAGE>
Stock of the Company that are not sold as Firm Shares as promptly as practicable
following the execution of this Agreement and the Selling Stockholder
acknowledges and agrees that the Company will enter stop transfer orders with
its transfer agent with respect to such shares that are not sold as Firm Shares.
(f) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions contemplated under the Underwriting Agreement, the
Selling Stockholder hereby delivers to the Custodian, who is hereby instructed
to re-deliver the same to the Representatives a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
(g) This Agreement and the Expenses Agreement constitute the valid,
legal and binding obligation of the Selling Stockholder and are enforceable
against such Selling Stockholder in accordance with their respective terms,
subject to bankruptcy, insolvency, and similar laws governing the rights of
creditors generally and to the discretion of courts in granting equitable
remedies.
(h) All information furnished to the Company by the Selling
Stockholder specifically for use in connection with the preparation of the
Registration Statement and the Prospectus is true and correct in all material
respects and does not omit any material fact necessary to make such information
not misleading.
(i) No consent, approval, authorization, order, registration or
qualification of or with any court or any regulatory authority or other
governmental body is required for the sale of the Firm Shares by the Selling
Stockholder or the consummation by it of the other transactions contemplated by
the Underwriting Agreement, except the registration under the Act of the Shares
and such consents, approvals, authorizations, registrations or qualifications as
may be required under state or foreign securities or blue sky laws in connection
with the sale of the Shares as contemplated by the Underwriting Agreement and
the contemplated distribution of the Shares by the Underwriters.
(j) The Selling Stockholder will cooperate, when and as requested by
the Representatives, in the qualification of the Shares for offer and sale under
the securities or blue sky laws of such jurisdictions as the Representatives may
designate and, during the 12-month period after the Registration Statement
becomes effective, in keeping such qualifications in good standing under said
securities or blue sky laws; provided, however, that each of the undersigned
Selling Stockholders shall not be obligated to file any general consent to
service of process in any jurisdiction or to become subject to taxation in any
jurisdiction in which it is not otherwise subject to tax.
-6-
<PAGE>
(k) The Selling Stockholder does not have any actual knowledge or
reason to believe that the Registration Statement or the Prospectus, or any
amendment or supplement thereto (or any documents incorporated therein by
reference) contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(l) The sale of the Firm Shares by the Selling Stockholder pursuant
to the Underwriting Agreement is not prompted by any adverse information
concerning the Company which is not set forth in the Registration Statement or
the Prospectus or any documents incorporated therein by reference.
(m) With respect to the Company and the shares of Common Stock held
by the Selling Stockholders, the Selling Stockholder is in compliance in all
material respects with the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and the Act, has not taken any action that has violated the 1934
Act or the Act in any material respect, has not failed to take any action to
comply with the 1934 Act or the Act in any material respect, will not take any
action to violate the 1934 Act or the Act in any material respect and will not
fail to take any action to remain in compliance with the 1934 Act and the Act in
all material respects.
(n) The Selling Stockholder hereby reaffirms as if made and set forth
herein each of the representations and warranties made by such Selling
Stockholder in Section 1(b) of the Underwriting Agreement.
The foregoing representations, warranties and agreements are hereby
expressly made for the benefit of, and may be relied upon by, the Company, the
other Selling Stockholder, Wilson, Sonsini, Goodrich & Rosati, as counsel for
the Company, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel as counsel for the
Selling Stockholders, the Representatives, the Underwriters and their counsel,
and the Custodian.
9. The Custodian's acceptance of this Agreement by the execution hereof
shall constitute an acknowledgement by the Custodian of the authorization herein
conferred and shall evidence the Custodian's agreement to carry out and perform
this Agreement in accordance with its terms.
10. This Agreement may be executed in more than one counterpart with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
11. This Agreement shall be binding upon the Custodian, each of the
Selling Stockholders, the Company and the respective, distributees, successors
and assigns of the Custodian, the Selling Stockholders and the Company, as the
case may be.
12. This Agreement shall be governed by the laws of the State of
California applicable to contracts made and to be performed entirely in such
State.
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<PAGE>
13. Any notice given pursuant to this Agreement shall be deemed given if
in writing and delivered in person, or if given by telephone or facsimile if
subsequently confirmed by letter: (i) if to a Selling Stockholder, to the
address set forth below its signature; and (ii) if to the Custodian, to the
address set forth below its signature; and (iii) if to the Company, to the
address set forth below its signature.
14. In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Dated: _____________, 1994
Robert Half International Inc. Chemical Trust Company of California
By: By:
------------------------------- ------------------------------------
Title: Title:
---------------------------- ---------------------------------
Address: 2884 Sand Hill Road Address: 50 California Street
Menlo Park, CA 94025 San Francisco, CA 94111
Telephone Number: (415) 854-9700 Telephone Number: (415) 954-9516
Facsimile Number: (415) 854-9735 Facsimile Number: (415) 989-5241
THE FULCRUM III LIMITED THE SECOND FULCRUM III LIMITED
PARTNERSHIP PARTNERSHIP
By: Gibbons, Goodwin, van Amerongen, By: Gibbons, Goodwin, van Amerongen,
its General Partner its General Partner
By: By:
------------------------------- ------------------------------------
Title: General Partner Title: General Partner
Address: 600 Madison Avenue Address: 600 Madison Avenue
New York, New York 10022 New York, New York 10022
Telephone Number: (212) 832-2400 Telephone Number: (212) 832-2400
Facsimile Number: (212) 750-4788 Facsimile Number: (212) 750-4788
- -------------------------
* To be signed in exactly the same manner as the shares are registered.
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<PAGE>
SALE INSTRUCTION OF THE FULCRUM III LIMITED PARTNERSHIP
INSTRUCTION: Complete each column as to certificates to be deposited with
the Custodian.
CERTIFICATES DEPOSITED
Number of
shares of Common
Stock to be sold
Number of shares from certificates (if
Stock of Common Stock less than all shares
certificate represented by represented thereby
number(s) each certificate are to be sold)
- ----------- ---------------- ---------------------
-------------- ----------------
TOTAL:
-------------- ----------------
<PAGE>
PAYMENT INSTRUCTION OF THE FULCRUM III LIMITED PARTNERSHIP
INSTRUCTION: Indicate how you wish to receive payment for the shares sold
to the Underwriters. A wire transfer can be made only to an account standing in
exactly the same name as the person or entity, including trusts or other
associations, holding the shares being sold.
MANNER OF PAYMENT
I request that payment of the net proceeds from the sale of the shares of
Common Stock of Robert Half International Inc. to be sold by me pursuant to the
Underwriting Agreement be made in the following manner:
(___) WIRE TRANSFER to the following account:
Account No. ____________________
Bank ___________________________
(Name)
________________________________
________________________________
(Address)
ABA No._________________________
Bank Contact Person ____________________________
phone (___) ____________________
<PAGE>
SALE INSTRUCTION OF THE SECOND FULCRUM III LIMITED PARTNERSHIP
INSTRUCTION: Complete each column as to certificates to be deposited with
the Custodian.
CERTIFICATES DEPOSITED
Number of
shares of Common
Stock to be sold
Number of shares from certificates (if
Stock of Common Stock less than all shares
certificate represented by represented thereby
number(s) each certificate are to be sold)
- ----------- ---------------- ---------------------
-------------- ----------------
TOTAL:
-------------- ----------------
<PAGE>
PAYMENT INSTRUCTION OF THE SECOND FULCRUM III LIMITED PARTNERSHIP
INSTRUCTION: Indicate how you wish to receive payment for the shares sold
to the Underwriters. A wire transfer can be made only to an account standing in
exactly the same name as the person or entity, including trusts or other
associations, holding the shares being sold.
MANNER OF PAYMENT
I request that payment of the net proceeds from the sale of the shares of
Common Stock of Robert Half International Inc. to be sold by me pursuant to the
Underwriting Agreement be made in the following manner:
(___) WIRE TRANSFER to the following account:
Account No. ____________________
Bank ___________________________
(Name)
________________________________
________________________________
(Address)
ABA No._________________________
Bank Contact Person ____________________________
phone (___) _____________
